I for one care more about less stress, less inequality, etc. and decided that the Bay Area is not for me.
Sure if you want to work at an early stage startup, you can grind yourself into a paste. But there are plenty of jobs here where that's not the case.
The insane commutes, the work culture, the high rent / COL, the culture of trying to look as rich/smart/successful as possible, the sue happy people, the fact that there's absolutely nothing else to do other than work, etc really wore down on me.
I lived in the south bay though... admittedly it seemed slightly better in SF. Less money grobbing and more hipsters. But it looks like all that is going out the window very quickly. The south bay culture is spreading like a cancer.
I'm also mystified at the assertion that SF would be better in this respect. The conventional view is that SF is more status seeking and elitist while the South Bay neighborhoods are more laid back, or at least more diverse in their subgroup compositions.
The cost of living is insane, yes, although astronomical tech salaries entirely compensate for you and me. (Sucks for people who work retail though, and schoolteachers, police etc.)
As far as SF goes, I was talking about 5-6 years ago. I've heard its way worse these days. And it's going to keep getting worse, because the south bay is a cancer. It wasn't until I moved away when I realized that.
I'm glad things worked out for you in any case.
I don't think I'm getting my point across correctly. Sure. There are niches in the bay area that are great, and I'm sure I'd meet many interesting people there, if I decided to stay.
However, there's a certain point where enough is enough. It's not like this problem I'm describing is just the effect of a one-off bubble that will go away soon. It is going to get worse and worse; like it has always been. Housing prices / COL are going to go up and people are going to be constantly forced out of their homes and have to relocate and compromise. If you fuck up in your career or make one bad move with your finances, you are done. Bye bye bay area. If it doesn't happen to you it will definitely happen to your friends. It's just a horrible existence and I am honestly baffled you don't see this despite living there your whole life. The only way I could conceive of you not seeing this is if you and your friends have something like $2M saved up and don't need to worry about finances.
Oh god, you really quantified the cruft that made me hate the place. The bay is sublime in its beauty but could only be perfect for me if the population was subbed out for Austin's or DC's (which are in many ways opposite, but they're also far more distant from SFBay than they are from each other).
This is why I chose not to live here after graduation.
It's given me a very cynical view on life. I really don't know where else to move, I feel like I need to leave the country as well, or at least leave California. Where are you going, if you don't mind me asking?
> I lived in the south bay though
For me, it's mostly been great.
It's been worthwhile and we do plenty of stuff, but you have to be prepared to drive very long distances to see anyone. And many people who don't get into tech move away, so practically everyone is younger than me (and male) and can't afford the hipster restaurant visiting hobbies.
Oh, but the commute here is really not that bad compared to other American cities that aren't "world tier" (LA, Atlanta, DC) because those cities refuse to build mass transit.
I'm assuming you've never paid us a visit :( DC literally has the second largest mass transit system in the country.
It's sad that in the US, you have to take what you can get, and the reasons why the US doesn't have good public transportation have been discussed here ad nauseum, so I won't even flog that dead horse again.
I've only ridden the Metro once, yeah.
I remember reading a piece about alcoholism where it was describing an alcoholic who concluded that everyone drinks a great deal and just doesn't admit it because that was what their social circle was like. I rarely drink alcohol and have known plenty of people like me, so, no, not everyone drinks.
Most people suffer confirmation bias. We look for confirmation of what we believe to be true about a thing. It is unusual for someone to actively seek more objective data and try to determine what the actual truth is. Most of us default to trying to fit the world to our preconceived notions of it.
The culture of the South Bay is relatively non-existent outside of small pockets like Palo Alto, Los Gatos, Mountain view, and maybe Santana Row.
It's geared toward raising kids and family life in general.
Could you clarify what you mean? Because it sounds like either you are saying "Culture only exists in tiny parts of certain places, no place else in the South Bay even has a culture" (which is utterly nonsensical) or maybe you are saying "People who have kids and put family life first are not part of any culture." (again, a big fat nope).
Culture is a human artifact and although it exists partly out there in the world we create, a big piece of it lives inside us and informs us of the proper way to interact with both other people and the spaces we share. Sometimes, people who decry the lack of culture of an area are telling you more about themselves than about the area.
I was merely sharing my observation that certain areas in the South Bay tend to have more stuff to do (i.e. a downtown). Not sure why you took that as me denigrating parents and families. Perhaps I was being vague.
