Hacker News Reader

Comment by qqwaabb | Hacker News Reader

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.

View on HN

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.

> 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.

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.

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

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)

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.

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.

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

Reply on news.ycombinator.com