Does It Make Sense for Programmers to Move to the Bay Area?
blog.triplebyte.com
blog.triplebyte.com
I for one care more about less stress, less inequality, etc. and decided that the Bay Area is not for me.
Sure if you want to work at an early stage startup, you can grind yourself into a paste. But there are plenty of jobs here where that's not the case.
I remember reading a piece about alcoholism where it was describing an alcoholic who concluded that everyone drinks a great deal and just doesn't admit it because that was what their social circle was like. I rarely drink alcohol and have known plenty of people like me, so, no, not everyone drinks.
Most people suffer confirmation bias. We look for confirmation of what we believe to be true about a thing. It is unusual for someone to actively seek more objective data and try to determine what the actual truth is. Most of us default to trying to fit the world to our preconceived notions of it.
The culture of the South Bay is relatively non-existent outside of small pockets like Palo Alto, Los Gatos, Mountain view, and maybe Santana Row. It's geared toward raising kids and family life in general.
Could you clarify what you mean? Because it sounds like either you are saying "Culture only exists in tiny parts of certain places, no place else in the South Bay even has a culture" (which is utterly nonsensical) or maybe you are saying "People who have kids and put family life first are not part of any culture." (again, a big fat nope).
But the South Bay is basically suburbia, SJ technically being a "city" notwithstanding. So just like pretty much every other urban area in the US, there's enormously more "culture" (in the Arts, Theater, and Culture section of the newspaper sense) in the city, SF in this case, than in the suburbs.
Boston/Cambridge are exactly the same way. I live well West and like it but if I want to go to see a show or music performance, 95% of the time I'm going to drive into town.
Culture is a human artifact and although it exists partly out there in the world we create, a big piece of it lives inside us and informs us of the proper way to interact with both other people and the spaces we share. Sometimes, people who decry the lack of culture of an area are telling you more about themselves than about the area.
I was merely sharing my observation that certain areas in the South Bay tend to have more stuff to do (i.e. a downtown). Not sure why you took that as me denigrating parents and families. Perhaps I was being vague.
I agree that culture is something, as you put it, that is kept inside of us. However, people don't exist in a vaccum. We are very much influenced by the environment we live in. Most people don't exist in a cultural vacuum where they don't interact with the larger cultural forces in their environment.
My (admittedly anecdotal) experience has been that the South Bay is primarily a work culture. Having lived both in SF and the South Bay, I can tell you that both are offering very different answers for the same question, regardless of whether or not you are single, married, or have kids.
Yeah, no. Please do not assume that a reply of mine to one of three replies to my actual request for clarification is some kind of commentary on you.
I agree that culture is something, as you put it, that is kept inside of us.
That isn't at all what I said. I said it is a human artifact and part of it is stuff out in the world and part of it is a thing inside us, which is very different from saying it is "only" inside us, which is what your framing strongly suggests you read it to mean. In which case, it is you who are misconstruing my comments.
My (admittedly anecdotal) experience has been that the South Bay is primarily a work culture.
Thank you for clarifying.
The South Bay is a residential suburb. It doesn't have much of a nightlife. The same can be said about most of the places people live in this country outside of the densest urban centers.
If that's not what you want, then by all means move. But recognize that this is exactly the sort of stability many people strive hard for.
Sure there are disproportionately more workaholics in the area. There are also disproportionately fewer people who work 9-5 then go home and veg out on their couch. To me, the lifestyle here is rich and amazing. Where I grew up, which was in an equally large and cosmopolitan city, it's too cold or too hot for 4-6 months of the year to do much outdoors, salaries weren't high enough for people to routinely go to expensive restaurants or travel, and the geography is nowhere near as beautiful or interesting.
Maybe you should look inward more and take charge of your life; it may be that you're hanging around people who focus entirely on work, and so your perception is skewed.
But here's one thing I've found: People who really want to have fun find a way. There are small pockets all over the bay. SJ downtown is a little lame but it is getting better
You're overstating the issue. It's not New York or San Francisco, for sure, and we sure do need better rapid transit but you're definitely not an hour and a half from everything cool. You're more like half an hour or so. You just need to look for it.
Campbell also has a nice downtown; while it's not San Jose, it's surrounded by San Jose and is basically the same metro and is VTA-accessible. There's also Saratoga and Los Gatos, but those are further out.
Downtown, I'll grant you, though. San Pedro Square can be OK, and the area nearer the University has some quirky stuff, but it has a ways to go. It's gotten somewhat better over the years, though, and I think BART coming to the area may accelerate that a bit since it can actually be a destination.
* Rock climbing * Scuba diving in Monterey * Bicycling on the bay trail * Board gaming clubs * Meetups * Wineries * The boardwalk in Santa Cruz
You can even take an hour train ride straight to SF and spend the day with the snobs and homeless. And then take the same train home to a place that doesn't stink like urine.
The insane commutes, the work culture, the high rent / COL, the culture of trying to look as rich/smart/successful as possible, the sue happy people, the fact that there's absolutely nothing else to do other than work, etc really wore down on me.
I lived in the south bay though... admittedly it seemed slightly better in SF. Less money grobbing and more hipsters. But it looks like all that is going out the window very quickly. The south bay culture is spreading like a cancer.
This is why I chose not to live here after graduation.
It's given me a very cynical view on life. I really don't know where else to move, I feel like I need to leave the country as well, or at least leave California. Where are you going, if you don't mind me asking?
For me, it's mostly been great.
It's been worthwhile and we do plenty of stuff, but you have to be prepared to drive very long distances to see anyone. And many people who don't get into tech move away, so practically everyone is younger than me (and male) and can't afford the hipster restaurant visiting hobbies.
Oh, but the commute here is really not that bad compared to other American cities that aren't "world tier" (LA, Atlanta, DC) because those cities refuse to build mass transit.
I'm assuming you've never paid us a visit :( DC literally has the second largest mass transit system in the country.
https://en.wikipedia.org/wiki/List_of_United_States_rapid_tr...
I've only ridden the Metro once, yeah.
It's sad that in the US, you have to take what you can get, and the reasons why the US doesn't have good public transportation have been discussed here ad nauseum, so I won't even flog that dead horse again.
I'm also mystified at the assertion that SF would be better in this respect. The conventional view is that SF is more status seeking and elitist while the South Bay neighborhoods are more laid back, or at least more diverse in their subgroup compositions.
The cost of living is insane, yes, although astronomical tech salaries entirely compensate for you and me. (Sucks for people who work retail though, and schoolteachers, police etc.)
As far as SF goes, I was talking about 5-6 years ago. I've heard its way worse these days. And it's going to keep getting worse, because the south bay is a cancer. It wasn't until I moved away when I realized that.
I'm glad things worked out for you in any case.
I don't think I'm getting my point across correctly. Sure. There are niches in the bay area that are great, and I'm sure I'd meet many interesting people there, if I decided to stay.
However, there's a certain point where enough is enough. It's not like this problem I'm describing is just the effect of a one-off bubble that will go away soon. It is going to get worse and worse; like it has always been. Housing prices / COL are going to go up and people are going to be constantly forced out of their homes and have to relocate and compromise. If you fuck up in your career or make one bad move with your finances, you are done. Bye bye bay area. If it doesn't happen to you it will definitely happen to your friends. It's just a horrible existence and I am honestly baffled you don't see this despite living there your whole life. The only way I could conceive of you not seeing this is if you and your friends have something like $2M saved up and don't need to worry about finances.
Oh god, you really quantified the cruft that made me hate the place. The bay is sublime in its beauty but could only be perfect for me if the population was subbed out for Austin's or DC's (which are in many ways opposite, but they're also far more distant from SFBay than they are from each other).
> I lived in the south bay though
Well, yeah
Your phrasing is needlessly incendiary and possibly mistaken, since parent says
>> I am young and about to finish school, but I am moving away from the Bay Area and even move to a different country.
But if programming is what you intend to bring as a founder - if it's simply a means to get the burning ideas out of your head and into a product, then there's a much smaller number of places where that will work: San Francisco, Seattle, New York. You need to be able to have coffee with a VC, meet with multiple co-founder options, do a tech meetup and also spend a sizable chunk of the day coding.
If you live near a small city, working that way is an impossibility. You'd have to go to the nearest big city to find that type of collaboration, and the trip will burn through all your coding time, and you still won't have the kind of quality selection that you'd get in NY or SF.
As you say, hacking the rent-salary ratio, which is what the article is about, should be a much smaller factor in how you decide where to live.
If you are building a company that needs VC funding. Most companies don't.
"Venture Capital is the wrong source of capital for the vast majority of entrepreneurial ventures" http://avc.com/2005/03/dont_take_the_m/
If you aren't looking to raise VC but instead want to be part of a vibrant tech ecosystem, well, that opens up more mid tier cities. For starters: San Diego, LA, Boulder, Austin, Portland, Pittsburgh(?) in the USA.
And if you are into oil/gas, Houston. Marijuana, Colorado or Washington. Cars, Detroit (maybe?). Commodities, Chicago. Ag, Kansas City (maybe?). Outdoor experiences, SLC. Building something for Latin America, Miami. Ets, etc.
I imagine there are many other cities that dominate in niches that I'm missing.
But, as for the other 80% that's rent controlled, lots of it is pretty dilapidated, almost borderline 3rd world country in some parts. 1% (7k people) of the SF population is homeless and even more are nearly there (despite over 240 million$ a year spent fighting homelessness).
Perhaps the reason people find SF boring is due to the hollowing out of the middle class.