I agree that culture is something, as you put it, that is kept inside of us. However, people don't exist in a vaccum. We are very much influenced by the environment we live in. Most people don't exist in a cultural vacuum where they don't interact with the larger cultural forces in their environment.
My (admittedly anecdotal) experience has been that the South Bay is primarily a work culture. Having lived both in SF and the South Bay, I can tell you that both are offering very different answers for the same question, regardless of whether or not you are single, married, or have kids.
Yeah, no. Please do not assume that a reply of mine to one of three replies to my actual request for clarification is some kind of commentary on you.
I agree that culture is something, as you put it, that is kept inside of us.
That isn't at all what I said. I said it is a human artifact and part of it is stuff out in the world and part of it is a thing inside us, which is very different from saying it is "only" inside us, which is what your framing strongly suggests you read it to mean. In which case, it is you who are misconstruing my comments.
My (admittedly anecdotal) experience has been that the South Bay is primarily a work culture.
Thank you for clarifying.
But the South Bay is basically suburbia, SJ technically being a "city" notwithstanding. So just like pretty much every other urban area in the US, there's enormously more "culture" (in the Arts, Theater, and Culture section of the newspaper sense) in the city, SF in this case, than in the suburbs.
Boston/Cambridge are exactly the same way. I live well West and like it but if I want to go to see a show or music performance, 95% of the time I'm going to drive into town.
Sure there are disproportionately more workaholics in the area. There are also disproportionately fewer people who work 9-5 then go home and veg out on their couch. To me, the lifestyle here is rich and amazing. Where I grew up, which was in an equally large and cosmopolitan city, it's too cold or too hot for 4-6 months of the year to do much outdoors, salaries weren't high enough for people to routinely go to expensive restaurants or travel, and the geography is nowhere near as beautiful or interesting.
Maybe you should look inward more and take charge of your life; it may be that you're hanging around people who focus entirely on work, and so your perception is skewed.
Campbell also has a nice downtown; while it's not San Jose, it's surrounded by San Jose and is basically the same metro and is VTA-accessible. There's also Saratoga and Los Gatos, but those are further out.
Downtown, I'll grant you, though. San Pedro Square can be OK, and the area nearer the University has some quirky stuff, but it has a ways to go. It's gotten somewhat better over the years, though, and I think BART coming to the area may accelerate that a bit since it can actually be a destination.
But here's one thing I've found: People who really want to have fun find a way. There are small pockets all over the bay. SJ downtown is a little lame but it is getting better
You're overstating the issue. It's not New York or San Francisco, for sure, and we sure do need better rapid transit but you're definitely not an hour and a half from everything cool. You're more like half an hour or so. You just need to look for it.
The South Bay is a residential suburb. It doesn't have much of a nightlife. The same can be said about most of the places people live in this country outside of the densest urban centers.
If that's not what you want, then by all means move. But recognize that this is exactly the sort of stability many people strive hard for.
* Rock climbing
* Scuba diving in Monterey
* Bicycling on the bay trail
* Board gaming clubs
* The boardwalk in Santa Cruz
You can even take an hour train ride straight to SF and spend the day with the snobs and homeless. And then take the same train home to a place that doesn't stink like urine.
Your phrasing is needlessly incendiary and possibly mistaken, since parent says
>> I am young and about to finish school, but I am moving away from the Bay Area and even move to a different country.
But if programming is what you intend to bring as a founder - if it's simply a means to get the burning ideas out of your head and into a product, then there's a much smaller number of places where that will work: San Francisco, Seattle, New York. You need to be able to have coffee with a VC, meet with multiple co-founder options, do a tech meetup and also spend a sizable chunk of the day coding.
If you live near a small city, working that way is an impossibility. You'd have to go to the nearest big city to find that type of collaboration, and the trip will burn through all your coding time, and you still won't have the kind of quality selection that you'd get in NY or SF.
As you say, hacking the rent-salary ratio, which is what the article is about, should be a much smaller factor in how you decide where to live.
San Francisco is a place. Engineering talent is available everywhere, though perhaps most places it isn't so much fish jumping onto the line as in the Bay Area.
What about all the nerds who are Polish, Portuguese, and Peruvian and choose to remain local because their spouses, children, and other interests are? They can still code, some of them are definitely brilliant, and they can either work locally or (more likely) remotely.
