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I mean, by the numbers:

400k salary - 129k taxes - 72k housing (~1.2M dollar house) = ~200k left over

Just off that alone, the 400k blows the $130k out of the water, no matter where in the country the $130k is living.

https://smartasset.com/taxes/paycheck-calculator#ZI0BD3ambd

Still more money, but your number are off by about 25%

Does $1.2M put you within walking distance of any of the FAANG headquarters? I'm looking at Mountain View, and it appears it's more like $3M to live close to Google. There isn't anything listed (Zillow) close to Infinite Loop, Cupertino. What is listed is $1.8M+.

Just curious, as I currently walk to work and that's a massive QOL issue for me. Sitting in traffic even 60 minutes/day would be awful.

Almost nobody walks to work at the Silicon Valley tech company campuses - they are mostly suburban office parks surrounded by parking, so you'd have to walk pretty far. Lots of people bike though. There are plenty of people that walk to work in SF itself, and walking to work in San Jose will probably become more popular as the various new office buildings around Diridon start to open.

If you highly value walking to work (and to other amenities) then NYC is a great option. $1.2M won't buy you a place, but you can certainly rent a great apartment within walking distance of the Google or Facebook NYC offices for significantly less than $72k/year.

I'm in Reston, VA (outside DC) currently. $500k for a decent townhouse and 1 mile to the town center. I can walk to Google's Reston office spaces, Walmart Labs is around the corner, and AWS (Herndon) is a short bike ride.

Interestingly, the suburban office campuses in this area are beginning to go away. Companies are moving to locations that are at least Metro accessible (Google's new office), or into urban areas (Amazon HQ2). Local zoning has changed to make that more palatable - just interesting to see the change in preferences since I started work in 1999.

Reston is nice! Didn't mean to imply that NYC is strictly better. It would be nice if there were even more private-sector tech jobs in Reston, although I fear that housing supply constraints would then push Fairfax and Loudoun county home prices up to NY/NJ levels.

I own already, that’d be great for my retirement. ;)

And to be honest, my ability to walk was dumb luck. If I change jobs, I’m just as likely to have to drive/Metro into Tyson’s as walk locally. But walking is a big incentive to stay put.

That was one fear with HQ2 coming to DC. With it on the other side of Fairfax, it’ll be a while before it impacts housing out here. But if Google expands its footprint, and with the Metro opening soon, we might see another bump soon.

Here's a 2 bedroom less than 10 mins away from Google for $1.2M: https://streeteasy.com/building/marais-coop/10b

900sqft. I like my space.

I like my city. I don't need more space.

The point is, buying a place for $1.2M in walking distance isn't crazy.

That isn't a house at all.

It's an apartment condo. Worse yet, the land itself is leased from a different owner.

Start with the idea that you own the land and the building, and that you can walk around the building while staying on land that you own. Ideally you would also have mineral rights, the right to drill a well, and similar. You should have the right to bulldoze the building, paint it any color, add brick facing, add gargoyles, or install a triangular front door.

? All the new SFH in mountain view near Google are close to $2m, not $3m. $3m buys you a massive lot as well.

Either way, rent is around $5k a month here for a three bedroom, which is quite doable on a Google salary.

$1.3m will get you a 1300 sq foot town house, so yes, it's quite possible to be located near fang HQ on the budget described above with a family.

Source: Zillow around whisman station

There are many houses just east of AP to the airport in the 1.2 range, and they are not in bad areas

I rent a studio in NYC for $2500/mo ($30k/yr). It's within a 12 minute walk to Google and a 12 minute bike ride to FB. Also close are Amazon, Twitter, Spotify, Uber, etc.

You don't need to be at the company headquarters to make $500k a year. Not being at the headquarters is only a problem if you want to get past director level ($1.5 M/yr)

1.2M house on the penninsula is going to be extremely crappy and definitely in a very bad neighborhood, maybe previously was a crack house.

1.2M house? Assuming you want what's going to be pretty typical in the midwest, that's not at all realistic.

https://www.redfin.com/city/17151/CA/San-Francisco/filter/mi...

If you really want a house comparable to what's affordable on 130k out there, you're talking at least double that.

Kind of. The problem with a $1.2M is that for most people this means you are massively leveraged. If anything goes wrong (e.g., market, tax mistakes, health issues), you can easily end up bankrupt.

Did this once and won my bet, but was very aware of how bad it might go. (Well, "won", since my ex got it all...)

Those are low taxes, to start. You can use SmartAsset [1] for effective total tax rates (40% leaving you $238k in SF, 30% leaving you $90k in NC).

