
I made 6 figures at my Facebook dream job – but couldn't afford the Bay Area - yladiz
http://www.vox.com/2016/9/14/12892994/facebook-silicon-valley-expensive
======
zeveb
> I’d been granted a few thousand shares when I got hired, and after the
> company had its IPO in 2012, I sold all the shares that had vested. … We
> could finally rent a house for just our family, no roommate. In order to
> afford that, selling stock became necessary every quarter it vested.
> Obviously, this is not the path to financial security, but when the sum of
> money that lands in front of you isn’t life changing, you look to the short
> term and what it can do for you right now.

What‽ Selling capital in order to finance daily survival is _terrible_ : the
entire point of a working life is to accumulate capital in order to finance a
retirement.

Not having a roommate was, literally, a luxury he and his family could not
afford.

> But for a person with a family of four who has a certain lifestyle that they
> want to try to maintain (a niceish $40,000 car, the ability to go out once a
> month and leave the kids with a sitter, a house that wasn't last remodeled
> in ’70s, etc.) it can be difficult.

If you have a wife and two kids, then maybe buying $40,000 cars is a mistake.
Maybe getting a fancy house is a mistake. True fact: children survived into
adulthood just fine in the 1970s. Part of being an adult is knowing how to
differentiate between essentials and luxuries.

Honestly, with his sort of (admitted) short-term financial mismanagement, I
don't think he could survive on six figures in Dallas, Houston, Denver, Kansas
City or anywhere else. He'd make the same sort of bad decisions, perhaps with
a longer runway to ruin.

~~~
swsieber
People want the nice things their parents had, but not on the same timeline.
They don't realize that nice things take a while to accumulate.

Yes my parents drive a Prius. But growing up in a family with 5 other
siblings, they pretty much drove beaters. And our house started with, as we so
fondly called them, the seven ugly carpets of the world. And those were slowly
replaced over time. The house we lived in until I was one had slanted kitchen
floors - just throw a towel at the correct wall if you spilled.

The point is that our parents affluence isn't the result of a general rise in
affluence - it's accumulated. But we often don't think about that when making
our early financial decisions.

~~~
grecy
> _People want the nice things their parents had, but not on the same
> timeline_

I don't think that's telling the whole tale.

Soon after my parents got married in '74 they bought their first home, brand
new. It cost 5 years of my Dad's salary at the time (a new teacher). So with
the two of them working, they paid it off in just over 3 years.

Go find me a house for sale now that's less than 10 or 15 years of an
individuals salary.

The world is a much different place - so I think people want the nice things
their parents had, and they'd be happy if it were even _the same_ timeline,
but it's much, much longer.

~~~
brockers
My home is 2-3 years of my annual salary. So is most of my co-workers. Yes,
that is probably not true for a teachers salary (although my first home was
definitely within 4 years of a teachers salary.)

Are you living in the Bay Area? Is that why medium home prices are so high?

~~~
grecy
> * you living in the Bay Area? Is that why medium home prices are so high?*

Canada/Australia.

Pretty much anywhere you want to live houses are insanely expensive. Upwards
of $450k for a 2-3 bedroom built in the 60s.

------
timtadh
I think the point is: his salary while not high by SF was high in nearly any
other location in the US. In any other location, he and his family could live
how they wanted. In any other location, have a $40,000 car instead of a
$10,000 or less car is a perfectly reasonable. In any other location, eating
out more than once a month would be perfectly reasonable. Having a expensive
hobby racing cars is reasonable, just not in SF.

The point of the article wasn't that I am poor you should feel sad for me. The
point was: look the Bay Area is so expensive that it is impossible to afford
unless you are making an extremely high salary. A good salary isn't enough, a
high salary isn't enough, it has to be extreme otherwise you will need to make
life style sacrifices to live in the Bay Area.

~~~
hapless
Spending 40% of your annual income on a car while supporting an entire family
on that income is grossly irresponsible, regardless of the geography.