Starting a "startup" with venture capital might be next to impossible in Peru, for all I know, but a hell of a lot of folks don't want to exit, don't want to dilute their ownership of their product, and frankly like the environs elsewhere.
Not that I have anything against using out of country programmers, but it's a fact that China does not strongly enforce copyright and does not go out of its way to protect foreign businesses. I don't know about Russia, India, South America, etc, I'd be curious about anybody that's done this sort of thing before. Tim Ferris always talks about it for things like running his support and returns and whatnot.
There are certain restrictions that the Bay Area places on you, like how much money you need to earn, and a particular lifestyle you want to live, in a very specific industry. This is the same as someone going to Houston for Oil, NYC for Finance/Fashion, LA for entertainment, etc. People who live in those places have a particular set of goals - e.g. building big companies (vc or not), doing well on wall street, hitting it big in the movies, etc.
If you don't have those goals, then absolutely - stay where you want to stay. Work remotely. There is a ton of arbitrage in software dev right now, you can make a killing and live in really cheap places. You can literally live like a king. if that is what you want to do.
So it all comes down to your goals, and the Bay Area as a whole is self selecting in that way. If you want to do something more chill in software, that's great. We need more people making money writing code - it's great for the world economy. But you don't need to be in the Bay Area for this (unless you want to).
If you are building a company that needs VC funding. Most companies don't.
"Venture Capital is the wrong source of capital for the vast majority of entrepreneurial ventures" http://avc.com/2005/03/dont_take_the_m/
If you aren't looking to raise VC but instead want to be part of a vibrant tech ecosystem, well, that opens up more mid tier cities. For starters: San Diego, LA, Boulder, Austin, Portland, Pittsburgh(?) in the USA.
But, as for the other 80% that's rent controlled, lots of it is pretty dilapidated, almost borderline 3rd world country in some parts. 1% (7k people) of the SF population is homeless and even more are nearly there (despite over 240 million$ a year spent fighting homelessness).
Perhaps the reason people find SF boring is due to the hollowing out of the middle class.
And if you are into oil/gas, Houston. Marijuana, Colorado or Washington. Cars, Detroit (maybe?). Commodities, Chicago. Ag, Kansas City (maybe?). Outdoor experiences, SLC. Building something for Latin America, Miami. Ets, etc.
I imagine there are many other cities that dominate in niches that I'm missing.
Doesn't make sense. The big 4 have campuses across the country.
Instead of telling people to move to SV I would recommend making sure to get into the right (big 4 or not) team and role for your career. Just fixing bugs at big SV company will not help much. You want to make sure you have a chance to contribute something to show your skills on an innovative or leading team.
- I promise you that's only true as far as your project's priority. For example if Google Maps in Colorado is more important to the company, at the moment, than some other project at HQ, then working on that project at HQ is not better for your career.
- Remember a recruiter is a sales person. Some are honest, some will tell you what serves their own interest.
Yes, but a disproportionate number of their positions are in the bay area. Also, it's much easier to job hop between high-paying companies in the bay area, and this is particularly true if you have a specialization more specific/less common than "web dev" or "iOS dev".
They're called "incidents" at some (enterprise software) bigcos, BTW :) - and tend to be called "defects" in software services companies using software engineering standards like ISO 9000 or SEI CMM.
Juniors or freshers tend to get assigned those for a while. Nothing wrong per se, it helps them learn the codebase, and in some bigcos, the codebases can be pretty big. The same practice is followed in some smallcos too.
The downside is everything is so expensive. Housing, of course. But also everything else too, services, other things. If you can live frugally, it may be to your benefit - you get higher income and keep low spending, win. But if you can't or work lower income job, it may be a problem.
The upside is there are a lot of exciting opportunities around, both in employment and in conferences, lectures, events, etc.
But to your point, there are some great events and conferences which is probably the biggest thing missing from Portland. There are a few good events, but nothing at the scale of what happens in SF.
I thought Portland's, and Oregon's schools in general, are not that good. Unless you are talking about private schools.
Curious about how huge the difference in costs and life-quality might be? Play with https://teleport.org
I'm living in a median cost market in an expensive state and live like a king in comparison to someone in my job (senior tech role) in SFO, although my salary is 50% less. I won't be working for Google anytime soon, but I don't need $500k to live in the lifestyle that I want for my family.
If you want the northern CA lifestyle, wait for the real estate cycle to bust and save some money in a normal place.
