Comment by ChuckMcM | Hacker News Reader

Comment by ChuckMcM | Hacker News Reader

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Ok, as a perennial voice for free markets I agree with your observations, but not your point. Having lived through it I see the damage it is doing to individuals who will take years to recover.

Too many engineers today, perhaps like sports players, take a big salary, project it across 30 years and then say "Wow I've got millions headed my way, do I really need to bag my lunch?"

I've watched as they became both broke and depressed as the wave that was supporting those salaries and the technology that was supporting their employment have broken (as they always do) and they are suddenly "too old and too out of date."

Like the guy who was making $200K/year as a SOAP architect for some package that managed really expensive enterprise server and storage gear. When the wave passed and people moved to cheap white box servers in abundance using things like Docker or Chef to run and manage them, this guy walked into a world at 45 years of age with zero applicable experience to your distributed server cluster based company. And he is slowly burning what savings he had because the only entry level programmer job he could get is paying him $85K and his take home pay doesn't completely cover his burn rate (he optimistically expects to be promoted to a high paying job as soon as they see what he can do.)

If you are living the high life as an in demand engineer please don't be that guy. Start planning to provide funds for your kids education, or if you're not having kids ever then a fund to pay someone else's kids to take care of you when you're too old to work. Cut out recurring expenses in your life where ever you can and put excess money into savings or investment vehicles so that it can start working for you by earning more money. Understand that life is change until you die. Anticipate change to avoid having change drive your decisions.

I agree with everything you said but I think you're underestimating the importance of fighting lifestyle inflation at all costs. It's incredibly hard to justify a six-figure burn rate under any circumstances, even in San Francisco. If you've got a job making multiples of the median household income in the US, it's incredibly irresponsible to live in a manner that wouldn't support a pretty major pay cut at any point.

I agree, but unfortunately what I've also seen is that cutting major costs frequently amounts to leaving areas altogether, which then torpedoes a lot of opportunities.

I was stoked to move to cheaper area and work remote for these reasons, but it put a serious brake on career/income growth. And all it takes is some old-school mgmt to come in and then you are treated like some pariah.

IMO, housing is a partial exception. You can easily opt out of 25$ for lunch and 6$ coffee seeming normal, but wasting hours a day driving is soul crushing. That said, making 150k and having roommates is completely reasonable.

A 6 figure burn rate is what's required to own property in or near sf. Take a modest $900k 3 bedroom condo: it costs nearly $5k/mo in mortgage (even with a sizable downpayment), insurance, taxes, and maintenance. And you haven't eaten yet, or owned even a single car.

At 3.92% interest rate for 30-years fixed with a 20% downpayment that's about $3,400/mo and at $900k property tax is another $6k/year, insurance is less than $100/mo so you net out at less than $4k/mo in PITI. And maintenance you'd hope to check what's wrong with the house before you buy but a new roof costs about $20k so unless you replace a roof a year I doubt you'll be spending over $1000/mo for maintenance, at least I'm not. And 20% is not a sizeable downpayment but the minimum to not have to pay mortgage insurance, a sizeable downpayment is 30%, which in a 30 years fixed means paying less than $3500/mo PITI. Of course if you go with ARMs you'd end up paying even less since interest rates are even lower there. If you can afford the downpayment you'd be paying less than rent in SF most of the time.

actually, property taxes in sf are a little over 1%, so you're looking at $10.4k/year on that $900k condo (note: on the cheap for sf). $3400 + $900 tax + $100 insurance = $4.4k, again, without any condo fees, maintenance, or utilities. So you'll net much closer to $5k than $4k. Which to my claim, means you're out $60k post tax (over $100k pre) without eating, health insurance, owning a car, or parking yet.

Yeah the economics of SF just don't work out unless you have a trust fund or your company IPOs, that's why everyone I know who wants to buy a house is moving to Austin and Portland.

How would you only be paying $6k/year property tax? I'd expect more than $10k/year or around 850/month.

The property tax rate is 1.1826% of assessed value in SF (1% state + a small % local). And your initial assessed value is based on your purchase price.

I think it's more realistic to say you'd be spending close to 4500/month net assuming you didn't live in a place with an HOA. If you live in a condo with an HOA, you could easily be spending 5000 to 5500/month.

On the plus side, at least you get to deduct all that mortgage interest and property tax on your federal taxes. When you are paying 3k/month+ in interest and taxes, that's a really nice tax advantage over renting a similar property.