~~~
atombath
I guess I'll respond everywhere you tried to make this point. A $40k car will
likely come with a 5yr loan that's cheaper than student loans. That'd actually
be $8k/yr+interest... which is not 40% of your salary. Find something else to
judge the guy for.

~~~
hapless
Even if it's 0% interest across 5 years, it's still _forty thousand dollars._
Whether you pay it all at once, or in dribs and drabs each month, you are
paying more than you can reasonably afford.

(To say nothing of the prudence in financing a depreciating asset)

------
noer
I don't know, it seems like a lot of this guy's problems are totally within
his control. I sort of assume he's the only income source for his family, but
also has an expensive hobby he doesn't want to give up and also wants to live
a life of (somewhat) luxury. I mean, I get it, kids and the Bay Area are
expensive, but I think there are better examples of "the cost of living in the
Bay Area is out of control" than a guy with a reasonably good job and an
expensive hobby he doesn't want to give up.

~~~
decaysackparity
Yeah, I don't get it either. What happen to living below your means?

I make 6 figures, drive a 16yo car (2000 accord FTW!), take public
transpiration to work, brown bag lunch. My partner works part-time to take
care of our child. My home is the right size for what we need.

Why does this guy have to live in a Bay Area? No one is going to weep for you,
buddy. You made bad life decisions and you need to deal with them.

EDIT: spelling

------
dsfyu404ed
What the title should read is "couldn't afford a lifestyle I felt was
befitting someone making six figures in the bay area"

~~~
dgacmu
"a niceish $40,000 car,"

ish.

High on the list of signs that you've bought far too much into lifestyle
inflation is thinking that a car costing 70% of the US median household income
is only "nice-ish."

~~~
cyberpanther
Lets take the product of Silicon Valley, the Tesla. Even take the cheap one at
$35,000. I don't think that is much to expect in a lifestyle also considering
you make more than most people.

Henry Ford back in the day raised wages and cut hours because he noticed not
even his employees had money or time to enjoy his product.

I think Silicon Valley is at this same point. Work your butt off to not enjoy
life. If your single I think the economics work out but for families the area
is very hostile.

~~~
brockers
Nobody "deserves" or should "expect" a lifestyle. Life is simply a series of
choices. If you choose to have a $40,000 car on 100K income, then you choose
to take money from your stocks because you choose a lifestyle over substance.

I make more than 100k, and I have never bought a car for more than $14,000...
why? Because I choose my family over my lifestyle.

~~~
monochr
And no one deserves customers. What silicon valley is doing is destroying the
consumers that would be buying its products.

The guy doesn't work at Tesla, but if the average employee in Tesla can't
afford their standard model and have enough money left over to live they are
not a viable company, as Henry Ford figured out more than a century ago.

It's capitalism 101, you cut labour costs only to find that you've cut demand
as well.

------
koolba
> We knew as our family grew that we wouldn’t want to live with a roommate
> forever. So when the opportunity arose for me to supplement my salary by
> selling my Facebook stock, I took it. I’d been granted a few thousand shares
> when I got hired, and after the company had its IPO in 2012, I sold all the
> shares that had vested.

> We could finally rent a house for just our family, no roommate. It was
> great, but that also meant even larger housing costs. In order to afford
> that, selling stock became necessary every quarter it vested. Obviously,
> this is not the path to financial security, but when the sum of money that
> lands in front of you isn’t life changing, you look to the short term and
> what it can do for you right now. In many ways, this follows exactly with
> the Silicon Valley hustle that many startups fall into. The path in front of
> you isn’t always clear, so you hedge your bets.

WTF? If your day to day financial survival depends on selling stock as it
vests you're either a) an idiot or b) backed into a corner. In this guys case,
it should have been obvious when he started the gig that it wasn't
sustainable. If not immediately, then when he moved out and started selling
stock to cover renting a house.