Then you can use NerdWallet for cost-of-living excluding taxes (SF is 211% of NC). So after you've replicated your $90k take-home in SFO, you have about $48k surplus to invest. Not bad, but also probably not what you were expecting!

[1] https://smartasset.com/taxes/income-taxes [2] https://www.nerdwallet.com/cost-of-living-calculator/compare...

The only thing that’s significantly more expensive in the Bay Area is housing. Even with the housing prices, you will still probably come out ahead. Remember that if you own, you are building up equity in a huge asset.

CoL calculators online are not accurate at all.

I personally work remotely for a FAANG from the upper Midwest, but if this arrangement ever runs out I’d move to California or Seattle before I took a 30% pay cut.

I agree with your overall point, but in addition to housing I'd also include childcare / private school tuition, and taxes.

> I personally work remotely for a FAANG from the upper Midwest

Which FAANGs hire remotely, please?

And why do you think online COL calculators are inaccurate? They're relatively close to government reimbursement tables, which are pretty well-researched.

Edit: Also, once again, I'm not arguing that I wouldn't come out ahead, only that you have to consider COL. So many new grads I know have moved to CA for a junior position, elated at making the same salary I make here as a senior, only to realize that cost of living eats up a huge percentage of that salary. Granted, some of these people may not be the most financially frugal around...

My main argument is that COL is an important component of salary.

Amazon at least for AWS consulting positions seem to hire from almost any major city as long as you are willing to travel and are near a major airport. I’m mostly a software engineer now but I’ll probably be looking to work for AWS directly or one of their consulting partners in two years when I am more willing to travel.

I think the same applies to Microsoft (Azure) and Google (GCP)

Cost of living calculators are calibrated for the median budget, which looks very different from the budget of someone who makes 400k/year. Poor people spend a large fraction of their money on housing, which is much more expensive in HCOL areas and skews the cost of living multiplier. If you were only paying 5% of your income on rent in a LCOL area and your rent quadruples after moving to SF, you only need a 15% pay increase to cover that, not a 300% increase.

Also don’t forget that wealthy people can save most of their money, so an X% increase in overall expenses doesn’t need to translate to an X% increase in income.

You need to account for savings. A dollar saved in a high COL area is as good as one saved in a low COL area. If compensation triples and cost of living triples, your savings also triples.

If you are saving 100k/year in a place that is very expensive, and are happy to live in a place with low COL, work for 10 years in the high earning/high cost of living area and retire in the low COL area.

Just to back you up on this, the savings should more than triple. 3x the compensation probably more than offsets the 3x in costs, so your savings may be more like 5x or more compared to low COL areas.

Assumption: cost + savings = income

3 * income - 3 * cost = 3 * ( cost + savings ) - 3 * cost = 3 savings

Is my assumption wrong? Otherwise it's 3x and not 5x.

I should have phrased it differently, the 3x in cost primarily applies to housing while most other expenses only increase marginally. Overall costs are closer to 2x increase instead of 3

Note remote but Amazon/AWS have offices in the twin cities. Google has an office in Madison, Wisconsin. Google is also opening up an office in Rochester, MN. Whether you can work remote is another question.

The problem with COL calculators is that 100% of your pay does not go to costs. You can't just say SF is 4x as expensive as Chicago so I need 4x the salary. The increased costs are a fixed number, not something that scales with salary.

Typically to be allowed to work remote at a FAANG, you need to have spent time doing critical work onsite - this is still a very rare arrangement.

One secret is that management in most companies, even FAANG, often will let you work remotely from time to time as long as you get your work done - I have often worked while traveling in order to cut down on vacation day usage without complaint.

Otherwise, I have seen Netflix offer remote positions on occasion, but know that such positions are extraordinarily competitive. You will not get such a position by being just an above average dev.

You're forgetting taxes. CA has some of the highest taxes in the country. Comparing to TX, for example, gas is about $1/gal more in the bay and TX has no income tax.

Honestly I don't think I'd switch. My current job is comfortable and interesting, despite the "low" salary. It also allows me the freedom to explore my own ideas and projects while maintaining really nice work/life balance.

Numbers on paper don't tell the whole story.

if accredited investor status accounted for Cost of Living I would agree with you

but the reality is that hard numbers, especially when they are 300% more, really do matter

Sure, but after a certain point, more money doesn't make much of a difference.

I travel enough. I go to plenty of good restaurants with my wife and friends. I can buy some fun toys. My retirement fund is in progress. I have no debt.

