4 ms·

I keep seeing this talk about "six figures" in the valley as code for "overpaid". I don't live in San Francisco but everything I can tell about the cost of liv

by criley 14y ago

I keep seeing this talk about "six figures" in the valley as code for "overpaid". I don't live in San Francisco but everything I can tell about the cost of living shows me that a $100,000 salary in SF is roughly equivalent to what, $45,000 here in Atlanta, GA. (http://www.bestplaces.net/col/?salary=100000&city1=50667000&city2=51304000 http://www.bestplaces.net/col/?salary=100000&city1=50667...) Which is certainly a good salary for a college grad but it's NO WHERE NEAR "overpaid", in my opinion...

emmett 14y ago
It's deceptive though. Making $100k/year in San Francisco means that rent is very expensive, relatively speaking, but that consumer goods are incredibly cheap. Living in SF: Eating out at restaurants, buying the latest iPhone, plane tickets, clothes shopping all relatively cheap. Living in Atlanta: Getting a big house in a desirable neighborhood, parking are cheap. So if you'd prefer to consume more real estate and real estate dependent goods, you should prefer to live outside boom zones. If you like to buy experiences and consumer goods, you should live in the boom zone.
- eli_gottlieb 14y ago
  The problem being that everyone who has children eventually moves into the former group.
- dpeck 14y ago
  Not sure I understand this. At 100k/year eating out at restaurants, buying latest iphone, plane tickets, clothes shopping, etc are all relatively cheap most anywhere, aren't they? There are plenty of Atlanta people who fall into the real estate trap, and it is a trap, but there are also plenty who live in slummy east atlanta, or get a reasonable condo/apt in midtown. Leaving them with relatively huge amounts of disposable income for experiences and shiny things.
  - wmeredith 14y ago
    Yeah, this doesn't compute for me either. The price of iPhones and plane tickets have little to do with geography until you start crossing national borders.
    - emmett 14y ago
      Exactly! The price of iPhones is constant, but income is variable. So as a percentage of income, the price of iPhones varies hugely from location to location.
  - emmett 14y ago
    Incomes are not the same in Atlanta and SF! The same person at an equivalent job will earn MUCH more money in SF. Let me break down the math (all approximate): SF: $100k/year income, $24k/year rent, $45k/year taxes, $31k/year disposable Atlanta: $50k/year income, $8k/year rent, $20k/year taxes, $22k/year disposable So if you live in SF, an iPhone is 1.6% of your disposable income. In Atlanta, it's 2.3%. That makes it "cheaper". However, $24k/year in SF probably buys you a lot less house than $8k/year does in Atlanta. The SF real estate market is stupid.
    - dpeck 14y ago
      Interesting I could see that as a possibility, but I think we're comparing two different fictional people. Of course if you could double your salary moving to SF it usually makes sense, but I think its often more of a 25-50% difference. And also, I don't believe it scales 1:1. The developers I know well here, 5 to 7 years out of school, nearly everyone in Atlanta is making close to 100k (almost all +/- 10k). Developers with similar positions and experience aren't making 180-220 are they? Perhaps I'm wrong, maybe SF really is the promised land, but the numbers have never worked out on any positions I've looked at. YMMV of course.
      - rdl 14y ago
        I think you're more likely to get meaningfully-valued equity in Silicon Valley $140k/yr jobs than in Atlanta $80k/yr jobs, and then there's the tax differential there (lower rate as well as the income vs. LTCG differential). The absolute win seems to be to work in Silicon Valley for 3-5 years, accepting a low "house" standard of living while enjoying consumer goods and travel, and then take your $100-150k/yr salary (and history of working at top companies) to do one of two things: 1) work remotely for top companies from a place like Seattle for $100-120k/yr (or, if you want to optimize even more, move to Thailand or something and work remotely for $60k/yr) 2) Found a startup, deferring as much compensation as possible into LT capital gains. Being much easier to raise money in Silicon Valley makes up for all the other things. Potentially open an engineering office outside the Bay Area to hire people who chose path #1.
- rdl 14y ago
  Totally agree for individuals. Interesting to think about how the same kind of market differentials exist for companies in the area. People are super expensive (salaries, recruiting and retention, etc.). Real estate is somewhat expensive (but, not that expensive; even at $7/ft2/mo peak, giving someone 200ft2 vs. 100ft2 isn't going to kill you -- and you can get cheaper RE in some areas, especially if you get bigger areas. I'd kill to work near VMware.). Computers and outsourced (outside the Bay Area) services are cheap. Buying people out of their houses outside the Bay Area would presumably be cheap ($50k underwater on a house in Ohio is a big deal to some people, but $50k is a reasonable hiring cost for a senior developer). Also, interesting how similar differences exist for VC funded vs. bootstrapped companies. (AWS is 3-10x more expensive than buying hardware and putting it in colo, but takes less time for some things (and more for other things...), but less upfront cash cost, and can scale)
- zbruhnke 14y ago
  The problem with these theories is that it assumes people in other states cannot make six figures a year. I have a cushy job in Louisiana that pays me right at six figures and allows me to work only 15-20 hours a week most of the time, in my extra time I run a software consultancy that pulls in several thousand dollars a month as well. This means for me to live the same lifestyle in SF I'd have to make $250k per year or more. Even with that said I actually just accepted a job in the bay area and took a pay cut because I want to be around people who make me better and there is no better place to do that in tech.
SomeCallMeTim 14y ago
Any reasonably experienced engineer should pull in six figures in the Bay Area at this point, or close to it. Honestly the range should go a lot higher than it does for GOOD engineers; a good engineer who can accomplish 10x over an "average" $80k engineer should be able to make more than $120k or so. But I'm not bitter... [1] ;) [1] Actually, I'm not. I took my ~$120k salary to another state and worked from remote for 3 years, getting the lower cost of living combined with the San Francisco salary, and giving myself an "effective" raise of about 80% (it wasn't Atlanta-cheap or it would have been even better). I kept everything well documented, but they still knew they couldn't easily replace me. YMMV.