I thought PDX was a vibrant (albeit small) tech scene until I moved to Seattle. It was amazing how many more opportunities to meet and learn from interesting people there were across all tech stacks. Having enough friends down in the SF area I get the impression that their scene is even more lively.
As for bigger salaries, I think it's mostly hype. My anecdotal evidence makes me believe that there's likely more opportunities for early stage equity/stock type agreements than you'd find in other places, but my salary has always compared favorably to people in the exact same role living down in the bay- and that's before factoring in the cost of living.
Expanding highways makes traffic worse.
Avoid living or working in brick buildings (they fall apart).
If worried, perhaps avoid high tsunami risk zones (that lack high ground, roads are less useful since they will be unusable during large earthquakes).
If you catalog your risks, earthquake death or disability is probably low in scheme of things.
From my experience, if you work in software with a laptop, earthquakes are not likely to affect your work too much.
Unless you have a neurotic partner, in which case avoid earthquake zones, because they lose the plot when the earth takes control.
Spending time there and experiencing the people and general fast approach to development has definitely help me and my career. It is, mostly, different to the more conservative approach typical used elsewhere. So experiencing the two and being able to use both, when appropriate, is helpful.
After two years we moved back to the UK.
Living and working there was amazing. But, overall it felt like it came at a too huge a cost (financially, work commitment, and commuting).
PS: I do miss being there though. :)
but remember, it's all sorts of a fucked up and competitive out here so be prepared to work your ass off. don't move out here to just make friends.
try it out at. you will miss your friends and your family.
What troubles me is the use of median rent to compare housing costs. As rent increases, renters are likely to downsize offsetting some of the rent increase. I'd be willing to bet Seattle renters are able to get more space for the area's median rental. Accordingly, the salary increase probably doesn't cover the rent increase for a similar sized home.
Median would be relevant if you were talking about moving to CA to sell car insurance to tech people.
I incorrectly multiplied the tax rate to the salary difference, and said that this was a 5$ difference. This is totally wrong (as multiple people point out below). I'll leave my original embarrassing comment as a cation to not write stupid things :)
I just added in a mention of the tax difference. But the numbers are 13.3% in CA vs 0% in WA. That's significant, for sure. But 13% tax on $33k is about $5k. I don't think that changes the conclusion that the salary difference does (in many cases) cover the housing costs.
You're likely correct about the price for a similarly sized home. People who want large homes should probably not move to the Bay Area.
On a $150K income you are going to be paying an effective rate for CA around 7%.
Not sure what MediCal is. You mean Medicare? That's federal.
CA OASDI/EE is 0.9% but you only pay it on the first $100K or so.
If the salary difference of $33k is the difference between gross salary, that $33k is going to be taxed at the marginal tax rate. My guess at a marginal tax rate would be ~40%. Accordingly, that $33k becomes closer to $20k after tax.
Edit: to clarify, consider a Seattle salary of $100k and a Bay Area salary of $133k. The take-home salary for each location would be:
Seattle : $100k*(1-0.4) = $60k
Bay Area: $130k*(1-0.4) = $78k
Works out to $9k according to this for a single filer: https://smartasset.com/taxes/california-tax-calculator#8TRRj... -- so your additional income is more like $11k, or just under $1k / mo. In my experience, the difference in housing is far more than $1k/mo, so you come out ahead in Seattle.
EDIT: Looks like I forgot about California's other taxes on payroll, so it's actually even more in Seattle's favor.
Sounds high for Seattle.
The idea is to normalize salaries by cost of living. If you have more specific information for each area (you have actual offers), then you can use that. However, using a lower rent for the Bay Area, for example, because you'll have roommate, may set you up to take an equivalently lower salary.
For example, if you're going from $100k/$2000 location to $100k/$3000 (salary / rent), but you set it back to $2000 because that's your rent with roommates, you've foolishly/ignorantly accepted a lower equivalent salary.
A paid parking space will run you the price of a 1-bedroom in a sane region.
Mountain View's Walmart does not, according to this: http://www.walmartlocator.com/no-park-walmarts-in-california...
A 2015 report by Hired found that when engineers from
the Bay Area relocate to other areas, they out-earn
engineers on the local market. Experience in the Bay
Area seems to advance careers. Engineers moving from
San Francisco to Seattle make an average of $9,000
more than others who get offers in Seattle. This Bay
Area premium is even higher in other cities: $16,000
in Boston, $17,000 in Chicago, and $19,000 in San Diego.