A pretty simple rule is that you should be accumulating capital, not spending
it to cover operating expenses. Sure if shit hits the fan, and it invariably
will at some point, you will be spending from capital till you get back on
your feet. But it shouldn't be a day to day thing.

~~~
robalfonso
I agree completely with you, I would stipulate one thing. When starting a new
job its reasonable to take a short term hit in the hopes of advancement (and
higher wages). So its fine to have a room mate and live a less than desirable
life time short term. I think the time to pull the plug though is at dumping
the stock.

------
simonturvey
I was quite sympathetic until I hit the mini-bio at the bottom:

"Matt Kulka works for Local Motors in Phoenix, Arizona. He loves to drive cars
around race tracks, his expensive hobby that he just doesn’t want to kick."

~~~
pinewurst
For me it was:

"My salary was about on-par with what I was making at my last job in Phoenix —
just barely breaking into the six figures — but housing costs were
significantly different."

Who in their right mind would move to the Bay Area on a Phoenix salary?!

~~~
PacketPaul
Two reasons:

Stock Options

Work at Facebook

------
ones_and_zeros
I think there is something to be said about living beyond their means but, to
me, a new car and home for my family is a fair middle class lifestyle. (You
can quibble over the 40k price tag, but buying a 40k car and making it last
doesn't have as much of a financial difference as a 30k car over the long
term)

I think this article is speaking out against this narrative that techies are
incredibly well paid while in reality we mostly work in over priced cities
with awful commutes and have a government and industry openly trying to
suppress wages.

Any time one of us says "hey, we aren't that well paid" there is always
someone to say we should move further away from work, or downsize, or skip
having a family, or stick to rice and beans and it's getting old.

~~~
hapless
When you support an entire family on a single income, spending 30% or 40% of
your annual pay on a car is irresponsible.

No "ifs," "ands," or "buts." That's just bad financial planning. It's a
totally unnecessary luxury that holds the potential to burden the entire
family.

Additionally, your definition of "middle class" is quite peculiar. The median
wage in the United States is less than $30k. The median household income is
less than $60k. Do you really think "middle class" families are buying cars
that cost as much as one of their salaries?

~~~
atombath
Does no one here buy cars? I forgive you. A $40k car will likely come with a
5yr loan that's cheaper than student loans. That'd actually be
$8k/yr+interest... which is not 40% of your salary. Find something else to
judge the guy for.

~~~
skybrian
You could also by a nice used car for 10-15k or so, pay cash, and have no
payments for many years. People who can afford better will willingly do this
to save cash for other things. If you refuse to play the game well it's
probably because you have weird ideas about what you "deserve".

~~~
atombath
Definitely. Also, getting a new car that prioritizes reliability is a smart
move as well. The author didn't do this though. A nice(imo) new car can be had
for less than ~$25k and his $40k tells me he wanted something a little more
flashy. I agree these overextended purchases usually come down to someone's
ego getting in the way. A direct consequence of our "what you buy defines you"
culture.

------
byoung2
_The only problem: It’s really hard for a family of four to live in the Bay
Area on just one income — even if it’s a great income_

In any of the prime real estate markets it's hard to live on one salary. That
is not a problem unique to the Bay Area. Furthermore, barely breaking 6
figures is not a generous salary in tech (he even says it was on par with his
salary in AZ).

~~~
flubert
Yes. Compare and contrast:

[http://www.zillow.com/homedetails/152-Sagamore-St-San-
Franci...](http://www.zillow.com/homedetails/152-Sagamore-St-San-Francisco-
CA-94112/15195448_zpid/)

[http://www.zillow.com/homedetails/1055-Gilman-Ave-San-
Franci...](http://www.zillow.com/homedetails/1055-Gilman-Ave-San-Francisco-
CA-94124/15154652_zpid/)

[http://www.zillow.com/homedetails/15320-Swan-Ct-Gulfport-
MS-...](http://www.zillow.com/homedetails/15320-Swan-Ct-Gulfport-
MS-39503/81696625_zpid/)

------
cyberpanther
Having the same problem. I have a lot of job offers for the bay area but can't
make the jump because it would destroy my family life due to the high cost.

Middle class families are basically priced out of Silicon Valley.

~~~
calebm
Perhaps... some companies would see that as an advantage? If you were a
company who only wanted to hire young people with no family to keep them from
working 70 hours a week, then locating in Silicon Valley could be a great
strategy.

