Does It Make Sense for Programmers to Move to the Bay Area? • Hacker News Board

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

#131

Post by kevinskii » Wed, Dec 14, 2016, 8:41 PM UTC

eloisant wrote: post #79

colechristensen wrote: post #70

Earlier quoted context omitted.

It could be as simple as Bay Area hackers being accustomed to higher salaries and negotiating higher (or not accepting lower offers) even in places with cheaper living expenses.

There is that, and the fact that in the eyes of prospective employers Bay Area experience is highly valued. 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.

Maybe European companies see a Bay Area "halo," but I wouldn't say the same about American companies.

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.

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

#132

Post by bcheung » Wed, Dec 14, 2016, 8:41 PM UTC

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…

Where are you getting 13.3%? Most likely a software developer is going to be in the 9.3% bracket. And it is also a graduated bracket system so you are only paying that 9.3% on income over $51K.

See https://smartasset.com/taxes/california-tax-calculator

On a $150K income you are going to be paying an effective rate for CA around 7%.

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

#133

Post by kirubakaran » Wed, Dec 14, 2016, 8:41 PM UTC

evanpw wrote: post #123

harterrt wrote: post #75

Earlier quoted context omitted.

This could also be an artifact of the metric. I call this the "Geico" fallacy. 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.

I've always found those advertisements weird. If consumers are rational and have good information, then the average savings from switching is the same as "how much do you have to pay someone to switch to Geico?". The higher it is, the worse you should expect service to be!

Exactly! "Customers pay us more than our competition. They clearly love us and we're doing something right" is a nuanced point hard to make in an ad, but it needs to be made somehow. That's probably why Statefarm et al focus on their customer service in their ads, but those ads don't sound so catchy.

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

#134

Post by logfromblammo » Wed, Dec 14, 2016, 8:41 PM UTC

mrkurt wrote: post #24

JKCalhoun wrote: post #20

If you plan on buying a home it is worth considering the future when you decide to (semi?) retire from Corporate and sell the kid-raising home. Cashing out in Arkansas means you can move to ... a cheaper part of Arkansas. Cashing out in Silicon Valley means you can go about anywhere.

Arkansas and other places where land is effectively free work differently than California. You buy a starter home straight out of college, maybe you improve it, it'll probably increase in value marginally over the next 5 to 7 years. Then you sell it and put what you've "earned" into your next house. My friends back in Oklahoma are on their third or fourth houses (we're all around 35) at this point. In the Bay Area, y…

If you have ever seen hermit crabs do a multiple shell swap, that's about how it works. In areas where housing is cheap enough to have younger homeowners, the sale of a big home can often depend on a chain of other sale contingencies that depend on whether a first-time homebuyer can scrape up a $15k down payment.

So you have the 1/1 homes for young singles, 2/1 homes for young couples, 3/2 and larger homes for families, and then maybe a step-down option for empty-nesters.

My chain broke in 2007, when I got canned in a buyout, had to move to find work, and couldn't sell either the 3/2 or the previous 2/1 (rented out) at a decent price, and all my accumulated equity vanished. I would probably also be on my 3rd or 4th house by now if I hadn't been busted back down to tenant.

I definitely can't afford SV home prices, even with a higher salary. I need at least a 3/2, and don't have enough millions in the bank to get one anywhere near SF Bay.

Homes aren't the retirement plan around here, but the retirement plans definitely factor in not paying rents or mortgages after about age 55.

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

#135

Post by anigbrowl » Wed, Dec 14, 2016, 8:43 PM UTC

Not if rent/property prices are a major economic factor for you. Obviously you can find deals if you know someone or get lucky, but housing prices have gone back to pre-recessionary craziness. As a homeowner I regularly get mail from real estate agents offering to get the best price if I want to sell; over the last 5 years prices in my neighborhood have increased 300%. Yes, three hundred per cent. A small one bedroom apartment in this nice-but-not-fancy North Oakland neighborhood typically starts around $2000/mo.

There's just too much money chasing too few housing units, and while I am seeing a fair amount of new residential construction in the last few years it's only a fraction of the amount demanded.

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

#136

Post by beachy » Wed, Dec 14, 2016, 8:43 PM UTC

Kluny wrote: post #17

rememberlenny wrote: post #4

This point is interesting: [3] We find that engineers often under-value startup success (growth rate, revenue) when looking for jobs, and instead place an emphasis on brand-recognition, or whether they find the subject area exciting. Now, I don't mean to judge anyone for this — working in an areas of passion may be great choice. But if your goal is to maximize your financial outcome, looking at startups more like an…

Investors diversify their portfolios by investing in a number of startups and also in more reliable investments like well-established companies. You can't treat a job that way - there's no way to diversify the hours of day into several different companies with different risk levels. What the author describes is gambling. You bet all your resources (time, in this case) on one horse and hope it pays off big. That's not…

Gambling and investing are just points at each end of a continuum.

Just because you can't diversify doesn't mean its not still a good idea to pick your employer in the same way an investor would.

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

#137

Post by _xhok » Wed, Dec 14, 2016, 8:43 PM UTC

As a college dropout, I have nowhere to go but the Bay Area, where many startups don't care much about credentials. Everywhere else does.

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

#138

Post by logfromblammo » Wed, Dec 14, 2016, 8:44 PM UTC

timothycrosley wrote: post #29

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

I would encourage everyone considering Seattle to research the tectonic stresses in the Pacific northwest (US).

I'll get you started: "Cascadia megathrust".

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

#139

Post by bcheung » Wed, Dec 14, 2016, 8:45 PM UTC

mrkurt wrote: post #86

ammon wrote: post #48

Earlier quoted context omitted.

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. :)

Taxes can be complicated but tax brackets aren't a complicated concept. Especially for programmers. Not understanding and planning around taxes is extremely unwise and inefficient. If you understand taxes and finances you can cut another 10-20 years off your working life.

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

#140

Post by yourapostasy » Wed, Dec 14, 2016, 8:47 PM UTC

komali2 wrote: post #18

rememberlenny wrote: post #4

This point is interesting: [3] We find that engineers often under-value startup success (growth rate, revenue) when looking for jobs, and instead place an emphasis on brand-recognition, or whether they find the subject area exciting. Now, I don't mean to judge anyone for this — working in an areas of passion may be great choice. But if your goal is to maximize your financial outcome, looking at startups more like an…

I never understood this mindset here, maybe because we didn't have it in Houston where I grew up before moving out to the Bay Area for an engineering job. I found a nice small but profitable company and am quite cozy here, but people are always telling me I need to do the 2 year startup hop. It seems like gambling to me - 2 years of my life again and again in the hopes I'll strike gold? I'd rather slowly and steadily…

> I'd rather slowly and steadily squirrel away savings and grow my 401k and other investments while actually enjoying my work.

I call this the startups::"active investment" versus slow-and-steady::"index investment" comparison. For the majority of software engineers who are not rock stars with commensurate 400K+ total annual compensation plans, it's not clear to me participating in the startups/SF-Bay ecosystem is statistically worth the financial instability risks, just as for the majority of retail investors, index investing is currently the most statistically consistent path to wealth accumulation.

If you are a "retail" engineer (perhaps there is a signaling indicator like if you aren't negotiating a compensation package directly with VC's or founders and not their representatives, then you're "retail"), then like most retail products, the vast majority of your value, half and more, is reserved for capital holders. It is your call whether or not if there is any statistically increased long-term job precariousness involved with accessing that startup/SF-Bay ecosystem, and if the tradeoff is worth it to your personal situation.