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people don't realize the enormous difference in living cost of bay area vs midwest. 400K on the penninsula is less than 150K in the midwest. I once calculated

people don't realize the enormous difference in living cost of bay area vs midwest. 400K on the penninsula is less than 150K in the midwest. I once calculated the average salaries of the bay area vs mid western cities and adjusted those salaries based on the cost of housing: https://skilldime.com/blog/see-which-cities-pay-the-highest-software-engineering-salaries-adjusted-for-col/ https://skilldime.com/blog/see-which-cities-pay-the-highest-...

tracer4201 7y ago
I’d rather earn $400K for several years, live as cheaply as possible, and when I start to feel fatigued, then switch to one of these slower companies in the Midwest. By that time, your portfolio is decent strong and you’re already set for retirement. Starting your career in the Midwest at their typical salary levels and given the kinds of problems many of these companies or their IT departments are solving is a very short sighted approach. I say that having been there. I pivoted my career. My first 6 months I had more impact and learned way more than in working 4 years in the Midwest.
braindeath 7y ago
These calculators are highly misleading. You absolutely can live comfortably and squirrel away much more cash at 400k anywhere in the US vs 150k. I’ve lived this experience between “low” COL and high areas.
xyzzyz 7y ago
Lets compare salaries on a city by city basis and adjust those salaries based on the Cost of living in dollars per square foot (cost of a house/condo from Zillow). To calculate the location adjusted salary, we simply multiply the salary by 500 (rough average of $/sq foot) and divide by the cost per square foot in that city. This comparison makes sense only if your salary is spent on literally nothing else but housing.
- nemo44x 7y ago
  Lots of truth here. Having lived in both types of places I can say with certainty that yes, housing is a big difference. But otherwise much is the same and the vastly higher salaries lead to much accelerated retirement savings and wealth generation. Some very expensive places like nyc allow you to factor out automobile expenses making the rent burden manageable. Food is a bit more, going out is the same if you figure out where to go, and day to day expenses aren’t too far off either. I’d say it’s about 20% more overall all things considered.
  - alain94040 7y ago
    Yes, more detailed math here: https://thestartupconference.com/2018/09/21/about-that-silicon-valley-job/ https://thestartupconference.com/2018/09/21/about-that-silic...
    - nemo44x 7y ago
      Well their yearly savings is a bit off to be sure. Unless you live in a dumpster which isn’t compatible with a spouse. But the general idea is right. Pre-tax savings and having more to set aside after tax as well as faster appreciating real estate equity is the winning path in today’s economy.
ededdeddy 7y ago
This is commonly brought up but isn't correct simply because what matters more is generally the absolute amount of disposable income you have, not the percentage of your total salary. If you make 400k / year (typical for a FAANG senior engineer, which plenty of people people reach in their mid-to-late 20s) your expenses might break down as: - 160k taxes - 50k housing (luxury 1 bedroom in SF or Palo Alto) - 10k food (eat at work on weekdays for free, $200 a weekend to eat out at nice restaurants) - 10k transportation (Tesla Model 3 like everyone else) = 230k total So you end up with ~170k a year of disposable income while living very well. If you were willing to cut expenses to the bone (roommates is the big one, cook for yourself, old car) you'd probably end up at around 200k of disposable income. 170k-200k is more than most software engineers can hope to make in gross income in the Midwest. Sure, you might not want to buy a house for $2M, but with just two years of savings you can move to the Midwest and buy a house outright. After 10 years (remember, most of these people would be in their late thirties) you could easily save ~$2M before investment returns and retire to a low cost of living area. For people who are not tech workers and live in the Bay Area making <$100k / year, there is definitely a great argument that the cost of living is way too high. For software engineers, it's worth remembering the cost of living is so high only because software engineers get paid so much.
- cheese4242 7y ago
  Wow, I swear every time I read one of these salary threads the "typical" salary for a FAANG engineer jumps by 50k. Not doubting it, it's just fucking nuts. I do wonder though what percentage of engineers are making that type of money though? How typical is it really?
  - scarmig 7y ago
    Percentage of engineers, or senior engineers? Overall, I'd guesstimate 40% make 400k or more, with most senior engineers making that much. Not at all atypical, particularly if you've been at one for a couple years.
    - Apocryphon 7y ago