Bay Area hackers are more valued in different markets than local hackers. I would love to see the raw data for the "relocating" hackers and local hackers. Is it a question of applied experience opportunities in the Bay Area hackers? Is just startup afterglow? Are relocating hackers better than average pre-Bay Area experience to begin with and this shows up when they migrate away from the Bay Area?
Geico advertises that "People who switch to Geico save 15% or more". Notice that people who would lose money by switching to Geico should rarely switch. Accordingly, this metric will usually be positive.
Consider that people moving to a new city for a job may need more incentive to move.
Same basic problem as an employee who has worked at the same company for 10 years, and gotten their 3% raise every year - the market may have changed radically, but looking is a burden (emotionally, and otherwise) so they are unaware of that.
Enter a tremendous flood of car insurance advertising... to get people to actually evaluate if they are paying too much.
For what it's worth, when I had to make claims with Geico it was fine. But I was clearly not at fault in either case so it was not a difficult process.
I also think part of their ability to offer lower premiums is generally having lower human involvement -- no independent agents, claims routed through Web site or call centers, claims adjuster on site in body shop instead of visiting you, etc.
"Fifteen minutes could save you 15 percent or more on car insurance."
While I agree with the others calling this a type of sampling bias, I've seen this type of error frequently enough that I think it deserves a more specific name.
Honestly I don't think experience in Bay Area is necessarily better, there are great teams in Europe/rest of US and shitty teams in SV, but for some reason there is this Bay Area "halo".
Source: I've relocated to Europe after 3 years in Silicon Valley.
My company has software developers in Los Angeles, Boston, Dallas, and Sunnyvale. From what I've seen it's a lot easier to bullshit your way into a senior software role in the Bay Area than it is elsewhere, so the rest of us tend to be a bit wary of the ones we don't yet know well.
On a side note: Calling them hackers when you clearly mean run of the mill corporate programmers seems like something straight out of an HBO show.
I lived and worked in the Bay Area for a little over fifteen years, almost two thirds of it at Apple, and almost a third of it at a successful startup called Reactivity.
I left in 2006 because of some catastrophic health events, and have lived and worked in Arkansas since recovering my ability to work.
When I'm working, I find it pretty easy to command higher-than-average pay for this area. Of course, I fairly often work remotely for people still in the Bay Area, or in Boston or Denver, and naturally they're going to tend to offer me more than Arkansas companies would. But I can also command a pretty good premium in Arkansas.
I don't know how much you can take from my example. I'm an old-fart developer now, with a long resume that has a bunch of famous names on it. People who are impressed by those things will naturally tend to offer more money to get them. I've seen some employers in this area become visibly more enthusiastic because of some of the people I've known and worked with, or that I can offer as references. My assessment is that some of that enthusiasm has been respect by association.
On the other hand, there may be some real quality differences in engineering culture, and some fraction of the premium may reflect that. Some of the markets I've worked in outside Silicon Valley have significantly different standards and practices, and the differences are not often for the better. In some cases they've verged on infuriating or clown-car laughable. Maybe some fraction of the premium is employers paying for people they expect to know better, and maybe they're not entirely wrong.
More of our salary went to the local economy than I expected. We have a bunch of kids, which amplified the effect, but I am astonished at how much money it took to not feel like we were struggling to stay above water. Babysitting, gas, food, clothing, activities were all extremely expensive. Even insurance was high.
The things that didn't go to the local economy still cost more — because taxes. We bought a car from Minnesota and paid a huge amount of excise tax to the state of California. Almost everything we ordered from out of state was subject to high local sales taxes. Income tax didn't help either — our higher salary put us in a higher tax bracket. The top $50k of salary only netted us $25k in buying power, which was eaten up by rent.
They can be your highest spending categories and still leave plenty of room left over to save.
As a young person living in NYC (high taxes, high housing, high food costs) I can still save a huge percentage of my income due to the high salaries.
You're not wrong about NYC, but the bay area is really broken.
However, the caveat is that housing is so expensive here that it's difficult to save up for a down payment on any kind of housing on a single engineer's salary. A 20% down payment on pretty much anything is more than $100k, and even a highly paid engineer will need a long time to save up that kind of money while also paying high rent. An 80/10/10 mortgage or some kind of mortgage with PMI is easier to achieve, but those have significant drawbacks.