~~~
cyberpanther
Yes I often wonder if that is a real strategy. Any whistle blowers want to let
us know?

------
scarby
Barely breaking 6 figures is an entry level engineers salary in the bay area.
Also in the world that I live in single income families are the exception
rather than the rule.

~~~
pmiller2
He was barely breaking 6 figures in 2009. I wasn't around the Bay Area then,
but that strikes me probably significantly better than entry level at the
time, given the way rents have gone.

~~~
stephencanon
Back in 2009 you could rent a house with a yard in a nice part of Palo Alto
for ~2.5k/month (Or less, my wife and I were paying 1.8k at the time for a
small but very nice house with a 1 acre yard). ~$100k (while still reasonably
entry-level) went pretty far then.

------
bgirard
I'm moving to the bay area to take a job at Facebook in 2 weeks. When
comparing all my offers, my wife and I made a budget for each offer to
understand the salary differences and their cost of living. We know exactly
what we can afford. I don't understand why everyone doesn't do this before
taking a job somewhere.

------
surfrider
This guy would get DESTROYED over at /r/personalfinance

~~~
paulcole
LENTILS!

------
nunez
Tech is a well-paying job in areas where you need to be well-paid to live
somewhat comfortably. It isn't nearly as lucrative in other areas _unless_
you're a remote worker _and_ you negotiate well _and /or_ you work in the
right industry (finance, healthcare, law).

At least that's what I'm beginning to notice anyway.

The fiscally responsible thing to do would be to move to New York City, take a
$100k+ job, live about 45-60 minutes away in Brooklyn, Queens, Staten Island
or the Bronx, create an emergency fund, get promoted a few times and spend a
good while finding a high-paying job in the area you actually want to live in
that has a significantly lower COL.

The thing about SF is that it isn't just the rent that kills you. You also get
taxed like crazy for everything _and_ , from what I've heard from coworkers
over the years, you'll need to have a car to be realistically mobile outside
of the Bay (unless you never leave the Bay, of course). Insurance premiums
cost more there and CA gas is the most expensive in the nation.

As much as we like to complain about it, public transit in NYC is amazing. You
legitimately don't need a car to live there. It's darn convenient in the
outerboroughs, but it isn't a necessity and, in many cases, it's a pain in the
ass. Speed limits are low city-wide. Expressways top out at 50 and are usually
set at 40 because of population density and shitty road conditions. People are
super aggressive. NYC is not fun to drive in. Manhattan is much much worse.

Nearly the entire city is reachable by train and/or bus. You can save a lot of
money this way.

------
alain94040
On craigslist, I find 2-bedroom houses in Santa Clara for $2300 [1]. That
would give you a very decent commute to Facebook (much better than living in
the East Bay). That's $28K/year. His net salary should be around $65K. You
should be able to go out more than once a month with the money.

[1]
[http://sfbay.craigslist.org/sby/apa/5780924443.html](http://sfbay.craigslist.org/sby/apa/5780924443.html)

~~~
api_or_ipa
I wonder why the author wholesale ruled out apartments when homes like the one
you linked to are all together very similar in living space.

On a side note the Bay areas' affordability problem could be greatly reduced
if more dense housing stock was pursued. Sadly, I fear too many of us demand
living in houses as an unassailable demand.

------
ravenstine
That's exactly why I chose not to work in the Bay Area. Perhaps I have chosen
the less challenginger or rewarding path (I don't know), but my first job as a
programmer paid me peanuts(40k) and I lived in a pretty nice place with a
roommate; a year later I got another job that paid 84k and got to rent a small
house, live on my own, and not have to worry about how much I spend. Entry
level pay, even in SoCal, can mean decent living. Entry level in the Bay seems
to mean constantly struggling to make ends meet while living with several
people. Granted, I know people who get a thrill out of that, and that's
perfectly fine, but that's just not for me. Living both in San Francisco and
the East Bay taught me that. Was fun, but I like not being a workhorse and
having excess cash to spend on my various projects.