tracer4201 7y ago

I’d rather earn $400K for several years, live as cheaply as possible, and when I start to feel fatigued, then switch to one of these slower companies in the Midwest. By that time, your portfolio is decent strong and you’re already set for retirement. Starting your career in the Midwest at their typical salary levels and given the kinds of problems many of these companies or their IT departments are solving is a very short sighted approach. I say that having been there. I pivoted my career. My first 6 months I had more impact and learned way more than in working 4 years in the Midwest.

braindeath 7y ago

These calculators are highly misleading. You absolutely can live comfortably and squirrel away much more cash at 400k anywhere in the US vs 150k. I’ve lived this experience between “low” COL and high areas.

xyzzyz 7y ago

Lets compare salaries on a city by city basis and adjust those salaries based on the Cost of living in dollars per square foot (cost of a house/condo from Zillow). To calculate the location adjusted salary, we simply multiply the salary by 500 (rough average of $/sq foot) and divide by the cost per square foot in that city. This comparison makes sense only if your salary is spent on literally nothing else but housing.

nemo44x 7y ago
Lots of truth here. Having lived in both types of places I can say with certainty that yes, housing is a big difference. But otherwise much is the same and the vastly higher salaries lead to much accelerated retirement savings and wealth generation. Some very expensive places like nyc allow you to factor out automobile expenses making the rent burden manageable. Food is a bit more, going out is the same if you figure out where to go, and day to day expenses aren’t too far off either. I’d say it’s about 20% more overall all things considered.
- alain94040 7y ago
  Yes, more detailed math here: https://thestartupconference.com/2018/09/21/about-that-silicon-valley-job/ https://thestartupconference.com/2018/09/21/about-that-silic...
  - nemo44x 7y ago
    Well their yearly savings is a bit off to be sure. Unless you live in a dumpster which isn’t compatible with a spouse. But the general idea is right. Pre-tax savings and having more to set aside after tax as well as faster appreciating real estate equity is the winning path in today’s economy.

ededdeddy 7y ago

This is commonly brought up but isn't correct simply because what matters more is generally the absolute amount of disposable income you have, not the percentage of your total salary. If you make 400k / year (typical for a FAANG senior engineer, which plenty of people people reach in their mid-to-late 20s) your expenses might break down as: - 160k taxes - 50k housing (luxury 1 bedroom in SF or Palo Alto) - 10k food (eat at work on weekdays for free, $200 a weekend to eat out at nice restaurants) - 10k transportation (Tesla Model 3 like everyone else) = 230k total So you end up with ~170k a year of disposable income while living very well. If you were willing to cut expenses to the bone (roommates is the big one, cook for yourself, old car) you'd probably end up at around 200k of disposable income. 170k-200k is more than most software engineers can hope to make in gross income in the Midwest. Sure, you might not want to buy a house for $2M, but with just two years of savings you can move to the Midwest and buy a house outright. After 10 years (remember, most of these people would be in their late thirties) you could easily save ~$2M before investment returns and retire to a low cost of living area. For people who are not tech workers and live in the Bay Area making <$100k / year, there is definitely a great argument that the cost of living is way too high. For software engineers, it's worth remembering the cost of living is so high only because software engineers get paid so much.

cheese4242 7y ago
Wow, I swear every time I read one of these salary threads the "typical" salary for a FAANG engineer jumps by 50k. Not doubting it, it's just fucking nuts. I do wonder though what percentage of engineers are making that type of money though? How typical is it really?
- scarmig 7y ago
  Percentage of engineers, or senior engineers? Overall, I'd guesstimate 40% make 400k or more, with most senior engineers making that much. Not at all atypical, particularly if you've been at one for a couple years.
  - Apocryphon 7y ago