Would I turn down another hundred grand a year? No. Would I do much with it? No, it'd just go to investments, which I may or may not live long enough to use.

nah, I want to be able to make the same amount annually from interest alone, I want to be able to afford appeals court for any civil or criminal issue, I want a total exemption from the socio-economic woes of the proletariat such as the privilege of switching fielty to nations when convenient or preferred, a total exemption from ever needing to split assets built in a marriage because they would have never been built in a marriage or at least no real impact to an actual nest egg since they existed beforehand

That's... oddly specific.

You do you, though.

Its the privilege that separates the classes. As you pointed out the consumptive aspects completely disappear, but its an incredibly limited view of money.

I forgot to mention the tax and liability advantages of a fully funded trust and autonomous private foundation.

I admit I never considered these aspects of financial gain. What books or other reading would you recommend on the subject?

This is very bad advice. 130k in low COL is absolutely not equal to 400k in Bay. People generally cap their housing expense to 30% salary. So that may give you a mansion in low COL and a 3 bedroom townhome in bay, but the remaining 70% goes very very far. Remember vacations, Tesla, electronic goods, in n out, cost the same no matter where you live.

> 130k in low COL is absolutely not equal to 400k in Bay

It's amazing to me how little people read comments. They latch onto one idea, and then respond to that.

I mentioned - 3 times! - in my original comment that they were not equivalent, but only much closer than they appeared at first glance because of COL. In light of all the responses above, many of which were enlightening to me, I stand by that assertion.

As a parent and engineer in the bay area COL is more extreme than other higher cost areas in the country, My company gives a 15% paycut from the sf bay area to say Colorado front range and these were a few things I noticed (having lived in both, colorado on left sfbay on right): - Housing, 3000 sqft house vs. 1500 sqft (sfbay house double the cost) - Taxes(state) - ~4.8% vs ~10% - Property taxes - $6k vs. $17k yearly - Gas ~$2.2 per gal vs. ~$3.40 a gal - Childcare, 12k vs 24k

I don't think your analysis is correct. Or at least, it's really incomplete and thereby misleading. I'm going to use hard numbers as someone who lives in one of the highest COL areas, but I want to emphasize I'm doing that for illustrative purposes and not to be condescending.

To begin with, the cost of basically anything you buy online from Amazon, Walmart, Apple, Best Buy, etc is the same no matter where you are in the country. Likewise for digital goods. That's a point in favor of the high COL areas.

Of course it's not that simple. You're right that there are plenty of things which cost more money in higher cost of living areas; namely entertainment, cinema, service-oriented experiences like restaurants, bespoke labor, groceries and housing.

In most of those cases the absolute cost raises significantly but the relative cost to your increased salary is still tiny; for example, I spend $6 - $8 for a half gallon of milk, but since I earn well over $300k/year that doesn't really matter. Similarly movie tickets are ~$18 but again, that doesn't scale enough to make much of a dent relative to a competitive engineering salary here.

On the other hand, some cost increases are significant even relative to competitive salaries. This mostly and primarily applies to housing, but it does also apply to restaurants and entertainment somewhat. But despite the fact that I spend over $4000/month for a luxury condo and another ~$2500/month on fun "stuff", I'm also saving over $100k/year on top of maxing out my 401k. That simply blows out any combination of lifestyle and savings I could enjoy in a meaningfully cheaper area.

Finally there is (unfortunately) an opportunity cost to working outside of high COL areas. The concentration of wealth and capital in high COL cities has a superlinear feedback effect on opportunity and lifestyle. There are numerous Michelin rated restaurants near me, a concierge and retinue of helpful staff in my building, world famous entertainment venues within a 20 minute train ride, numerous gyms, lots of childcare, excellent schools, etc. My commute to work is also only 20 minutes.

But those things don't interest everyone. More practically, it is also easier to quickly change jobs here, either out of necessity or for a quick 20 - 50% increase in compensation. Not only is the higher COL a justification for higher salary, but the employee power that comes with a bidding war puts a positive pressure on external compensation packages. The last time I went looking, I received about 10 offers. I don't even currently work at one of the most competitive companies according to levels.fyi.

I don't want to push this on other people because money isn't everything and it's perfectly valid to choose a lower COL area. But I do want to lay out the hard numbers from my experience so as to give a better picture for the situation.

That's interesting. Thank you for that analysis. Again, I wasn't arguing that they were exactly equivalent. They're just not as different as they appear at first glance. It is true that you have a good chance of increasing your savings rate if you can get a job with a FAANG, which is a big deal.

It's also true that it's much easier to change jobs there. That's IMHO the biggest asset and what I used to argue for moving (wife won out).