Then again, it sounds like tat guy's spending was way out of line. Like many
people, he probably blew his money on expensive toys(and a penis car) to gain
a feeling of status.

------
lj3
Am I the only one who thinks the great big takeaway from this is the guy works
for local motors?!? Talk about landing on your feet. I've wanted to work for
them for years, but their need for web developers is small and the timing
never quite worked out.

------
c17r
> The offices are like Disneyland for tech folk. Vast open stretches of
> adjustable desks....

I kinda stop reading and just started skimming after that.

------
jkot
I work remotely for past 5 years. Nothing beats that if you have small
children.

------
ting_bu_dung
the price increase of silicon valley homes partly is affected by all the
foreign capital seeking stable, safe investment in US, particularly China's in
the last few years (due to China's exponential growth in debt creation). we
should see substantial slowdown/decline in the coming months (because China's
economy has stagnated, and because the capital control for most normal
citizens have worked)

~~~
kelukelugames
I hear this anecdote all of the time. In fact, when I was buying a house I
lost two offers to foreign buyers. I've seen studies show the impact of AirBnB
on real estate prices, are there similar one for foreign buyers?

------
cemregr
Facebook has offices in Seattle and NYC too. In NYC you can buy in NJ, Queens
or Brooklyn and still have a reasonable commute.

------
wehadfun
100K aint what it used to be.

------
davidf18
The higher prices for housing are because of politically induced scarcity
through zoning density restrictions. SF, NYC, LA, Boston, DC, London, and
other cities suffer from these "market failures" in this case called "economic
rents." The result is a regressive "tax" transferring wealth from renters to
landlords. Income that should be going towards goods and services are going
toward landlords such as Donald Trump instead making landlords far wealthier
than they would be in an efficient market.

In NYC, there was formerly a politically induced scarcity of taxi medallions
(limited to 13,000) with the result that medallions had a market value for
$1.2 million and taxi riders paid higher fares to help cover the higher taxi
leasing prices of drivers. Once Uber/Lyft came to town, the politically
induced scarcity was no longer occurring as there were many more taxi-like
vehicles. The result: taxi medallions dropped in value to $700,000 and
Uber/Lyft rides have been getting cheaper (but still far higher than LA,
Chicago).

See (Harvard Economist) Edward Glaeser: Build Big Bill
[http://www.nydailynews.com/opinion/build-big-bill-
article-1....](http://www.nydailynews.com/opinion/build-big-bill-
article-1.1913739)

and Financial Times columnist and BS, MS Economics Oxford Tim Harford: The
Undercover Economist
[https://www.amazon.com/dp/B007NIDW1Q/](https://www.amazon.com/dp/B007NIDW1Q/)

Many people complain about the high cost of living, but the issue is simply
political. High tech people, particularly need to get involved in politics to
help make housing more affordable for all. Simply fix the "rent seeking" laws
that restrict zoning density.

In the 19th century, David Ricardo wrote about the "Corn Law" which placed
high tariffs on all grain imported to England with the result that landlords
that owned land that grain was grown on realized far greater "economic rents"
amounts of money for their land while other people paid for for basic food
such as bread. Ricardo went into politics to help reverse the Corn Laws with
the result that landlords no longer realized their regressive tax on consumers
while food prices decreased.

The housing problem is simply another case of "Corn Laws."

In particular, Google (Alphabet) has a profit making subsidiary called
Sidewalk Labs for improving cities.

[https://www.sidewalklabs.com](https://www.sidewalklabs.com)

From the website: "Sidewalk Labs is a new type of company that works with
cities to build products addressing big urban problems."

City Labs is in a position to use Google's resources to make housing more
affordable. Google owns one of the largest office buildings in NYC and
Sidewalk labs is located in NYC, so NYC might be a good place to start.

Like Ricardo's case of reversing the "Corn Laws" this is simply reversing
unfair laws that benefit landlords over renters and make housing unaffordable.
No increase in taxes are required.