So, if you have significant cash savings, or a home somewhere else you can sell, you can achieve home ownership in the Bay Area (but it will probably be a smaller home than the one you have now). If you don't aspire to home ownership, you'll be fine too -- a software engineer with an average salary can afford to pay rent here, and people who say otherwise are simply incorrect. But if you are just starting your career and move to the Bay Area planning to buy a home anytime soon, you're going to be disappointed.
Given that many people predicate their quality of life on home ownership, that's a pretty big caveat.
The problem is that $100K is a very low estimate for a down payment in the Bay Area these days. Most people I know are getting parental help to put down $500K down, because with housing prices running around $1.2M, that's what's necessary to get under the $700K jumbo mortgage threshold.
I'm not sure what you think an average salary is. If you think an average engineer can save $50k cash per year out of his/her net income, you're way above the average I had in mind.
Let's assume an average salary of $120k per year gross. That's about $6k per month net for a single person who takes the standard deduction, assuming no 401k contributions. That's a net income of $72k per year. If that engineer saves $50k, that leaves only $12k for everything else. Saving $100k in two years on that salary, which I think is pretty close to the average, is just not doable.
EDIT: Should have been $22k left over, not $12k. Still not enough to live on considering the cost of rent.
Whether or not the established places will toss so much money around if the hiring competition from startups dries up if there's a crunch there, well, that's probably a legitimate question, but I'm not sure that job losses of that size would only hit the Bay Area.
Yes it's expensive, but also yes there really are quite a lot of jobs that pay more than well enough to make up for it.
Why? Fully contributing to a 401k (assuming no company match) would put your "take home" at ~$79,200 instead of $72k following your tax rate (which I assume is roughly correct).
> That's a net income of $72k per year. If that engineer saves $50k, that leaves only $12k for everything else
$72k - $50k = $22k, not $12k.
So with no 401k, you'd have to live on $22k to save $50k/year. When contributing to a 401k, you'd have $29k to live on, which sounds pretty do-able. Add in the fact that you would probably invest these savings, and you can hit $100k after 2 years by saving a bit under $50k each year.
Saving $100k in 2 years is not as outlandish as you make it seem.
I guess it depends what you mean by "take-home". The original premise was "saving 100k in 2 years". I hope we can agree that saving money in a 401k is saving money, regardless of whether we agree it's "take-home".
Most 401k loans become due in full if you leave your job. That traps you in your job until you pay it back, because if you had enough cash to pay the loan outright, you would not have needed the loan in the first place. Unless you have an unusually good severance agreement with your employer that would enable you to pay back the loan if you leave your job or get fired, taking out a 401k loan is a bad idea.
But that's still less than most people's annual rent, so it's still not enough to live on. It doesn't change my argument.
My rent+util is about $2000/month. I live in a very /cheap/ 1-bedroom with creaky carpet floors, no insulation, and near train tracks that's far outside SF. (Belmont)
Altogether I spend close to $4000/month if I don't do anything special. /Everything/ is more expensive in this region. Food is expensive for no apparent reason other than to gouge customers. ($6 for a few sticks of butter? When I was in Seattle, it was $2-3.) I eat less fruits here because the prices are high year round. My job doesn't provide lunches, so I have to eat out everyday I'm at work. I mean, even cars cost more here just on Craigslist. In the same way there's an Apple tax, there's definitely a Bay Area tax.
I cannot possibly save $50k/yr for a house. Oh and $150k/yr is not $110k/yr after taxes. It's more like $94k.
I'm saving maybe $20k/yr right now. Ain't even contributing to retirement. Just trying to save for who knows what until I can get a job that pays 50% more.
You don't have to spend $6/lb of butter, but if you buy it at Whole Foods (or similar), you do.
Granted, the house was a good deal, but should be able to swing a 2/1 for 2500 or so.
That's including rent right? If so that's not too bad.
> Food is expensive for no apparent reason other than to gouge customers.
Stop shopping at overpriced pseudoscience stores (eg Whole Foods). Regular grocery stores are not that expensive. Or buy in bulk at Costco.
> My job doesn't provide lunches, so I have to eat out everyday I'm at work.
Bring food from home and stop wasting money on buying lunch.
You're not the only one paying extra rent to rentiers. So are retailers and restaurants.
$4,000 * 12 is $48,000. Plus your $20k in purported savings is only $68k.