The culture stuff isn't as interesting. Sadly, wife and I are just homebodies. When we were first married, we lived within a short subway ride of Manhattan yet rarely made it down there. We tend to enjoy cooking, reading, hobbies, etc. Kids are the same. Also, there are multiple other extenuating circumstances that make a move not possible at present.

I do agree with you about the opportunity cost of working outside high COL areas, and I agree that it's not a good thing. It's increasing the country's polarization, which bodes poorly for everyone. But you're right that it's the current reality.

What about my assertion about senior software engineers usually getting shuffled into engineer positions. Do you think that's true, or no?

You mean like downleveling? Sure, that happens a lot. The top paying companies mostly only consider engineers from similarly high paying companies to be known quantities. So if you are a staff engineer at a smaller tech company or a startup, you'll probably end up being "only" senior at Google or Facebook.

> You mean like downleveling? Sure, that happens a lot

Yeah, so that's a major factor here to consider, right? We're talking about moving to a FAANG from a non-FAANG in another region. If most non-FAANG people lose a level, then it really does make the salaries less when you consider cost-of-living.

Downleveling happens, but the $ calculation almost always makes it out very much ahead. At my previous job at a startup, I was making $160k base with stock options as a tech lead/engineering manager, but at my current job at a FAANG, I was offered the same base but with $15k signing bonus and $105k RSUs that are now almost worth double as a high mid-level engineer. For me, accepting the offer was an absolutely a fantastic financial decision. Responsibility-wise, I never felt like I was given less responsibility than at a startup either.

What the downleveling does is align expectations correctly, since most people not at a top tier company likely need some time to ramp up to the expectations of the next level up. What senior/staff/principal mean at companies like Google/FB/Apple is very different from what it means at most companies.

Well, not really. Look back at the salary levels from the levels.fyi PDF. Most people downleveled from senior will end up one or two levels up from new grad. That puts you below the numbers from my comment, but not by a whole lot! And after one promotion you'll be at or exceeding my present situation.

I am much closer to the floor (new grad) than I am to the ceiling, as far as FAANG salaries are concerned.

Does up-leveling happen too? If you were senior or staff at Google, can you get a Principal job at a smaller growth company?

Yes. That's really common when someone very senior at a FAANG wants to achieve a greater level of autonomy and "impact". Once you hit L5/L6 at Google/Facebook (or equivalent elsewhere), the promotion rate slows down quite a lot. So one option to continue career growth is to jump ship for a smaller (but promising) tech company in exchange for more responsibility and a title increase.

It’s certainly true that senior people are unlikely to get hired at a FAANG in a senior role for their first year.

Being a high achieving senior engineer is about delivering on communication and prioritization, more than anything else. It’s very hard to evaluate a prospective hire’s day-to-day willingness to communicate and prioritize, no matter how impressive their resume.

If you do well, you’ll quickly get promoted, though.

And the salary difference is pretty negligible, relative to RSUs, and people who think of themselves as senior can often get pretty senior RSU packages, so this distinction isn’t super relevant for total compensation.

How does that all change if you live a decidedly non-California/non-Bay-Area lifestyle?

I work in the auto industry, which doesn't pay nearly as well, and I'll grant that you're all talking savings rates above my before-tax salary, so you win on that point. However, my hobbies include a machine shop in my basement and a woodshop in the backyard. I estimate the expense of moving to the Bay at north of $150k due to having a non-50-state truck that I would need to replace to be able to move a machine if I ever wanted to upgrade or replace, etc, along with the need for ~2x the typical space that people want in definitely not a condo or apartment. Is that even possible, nevermind practical, in Mountain View?

I probably have a dozen hobbies I'd love to explore that just aren't compatible with my NYC lifestyle. Like anything else, you make your choices on what tradeoffs are worth it to you. For me, not being able to have a machine shop (also on my list) is well worth all that I get in return. You can't have it all, and trying is just going to make your life miserable. If you're happy where you are, then that's what's important.

I hear you on that. I mean that I currently have these things and don't want to sacrifice them, but I seriously am unsure if it's possible to have them in the Bay. If it's not, as I'm coming to expect, I doubt I'll ever consider the switch. I definitely won't for the pay at a startup or the like.

It's very difficult. Whole classes of hobbies are more or less out of the question in the Bay just because of the high cost of housing. If you play the game for a few years, some doors open up but it's never going to be as straightforward as it would be in a low COL area. You'll end up using more shared spaces and possibly need to sacrifice on the commute front to buy more spacious housing.

On the other hand, new venues open up due to the larger amounts of cash on hand. More expensive travel or dining, for example.