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Comment by Afforess | Hacker News Reader

Six figures in San Francisco is a joke. I was working out of Raleigh, NC until recently, with a take home pay w/benefits around $85k. I calculated to have an equivalent standard of living and spending money in SF, I would need to take home around 150-160k. Equivalent! That includes no raise over my previous position!

Housing was a large part of it, but equally problematic was taxes. The more you make, each extra marginal dollar is taxed at the highest bracket. So each marginal dollar earned goes a little bit less far. Combined, the high cost-of-living and marginal tax rates make SF extremely expensive. I laugh at 120k offers in SF, that's like making 65k in a reasonable city.

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Perhaps its been a long time since you calculated those numbers, or you don't have first hand familiarity with the SF bay area, but your 2x estimate is woefully under comp. For the general bay area, you need to add another x. And if want to live in SF proper, add still another x.

The SF bay area is such an extreme outlier that none of the cost of living comparison calculators are accurate.

Taxes, housing, childcare, quality of schools, gas prices, and on and on and on pile onto the expense. Even things like traffic tickets add up: a red light ticket in California will cost over $500 before even factoring in higher insurance costs; this is roughly quintuple most of the country. I pay less than $0.08/kWh for electricity; bay area rates are 3-4x that.

I lived in the bay area for a long time before moving to a suburb of Seattle, where I own a nice home and live near excellent schools. I estimate that I would have to make at least 2.5x more to maintain the same standard of living in the bay area (forget about SF).

Which suburb of Seattle?

Your 2.5x figure is exaggerated.

Gig Harbor, which is about as far from Seattle as Sunnyvale is to SF.

How much do you think a home like this would list for in the bay area?

https://www.redfin.com/WA/Gig-Harbor/2403-20th-Avenue-Ct-NW-...

That is >40 miles from Seattle.

Here's a comparable home in Vallejo for 10% more (but an extra bedroom) in Vallejo, which is 30 miles from SF or 25 miles from Berkeley

https://www.redfin.com/CA/Vallejo/9311-Big-Ben-Ct-94591/home...

Both homes have a toll bridge to cross, though I suspect the Tacoma Narrows has a lower toll than any of the options in the bay area.

The home you listed: in Vallejo, which is very undesirable; has $2460/year HOA dues; is in a borderline terrible school district; is on 4200 sq ft lot, with most of the windows blocked due to the neighbors being within normal talking voice distance.

The home I listed: is in Gig Harbor, which is very desirable; in an excellent school district; is on a third of an acre.

In short, the two homes are not at all comparable. For a good comp, you would need to find something in the south bay.

For 5% more, you could own 100' of waterfront.

https://www.redfin.com/WA/Gig-Harbor/6010-106th-Ave-NW-98335...

Still doesn't matter, Bay Area is bigger than SFO.

You could go anywhere. San Ramon, Morgan Hill- Far off places. Yet very expensive.

Housing in and around Bay Area is very expensive.

It's extremely hard to come up with any across the board cost of living comparison.

For example, you mentioned a red light ticket. That presupposes you drive a car, which is pretty much required in NC but far from a necessity in the SFBA.

Not to mention that while your expenses might increase substantially, there's no reason you have to keep your savings rate consistent. I'd much rather save 30% of $200k/yr than 40% of $80k/yr.

> Not to mention that while your expenses might increase substantially, there's no reason you have to keep your savings rate consistent. I'd much rather save 30% of $200k/yr than 40% of $80k/yr.

This is what most of these naive cost-of-living conversions tend to miss, by always assuming a savings rate of 0%.

High income earners like software engineers tend to be able to save a very significant percentage of their income, and the stock market grows at the same percentage no matter where you live (within the US), which compounds the difference in net worth growth.

This is why I vastly favor high cost-of-living, high salary areas when looking for work. Of course, if you project for yourself a 0% or lower potential savings rate at both locations, then the original naive comparison holds, but then you have bigger problems.

> High income earners like software engineers tend to be able to save a very significant percentage of their income

Exactly, especially when you're young. It's very possible to save 50+% of your income as a software engineer in a HCOL.

This is especially useful since nothing says you have to retire where you work. Even before then, lots of high-ticket purchases (like vacations) don't scale with your COL.

That's not accurate. My gross before moving out here was less than your net. I doubled that with the move. A larger fraction of my take home is consumed by rent. That take home is less than twice my previous take home because of state taxes. Food, utilities and commute costs are all about the same. (Edit) My wife (who's salary didn't change when we moved) and I support a family of four, including private school tuition and service a mountain of school and medical debt and live just fine. And I'm saving twice as much. Our gross household income is in the neighborhood of $200k, give or take.

Although I do agree that the common low $100k range for engineers is a joke. We're underpaid by a significant factor. Just like most other low status workers.

Can you break it down for us?

I pay over $4k/month for a 3 bedroom house.

Private school is what? 8-10k/year per kid? So $32-$40k/year?

Yeah it doesn't make sense I guess 160k takehone is 250k salary maybe

let me shed some tears while you see the need to factor in private school.

Please don't troll.

I was asking how the parent commenter could afford private school and still save a significant amount.

By the way most people on a visa have to pay for private school (as it should be - but my point is it's often not a luxury).

Sounds about right. I mean, I don't want to get too detailed, but our take home after taxes, 401k/retirement, etc. covers the two expenses you mentioned and leaves plenty left over for other living expenses and debt service.