San Francisco is a place. Engineering talent is available everywhere, though perhaps most places it isn't so much fish jumping onto the line as in the Bay Area.
What about all the nerds who are Polish, Portuguese, and Peruvian and choose to remain local because their spouses, children, and other interests are? They can still code, some of them are definitely brilliant, and they can either work locally or (more likely) remotely.
Starting a "startup" with venture capital might be next to impossible in Peru, for all I know, but a hell of a lot of folks don't want to exit, don't want to dilute their ownership of their product, and frankly like the environs elsewhere.
Not that I have anything against using out of country programmers, but it's a fact that China does not strongly enforce copyright and does not go out of its way to protect foreign businesses. I don't know about Russia, India, South America, etc, I'd be curious about anybody that's done this sort of thing before. Tim Ferris always talks about it for things like running his support and returns and whatnot.
There are certain restrictions that the Bay Area places on you, like how much money you need to earn, and a particular lifestyle you want to live, in a very specific industry. This is the same as someone going to Houston for Oil, NYC for Finance/Fashion, LA for entertainment, etc. People who live in those places have a particular set of goals - e.g. building big companies (vc or not), doing well on wall street, hitting it big in the movies, etc.
If you don't have those goals, then absolutely - stay where you want to stay. Work remotely. There is a ton of arbitrage in software dev right now, you can make a killing and live in really cheap places. You can literally live like a king. if that is what you want to do.
So it all comes down to your goals, and the Bay Area as a whole is self selecting in that way. If you want to do something more chill in software, that's great. We need more people making money writing code - it's great for the world economy. But you don't need to be in the Bay Area for this (unless you want to).
Doesn't make sense. The big 4 have campuses across the country.
Instead of telling people to move to SV I would recommend making sure to get into the right (big 4 or not) team and role for your career. Just fixing bugs at big SV company will not help much. You want to make sure you have a chance to contribute something to show your skills on an innovative or leading team.
Yes, but a disproportionate number of their positions are in the bay area. Also, it's much easier to job hop between high-paying companies in the bay area, and this is particularly true if you have a specialization more specific/less common than "web dev" or "iOS dev".
- I promise you that's only true as far as your project's priority. For example if Google Maps in Colorado is more important to the company, at the moment, than some other project at HQ, then working on that project at HQ is not better for your career.
- Remember a recruiter is a sales person. Some are honest, some will tell you what serves their own interest.
They're called "incidents" at some (enterprise software) bigcos, BTW :) - and tend to be called "defects" in software services companies using software engineering standards like ISO 9000 or SEI CMM.
Juniors or freshers tend to get assigned those for a while. Nothing wrong per se, it helps them learn the codebase, and in some bigcos, the codebases can be pretty big. The same practice is followed in some smallcos too.
http://www.oregonlive.com/earthquakes/index.ssf/2015/07/the_...
Avoid living or working in brick buildings (they fall apart).
If worried, perhaps avoid high tsunami risk zones (that lack high ground, roads are less useful since they will be unusable during large earthquakes).
If you catalog your risks, earthquake death or disability is probably low in scheme of things.
From my experience, if you work in software with a laptop, earthquakes are not likely to affect your work too much.
Unless you have a neurotic partner, in which case avoid earthquake zones, because they lose the plot when the earth takes control.
Expanding highways makes traffic worse.
The downside is everything is so expensive. Housing, of course. But also everything else too, services, other things. If you can live frugally, it may be to your benefit - you get higher income and keep low spending, win. But if you can't or work lower income job, it may be a problem.
The upside is there are a lot of exciting opportunities around, both in employment and in conferences, lectures, events, etc.
But to your point, there are some great events and conferences which is probably the biggest thing missing from Portland. There are a few good events, but nothing at the scale of what happens in SF.
I thought Portland's, and Oregon's schools in general, are not that good. Unless you are talking about private schools.
I'm living in a median cost market in an expensive state and live like a king in comparison to someone in my job (senior tech role) in SFO, although my salary is 50% less. I won't be working for Google anytime soon, but I don't need $500k to live in the lifestyle that I want for my family.
If you want the northern CA lifestyle, wait for the real estate cycle to bust and save some money in a normal place.
but remember, it's all sorts of a fucked up and competitive out here so be prepared to work your ass off. don't move out here to just make friends.
try it out at. you will miss your friends and your family.
Curious about how huge the difference in costs and life-quality might be? Play with https://teleport.org
I thought PDX was a vibrant (albeit small) tech scene until I moved to Seattle. It was amazing how many more opportunities to meet and learn from interesting people there were across all tech stacks. Having enough friends down in the SF area I get the impression that their scene is even more lively.
As for bigger salaries, I think it's mostly hype. My anecdotal evidence makes me believe that there's likely more opportunities for early stage equity/stock type agreements than you'd find in other places, but my salary has always compared favorably to people in the exact same role living down in the bay- and that's before factoring in the cost of living.
Spending time there and experiencing the people and general fast approach to development has definitely help me and my career. It is, mostly, different to the more conservative approach typical used elsewhere. So experiencing the two and being able to use both, when appropriate, is helpful.
After two years we moved back to the UK.
Living and working there was amazing. But, overall it felt like it came at a too huge a cost (financially, work commitment, and commuting).
PS: I do miss being there though. :)
What troubles me is the use of median rent to compare housing costs. As rent increases, renters are likely to downsize offsetting some of the rent increase. I'd be willing to bet Seattle renters are able to get more space for the area's median rental. Accordingly, the salary increase probably doesn't cover the rent increase for a similar sized home.
I incorrectly multiplied the tax rate to the salary difference, and said that this was a 5$ difference. This is totally wrong (as multiple people point out below). I'll leave my original embarrassing comment as a cation to not write stupid things :)
==
I just added in a mention of the tax difference. But the numbers are 13.3% in CA vs 0% in WA. That's significant, for sure. But 13% tax on $33k is about $5k. I don't think that changes the conclusion that the salary difference does (in many cases) cover the housing costs.
You're likely correct about the price for a similarly sized home. People who want large homes should probably not move to the Bay Area.
If the salary difference of $33k is the difference between gross salary, that $33k is going to be taxed at the marginal tax rate. My guess at a marginal tax rate would be ~40%. Accordingly, that $33k becomes closer to $20k after tax.
Edit: to clarify, consider a Seattle salary of $100k and a Bay Area salary of $133k. The take-home salary for each location would be:
Seattle : $100k*(1-0.4) = $60k
Bay Area: $130k*(1-0.4) = $78k
Sounds high for Seattle.
Works out to $9k according to this for a single filer: https://smartasset.com/taxes/california-tax-calculator#8TRRj... -- so your additional income is more like $11k, or just under $1k / mo. In my experience, the difference in housing is far more than $1k/mo, so you come out ahead in Seattle.
EDIT: Looks like I forgot about California's other taxes on payroll, so it's actually even more in Seattle's favor.
See https://smartasset.com/taxes/california-tax-calculator
On a $150K income you are going to be paying an effective rate for CA around 7%.
Not sure what MediCal is. You mean Medicare? That's federal.
CA OASDI/EE is 0.9% but you only pay it on the first $100K or so.
[0] http://blog.harterrt.com/is-moving-to-the-bay-area-worth-it....
Median would be relevant if you were talking about moving to CA to sell car insurance to tech people.
A paid parking space will run you the price of a 1-bedroom in a sane region.
Mountain View's Walmart does not, according to this: http://www.walmartlocator.com/no-park-walmarts-in-california...
The idea is to normalize salaries by cost of living. If you have more specific information for each area (you have actual offers), then you can use that. However, using a lower rent for the Bay Area, for example, because you'll have roommate, may set you up to take an equivalently lower salary.
For example, if you're going from $100k/$2000 location to $100k/$3000 (salary / rent), but you set it back to $2000 because that's your rent with roommates, you've foolishly/ignorantly accepted a lower equivalent salary.
FTA:
A 2015 report by Hired found that when engineers from
the Bay Area relocate to other areas, they out-earn
engineers on the local market. Experience in the Bay
Area seems to advance careers. Engineers moving from
San Francisco to Seattle make an average of $9,000
more than others who get offers in Seattle. This Bay
Area premium is even higher in other cities: $16,000
in Boston, $17,000 in Chicago, and $19,000 in San Diego.
Bay Area hackers are more valued in different markets than local hackers. I would love to see the raw data for the "relocating" hackers and local hackers. Is it a question of applied experience opportunities in the Bay Area hackers? Is just startup afterglow? Are relocating hackers better than average pre-Bay Area experience to begin with and this shows up when they migrate away from the Bay Area?
Honestly I don't think experience in Bay Area is necessarily better, there are great teams in Europe/rest of US and shitty teams in SV, but for some reason there is this Bay Area "halo".
Source: I've relocated to Europe after 3 years in Silicon Valley.
My company has software developers in Los Angeles, Boston, Dallas, and Sunnyvale. From what I've seen it's a lot easier to bullshit your way into a senior software role in the Bay Area than it is elsewhere, so the rest of us tend to be a bit wary of the ones we don't yet know well.
Geico advertises that "People who switch to Geico save 15% or more". Notice that people who would lose money by switching to Geico should rarely switch. Accordingly, this metric will usually be positive.
Consider that people moving to a new city for a job may need more incentive to move.
Same basic problem as an employee who has worked at the same company for 10 years, and gotten their 3% raise every year - the market may have changed radically, but looking is a burden (emotionally, and otherwise) so they are unaware of that.
