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Does It Make Sense for Programmers to Move to the Bay Area?

blog.triplebyte.com

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Re: Does It Make Sense for Programmers to Move to the Bay Area?

#81

Post by bcheung »

One thing the article is missing and not factoring in is home ownership. It can be a tremendous form of "compensation" as well provided you can weather out any downturns (10 years will probably be sufficient).

With high salaries you have high tax brackets. Probably 40-50% total marginal tax rate with state, federal, and all the misc taxes. Being able to subtract your mortgage interest and the fact that your "rent" is going to pay down equity, on paper at least, your living costs are actually lower. Even more so if you have roommates.

Factor in 4-10% appreciation with leverage (10% down = 1000% leverage) so that becomes a 40-100% annual ROI.

Work in the bay area for about 10 years when you are young and then sell your house. You can buy another house somewhere cheaper for cash and then retire.

Might also be possible to just rent out the house in the bay area. The rent should cover rent some place cheaper and have plenty of additional cash flow to live on each month.

Re: Does It Make Sense for Programmers to Move to the Bay Area?

#82

Post by sidlls »

maqr wrote: post #65
JoshTriplett wrote: post #35

Earlier quoted context omitted.

> I do not understand the obsession the software industry has for locality. For many types of problems, collaborating in person works far better than collaborating online. Lower friction, easier to have a conversation, easier to sit around a computer and experiment, and generally easier to handle things in a few minutes that would take longer otherwise.

Yes, let's all keep believing that. If companies realized that all programmers can actually work decentralized, we might not be able to command a decent salary as it becomes a global race to the bottom...

Most programming is work that can be done in a decentralized fashion. Some can't be. In either case the salary commanded is influenced by a number of factors other than supply (quality of the supply, for example). So I'm not sure a "global race to the bottom" of the apocalyptic kind you imply would result in such a realization.

Re: Does It Make Sense for Programmers to Move to the Bay Area?

#83

Post by bcheung »

JoshTriplett wrote: post #35
jasonjei wrote: post #31

I do not understand the obsession the software industry has for locality. Wouldn't it make sense for people to work anywhere? Haven't Bay Area companies heard of something called the Internet? If you have to have people in the office to make sure they're working, you already have a fundamental hiring problem.

> I do not understand the obsession the software industry has for locality. For many types of problems, collaborating in person works far better than collaborating online. Lower friction, easier to have a conversation, easier to sit around a computer and experiment, and generally easier to handle things in a few minutes that would take longer otherwise.

It definitely facilitates communication. However, most tech companies have open floors for programmers and it is a huge hinderance to productivity.

Plus, it's really hard to eat healthy at a tech company.

Re: Does It Make Sense for Programmers to Move to the Bay Area?

#84

Post by tedmiston »

Counterpoint: Globalization is real. Top tier accelerators accept companies from outside of the Bay Area and tech hubs these days. You can work for a tier 1 early to mid stage startup in a tier 3–4 startup ecosystem if you look hard enough (I do).

(The Triplebyte recruiter didn't seem super enthused with that being my response to why I didn't do their process.)

Re: Does It Make Sense for Programmers to Move to the Bay Area?

#85

Post by the_gastropod »

_skel wrote: post #52
nostrademons wrote: post #34

Earlier quoted context omitted.

It takes about 2 years to save up $100K on a typical Bay Area engineer's salary, if you're fiscally prudent. Figure that $150K/year after taxes is about $110K/year, and live on $60K/year. That's eminently doable even in the Bay Area. 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…

> It takes about 2 years to save up $100K on a typical Bay Area engineer's salary, if you're fiscally prudent. 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 standa…

> assuming no 401k contributions.

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.

Re: Does It Make Sense for Programmers to Move to the Bay Area?

#86

Post by mrkurt »

ammon wrote: post #48
harterrt wrote: post #32

It looks like the salary differential of $33k listed in the article is gross earnings. After taxes this would just barely cover the rent differential of $1.5k/mo ($18k/year). Note that this is the best case scenario according to their estimates. 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…

EDIT 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 do…

Ha, getting taxes wrong isn't stupid. It's a sign that taxes are complicated. :)

Re: Does It Make Sense for Programmers to Move to the Bay Area?

#87

Post by timothycrosley »

stephencanon wrote: post #62
timothycrosley wrote: post #29

The smartest thing would be to start in Bay Area, and then transfer to Seattle at the same pay rate.

If you are going to transfer somewhere at the same pay rate, transfer somewhere cheaper and nicer than Seattle. Lots of options (I'm partial to northern New England, personally, as I like having proper winter).

It's much easier to justify keeping the salary with a move to Seattle, since the pay rate difference isn't as large. It's also much easier to then find a new programming job if you lose one in Seattle.

Re: Does It Make Sense for Programmers to Move to the Bay Area?

#88

Post by superqd »

jeroen94704 wrote: post #41

This article seems to assume you're single and not in a hurry to start a family. I'd be interested to read an article "Does it make sense for a programmer with a wife and kids to move to the bay area". I secretly suspect the answer will be "no", since no matter how you slice it, a 4-bedroom house in the Bay Area won't be reachable until you are well on your way to, say, 40 or so.

I interviewed over phone and skype with a Bay area company not too long ago. In between interviews, since things were going well, I started looking for places to live. I have 2 kids, and currently live in a 4200 sq ft house in Texas. I was more than fine with downsizing, but not at the cost of eating up all my salary to live with my family in an apartment that was barely acceptable when I was single. My kids are currently in a top school district here, and to send them to a top (public) school in the Bay area was insanely expensive. The salary I would have received ($130k range) was no where near enough to get me into a 2k sq ft home near good schools. As I researched areas, I just couldn't understand how the salaries were so low, and the cost of homes/apartments so high. But if you have no family to support, take on roommates and are fine with 500 sq ft to live in, then it will be mostly ok to live there.

Re: Does It Make Sense for Programmers to Move to the Bay Area?

#89

Post by timothycrosley »

balls187 wrote: post #56
timothycrosley wrote: post #29

The smartest thing would be to start in Bay Area, and then transfer to Seattle at the same pay rate.

Because Seattle companies don't understand cost of living?

Because you're working for the same company, in the Seattle office. Additionally, a lot of the difference is from income taxes that you no longer pay - something that companies take into account when making the initial offer, but not generally when doing transfers.
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