5 ms·

The median home value in SF is ~$1.5 million. A typical mortgage on a home like that is ~$4-5k per month. So you're assuming folks have $25-30k in liquid cash

The median home value in SF is ~$1.5 million. A typical mortgage on a home like that is ~$4-5k per month. So you're assuming folks have $25-30k in liquid cash hanging around all the time. Not unrealistic but certainly not everyone working at tech companies there has that kinda cash. And that's before you factor in other costs like property taxes, insurance, etc. that you'll need to cover too.

mc32 4y ago
In the rust belt when a factory closes or when people lose their farms, they move to where it makes economic sense. But these (ex-Twitter emps) are some of the most mobile people on Earth! It is sad when someone anyone loses their source of income -on the other hand these are among the most capable of landing on their feet.
stocknoob 4y ago
Do you think it’s a good idea for someone in a well-paying job not to have 3-6 months of expenses saved? Nobody is forcing them to live in SF, especially not Twitter.
willcipriano 4y ago
You know what you call someone with 1.5 million worth of assets? A millionaire. They will live, even if they have to move to "flyover country".
- etchalon 4y ago
  If they have a mortgage, they don't have 1.5M in assets. They have 1.5M in debt.
  - willcipriano 4y ago
    They would've put at least 150k down wouldn't they? This also assumes they just moved in. If you have a 1.5 million dollar home in SF today you likely bought it for less than that at some point in the past. These people have net worths that would allow them to buy a nice house, almost anywhere else on the planet for cash.
    - etchalon 4y ago
      You're making a lot of assumptions here, none of which might be true, and which are incredibly individualized. "I have a mortgage on a house" tells you essentially nothing about a person's finances, how they financed the house, their assets, their monthly expenses or their debt-to-income ratio. Some people might have put 20% down, avoided PMI, have no other debt and only put down 20% because they wanted to hold onto cash. They had a good credit score, and got a reasonable interest rate. Others may have utilized any one of a number of loan programs to put down > 5%, which they financed through loans from family, or emptying their 401K, got a not great rate, have PMI, have student loans on top of that, a healthcare debt, etc. You have zero information beyond "well, they have a house."
  - refurb 4y ago
    I hear there are plenty of willing buyers in the the Bay Area.
  - nunez 4y ago
    And yet home value is used to calculate net worth.
    - icedchai 4y ago
      Mortgages (debt) are also used to calculate net worth, so it balances out.
filoleg 4y ago
> $25-30k in liquid cash hanging around all the time That's like 3-4 months of post-tax pay for a twitter engineer (and not a senior one at all). Yeah, i would expect them to be able to have that much in savings. If someone cant accumulate roughly 15% of their annual compensation in savings, while earning $200-400k/yr, then I have no idea what else could be done here to help.
- xienze 4y ago
  > If someone cant accumulate roughly 15% of their annual compensation in savings, while earning $200-400k/yr, then I have no idea what else could be done here to help. The thing with those crazy Valley salaries that you hear about here is that a lot of the time a good amount is in the form of stock that vests on a rolling basis. So maybe you get $150K in cash and $75K in stock. After 401k, California and federal taxes, California housing costs, and California <everything costs>, I can understand how someone making “$225K” in the Valley might not be able to save a whole lot.
  - KerrAvon 4y ago
    Yup. Pretty much cut 45-50% off the top for federal and state taxes immediately. Divide the remainder between stock that won't actually vest for years and your base pay. It's way more complicated than "you're making six figures!!! why can't you SAV3!!1 too much avocado toast!" Should people be more disciplined? Isn't it possible to do better? Sure, totally. But let's start with reality and not boomer bootstrap fan fiction.
    - seoaeu 4y ago
      If you are paying 45% of your income in state/federal/FICA taxes, then your after tax income is over $330,000/year.
  - cecilpl2 4y ago
    > The thing with those crazy Valley salaries that you hear about here is that a lot of the time a good amount is in the form of stock that vests on a rolling basis. This doesn't make any sense. Yes, your stock "vests on a rolling basis" the same way your salary "vests" every two weeks. If you are making 150k in cash and 75k in stock, then you get access to 225k (minus tax) of liquid cash every year. The vesting schedule is irrelevant.
fleddr 4y ago
I'm stunned really. I'm from the Netherlands, known for its comparatively poor pay for engineers as well as high costs of living. Despite that, from day 1, when my salary was at its lowest and I was still single, I saved 25% of my salary. A lot of years later and no longer single, I've build up multiple years in savings. Even more than that if I add my spouse. And the funny thing is that the need to do this applies less here, as unemployment benefits are relatively generous. It just shows the dramatic difference in culture. I'm shocked how even the best paid engineers can't even manage to save 30K. 30K...are you kidding me? A single event or large expense (construction at house, car breaks down) would bankrupt you. And if your cost of living is so enormous, what the hell does 30k even do during unemployment? If I'd earned 200K+, I'd save so hard and retire 20 years early. The US has such a spending culture.
- throwaway5959 4y ago
  Exactly. I know people who make $50k/year that have six month emergency funds.
- bombcar 4y ago
  The key is that you started saving from the beginning. This informs all your future purchases and helps you maintain it going forward. Many who get a high-paying job at the beginning spend to the limit of their income and then some. Very sad.
  - fleddr 4y ago
    True, and the other discipline is that at one point I settled on a lifestyle and never upped it again, despite a growing income. So the savings rate itself also increases over time.
FireBeyond 4y ago
You are not getting a mortgage in that range on that house unless you're putting 600-900K down.