Enter a tremendous flood of car insurance advertising... to get people to actually evaluate if they are paying too much.
For what it's worth, when I had to make claims with Geico it was fine. But I was clearly not at fault in either case so it was not a difficult process.
I also think part of their ability to offer lower premiums is generally having lower human involvement -- no independent agents, claims routed through Web site or call centers, claims adjuster on site in body shop instead of visiting you, etc.
While I agree with the others calling this a type of sampling bias, I've seen this type of error frequently enough that I think it deserves a more specific name.
"Fifteen minutes could save you 15 percent or more on car insurance."
https://web.archive.org/web/20111201164345/http://www.the-dm...
On a side note: Calling them hackers when you clearly mean run of the mill corporate programmers seems like something straight out of an HBO show.
I lived and worked in the Bay Area for a little over fifteen years, almost two thirds of it at Apple, and almost a third of it at a successful startup called Reactivity.
I left in 2006 because of some catastrophic health events, and have lived and worked in Arkansas since recovering my ability to work.
When I'm working, I find it pretty easy to command higher-than-average pay for this area. Of course, I fairly often work remotely for people still in the Bay Area, or in Boston or Denver, and naturally they're going to tend to offer me more than Arkansas companies would. But I can also command a pretty good premium in Arkansas.
I don't know how much you can take from my example. I'm an old-fart developer now, with a long resume that has a bunch of famous names on it. People who are impressed by those things will naturally tend to offer more money to get them. I've seen some employers in this area become visibly more enthusiastic because of some of the people I've known and worked with, or that I can offer as references. My assessment is that some of that enthusiasm has been respect by association.
On the other hand, there may be some real quality differences in engineering culture, and some fraction of the premium may reflect that. Some of the markets I've worked in outside Silicon Valley have significantly different standards and practices, and the differences are not often for the better. In some cases they've verged on infuriating or clown-car laughable. Maybe some fraction of the premium is employers paying for people they expect to know better, and maybe they're not entirely wrong.
The cost of living comparisons I've seen are comparing the "local economy". They compare the cost of: housing, food, transportation, health care.
More of our salary went to the local economy than I expected. We have a bunch of kids, which amplified the effect, but I am astonished at how much money it took to not feel like we were struggling to stay above water. Babysitting, gas, food, clothing, activities were all extremely expensive. Even insurance was high.
The things that didn't go to the local economy still cost more — because taxes. We bought a car from Minnesota and paid a huge amount of excise tax to the state of California. Almost everything we ordered from out of state was subject to high local sales taxes. Income tax didn't help either — our higher salary put us in a higher tax bracket. The top $50k of salary only netted us $25k in buying power, which was eaten up by rent.
They can be your highest spending categories and still leave plenty of room left over to save.
As a young person living in NYC (high taxes, high housing, high food costs) I can still save a huge percentage of my income due to the high salaries.
You're not wrong about NYC, but the bay area is really broken.
However, the caveat is that housing is so expensive here that it's difficult to save up for a down payment on any kind of housing on a single engineer's salary. A 20% down payment on pretty much anything is more than $100k, and even a highly paid engineer will need a long time to save up that kind of money while also paying high rent. An 80/10/10 mortgage or some kind of mortgage with PMI is easier to achieve, but those have significant drawbacks.
So, if you have significant cash savings, or a home somewhere else you can sell, you can achieve home ownership in the Bay Area (but it will probably be a smaller home than the one you have now). If you don't aspire to home ownership, you'll be fine too -- a software engineer with an average salary can afford to pay rent here, and people who say otherwise are simply incorrect. But if you are just starting your career and move to the Bay Area planning to buy a home anytime soon, you're going to be disappointed.
Given that many people predicate their quality of life on home ownership, that's a pretty big caveat.
The problem is that $100K is a very low estimate for a down payment in the Bay Area these days. Most people I know are getting parental help to put down $500K down, because with housing prices running around $1.2M, that's what's necessary to get under the $700K jumbo mortgage threshold.
Read: Don't have a family and don't do anything special, like take vacations.
Also, average rent is $3600/month. That's over $43k a year. That leaves $17k for everything else, following your plan.
Families that need 2+ bedrooms and a good/safe neighbourhood are screwed though.
I'm not sure what you think an average salary is. If you think an average engineer can save $50k cash per year out of his/her net income, you're way above the average I had in mind.
Let's assume an average salary of $120k per year gross. That's about $6k per month net for a single person who takes the standard deduction, assuming no 401k contributions. That's a net income of $72k per year. If that engineer saves $50k, that leaves only $12k for everything else. Saving $100k in two years on that salary, which I think is pretty close to the average, is just not doable.
EDIT: Should have been $22k left over, not $12k. Still not enough to live on considering the cost of rent.
Why? Fully contributing to a 401k (assuming no company match) would put your "take home" at ~$79,200 instead of $72k following your tax rate (which I assume is roughly correct).
> That's a net income of $72k per year. If that engineer saves $50k, that leaves only $12k for everything else
$72k - $50k = $22k, not $12k.
So with no 401k, you'd have to live on $22k to save $50k/year. When contributing to a 401k, you'd have $29k to live on, which sounds pretty do-able. Add in the fact that you would probably invest these savings, and you can hit $100k after 2 years by saving a bit under $50k each year.
Saving $100k in 2 years is not as outlandish as you make it seem.
I guess it depends what you mean by "take-home". The original premise was "saving 100k in 2 years". I hope we can agree that saving money in a 401k is saving money, regardless of whether we agree it's "take-home".
Most 401k loans become due in full if you leave your job. That traps you in your job until you pay it back, because if you had enough cash to pay the loan outright, you would not have needed the loan in the first place. Unless you have an unusually good severance agreement with your employer that would enable you to pay back the loan if you leave your job or get fired, taking out a 401k loan is a bad idea.
Oops.
But that's still less than most people's annual rent, so it's still not enough to live on. It doesn't change my argument.
Whether or not the established places will toss so much money around if the hiring competition from startups dries up if there's a crunch there, well, that's probably a legitimate question, but I'm not sure that job losses of that size would only hit the Bay Area.
Yes it's expensive, but also yes there really are quite a lot of jobs that pay more than well enough to make up for it.
My rent+util is about $2000/month. I live in a very /cheap/ 1-bedroom with creaky carpet floors, no insulation, and near train tracks that's far outside SF. (Belmont)
Altogether I spend close to $4000/month if I don't do anything special. /Everything/ is more expensive in this region. Food is expensive for no apparent reason other than to gouge customers. ($6 for a few sticks of butter? When I was in Seattle, it was $2-3.) I eat less fruits here because the prices are high year round. My job doesn't provide lunches, so I have to eat out everyday I'm at work. I mean, even cars cost more here just on Craigslist. In the same way there's an Apple tax, there's definitely a Bay Area tax.
I cannot possibly save $50k/yr for a house. Oh and $150k/yr is not $110k/yr after taxes. It's more like $94k.
I'm saving maybe $20k/yr right now. Ain't even contributing to retirement. Just trying to save for who knows what until I can get a job that pays 50% more.
Granted, the house was a good deal, but should be able to swing a 2/1 for 2500 or so.
You don't have to spend $6/lb of butter, but if you buy it at Whole Foods (or similar), you do.
You're not the only one paying extra rent to rentiers. So are retailers and restaurants.
$4,000 * 12 is $48,000. Plus your $20k in purported savings is only $68k.
That's only $100k in gross pay, which is the bare minimum for a developer in SV. Most new grads make more than that.
1: http://www.payscale.com/research/US/Job=Software_Engineer/Sa...
2: https://www.glassdoor.com/Salaries/san-francisco-software-en...
EDIT: And to add more to the conversation than that curt response:
When I compare take-home pay among various jobs I tend to ignore bonuses (because they're subject to your employer's whim--you don't necessarily get them) and I tend to ignore equity (because it's typically temporary--once you vest it no longer adds to your yearly take-home). To compare apples with apples you can only really compare base salary.
A company offering $100k in salary + $20k in bonuses and $80k in RSUs is paying significantly more than one offering $120k in salary with no bonus or RSUs.
Also, Glassdoor tends to skew low. Here's a more reasonable database of new grad offers which average $109k base for public tech companies. [0]
Most new grads here make $90k-110k from what I've seen. Yes, you can make more. Yes, there are companies that pay stock on top of that. Those people are not me.
I make ~$110k. Minimal benefits. No stock. I happen to work for a big company too. Not every company here pays well and many low ball as hard as they can. (And succeed at low balling)
Before this job, I made $65k. Companies low ball hard and if you can't interview well, you take what you can get.
If you're not a new grad and you're only making $110k, then yes you are making under-market. I'm not disputing what you make (that'd be ridiculous), but your assertion that you're making a standard salary.
That's including rent right? If so that's not too bad.
> Food is expensive for no apparent reason other than to gouge customers.
Stop shopping at overpriced pseudoscience stores (eg Whole Foods). Regular grocery stores are not that expensive. Or buy in bulk at Costco.
> My job doesn't provide lunches, so I have to eat out everyday I'm at work.
Bring food from home and stop wasting money on buying lunch.
Also, I don't know anybody who got that kind of parental help or put $500k down.
September 2016: http://www.bankrate.com/financing/mortgages/jumbo-home-rates...
From TFA "the jumbo loan is supposed to come with a slightly higher rate". IMO the rate should be a LOT higher; otherwise PMI is always a losing proposition. Bizarre market forces indeed.
It was certainly surprising/counterintuitive that jumbo rates would be lower than conforming, but even when they're not, it sounds like they're incredibly close.