That's only $100k in gross pay, which is the bare minimum for a developer in SV. Most new grads make more than that.
EDIT: And to add more to the conversation than that curt response:
When I compare take-home pay among various jobs I tend to ignore bonuses (because they're subject to your employer's whim--you don't necessarily get them) and I tend to ignore equity (because it's typically temporary--once you vest it no longer adds to your yearly take-home). To compare apples with apples you can only really compare base salary.
A company offering $100k in salary + $20k in bonuses and $80k in RSUs is paying significantly more than one offering $120k in salary with no bonus or RSUs.
Also, Glassdoor tends to skew low. Here's a more reasonable database of new grad offers which average $109k base for public tech companies. 
Most new grads here make $90k-110k from what I've seen. Yes, you can make more. Yes, there are companies that pay stock on top of that. Those people are not me.
I make ~$110k. Minimal benefits. No stock. I happen to work for a big company too. Not every company here pays well and many low ball as hard as they can. (And succeed at low balling)
Before this job, I made $65k. Companies low ball hard and if you can't interview well, you take what you can get.
If you're not a new grad and you're only making $110k, then yes you are making under-market. I'm not disputing what you make (that'd be ridiculous), but your assertion that you're making a standard salary.
Have you actually done this? Know anyone who has?
This seems completely implausible, outside of some extreme frugal lifestyle cases (I'm talking "eating garbage dumped by grocery stores" level frugal)...
 Googling "average software engineer salary california" shows figures ranging from 107k to 135k, 120k seems to be more or less the median of Google's figures.
Edit: added footnote
You must admit that $40k bonus after tax is a huge, atypical amount of money. It makes your effective yearly income to be about $156k.
It reminds me of the mrmoneymustache.com guy, saying "anyone can retire early! Just look at me, all I had to do was get $1M in stock from Cisco!"
No disrespect intended for you; I'm sure compared to some of your friends you lived frugally. The point I'm making is that to duplicate your living standard today, very few comparable developers would be able approach your level of savings.
Not sure what typical bonuses are these days, but I don't think that's out of line for a big tech company. Certainly stock grants can be much more than that, but it usually takes more than 18 months for them to amount to anything.
[1: I am an engineering manager at Google]
The whole point of the original statement was "I made $X and saved $Y, it's not that hard." But when you examine the X and the Y, they are not representative at all!
It has similar merit to a lottery winner saying, "why can't you win the lottery too? All I did was buy a lottery ticket."
Not being very frugal:
- rents $2000K/mo 1BR apartment (single but wants some comfort in the Peninsula, no hellish commutes from East Bay)
- transportation $200/mo
- free lunch (and possibly dinner) at the company - eating out and groceries $300/mo
- entertainment $200/mo
So far, $36k expenses + $50k savings and you still have $8k left to go on ski trips to Tahoe, Outside Lands and other non-frugal lifestyle expenses.
"A decent 1BR" - It all depends on the definition of decent. I pay $2k for a 1BR walking distance to Redwood City downtown/Caltrain.
But forget about renting an apartment, if you want to save and you're single, having roommates allows you to rent in the Peninsula for much less than $2k/mo.
Also, I added $300 discretionary spending which lets you to cover some of the things you described, and you're left with $8k at the end of the year.
Can you easily save $50k while spending $3k on rent+utilities to live in a fancy apartment in the Peninsula ? Maybe not, but you certainly don't need to be "eating garbage dumped by grocery stores".
Nice strawman :) I was specifically talking about the situation conditional on saving the 100k in 18 months, my comment was a response to the comment above it.
Separate point: your figures seem very low. I thought SF is roughly equivalent to NYC in terms of cost of living. In which case 300/mo is a zero off as an estimate for all food expenses.
Like the article mentions, saving a lot is easy if you're fine with a roommate and living in a non-luxury apartment, but if your housing standards are higher than that then it's tougher.
This is, of course, at the compensation levels talked about in the article. Some companies (early stage start-ups, banks) pay much less.
NYC, not SF, but the difference isn't huge.
Most people are atrocious with their money by either overspending or under-optimizing.
Also, the average apartment in Manhattan (if you do rent without roommates) is pretty close to your cited figure for total monthly expenses. Which means you either lucked out, or seriously compromised on your living arrangements.
I was making $150k/yr, which is pretty standard for a developer in NYC.
> Also, the average apartment in Manhattan (if you do rent without roommates) is pretty close to your cited figure for total monthly expenses.