Yep. The hedonic treadmill* is real. There are things worth paying for, and there are things whose net effect is only to make it more expensive for you to be happy. It's very much worth it to be deliberate in what luxuries you allow into your life, as once they've been there for a while you'll no longer derive any pleasure from them, but you'll miss them dearly if you were to give them up.

* https://en.wikipedia.org/wiki/Hedonic_treadmill

Young developer here.

The "lifestyle inflation is evil" mantra never made sense to me. The definition I usually find is "living better than a college student once you are a working professional," so apologies if you mean something different.

I was raised to save 15% for retirement, to never carry a credit card balance, to build a 6 month emergency fund, etc. All of these priorities come first. But, after they are funded:

I am in software in part because because I like it, but also because it enables the life I want: a decent apartment to myself, a decent car, some international travel, not having to agonize over small day-to-day purchases. I want these things much more than I want early retirement (which is not particularly useful if all I can do with it is sit in a low-cost-of-living-city home and eat Ramen). If you told me I'd be a broke college student forever, I'd probably go into theater.

Why should we compromise parts of our life for more money, and then carry that money in our savings accounts perpetually? It really seems like you should either use the money in a way that's important to you, or optimize for free time instead.

Silicon Valley as we imagine it might die, and I'm set to absorb a few months. I can't imagine the world will stop wanting code. And if it does, I can change careers like my parents both did in their 40s.

I don't think he's talking to you. If you are under 40 and are saving for retirement, have no debt, and have 6 months of expenses then you are lightyears ahead of most people in the US and you should call your parents and thank them for teaching you well.

I think he's referring to how most people do it - carrying debt, little or no savings, paycheck to paycheck no mater how they make. And when they do get a raise, instead of putting the extra money towards getting on track financially, they just bump up their lifestyle so that they're always living right on the edge of what they can manage.

bcg1 is right - I am largely referring to people very much like the example in the comment I replied to. Also when i think of "lifestyle inflation" it's more geared toward currently working professionals - folks who get a raise and their take-home increases by $800/mo so they go out and buy a car with a $700/mo payment attached to it - and less the transition from student to worker.

Yes, but you forget the protestant work ethic is strong in America. The more you suffer and the less money you make, the better of a person you are. Fucking-A hiring managers, no one is here to be "the salt of the earth", we're here for a paycheck and some mental stimulation.

hn has an outspoken minority actively competing in the cheapskate olympics. everyone's circumstances are different, do what makes sense to you.

there's always some penny pinching proselytizer trying to tell other people how to live.

i find it better to focus on making more money.

My personal favorite are those people who are living in a rent controlled apartment that they split with a partner and pay $700 on.

They say "$2k for an apartment? That's way too much! Why don't you move to [place]?"

Honestly if you haven't rented an apartment in the last few years, you have no idea. You also have no idea how lucky you are to get that rent control subsidy.

Sure. You just have to be careful with the "make more money" mentality because it eventually leads you out of being a full-time software developer.

You can go manager or freelancer, of course.

In San Francisco, anyway, having "a decent apartment to myself" and "a decent car" already seems like a huge extravagance. Median 1BR rent is $3,620, add $300/mo for parking and let's say $300/mo for a car lease, you're at $4,200ish before any sort of food, travel, etc. Even if you're making nominally $120k/year, you need a lot of frugality to make that work.

I remember moving to SF and making ~$110k, and renting a ~$2500 studio in a mediocre part of town with no car (I got a motorcycle eventually) and it was difficult to save any money, even if I wasn't bankrupting myself.

There are Oakland studios with parking for closer to $2200.

Plan on getting out of software ASAP as age discrimination is rampant in the business.

Man, if there are any other young devs reading this, please take ChuckMcM seriously. I saw this happen to my dad in the dot com crash - luckily my family had saved enough money that my parents didn't have to make many compromises to take care of my brother and I, but it's still a damn scary experience. As a 25-year-old whose just getting started in the industry (through a bootcamp, no less), it's something I think about every day.

I totally agree with this. Tech waves can come and go so quickly that you could be obsolete before you even finish building something with the popular tech stack from last month (ok, a bit of hyperbole, but it sometimes feels like new things replace the last new thing before you even know why you would need the thing in the first place).

Not only do you need to try and save as much as possible (which is really hard if you are not single and able to live with roommates), you need to be constantly learning.

SFO is a region and city that lives in a boom/bust cycle. It's just the nature of the beast.

If you're attracted to the boom, but don't have the wherewithal to get rich, by definition you're not the type of person who plans well.

I agree with everything you've pointed out, but that's not the topic to which the OP was directing his attention to and hence why I didn't address it.

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