That said, if someone wanted to throw $500k at me to buy a house, I wouldn't turn it down :)
Regardless, whether it's 2 years or 3 years, to do the lifestyle you're suggesting takes and incredible amount of willpower to be willing to sacrifice and prioritize. It's passing up that cell phone upgrade. It's cutting discretionary spending to zero. It's passing on happy hour and bringing lunch every day.
While feasible, it's hard.. but suffering for two years to benefit for a decade. Quite possibly worth it.
It is easy to end up spending double rent on a comparable place. The difference is for now at least the home you buy can grow nicely so you need to do the math on rate of return for that vs other uses of that cash.
When I bought my first home my loan (P+I) payment was $1300 per month on average (paid every 2 weeks), which was not only affordable but cheaper than what I was renting at once you accounted for interest deductions! But the taxes were somewhere around $500 a month after the township raised local property tax by the maximum year after year. Due to average daily balance laws and escrow regulations, we often had a substantial amount of money "invested" in to our escrow account.
There was no amount of deductions to make this home an asset. It pushed a good quality home at a great price to something that now remains completely unoccupied.
My situation is 100% atypical - but I more meant to illustrate how big of an impact property taxes can be.
Have you actually done this? Know anyone who has? This seems completely implausible, outside of some extreme frugal lifestyle cases (I'm talking "eating garbage dumped by grocery stores" level frugal)...
[1] Googling "average software engineer salary california" shows figures ranging from 107k to 135k, 120k seems to be more or less the median of Google's figures.
Edit: added footnote
You must admit that $40k bonus after tax is a huge, atypical amount of money. It makes your effective yearly income to be about $156k.
It reminds me of the mrmoneymustache.com guy, saying "anyone can retire early! Just look at me, all I had to do was get $1M in stock from Cisco!"
No disrespect intended for you; I'm sure compared to some of your friends you lived frugally. The point I'm making is that to duplicate your living standard today, very few comparable developers would be able approach your level of savings.
Not sure what typical bonuses are these days, but I don't think that's out of line for a big tech company. Certainly stock grants can be much more than that, but it usually takes more than 18 months for them to amount to anything.
[1: I am an engineering manager at Google]
The whole point of the original statement was "I made $X and saved $Y, it's not that hard." But when you examine the X and the Y, they are not representative at all!
It has similar merit to a lottery winner saying, "why can't you win the lottery too? All I did was buy a lottery ticket."
Like the article mentions, saving a lot is easy if you're fine with a roommate and living in a non-luxury apartment, but if your housing standards are higher than that then it's tougher.
This is, of course, at the compensation levels talked about in the article. Some companies (early stage start-ups, banks) pay much less.
Not being very frugal:
- rents $2000K/mo 1BR apartment (single but wants some comfort in the Peninsula, no hellish commutes from East Bay)
- transportation $200/mo
- free lunch (and possibly dinner) at the company - eating out and groceries $300/mo
- entertainment $200/mo
So far, $36k expenses + $50k savings and you still have $8k left to go on ski trips to Tahoe, Outside Lands and other non-frugal lifestyle expenses.
"A decent 1BR" - It all depends on the definition of decent. I pay $2k for a 1BR walking distance to Redwood City downtown/Caltrain.
But forget about renting an apartment, if you want to save and you're single, having roommates allows you to rent in the Peninsula for much less than $2k/mo.
Also, I added $300 discretionary spending which lets you to cover some of the things you described, and you're left with $8k at the end of the year.
Can you easily save $50k while spending $3k on rent+utilities to live in a fancy apartment in the Peninsula ? Maybe not, but you certainly don't need to be "eating garbage dumped by grocery stores".
Nice strawman :) I was specifically talking about the situation conditional on saving the 100k in 18 months, my comment was a response to the comment above it.
Separate point: your figures seem very low. I thought SF is roughly equivalent to NYC in terms of cost of living. In which case 300/mo is a zero off as an estimate for all food expenses.
edit I don't know what a 401k is good for (I already have two retirement saving schemes in other countries), mostly did staycations since SF is such a tourist destination.
NYC, not SF, but the difference isn't huge.
Most people are atrocious with their money by either overspending or under-optimizing.
Also, the average apartment in Manhattan (if you do rent without roommates) is pretty close to your cited figure for total monthly expenses. Which means you either lucked out, or seriously compromised on your living arrangements.
I was making $150k/yr, which is pretty standard for a developer in NYC.
> Also, the average apartment in Manhattan (if you do rent without roommates) is pretty close to your cited figure for total monthly expenses.
I take it you don't live in NYC. The average is a useless metric because it's distorted by millionaires and billionaires. Just go on Craiglist and you'll find plenty of suitable apartments in the $2-3k range.
Nobody I know pays more than $3k/m for their apartment. Heck, my friend just rented a beautiful luxury single-bedroom for $2.8k.
In my case, I chose to go for a non-luxury apartment for $1.8k/m. This was definitely a deal, but even though it wasn't luxury there was plenty of space and I even had a back yard.
I do.
> Nobody I know pays more than $3k/m for their apartment.
Few people I know pay under. We live in parallel dimensions I guess.
> In my case, I chose to go for a non-luxury apartment for $1.8k/m.
I don't know what NYC you live in, but this is non-existent AFAIK. I know someone who went all the way to Rego Park (this is really far from Manhattan) to rent a 1BR for $2.5k.
I make about that much, at a company without free food perks that doesn't give me amazing stock bonuses (my social skills are too bad to negotiate them…) and I live frugally but could never save that much after $2k/mo rent! And there's no huge parental loans for me.
But if you do and are, you have $100K. Congratulations. That does you no good when homes are $1M+. Keep saving.
The other big thing to help with home ownership is to get married. With double the income it is a lot easier to save for a downpayment.
With a frugal lifestyle, 10% should be doable in a couple years, especially if you're okay with living in the East Bay (so the house price is somewhat reasonable).
On an engineer's salary, it is very doable to pay rent and still save up enough to buy an entire house in cash elsewhere in the country.
[1] https://medium.com/migration-issues/millennials-have-less-de...
My big break was finding a job in San Francisco. I charmed my way into an entry level sales gig with a base salary of about 35K USD (in 2004), and was soon making at a 70K-ish "annual run rate" (stealing that from startup PR lingo). And that job did all of the lead generation for me. I wasn't able to find a job like that outside of a big city.
Even when I was homeless for a bit a few years later, I chose to stay in San Francisco over moving in with my suburban LA parents because there I saw more opportunity in San Francisco. For me, it was riskier to play it safe in the burbs than hustling in San Francisco. It's better to burn out than fade away.
The way I see it, if you wanna make it as a professional, and you don't have a reasonably understood career path to follow, it makes sense to go where the money is. You can live financially cheaply in most places, and you'll have to decide how much you're willing to work for it. For me, living in San Francisco is, and has been, worth it.
"Do not put your faith in what statistics say until you have carefully considered what they do not say." - William W. Watt
Conflict of interest
> So assuming you’re looking throughout the Bay Area for a good deal and you’re comfortable renting rather than buying a home, as most of us are during the early stages of our careers, higher Bay Area salaries at least cover the costs of higher rents.
Data:
> engineers at top tech companies in the Bay Area stand to make between $15,000 and $33,000 more per year than engineers at top tech companies in Seattle.
and
> median rent is about $1400-$1500 a month (or roughly $17,000-$18,000 a year) higher in the Bay Area than in the Seattle metro area
Somehow $15k-$33k marginal income "at least cover" $17k-$18k. That's just outrageously untrue, even if you ignore the fact that it fails to cover any of the numerous other ways that SF is more expensive (food? local services? CA income tax?) or the fact that you have to pay taxes on the extra money (which brings $15k-$33k down to $10k-$22k, assuming a conservative marginal tax rate estimate of 35%).
Even assuming they aren't missing anything, cherrypicking data, etc., their data doesn't come close to supporting the claims they're making. Claiming bias seems like a pretty generous interpretation here.
When you game out salary vs cost of living for a region, you tend to make an assumption that you'll be employed 100% of the time. But once you break that assumption, it can change the dynamics considerably. The $2000/mo you spent comfortably on rent while working full-time quickly becomes an uncontrollable drain on savings when you stop.
For me, I decided to move to a place (CO, an hour north of Denver) with a lower cost of living (and for me, a better quality of living, too), a place where I could live comfortably even if I didn't (or wasn't able to) work full time all the time. And if I do work full time, I could potentially "retire" in my 40s if I wanted, where "retire" probably means "work on whatever I want without needing to get funding," and/or "be a parent," etc.
I have a 3yo kid and another on the way, and I do not regret my decision for one second, particularly when I hear horror stories from my stressed-out friends in SF/SJ. Also we can easily pay the mortgage on one salary and my wife is able to finish her PhD without us going into debt.
For us, it wasn't just about salary vs cost of living, but also about the stresses of big city life, competing for limited places in overtaxed childcare, sitting in traffic for hours every day, and being surrounded by other parents enduring the same tortures. No thanks.
This wasn't the only reason but it was one of the biggest. Another reason being that I wanted to work in tech as it relates to media and content, and there were many more options to choose from here.
Monterey Park is basically my ideal location, though I'm plenty willing to live in some of the other nearby suburbs. For example, I saw a really great house in Temple City listed on Zillow, and I came really close to asking for a transfer to my company's LA office because of it (and the only reason I didn't is because our LA office is at LAX, and I'm not looking forward to that commute... I'll have to change jobs or go remote if I want to live in the SGV).