I take it you don't live in NYC. The average is a useless metric because it's distorted by millionaires and billionaires. Just go on Craiglist and you'll find plenty of suitable apartments in the $2-3k range.
Nobody I know pays more than $3k/m for their apartment. Heck, my friend just rented a beautiful luxury single-bedroom for $2.8k.
In my case, I chose to go for a non-luxury apartment for $1.8k/m. This was definitely a deal, but even though it wasn't luxury there was plenty of space and I even had a back yard.
> Nobody I know pays more than $3k/m for their apartment.
Few people I know pay under. We live in parallel dimensions I guess.
> In my case, I chose to go for a non-luxury apartment for $1.8k/m.
I don't know what NYC you live in, but this is non-existent AFAIK. I know someone who went all the way to Rego Park (this is really far from Manhattan) to rent a 1BR for $2.5k.
edit I don't know what a 401k is good for (I already have two retirement saving schemes in other countries), mostly did staycations since SF is such a tourist destination.
I make about that much, at a company without free food perks that doesn't give me amazing stock bonuses (my social skills are too bad to negotiate them…) and I live frugally but could never save that much after $2k/mo rent! And there's no huge parental loans for me.
Read: Don't have a family and don't do anything special, like take vacations.
Also, average rent is $3600/month. That's over $43k a year. That leaves $17k for everything else, following your plan.
Families that need 2+ bedrooms and a good/safe neighbourhood are screwed though.
But if you do and are, you have $100K. Congratulations. That does you no good when homes are $1M+. Keep saving.
Regardless, whether it's 2 years or 3 years, to do the lifestyle you're suggesting takes and incredible amount of willpower to be willing to sacrifice and prioritize. It's passing up that cell phone upgrade. It's cutting discretionary spending to zero. It's passing on happy hour and bringing lunch every day.
While feasible, it's hard.. but suffering for two years to benefit for a decade. Quite possibly worth it.
When I bought my first home my loan (P+I) payment was $1300 per month on average (paid every 2 weeks), which was not only affordable but cheaper than what I was renting at once you accounted for interest deductions! But the taxes were somewhere around $500 a month after the township raised local property tax by the maximum year after year. Due to average daily balance laws and escrow regulations, we often had a substantial amount of money "invested" in to our escrow account.
There was no amount of deductions to make this home an asset. It pushed a good quality home at a great price to something that now remains completely unoccupied.
My situation is 100% atypical - but I more meant to illustrate how big of an impact property taxes can be.
It is easy to end up spending double rent on a comparable place. The difference is for now at least the home you buy can grow nicely so you need to do the math on rate of return for that vs other uses of that cash.
Also, I don't know anybody who got that kind of parental help or put $500k down.
From TFA "the jumbo loan is supposed to come with a slightly higher rate". IMO the rate should be a LOT higher; otherwise PMI is always a losing proposition. Bizarre market forces indeed.
It was certainly surprising/counterintuitive that jumbo rates would be lower than conforming, but even when they're not, it sounds like they're incredibly close.
That said, if someone wanted to throw $500k at me to buy a house, I wouldn't turn it down :)
The other big thing to help with home ownership is to get married. With double the income it is a lot easier to save for a downpayment.
With a frugal lifestyle, 10% should be doable in a couple years, especially if you're okay with living in the East Bay (so the house price is somewhat reasonable).
On an engineer's salary, it is very doable to pay rent and still save up enough to buy an entire house in cash elsewhere in the country.
The cost of living comparisons I've seen are comparing the "local economy". They compare the cost of: housing, food, transportation, health care.
My big break was finding a job in San Francisco. I charmed my way into an entry level sales gig with a base salary of about 35K USD (in 2004), and was soon making at a 70K-ish "annual run rate" (stealing that from startup PR lingo). And that job did all of the lead generation for me. I wasn't able to find a job like that outside of a big city.
Even when I was homeless for a bit a few years later, I chose to stay in San Francisco over moving in with my suburban LA parents because there I saw more opportunity in San Francisco. For me, it was riskier to play it safe in the burbs than hustling in San Francisco. It's better to burn out than fade away.
The way I see it, if you wanna make it as a professional, and you don't have a reasonably understood career path to follow, it makes sense to go where the money is. You can live financially cheaply in most places, and you'll have to decide how much you're willing to work for it. For me, living in San Francisco is, and has been, worth it.