Barely scraping by with a $250,000 salary in Silicon Valley | Hacker News Reader

Barely scraping by with a $250,000 salary in Silicon Valley

medium.com

43 pointsaestetix33 comments

This works as satire, the subtle point being that "barely scraping by" should not be equated with owning a 2-bedroom home and working toward a Stanford MBA just 4 years out of college.

That said, someone complaining they are having a hard time with $100K from Facebook isn't hard to believe, depending on circumstances. I'm reminded of the story about Menlo Park firefighters making well above $100K but being unable to live in Menlo Park: https://news.ycombinator.com/item?id=11367881

Insane as the SV real estate situation is, you're going to definitely have to throw kids into the mix for $100K to land you in the "scraping by" category. Anyone who's single and can't "scrape by" on $100k (or even a far lower figure) simply lacks imagination.

"Edited: Way too many people haven’t noticed this is satire. I’ve seen an article on Facebook claiming $100k isn’t enough to live in the valley, and then another one claiming $130k isn’t enough. Then there’s another Twitter employee complaining with $160,000.I wanted to make a hyperbolic next step to show the stupidity of those articles. There are service workers living with $10k or less. Working in tech, you should be fine with your salary. Stop complaining."

I understand this is intended as satire, but I don't think it succeeds on that basis.

Hyperbole based satire certainly can be used to reveal an absurdity, but sometimes the hyberbole involved in satire is exactly what turns a reasonable position into an absurd one. Although it is true that people make it in SF on less than 100k a year, I don't think it's reasonable to use a satire based on a single person earning 250k a year to tell people who earn 100k that the should be happy and stop complaining.

I noticed that this analysis left out childcare. A quick google search shows that the average cost of childcare per month is 1,900-2,400. If you want the kind that allows two people to work full time, 2,400 isn't a bad deal.

You also need housing, especially if you have two kids. That's going to be expensive. It's very unlikely you'll get this for less than $2500 a month in rent.

As for not complaining... honestly, most of the people I know with kids in SF and are hard up for money don't complain much, they get on with it. It's the Silicon Valley tech employers who constantly complain about hiring woes. These companies often refuse to allow remote work or find a way for workers to live in places where 100K would be a wonderful salary for a family.

As far as I see it, it's those companies that are constantly complaining to congress about a shortage of workers.

The recent article edit helped:

"Edited: Way too many people haven’t noticed this is satire. I’ve seen an article on Facebook claiming $100k isn’t enough to live in the valley, and then another one claiming $130k isn’t enough. Then there’s another Twitter employee complaining with $160,000. I wanted to make a hyperbolic next step to show the stupidity of those articles. There are service workers living with $10k or less. Working in tech, you should be fine with your salary. Stop complaining."

None of this changes the fact that Silicon Valley is, in fact, ludicrously expensive. Knocking someone down for alleged hypocrisy or naïvety may instill a temporary feeling of moral superiority but emphatically does not actually change that fact.

That's where he went wrong. You're not supposed to break character.

Felt like the author focused too much numbers and not enough about the plight of not being able to buy $4 toast, jetting off to Tulum like everyone, or an ordinary dinner Atelier Crenn wrecking his budget.

Nice satire, but to truly be on point he needs to do the kind of willfully-ignorant accounting that claims someone maxing out their 401(k) and putting another $40k/year into a retirement account is "after expenses, left with no extra money at all".

I have read a few that say "after regular expenses" and then go own to include: "$60k towards Roth/401k" and "three vacations a year"

After that..I'm only left with $17,000 for entertainment.

Wait, how do you even PUT 60k in a Roth/401k in one year?

You're capped at 18k for the 401k, and you're capped at 5.5k for a Roth IRA, assuming you're under the income cap to contribute to the Roth in the first place. If you're doing a Roth for your partner as well, that's another 5.5k.

So if you and your partner both max out your 401ks, that's 36k per year, plus another 11k for the two Roths to make 47k going to retirement savings.

Is there another vehicle for retirement savings that I could be dropping money into, aside from my Roth IRA, my wife's Roth IRA, and my 401k?

You can put an additional $35k in post-tax contributions to your 401k after $18k in pre-tax.