Can confirm. This has been my experience as a programmer in Los Angeles who has been approached and interviewed by a few Bay Area companies.
i'm not joking. if you move to LA, plan ahead.
That's a valid assessment.
Paragraph 2 -- if you pick a winning startup (uber, etc) then the bay area is great! Well, yes. The problem is picking that winning startup, and really, if you're good at that, stop wasting your life as an engineer and go invest money for a living. We shouldn't expect eng to be able to pick better than vcs, and their hit rate isn't great.
It also uses pre-tax salaries, not after tax salaries, where Seattle has a large advantage; even at $120k, you get $5k more in cash in Washington state. Which may not sound like much, but you should view it not as 5/120 but as 5/80 (roughly your take-home pay).
The discussion of housing (where exactly is that sub $800k housing in sfbay) ignores commute times and costs. Sure, if you want to live in outer sunset or east bay and deal with horrid commutes, there's cheap housing. If you want to live within 30 minutes of work, housing will likely be much more expensive.
The author also pays no attention to the effects of having to reset your social network / family to exploit moving to sfbay, banking the higher salary, then moving away. That's a large price to pay if your plan is to get to your mid 30s then move elsewhere. And hard to achieve buy-in from significant others who may similarly not be stoked about losing all his/her friends.
And finally, it finishes with a discussion of the two most generous employers, google and fb. Who, yes, are generous but also not representative.
If you're an investor, you need a company to succeed in a long-term sense: to pay out at the other end of the bet that started it. That's hard to predict: it's like looking at the fitness of animals in an ecosystem and trying to predict which one will end up with the most great-great-grandchildren.
But if you're an employee, you just need a company to be growing, and to be throwing money around in the process of doing that. You aren't looking for a fit animal, you're looking for a fat animal. Animals might get fat before they get fit, as before puberty in mammals—and investors try to encourage startups to "bulk up" to kickstart their metaphorical puberty. But unhealthy animals also get fat, and to a predator, they're just as edible.
If your goal is to "eat a lot of salary", you just need a company who's known to be throwing their fat around, not a company who will dominate their niche and sire a thousand children.
This conclusion is patently false. The article mentioned but failed to calculate California state income tax.
That $15k-33k salary differential is going to be eaten by at least $12k in California income taxes. That leaves $3-21k to cover the additional rent expenses which is $250 - $1750 per month. The difference in median rent is almost $1500 per month. The article itself already admits that Seattle is better if you wish to own rather than rent housing.
EDIT: The salaries at Microsoft (Redmond) are comparable to the salary figure for Google, Facebook, Twitter, Airbnb, and Uber. The salaries at Amazon are $5-10k lower but make up for the difference in stock.
I'm estimating stock and cash bonus to be 40% of salary (which is conservative for Google and Facebook, I think). California state income tax on $160k is $12k.
249 * .133 + 18 = 51.2, suggesting that a Microsoft engineer makes more in take home pay than a comparable Facebook engineer at Level 3.
As for energy costs, in MN homes are very well insulated, you frequently have a fair amount of trees providing shade, and you have a basement that's 30-40% of your sqft, so heating and cooling costs aren't quite as dramatic, even when it's -20F like it will be this weekend.
Who does the cleaning, you or your partner? I never got used to cleaning a larger space. It is definitely a huge waste of time, vacuum bots only help marginally. Also annoying is walking or especially moving something from one end of the dwelling to the other.
Went to an open house once in a huge ranch. When we decided to leave, I noted how long it took us to walk from the bedroom to the front door. Man I'd hate to dash back in the house "really quick" for something I forgot. I guess that's a first world problem though!
Honestly, the two biggest rooms in this house just store stuff. I can absolutely live without that space. I do enjoy having an extra bedroom to use for... fill in the blank. I bought my house as a foreclosure for 125k and now Zillow lists it for 235k (a bit inflated). The value of my house is about the down payment on a house in San Jose and what I paid is half that.
I have a 2900sq ft home in Texas and we spend next to nothing on heating and AC. Our electric bill per month averages around $160 and peaks around $200 in the summer when we run the AC a bit harder. More than half the expense there is all the electronics in the house, primarily: kitchen utilities, computers, and large screens.
But as already said by others, you fill the space and get used to it. There are times it's really nice to have so much space (holidays with family, birthday parties), and other times it's not (cleaning, a/c). Having a dedicated movie theater room is nice too.
I lived in a 600 sq ft. mobile home in the bay area with my wife and son. It was a bit cramped but not too bad. Now we're in Munich in a place that's...maybe 900 sq ft.? And it feels like a pretty good size, just wish we had a garage. 4200 just blows my mind. To me, I think having that much space would feel like a burden.
But, you are right, this much space does feel like a burden frequently, which is why we are moving and I plan on downsizing. A little.
Of course, it wouldn't take 4x the space we have now to get all that, but I definitely get it a little bit.
tools & supplies for a variety of hobbies that involve the physical world. guest bedroom(s) for visitors. a decent kitchen so two can do real cooking at the same time. book cases. a laundry room that doesn't involve limboing under ducting.
I'm somewhat pondering an Evil Scheme where I start a one-to-one "subcontracting" firm, where a plain-bad programmer who would never otherwise make it in a startup environment can hire someone [me] to do all their work for them—and maybe even guide them through their interviews with a concealed earpiece. Basically, the company would have "actually" hired me, and the person in the startup's office would just be serving as a human proxy for my skills.
Of course, that's effectively just a hack to get around the idiotic policies companies have against hiring remote workers for local salaries; and one that would cost quite a bit of salary (the proxy would still have to get paid, after all.) But I bet it would still turn out better than a non-Bay-Area wage.
I worked as a Data Science engineer in Seattle (startup), and just moved to San Francisco this year (Google). I know this sounds trivial, but I think the more pleasant weather in the Bay Area is beneficial to my career. The lifestyle aspect is just icing on the cake.
I can't get up in the morning when it's rainy and cold. Of course, I do show up to work, just a little bit later in the day than if the weather was pleasant. I'm less refreshed. I think less clearly. I work less efficiently. I make more mistakes. I feel less healthy, because grogginess and caffeine consumption is positively correlated. That's the effect weather has day-to-day. Week-to-week, month-to-month, I can't help but avoid having S.A.D. (Seasonal Affective Disorder) in Seattle. Occasionally, I'd have an Existential Crisis, to use the term lightly, questioning whether my work is meaningful, whether I've sold out on my passion for programming. It helps that I work at a Google, but San Francisco weather definitely makes me feel more excited for work.
Maybe things will change when I want to own a house. Until then, even if my take home pay minus cost of living in the Bay Area is lower than Seattle, the Bay Area is still a better payoff, both in finances and purposefulness.
Did a summer internship in Redmond, and realized how much the weather affects my happiness and psychological well-being.
While SFBA weather is way better than Seattle, I still find it a bit cold/dreary for my liking. I really wish the tech hub was in San Diego instead, I'd move there in a heartbeat.
Even when I am in bay area, I dread going out in the bright sunlight. I really like seattle due to its cloudy nature and misty rain.
Rain does the opposite and makes me happy/calm instead.
Weather has a very big influence on how one feels, but every person has different preference. I, for example, can't stand heat and sun (I get headaches, sleep problems, find it harder to focus etc). I love colder climates and it would be be very hard to convince me to move to CA, while I'd happily move to Norway or other northern country anytime.
However as a place to live it is quite nice. Technology is everywhere. You can go to a free meet up and literally see the creator of the language doing a talk (e.g. Guido tomorrow with the baypiggies). It has A LOT of opportunities to pursue the career that interests you. It's warm, close to the coast and a manageable drive to skiing in Tahoe.
Some times it is not all about the profit loss.
[3] We find that engineers often under-value startup success
(growth rate, revenue) when looking for jobs, and instead
place an emphasis on brand-recognition, or whether they find
the subject area exciting. Now, I don't mean to judge anyone
for this — working in an areas of passion may be great
choice. But if your goal is to maximize your financial
outcome, looking at startups more like an investor and
picking a company in a big market on a promising trajectory
is likely a winning strategy. The Bay Area, with a large
number of startups, is probably the best place to do this.Our next blog post is going to be about this (how engineers decide between offers, and how they can perhaps do it better)
Also, a lot of the time when I'm working at these startups as an employee (rather than a founder), the ongoing success and cashflow of the business are made utterly opaque to me and every other employee. Which means, if a potential hire came and asked me whether the company I'm working for has good growth/revenue... I wouldn't be able to tell them. I'd have an impression, but it'd be just that: an image created by the salesmanship of the business side of the company. Which means that asking others when I'm looking is just as useless.
> username: rememberlenny
It is definitively possible to diversify: Just do an agreement with other programmers to put all (or, say, 50%) your incomes into a common pot and distribute the content of the pot among all peers. Just set up terms and conditions and let everybody who is part of this agreement sign them.
Just because you can't diversify doesn't mean its not still a good idea to pick your employer in the same way an investor would.
An investor in startups is going for high risk, high reward investments. For every individual investment they make, the chance of any sort of return is quite low; they make up for this because the rare startups that succeed make enough to compensate for this low success rate. Since they are making a lot of these high risk/high reward 'bets', they can be fairly assured they will receive the expected value in return.
As an individual, you only get to place one bet on your employer. For most startup employees, that means they are very unlikely to get any sort of payout because of company success. It doesn't matter that the 'expected value' of working for a more-likely-to-hit-it-big startup is higher than for another company, since the probability is that you will not hit it big.