mc32 4y ago

In the rust belt when a factory closes or when people lose their farms, they move to where it makes economic sense. But these (ex-Twitter emps) are some of the most mobile people on Earth! It is sad when someone anyone loses their source of income -on the other hand these are among the most capable of landing on their feet.

stocknoob 4y ago

Do you think it’s a good idea for someone in a well-paying job not to have 3-6 months of expenses saved? Nobody is forcing them to live in SF, especially not Twitter.

willcipriano 4y ago

You know what you call someone with 1.5 million worth of assets? A millionaire. They will live, even if they have to move to "flyover country".

etchalon 4y ago
If they have a mortgage, they don't have 1.5M in assets. They have 1.5M in debt.
- willcipriano 4y ago
  They would've put at least 150k down wouldn't they? This also assumes they just moved in. If you have a 1.5 million dollar home in SF today you likely bought it for less than that at some point in the past. These people have net worths that would allow them to buy a nice house, almost anywhere else on the planet for cash.
  - etchalon 4y ago
    You're making a lot of assumptions here, none of which might be true, and which are incredibly individualized. "I have a mortgage on a house" tells you essentially nothing about a person's finances, how they financed the house, their assets, their monthly expenses or their debt-to-income ratio. Some people might have put 20% down, avoided PMI, have no other debt and only put down 20% because they wanted to hold onto cash. They had a good credit score, and got a reasonable interest rate. Others may have utilized any one of a number of loan programs to put down > 5%, which they financed through loans from family, or emptying their 401K, got a not great rate, have PMI, have student loans on top of that, a healthcare debt, etc. You have zero information beyond "well, they have a house."
- refurb 4y ago
  I hear there are plenty of willing buyers in the the Bay Area.
- nunez 4y ago
  And yet home value is used to calculate net worth.
  - icedchai 4y ago
    Mortgages (debt) are also used to calculate net worth, so it balances out.

filoleg 4y ago

> $25-30k in liquid cash hanging around all the time That's like 3-4 months of post-tax pay for a twitter engineer (and not a senior one at all). Yeah, i would expect them to be able to have that much in savings. If someone cant accumulate roughly 15% of their annual compensation in savings, while earning $200-400k/yr, then I have no idea what else could be done here to help.

xienze 4y ago
> If someone cant accumulate roughly 15% of their annual compensation in savings, while earning $200-400k/yr, then I have no idea what else could be done here to help. The thing with those crazy Valley salaries that you hear about here is that a lot of the time a good amount is in the form of stock that vests on a rolling basis. So maybe you get $150K in cash and $75K in stock. After 401k, California and federal taxes, California housing costs, and California <everything costs>, I can understand how someone making “$225K” in the Valley might not be able to save a whole lot.
- KerrAvon 4y ago
  Yup. Pretty much cut 45-50% off the top for federal and state taxes immediately. Divide the remainder between stock that won't actually vest for years and your base pay. It's way more complicated than "you're making six figures!!! why can't you SAV3!!1 too much avocado toast!" Should people be more disciplined? Isn't it possible to do better? Sure, totally. But let's start with reality and not boomer bootstrap fan fiction.
  - seoaeu 4y ago
    If you are paying 45% of your income in state/federal/FICA taxes, then your after tax income is over $330,000/year.
- cecilpl2 4y ago
  > The thing with those crazy Valley salaries that you hear about here is that a lot of the time a good amount is in the form of stock that vests on a rolling basis. This doesn't make any sense. Yes, your stock "vests on a rolling basis" the same way your salary "vests" every two weeks. If you are making 150k in cash and 75k in stock, then you get access to 225k (minus tax) of liquid cash every year. The vesting schedule is irrelevant.

fleddr 4y ago

I'm stunned really. I'm from the Netherlands, known for its comparatively poor pay for engineers as well as high costs of living. Despite that, from day 1, when my salary was at its lowest and I was still single, I saved 25% of my salary. A lot of years later and no longer single, I've build up multiple years in savings. Even more than that if I add my spouse. And the funny thing is that the need to do this applies less here, as unemployment benefits are relatively generous. It just shows the dramatic difference in culture. I'm shocked how even the best paid engineers can't even manage to save 30K. 30K...are you kidding me? A single event or large expense (construction at house, car breaks down) would bankrupt you. And if your cost of living is so enormous, what the hell does 30k even do during unemployment? If I'd earned 200K+, I'd save so hard and retire 20 years early. The US has such a spending culture.

throwaway5959 4y ago
Exactly. I know people who make $50k/year that have six month emergency funds.
bombcar 4y ago
The key is that you started saving from the beginning. This informs all your future purchases and helps you maintain it going forward. Many who get a high-paying job at the beginning spend to the limit of their income and then some. Very sad.
- fleddr 4y ago
  True, and the other discipline is that at one point I settled on a lifestyle and never upped it again, despite a growing income. So the savings rate itself also increases over time.

FireBeyond 4y ago

You are not getting a mortgage in that range on that house unless you're putting 600-900K down.