by criley 14y ago

emmett 14y ago

It's deceptive though. Making $100k/year in San Francisco means that rent is very expensive, relatively speaking, but that consumer goods are incredibly cheap. Living in SF: Eating out at restaurants, buying the latest iPhone, plane tickets, clothes shopping all relatively cheap. Living in Atlanta: Getting a big house in a desirable neighborhood, parking are cheap. So if you'd prefer to consume more real estate and real estate dependent goods, you should prefer to live outside boom zones. If you like to buy experiences and consumer goods, you should live in the boom zone.

eli_gottlieb 14y ago
The problem being that everyone who has children eventually moves into the former group.
dpeck 14y ago
Not sure I understand this. At 100k/year eating out at restaurants, buying latest iphone, plane tickets, clothes shopping, etc are all relatively cheap most anywhere, aren't they? There are plenty of Atlanta people who fall into the real estate trap, and it is a trap, but there are also plenty who live in slummy east atlanta, or get a reasonable condo/apt in midtown. Leaving them with relatively huge amounts of disposable income for experiences and shiny things.
- wmeredith 14y ago
  Yeah, this doesn't compute for me either. The price of iPhones and plane tickets have little to do with geography until you start crossing national borders.
  - emmett 14y ago
    Exactly! The price of iPhones is constant, but income is variable. So as a percentage of income, the price of iPhones varies hugely from location to location.
- emmett 14y ago
  Incomes are not the same in Atlanta and SF! The same person at an equivalent job will earn MUCH more money in SF. Let me break down the math (all approximate): SF: $100k/year income, $24k/year rent, $45k/year taxes, $31k/year disposable Atlanta: $50k/year income, $8k/year rent, $20k/year taxes, $22k/year disposable So if you live in SF, an iPhone is 1.6% of your disposable income. In Atlanta, it's 2.3%. That makes it "cheaper". However, $24k/year in SF probably buys you a lot less house than $8k/year does in Atlanta. The SF real estate market is stupid.
  - dpeck 14y ago
    Interesting I could see that as a possibility, but I think we're comparing two different fictional people. Of course if you could double your salary moving to SF it usually makes sense, but I think its often more of a 25-50% difference. And also, I don't believe it scales 1:1. The developers I know well here, 5 to 7 years out of school, nearly everyone in Atlanta is making close to 100k (almost all +/- 10k). Developers with similar positions and experience aren't making 180-220 are they? Perhaps I'm wrong, maybe SF really is the promised land, but the numbers have never worked out on any positions I've looked at. YMMV of course.
    - rdl 14y ago
      I think you're more likely to get meaningfully-valued equity in Silicon Valley $140k/yr jobs than in Atlanta $80k/yr jobs, and then there's the tax differential there (lower rate as well as the income vs. LTCG differential). The absolute win seems to be to work in Silicon Valley for 3-5 years, accepting a low "house" standard of living while enjoying consumer goods and travel, and then take your $100-150k/yr salary (and history of working at top companies) to do one of two things: 1) work remotely for top companies from a place like Seattle for $100-120k/yr (or, if you want to optimize even more, move to Thailand or something and work remotely for $60k/yr) 2) Found a startup, deferring as much compensation as possible into LT capital gains. Being much easier to raise money in Silicon Valley makes up for all the other things. Potentially open an engineering office outside the Bay Area to hire people who chose path #1.
rdl 14y ago
Totally agree for individuals. Interesting to think about how the same kind of market differentials exist for companies in the area. People are super expensive (salaries, recruiting and retention, etc.). Real estate is somewhat expensive (but, not that expensive; even at $7/ft2/mo peak, giving someone 200ft2 vs. 100ft2 isn't going to kill you -- and you can get cheaper RE in some areas, especially if you get bigger areas. I'd kill to work near VMware.). Computers and outsourced (outside the Bay Area) services are cheap. Buying people out of their houses outside the Bay Area would presumably be cheap ($50k underwater on a house in Ohio is a big deal to some people, but $50k is a reasonable hiring cost for a senior developer). Also, interesting how similar differences exist for VC funded vs. bootstrapped companies. (AWS is 3-10x more expensive than buying hardware and putting it in colo, but takes less time for some things (and more for other things...), but less upfront cash cost, and can scale)
zbruhnke 14y ago
The problem with these theories is that it assumes people in other states cannot make six figures a year. I have a cushy job in Louisiana that pays me right at six figures and allows me to work only 15-20 hours a week most of the time, in my extra time I run a software consultancy that pulls in several thousand dollars a month as well. This means for me to live the same lifestyle in SF I'd have to make $250k per year or more. Even with that said I actually just accepted a job in the bay area and took a pay cut because I want to be around people who make me better and there is no better place to do that in tech.

SomeCallMeTim 14y ago

Any reasonably experienced engineer should pull in six figures in the Bay Area at this point, or close to it. Honestly the range should go a lot higher than it does for GOOD engineers; a good engineer who can accomplish 10x over an "average" $80k engineer should be able to make more than $120k or so. But I'm not bitter... [1] ;) [1] Actually, I'm not. I took my ~$120k salary to another state and worked from remote for 3 years, getting the lower cost of living combined with the San Francisco salary, and giving myself an "effective" raise of about 80% (it wasn't Atlanta-cheap or it would have been even better). I kept everything well documented, but they still knew they couldn't easily replace me. YMMV.