As an individual, you are more concerned with things like salary, working conditions, and personal enjoyment of the work. Those are the things you are CERTAINLY going to experience; the tiny chance of huge success is most likely not going to affect you.
I think there is a good analogy to poker here; in Texas Hold'em, two aces are the best starting hand. There is almost no situation where it is best to fold them before the opening flop; your expected value is always positive against ANY other combination of opponent hands.
However, there are a few cases where even though you have the highest expected value for your hand, it is in your best interest to fold. One such case is if you are playing in a tournament, you are in the money, and two people with much larger stacks have already gone all-in. In that case, your best bet is likely to fold; even though you have the highest odds of winning the hand out of everyone, if you LOSE, you are out and can't keep playing. Even if you win, you will still have the smallest stack and are unlikely to move up any spots and win more money; if you fold, though, someone else is likely to be knocked out and you can move up.
It seems counter intuitive, but this holds because expected value only works as your primary decision making point when you can make many bets; if you only get one bet, lower risk with lower reward is often better for you even if the expected value is lower.
Think about it this way; lets say you only have $1,000, and you need it to pay your monthly rent (if you don't pay, you will be kicked out and be homeless). Someone comes up and offers you a bet; you bet $1000, and you get a 1% chance of winning $200,000. In terms of expected value, this is a great deal! If you made the bet many times, you will expect to win $1000 for each bet made! However, 99% of the time you are going to be homeless. For most people, the choice is to go against the expected value and play it safe.
I call this the startups::"active investment" versus slow-and-steady::"index investment" comparison. For the majority of software engineers who are not rock stars with commensurate 400K+ total annual compensation plans, it's not clear to me participating in the startups/SF-Bay ecosystem is statistically worth the financial instability risks, just as for the majority of retail investors, index investing is currently the most statistically consistent path to wealth accumulation.
If you are a "retail" engineer (perhaps there is a signaling indicator like if you aren't negotiating a compensation package directly with VC's or founders and not their representatives, then you're "retail"), then like most retail products, the vast majority of your value, half and more, is reserved for capital holders. It is your call whether or not if there is any statistically increased long-term job precariousness involved with accessing that startup/SF-Bay ecosystem, and if the tradeoff is worth it to your personal situation.
Investors on the other hand get thousands of at-bats. They're only limited by the amount of money they want to invest, so they can diversify all they want.
If your goal is to maximize your financial outcome
This is the bit I take issue with. I've done the whole startup thing, worked for 4 different companies in under 2 years, and it worked out great for me, but I did it in the Tennessee Valley, not Silicon Valley.
The Bay Area is not the only place with startup jobs. It's just the place with the biggest multi-national corporations still pretending to be startups.
I'd imagine this is the case for a lot of tech companies so comparing salary alone probably isn't going to make a good argument one way or another.
Also taxes. WA has no state income tax so add an additional 10% income buying power
Stock is hit or miss. The big 4 had tremendous growth in the past few years and that made some people lucky. Don't count on that again in the future.
(The Triplebyte recruiter didn't seem super enthused with that being my response to why I didn't do their process.)
If you are older, and you have a spouse and/or kids, then it makes less sense. It actually makes no sense if you're coming from a low cost area, and more sense if you're moving from NYC to Bay Area. If you're coming from a low cost area, you will suffer, because even if you owned your house outright, if you sell it it may be a decent downpayment, and then you'll have to spend a lot of money on mortgage. Plus school, commute, etc. I wouldn't recommend it in that situation.
1. It motivates moving to sv because there are "lots" of successful startups. Is the rate of successful startups higher than elsewhere?
2. Average reported salary is a garbage statistic. Compare median values, between jobs of equal "status" (Google != j-random shipping company... Compare Google sv to Google Seattle within job title groups)
Probably, yes, but hard to say since a 2–3x "acquihire" can be a big success for another a city but considered a failure in SF, so how "success" is defined is different.
Even with that, the probability of hopping on a rocketship is still very low < 1%. It might be higher in the Bay Area than elsewhere, but I felt the article was disingenuous if the intent was to suggest an engineer has good odds of picking the right rocketship at the early stage. It's not science.
There's just too much money chasing too few housing units, and while I am seeing a fair amount of new residential construction in the last few years it's only a fraction of the amount demanded.
Once you're making enough, it's about realizing the chances you'll be able to buy a house or find a compatible (and attractive) romantic partner are low.
Before the rent situation got completely out of control, it was easy to recommend at least living in the Bay Area for a while (just to see if you like it or not, and to have experienced it), especially if just out of school, but now things are unclear.
Many (of the better) tech companies have their headquarters in the Bay Area, and it's been commonly said that working out of any other office is a poor experience.
(Perhaps you have heard about...) ...the guy on Reddit who calculated that it would be cheaper to commute daily to the Bay Area from Las Vegas by plane than to rent an apartment in San Francisco?
However, I am going to nitpick the title:
Does It Make Sense for Programmers to Move to the Bay Area?
This question really ought to be:
Does It Make Financial Sense for Programmers to Move to the Bay Area?
I will also suggest that there are facets to this question that really are not covered by the article. I am keenly aware of this because I returned to California as soon as I could for health reasons. My health is simply better here ("here" being California -- I am not in the Bay Area currently).
My condition can be very expensive and very debilitating when it is not well controlled. So, while I am horrified by real estate prices out here, for me it makes more financial sense to be here than to be someplace that keeps me too sick to work while running up medical expenses.
There are many reasons to want to live in a particular place. While criticism of the insane cost of living and insane pace of inflation is totally valid, I think it is problematic to boil down a decision about which job to take or where to live to these (specific) financial metrics (of salary and rent). Life is multifaceted. Such decisions do not hinge entirely on money.
1. Bay area is extremely tolerant of immigrants and of different people. 2. Bay area is an excellent place for raising kids. The opportunities for your kids to learn are simply endless. There are excellent colleges near by and some of USA's best high schools. 3. Your experience as a programmer in bay area will always be valued more than your experience in Denver other things being same. 4. Job hopping is easier, finding another job when fired is even easier. 5. Skewed gender ratio means women might get more attention. 6. Networking opportunities are unparalleled in the world.
Disadvantages: 1. If you don't like racial, ethnic diversity then you might be uncomfortable in bay area. 2. If you are a single male finding a girl would be harder in bay area. 3. Competition is cut throat and sometimes it is stressful. 4. Job security is less as there are more people out there who can replace you. 5. California's tax policies and other government policies are very tyrannical and sometimes pure nonsensical. The Liberal state is far too liberal with your money. 6. Housing is bad. 7. Everything is expensive.
However, I think that "normal" companies in the Bay Area pay normal salaries.
If you are a normal software engineer, who wants to have a family, you are better off in Zurich. Here you can make similar money and have lower living expenses.
Disclaimer: I run coderfit.com, a platform which should become hired.com / triplebyte of Europe and I live in Zurich. Read my story about Zurich that I wrote two years ago: "8 reasons why I moved to Switzerland to work in tech" - https://medium.com/@iwaninzurich/eight-reasons-why-i-moved-t...
I, myself, moved from the Midwest to a very high COL East Coast city 7 or 8 years ago. My salary has pretty much doubled, though I imagine at this point it is about $40K more than I could get back home.
But I live very frugally, and I have saved a lot of money. The plan is to soon get out of here and buy a nice place somewhere cheaper (South or Midwest) with cash and not worry about making the same salary.
OTOH, I think many people end up losing out financially in places like NYC and SF. If your salary is only $40K more than it would be in Omaha, after taxes, you're probably looking at only $30K. If you rent a typical corporate apartment, you're probably now underwater.
I think we're going to start seeing more and more people refusing to move to SF, NYC, and DC if salaries don't allow similar lifestyles as $20K less in middle America.
That leaves plenty of places to live, but not very many that are well known for having a lot of good software jobs.
I don't really want to live in a broom closet with 3 other people that already get on my nerves in the space we're in now. It doesn't matter if you are willing to pay me more if I can't maintain the same standard of living on that.
It's easier to compare against Seattle: The housing is still very expensive, and you get only half as many sunny days.
Why not compare to someplace like Austin? Most people can afford a real house, it's very sunny, great grad school, great culture, great startup scene.
The SV big company advantage is not true. Most of the same big tech companies have a presence in Texas. And guess what. If you work for Microsoft, Amazon, etc, you get all the same stock compensation, same retirement matches, and your resume sparkles just as brightly.
The biggest advantage for SV that they don't even mention is making deals. VCs/Funding, partnerships, contacts, etc. All of these exist elsewhere just on a smaller scale. However this stuff is mostly an advantage if you start a company.
TripleByte's case is pretty weak.
Also the weather between Austin and Seattle is basically a wash, while Austin is sunnier it also gets very hot in the summer.
Also the utility of transit is location dependent. Would I live in Manhattan and own a car? No way, but Texas cities are very spread out. Most parking is free and everyone has a garage.
The outdoors are mostly great, but I admit tall mountains and ocean cannot be beat.
The author lost me right there, even though I did make an honest effort to read the article to the end.
(1) There are plenty of "brain centers" in the world. The fact that they don't tout it day and night makes them no worse than the Bay Area. In fact, as an European, I am more likely to move to Gothenburg, Oslo or even Reykjavik than the Bay Area -- on this basis alone. Most of us Europeans strongly dislike touting. In fact it says a lot to me and many others how the Bay Area gets the most press coverage of being the "tech innovation center of the world". Center of what? The 99% of failed startups that want to disrupt markets that didn't exist yesterday? Center of "work 16 hours a day for the measly promise of 1% equity if we ever take off"?