Ahh dual income each on 100k+?

No, I contribute much more than 50% of our household income. But it is a dual income, and much less than the person I was responding to thinks he'd have to have to live here with a _mostly_ equivalent lifestyle. The biggest hit would be housing. There's no getting around it: either you're rich, or you rent. A home one could buy almost anywhere else for $250k-$300k would cost $1M and up in this area, depending on where it is. My salary didn't increase by a factor of 5, but the cost to purchase housing did. Even so we live comfortably enough, and certainly not in a little 900 sq ft shoebox of an apartment.

I laugh at 120k offers in SF, that's like making 65k in a reasonable city.

Even if you think you can easily do better, you shouldn't "laugh" at salary offers in that range. The vast majority of people in the U.S. won't ever -- at their current (and for many, basically immutable) education level -- stand a chance of making anywhere near that much.

And being as it's just a matter of blind luck that we've been born at a certain time and place that enables us to make that kind of a salary.

For basically playing with shiny toys all day, and all.

The point is that you don't get to keep much of it. Basically, unless you're making >$200k or so (which is def possible and not st all unreasonable for engineers or management out here) , you might be able to save more post-tax post-expenses elsewhere.

The real game to be in here is real estate. Don't mine the gold, sell the shovels.

But people who will basically never be able to make that kind of money don't have that dilemma.

And the "game" for them is simply to survive.

Isn't that a strawman argument though? The discussion is around engineers making the most out of their salary so why would be lump in folks with different education / jobs?

The point is that you aren't more fortunate with a nominally higher salary if your baseline (not luxury) costs consume it all. I'm doing about the same as anyone else who can barely afford to rent a studio and can't afford to have a car or travel.

Someone with a third of my salary gets a house, a car, and more disposable income which goes further. The one area where I'm really blowing them out of the water is my $5/mo health insurance that makes all care effectively free. That's a function of the company, though, not the salary. Our much lower paid, lower skilled workers in satellite offices get the same benefits package.

Sounds like we're talking past each other, then.

The point I'm trying to make is that, thanks in a large part of very some "boom" you and I riding on, a lot of people not only can't afford to live in SF (or other pricier parts of the Bay Area) with a car and travel money -- nowadays, they can't afford to live there at all. Whereas 20 years ago, while it was never easy to make it in the Bay Area -- at least theoretically they could, at their skill and education level.

So while $120k may seem like chump change to you, it'd be a godsend to them. They may still not be able to travel, and they may have to cut back in a whole lot of other areas -- but at least they'd be getting by.

Which is again, the real "game" for most people.

I live in North Carolina (not in the tech-heavy part) and "work in" SF Bay Area ... it's a good situation.

Do you fly between NC and SF every day?

I believe what he means is he work remotely for a SF company and gets SF pay.

Now that truly is the dream. Probably make enough extra income to rent your own place in a We-Work or something similar too if you don't like working from home as much and still bank most of the difference.

Yep, I have a very good deal at this co-working place: http://flywheelcoworking.com/

They're also very involved in the community and encourage a lot of small companies.

[Edit] I'll also say a good perk is this awesome beer on tap for free to members: https://www.beeradvocate.com/beer/profile/11036/65993/ ... going to go get one right now! Wish you were here to join!

You live in the same city I do!

I do the same but in Virginia. Unfortunately, living close to D.C. is very expensive so I don't enjoy the benefit as much -- but the work itself is way better than yet another boring government contracting job that you can not talk about.

A alumnus of my school does the same thing, except he works out of Google Chapel Hill while managing a Mountain View team.

I wish I enjoyed remote work more, since I've managed to get contracts like that but really missed the feeling of working with a team in an office.

That is the real downside to remote work. I used to enjoy frequent outings and lunch time with co-workers.

How do you figure out an equivalent standard of living?

For example, in housing, if you were living in a standalone house in the second most desirable neighborhood of Raleigh of 2000 square feet on a quarter acre lot, is the equivalent a standalone in the second most desirable neighborhood of San Francisco of 2000 square feet on a quarter acre lot?

If not, how do you define equivalent?

I rented before, so I considered equivalent to be the same sqft (900f sqft), same quality neighborhood. I'm sure you could save some by getting a roommate or smaller living arrangements, but that wasn't what I wanted to compare.

That's totally a personal call. Some people would be OK trading a bedroom and bathroom to be able to walk home from the bar. Others wouldn't.

But the obvious criteria universally apply: commute time, square footage of the residence, crime rate in the area, quality of the local school district (YMMV), etc.

Most people when moving to a more expensive city compromise at least a little on all of those to keep rent manageable. So maybe a Bay Area resident spends three times as much on housing but they get half as much square footage and a much longer commute.

I agree that is the best way to think about it, but it means discussions about CoL differences are inherently subjective.

Perhaps, the least bad way to figure out what an equivalent salary in RDU and the Bay Area is to use revealed preferences and look at people that move between the two areas and what they are paid in either city.

150-160k is pretty reasonable for salary in the city. Most engineers I know are making around that or higher.

I'm in a similar situation in Columbus, OH. The jobs are here are generally more boring, but ultimately more profitable, at least for me. Especially given that we have Ohio State here, I wouldn't be surprised if the job market continued to improve here. I don't think I'd start a business anywhere else.

Taxes are the least of your problems in SF. It's not even a consideration and probably the wrong optimization to make when deciding where to live.

There's a reason most US billionaires live in CA or NY.

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