Ah, interesting; I didn't know that. It looks like the post-tax contributions get rolled over into a Roth IRA when you start disbursement (I think? I am not in the business of financial management and my grasp of the subject pretty much extends to "I should max out my 401k and my Roth IRA every year and if I keep on doing that then probably I'll be able to retire", so there are almost definitely some nuances here that I'm missing). I'll have to talk to somebody to figure out if this is a good option for me or not.

Isn't there also a $130k salary cap on a Roth IRA?

If you're single, then you have to make less than 132k a year to contribute to a Roth IRA (and it begins to phase out at 117k); if you're married filing jointly, then your combined income has to be less than 198k a year (and it begins to phase out at 184k).

If you're over those limits, then the website I'm looking at says that you should look into a "backdoor Roth", which as far as I can tell means you contribute money to a traditional IRA and then roll it over into a Roth IRA.

I am not a financial professional and if this is something that you are concerned about, you should probably consult one of those.

You can do a backdoor Roth IRA contribution. It has no limits.

That is incorrect. Conversion from traditional to Roth IRA has no limit. Contribution limit is $5500 per year regardless backdoor or not.

It's a well-known trick across googlers....

1. IRA Backdoor: Contributed to traditional ira with after tax money, capped at 5500, then converted to RothIRA

2. After-Tax 401k Mega Backdoor: Contributed to After-Tax 401k, capped at 26K, then converted to RothIRA.

You have to have contributed as much to a traditional IRA, which still has contribution limits.

That's still only $5.5k/year though, right?

Never mind that when he decides to sell and move out of "the valley" he's going to have multimillion dollar home to cash in. (Just don't retire to London or Tokyo and you'll be okay.)

That was really very, very subtle satire. Maybe it's a little sad that it was entire believable!

It's sad and hilarious because it's true. Some people are blowing 60+k/year dining out.

Well done, I read all the way to the end thinking "Wow, he is setting himself up for some serious backlash"

I wonder why SF/Peninsula SV knowledge workers have an expectation to live large at salary $X when many of their colleagues/friends are making just as much, whereas Manhattan New Yorkers do not have an expectation to live large making great money in absolute terms but still making relatively "average money" wrt relative income.

I suppose one hypothesis is that the region has yet to come to terms with how widespread high earning power in absolute terms (but not on relative terms) have become.

I think it's two things: the influx of young professionals who suddenly have lots of expendible income, and the fact that NYC has a very clear pecking order. I make a very comfortable living in NYC but there's still the "old money Central Park" crowd and the "lunch at Dorsia" crowd to remind me where I stand.

I'm bootstrapping on 9.5k/yr. It's doable. Which means I should probably stop all this startup "nonsense" and make more working a $250-300k salary and be a multimillionaire within a decade.

The majority of people choose to eat out every meal, subscribe to a bunch of memberships they use very little, redecorate with new furniture every few years, go to the movies every weekend, take a vacation with excursion$ and so on.

Spending or saving money is a choice, just like one's diet or anything else.

I did the big company route for a few years out of college and without even trying very hard, had something like an 80% savings rate. To be fair, this was a few years ago, so rents were better, but I live in an excellent location in the heart of the city and even _doubling_ my rent would leave me with a super high savings rate. I knew people making half as much as me and spending twice as much, and I'm truly baffled as to how they managed to do so. Especially since I have a weakness for (among other things) good food and beer: even if I did it regularly, spending $30 on a good beer hardly makes a dent in the kind of numbers we're talking about.

> My taxes are of 15%, because I get paid in capital gains, through equity.

I know this is satire, but out of curiosity is it really possible to be paid 100% in stock (and then just sell however much you need to live immediately)?

Even if it was, you still pay regular income tax on stocks which are given to you.

Get an individual patent and get arrange to get paid via royalty licensing. As I understand it, this is all long term cap gains. However. I am not a lawyer or a tax advisor.

a quick Google shows that royalties from patents are taxes as ordinary income.

EDIT: Read the whole thing, it was apparently a joke.

GSU when it vets is taxed at the marginal bracket.

You must have around 1M-2M to be able to get that much capital gains, too. doesn't sound right?

What's wrong with living in a trailer for a year and banking 200k?

Nice satire.

All he talks about are buying liabilities (pool, car, entertainment, renting, filling big house with shit you don't need).

Imagine if he talked about assets instead (ETF's, rental property, and starting his own side hustle corporation).

He's rich, but far from wealthy.

Admitted clickbait BS, could use a downvote for this one.

Reply on news.ycombinator.com