(2) "Amazing place and era to live in" is a good inspirational motto... and it only works until you get your first burnout and wish to just make good money and be at peace, and have time for your other hobbies, significant other or whatever else. I feel sorry for all the tryhard after-teens who are about to find that out the hard way.
(3) Company valuations in billions rarely mean anything. I am too lazy to dig around but I clearly remember there were cases of several companies being valued close to 1 billion, only to be sold for ~30 millions several months later. This is hype, it's produced by the investors and VCs themselves, they profit from it, and it has almost zero real-world credibility. I might be oversimplifying this; but I am convinced I am not that far off.
(4) The historical flashbacks only make the author want to desperately justify how cool is it to live in the Bay Arean. No, sorry; I'd honestly prefer 14th century Venice compared to San Francisco. There were tangible things to see there, for example Michelangelo's art. What can SF show you? Zombified devs hurrying for their commute, hellbent on zombifying themselves even more in the name of a cause that's 99% likely to fail?
It's the center of successful consumer-focused tech companies. A huge percentage of the megahits of the last couple decades have come out of the bay area.
> Most of us Europeans strongly dislike touting.
This is a Scandinavian trait, not universally European. It's not even universally Scandinavian.
You're mad about something, but I can't figure it out. What is it?
Apologies for the mistake -- I mean "Most of us Eastern Europeans strongly dislike touting", by the way.
It's a fact that I have never been to the Sillicon Valley. And after all the forced press coverage I don't want to either. I realize this is a bias, but hey, if the Bay Area residents don't like it, you should do some policing of the press hype.
About the statistic -- it's very likely we're both wrong. Let's not go there, none of us has solid data to support their claims. I am sharing intuitive impressions and I am not claiming them to be hard facts.
The notion that I or anyone else in the Bay Area is responsible for policing the free press's reporting on SF/SV is absurd.
But IMO counter-articles on Medium with a much milder tone and stripped of screaming marketing hype would go a long way. Help spread the right message about the Bay Area.
Seattle city proper prices are getting ridiculous and I suspect they will catch up with the Bay Area quite quickly and maybe even surpass it.
Seattle doesn't come close to the level of tech/economic output that the Bay does, but the output is more geographically dense. Amazon is, effectively in downtown Seattle. The most far flung tech outlier is Microsoft a mere 20 miles away. Expedia moved all of its staff from Bellevue to downtown. I would venture to put median home prices closer to 600k than the 450k reportedly here.
But I don't think it is. A place with much lower cost of living might give you much greater freedom to explore your interests and hone your skills, develop your talents, let you wander through your own ideas, implement your own projects, grow as a developer in a way that working for a company would not.
I'm a believer that more interesting things get done when talented people are left on their own to explore. Maybe down the line you get a job in SF after all that exploration is over. But I'm not sure that exploration ever really ends.
Then 2 years later, it's all back to hiring and partying, but for recent college grads and twenty-somethings who are suckered into the cycle and are unaware of the history.
But I'm sure 2017 will be different...
Cashing out in Arkansas means you can move to ... a cheaper part of Arkansas. Cashing out in Silicon Valley means you can go about anywhere.
My friends back in Oklahoma are on their third or fourth houses (we're all around 35) at this point.
In the Bay Area, you probably don't buy a house until you're 35. In fact, you have to get a bit lucky to be able to do it then.
Houses aren't retirement plans in most places. And I think that's good.
So you have the 1/1 homes for young singles, 2/1 homes for young couples, 3/2 and larger homes for families, and then maybe a step-down option for empty-nesters.
My chain broke in 2007, when I got canned in a buyout, had to move to find work, and couldn't sell either the 3/2 or the previous 2/1 (rented out) at a decent price, and all my accumulated equity vanished. I would probably also be on my 3rd or 4th house by now if I hadn't been busted back down to tenant.
I definitely can't afford SV home prices, even with a higher salary. I need at least a 3/2, and don't have enough millions in the bank to get one anywhere near SF Bay.
Homes aren't the retirement plan around here, but the retirement plans definitely factor in not paying rents or mortgages after about age 55.
> Houses aren't retirement plans in most places. And I think that's good.
Absolutely; the fact that they've worked that way in some places is completely poisonous. For one thing, it's obviously not sustainable; you can only have the inflation-adjusted average value of a home double so many times before it's literally impossible for anyone but the actually wealthy to afford. Secondly, it creates a strong incentive to oppose building more housing, which causes all kinds of problems.
Arguments like network effect, "being in the ecosystem" or near physical vicinity of other SV startups seem to be the face value but these are only superficial items.
I almost feel like with the connected world, as long as you are in a fairly crowded North American city, it shouldn't matter....unless your customers were all focused in SV area.
I'm not a city slicker or a instagram traveler so please feel free to offer any alternative view. Maybe being in SF is important but I'm too biased (haven't left Vancouver for 20+ years)...
But the biggest contra argument I had was the Diablo nuclear power station directly at the coast (protected by 6m walls) and directly near the a huge fault which will hit soon. The other 3 corners of the Pacific ring of fire already hit their 9.x in the last decade, San Fran not yet. And this will be in the country, not 50 miles outside. If so you get the Diablo meltdown by tsunami, if not something much worse. And then the career in this company will only be short term.
So not.
Here's example for Seattle and SF: https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...
I'm wondering if anyone could comment if those numbers look accurate for those cities.
3000 sq. ft. homes around here barely exist, but you're probably in the $3M range for that kind of place.
I find the Silicon Valley tech industry degenerate, and I honestly have no desire to be part of it. I'd rather work a corporate job at a traditional company than have anything to do with SV. I'm not fond of the general non-tech atmosphere in NorCal either... the lack of quality Mexican food puts me off in a big way.
On top of that, NorCal is the most expensive part of the US. Even SoCal is considerably cheaper (and I'm honestly considering moving to SoCal when I have to flee Texas next year).
If you have a family do not go to Silicon Valley.
Loved living in the Bay Area.
Hated the commute. Hated the prices of everything.
Loved the culture. Loved the crazy you can only find in SF ( altho much of that is moving to places like that warehouse which burned in Oakland ) Loved the beautiful ocean beaches.
Rent prices... well... you will lose money moving to the bay unless you get a ludicrous salary.
Single.. I wouldnt hesitate. Married with kids. Stay away from The Bay.
Smoke a joint in NYC, spend a night in jail. Smoke a joint in LA, change the world. How I look at it all.
We got Brooklyn, and that's about it.
I'm currently probably not clearable anymore (married a foreign national) so it's less relevant for me now, but I agree it's a nice area.
I admit that I stopped reading at this point. Maybe I read that wrong and they meant "in addition to other areas", but from the way it's written it sounds like a conflict of interest. It's going to be difficult to make an objective assessment of the pros and cons of living in the Bay Area if your business depends on people wanting to live in the Bay Area.
> Examples of topics we would like to cover include the salary differences between the SF Bay Area and other locations (does it make sense for engineers to move to SF?), the prevalence of remote work (is it harder or easier to get a remote job?), gender/age bias in hiring (How common is it?), and how credentials impact hiring decisions. We have insightful data on all these topics.
Now the government still cares. They care a great deal which kills prospects around the MD / DC / VA area. I was a contractor with only a 2 year degree so most companies were legally not allowed to charge more than about a junior level's worth when I first started. That was difficult. It was even more awkward when I was in charge of leading the technical side of a multi million dollar government project and my company couldn't bill for me beyond a Software Developer 2.
The Bay area mostly doesn't care BUT (and this is a HUGE BUT) many companies, like Google, make their hiring determinations based on the knowledge of very scholarly topics. So it's kinda indirect.
Economics is about supply and demand. And, every city in the world wants high-end developers. Many companies are willing to pay a lot because they have a shortage. But keep in mind that they're looking for someone who's good in more than just programming.
I came here for the things you can't easily put a price on - like the weather, local arts, music, and culture. Also driving into the mountains, or down the coast of California. Chicago is no slouch for fun but cold days like this make me glad I'm not waiting for the 'L' outside anymore. SF weather is generally magical.
Being in a top US city still gets me direct, reasonably priced, and frequently scheduled nonstop flights to family/friends in places like Chicago, Cincinnati, Los Angeles, Seattle - not always attainable in some of these smaller tech hubs (like Portland, or Austin.)
When people move here, there is a constant worry about how much money they will make or what company they work for - I didn't sweat it.
Within a month after arriving, I landed a great career. I spent the last two years exploring other hobbies and interests, and nurturing healthy new friendships.
Biggest tip I can give - It's nice to get to know people who've been around here for a while, they've seen it all before. Show an interest in your local community. Volunteer your time but branch out of tech. Get to know people here in all walks of life; show compassion You just may be liked enough by some old school San Franciscans that refer you to one of their friends; who rent you their old place (with parking and views on Twin Peaks) for $1200. It worked for me.
San Francisco is not an expensive city because of tech alone, it's always been a bit on the expensive side; as there's no place in America like it.
Of course this is my experience. I merely bring it up just as a reminder that there's so many things to focus on when decide whether or not moving here is worth it. The questions that guided me in my decision to move here were:
What are my goals long-term? What made me decide to move here? What is my contribution to the local community and society - outside of working in tech? Will I ultimately grow as a person; both personally and professionally? Is there enough other activities around that will keep me from being bored that I'll enjoy?
My $.02.
Holy crap, direct flights are critical. My family lives in San Diego now, and they have to multi-hop to go ANYWHERE. What a bloody nightmare. I fly nonstop out of SFO or SJC any time I travel. Last time I needed to take a connection, last week, was a total nightmare. Flight into Chicago delayed due to equipment problems, would have missed connecting flight, rebooked through Houston, THAT flight was delayed due to other issues, missed my connecting flight, spent hours waiting for rebooking and luggage and hotel vouchers. Just enough time to take a shuttle to the hotel, grab a crappy post-10-pm meal at the motel diner, sleep 6h, get up before daylight to catch ANOTHER flight, which finally got me there. You can tell I'm still not over the miserable experience of having to fly somewhere without a major hub.
Here's one attempt, as an appropriate illustration for the Bay Area: https://teleport.org/cities/san-francisco-bay-area/ (skip the top for startups, worst for housing and unfold the leisure, culture and tolerance categories, for example).
> ...when engineers from the Bay Area relocate to other areas, they out-earn engineers on the local market.
I think that part of it, for me at least, is just having the confidence to ask for more.
With high salaries you have high tax brackets. Probably 40-50% total marginal tax rate with state, federal, and all the misc taxes. Being able to subtract your mortgage interest and the fact that your "rent" is going to pay down equity, on paper at least, your living costs are actually lower. Even more so if you have roommates.
Factor in 4-10% appreciation with leverage (10% down = 1000% leverage) so that becomes a 40-100% annual ROI.
Work in the bay area for about 10 years when you are young and then sell your house. You can buy another house somewhere cheaper for cash and then retire.
Might also be possible to just rent out the house in the bay area. The rent should cover rent some place cheaper and have plenty of additional cash flow to live on each month.
Personally I just moved from Seattle to Boston. I'm conflicted on the two places. I really liked the outdoors areas in Seattle, commute was shorter and rent was also cheaper. But Boston has a lot of cool things too, food better, more interesting activities todo (other than outdoors but you can find it NH) and cycling infrastructure is poor compared to Seattle.
I'm not native of either place (from Montreal) so my experience is based on a few years of living in both.
Boston isn't exactly better in terms of winter sunlight that's for sure. Both are grayish in winters but summers are great (less humid in Seattle).
What did it for me is proximity to family. Being in the same timezone is huge.
Cool fact I learned recently, Boston-Cambridge-Nashua, MA-NH area has one lowest unemployment rate for any metro area at 2.6%.
There's a lot going on just under the radar in the smaller college towns. Amherst/Northampton MA, Burlington in VT, Hanover/Lebanon in NH. A lot of what's going on is in fairly small shops that don't have job postings, but would create a position for the right candidate, which makes it hard to find them if you're not in the area, unfortunately, but there are definitely some medium-size firms, too. These have a very different feel from Boston, though, so maybe not what you're looking for.
I also know a few folks who live near me (Hanover/Lebanon) and commute to Boston or NYC (2-3 days a week, WFH the other days). This is a pretty sweet deal if you can make it happen.
But, I left Seattle because of the dreary weather I suffered from my whole life, so I understand.
I'll get you started: "Cascadia megathrust".
If you have to have people in the office to make sure they're working, you already have a fundamental hiring problem.
For many types of problems, collaborating in person works far better than collaborating online. Lower friction, easier to have a conversation, easier to sit around a computer and experiment, and generally easier to handle things in a few minutes that would take longer otherwise.
I do decentralized development regularly, and for some kinds of work it works fine. For other kinds of work, it makes simple tasks take an order of magnitude longer.
On the other hand, the development of any one individual patch series to implement one feature typically occurs either by one developer, or by a set of co-located developers in one organization, not by geographically distributed developers. And some other kinds of work, such as backporting or rebasing a series of patches, doesn't work well when geographically distributed.
I worked at a 100% telecommute shop local to Chicago for 10 years. We also used offshore development firms on some projects, and I can tell you, if anyone ever seriously had the idea of replacing us with them, they were quickly dissuaded by the experience of working with these firms.
Plus, it's really hard to eat healthy at a tech company.
People think if they can keep jobs in the office then they can keep themselves in a job.
Maybe there's a future where seamless video conferencing, Beam robots, and better text communication could replace in-person conversation, coffee and lunch chats, and other office-place experiences. I've tried, and I don't think we're there yet.
Obviously for small startups this doesn't make sense. But mid to late stage, opening a satellite office for development somewhere else seems like a no brainer. I assume I'm missing something though.
Our secret sauce is one thing. Exactly one thing. What do you mean "tangentially related" we'd outsource anything unrelated.
The exit strategy is to be bought by a multinational megacorporation not to have two offices, or even ten. There's sort of a financial fund raising dead zone between having one office and being purchasable and having 500 offices and buying little companies. Very few companies jump that gap and its safer to try and get bought that to try and become Google2.0
Google Hangouts is decent for every type of sharing except "let another user control my computer directly".
I can press a button and usually within a few seconds I can see the chat recipient's screen on my end. Now I can watch his screen and we can pair with voice chat. I have my own screen to do occasional Googling and pasting info to chat if needed.
Basically I would find that far more efficient than unplugging my laptop, walking up to someone's office, plopping down, having to Google something while we pair, and now show him my laptop because there's no way to get it on his screen without duplicating the search work on his machine.
But yeah, your everyday, run-of-the-mill corporate coding job can easily be done at home. The problem is a trust factor with these companies: they don't trust the tools that enable remote working as much as they don't trust their ability to manage their remote people.
> If you have to have people in the office to make sure they're working, you already have a fundamental hiring problem.
It is possible to be remote and have your screen recorded to make sure you are typing for 8 hours, vs. being local and just being trusted to get on with it.
i personally have made a lifestyle choice not to work for any company that won't allow me to work largely remotely. i often apply to great companies who do interesting stuff and pay well, and then i hear "sorry, we don't do remote". that can be very frustrating. i'm losing a contract right now with a company that decided they were going to switch to a non-remote policy. that too was very frustrating. but the kind of data that's pointed to here really shows that the joke is on them.
think about the cost base of a completely centralized non-remote company: a large share of their employees' salaries goes into their landlords' rather than their own bank accounts. a large share of their time goes to crazy commuting routines rather than actual work.
tell your employees "okay, you make $140000 dollars now, but $30000 goes to your landlord for the privilege of being in the BA. work remotely, move to wherever you want, and we'll pay you $125000". both the company and the employee have $15000 to gain. that's 12%!
tell your employees: "okay, you do 8 hours of work now, and you do 2 hours of commuting each day. why don't you work from home for 9 hours instead." both sides win. the company gains an hour of work, and the employee gains an hour of time to themselves. if we subtract holidays, sick days etc. so that we assume that a year normally has 220 working days, that's 220 hours over a year.
cumulatively that adds up as follows: $140000 over a year for 220 x 8 hours equals an hourly rate of $80. $125000 over a year for 220 x 9 hours equals an hourly rate of $63. That's a 21% cost advantage for the company, and more money left over and a better life for the employee. Over a base of $125000 that 21% advantage is $26250 a year per employee.
i find it really funny how the word "coffee" keeps being brought up by people who deny that there's an economic opportunity here. when i lost my current remote contract, the argument was something like "sorry, our culture is such that so much information exchange is taking place over a coffee, and so many decisions are being taken over a coffee that we can't have you working for us if you can't be a part of that". someone in this discussion thread suggested that it's important to be able to "have coffee" with investors and co-founders. i get the point that we're all meant to be social creatures, and it's nice to be able to have coffee with people. but i'd seriously question the business acumen of people willing to value it to the tune of $26250 per employee per year.
the other thing i find interesting about this article and the discussion thread is that it's another example showing how markets always find a way to get into an equilibrium that rules out the possibility of any such thing as a "free lunch". the article mentions the idea of "building equity." my own first job was in a high-paying finance role, working with lots of other young people who come in with extremely naive ideas around the notion of building equity. "i'll work like crazy for top dollar until i'm 35. if at that point i want to deleverage my lifestyle, i'll always have that option. i'll be able to move to a trailer park and never have to work again in my whole life if it turns out at that point that that's what i want to do. by building equity i'm just expanding my options, never reducing them". the point i'd like to make is: earning more is easy. building equity at a higher rate is hard! the point of departure for your thinking might be "move to the BA because of the higher salaries". but then you start to think things through: "higher rents, higher costs of living, higher taxes, higher risk when you should find yourself out of work for a month, bad situation if you're foreigner, build a life there, then lose your job", and you inevitably conclude. "well there's no such thing as a free lunch in the BA either."
Moving to a high cost area to gamble for a position that might help your career in the future, given any unemployment for more than a month makes the living arrangement untenable, is a high-risk gamble. The idea that working for a big company changes your employment chances is about the same as what school you graduated from. It gets you an interview, you were probably going to get anyway in another geo-location. In a lower cost area (even relatively lower like Los Angeles) you end up with lower chances for a startup (with a brand that might eventually become household) but the experience isn't much different and landing your interviews are a cakewalk…talent pools are smaller everywhere else in the world. The positions you might qualify from, are about the same from some no-name sports gambling company as "I worked at uber for a year". Your experience at your role is what matters, you're a worker not a business consultant. The answer is a definitive no, and the headline is baiting a false equivalence, hence Betteridge.
^^^ Is not a selling point. Those are anomalies. How about the hundreds of other companies that are going under consistently everyday in the bay area. If I want to work for startups why would I not move to some where like Austin Tx? Get good experience, have a reduced cost of living, and have no state income tax?