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Why Silicon Valley Works

blog.samaltman.com

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Re: Why Silicon Valley Works

#231

Post by rgbrgb »

david927 wrote: post #214
rgbrgb wrote: post #143

Earlier quoted context omitted.

I'm sorry you're having a bad time, but you sound like you're caught up in a few delusions. When someone gets coffee with a stranger they are "going out of their way to help". What more are you asking for in these conversations? Agreed, nobody's going to fund some random biz guy with no track record and "an idea" (my guess from your post, sorry if I'm wrong). Reading that as racism/elitism is counterproductive and mo…

some random biz guy with no track record and "an idea" ? Now that's delusional. Clearly you wish that to be the case. It is not. SV is all about the gate-keepers, and they are all about profiling, which they call "signaling". If you don't fit into that mold, you are not going to receive a warm welcome; I don't care how good you are. Read Peter Thiel's Stanford class CS183 notes. Peter explicitly says this, "It's like…

`git commit -am "something people will use" && git push heroku master`

Understanding that line is the only true gate.

Re: Why Silicon Valley Works

#232

Post by x0x0 »

usaar333 wrote: post #222
x0x0 wrote: post #38

Earlier quoted context omitted.

You don't understand what it costs to live here. Keeping up with the Joneses means envy for new and shiny, not wanting a modest house, cars, kids, and retirement savings. And here, that means an income of $250k is tough to do -- one bedrooms in sf are $3500; condos in the peninsula sell for $700k+ and houses cost $1100/ft^2. $240k married filing jointly w/ 2 kids means $5900 hits your bank account twice a month. Esse…

Having always lived in the Bay Area, I find it hard to imagine it is tough to live on a combined income of $250k. That's at least top 10% of household incomes in the Bay Area. No, you won't get any neighborhood there is, but 80+% of places are open to you. First, $5900/month is a huge amount to spend on housing. Large houses on the peninsula rent for around the $4500 range; you only hit $5900/month for 4 bedrooms in…

A home requires: pmi (possibly, often on jumbos) until 80% ltv; insurance, at $300-$350 per month per million dollars; taxes, at roughly $1k per month per million dollars; earthquake insurance, particularly if you're near a fault line; and maintenance, of which I'd budget $5k/year on a million dollar home. Maybe more for CAs housing stock. So that $6k becomes $4k for a mortgage.

Using a house for retirement savings is for idiots; that's an enormous gamble on the future of CA 35 years from now.

The Madison house, btw, is in a location walkable from many offices; Madison is more competent than the bay area, so while buses aren't great, the roads are very drivable in many directions. Someone with even an hour long round trip commute has a very long commute there (except, perhaps, after snowfall.) So you could probably use one car, or one commuter car and one beater car for a couple. Not two cars as you need on the peninsula or sf for a couple with kids.

Not to mention that $70k doesn't capture all the other things significantly cheaper in Madison: food, daycare, and education (many Madison schools are quite good) being the most important. Many peninsula schools are quite good, but not in sf.

Re: Why Silicon Valley Works

#233

Post by rconti »

nostrademons wrote: post #178
rconti wrote: post #128

Earlier quoted context omitted.

Don't live in BFE Concord? Could get a 3/1 on the Peninsula for a bit more (say, 800-850). Less if you're willing to live in Daly City or EPA or something.

Single-family or townhome/condo? In the Mountain View/Sunnyvale/Los Altos area you can get a 3/1 townhome for about $800K, but if you want a single-family home with a postage-stamp yard those start at around $1.2M.

SFH. Obviously you're going to pay out the nose for MTV or Los Altos. I haven't shopped in Sunnyvale but that comparison (to the other 2) surprises me. I'd expect it to be cheaper than, say, Redwood City.

I remember back in '06, places in MTV were cheaper than Santa Clara. Should have bought back then! I remember thinking Google couldn't get any bigger, it was already a huge company. Guess I couldn't have been much more wrong.

For 1.2M you can get a decent-sized 3/2 or 4/2 of maybe 1800sqft. Not in Mountain View, obviously.

Re: Why Silicon Valley Works

#234

Post by Balgair »

viiralvx wrote: post #207
Balgair wrote: post #65

Earlier quoted context omitted.

On the living part: My folks live in Concord and their next door neighbor just moved into assisted living at 95. Her house sold within a week for 700k to a young couple. It's a 3 bed 1 bath single story in Concord with drainage problems, mind you. Lets do the math here shall we: What is the mortgage and taxes(thanks prop13) on a place like? Well, at 4.05%, good credit, and 15% down, it's 2857.80/month just on the loa…

And this is why I'm working in Austin, Texas, and not in California after graduation!

Bingo, I'm in Colorado now. 700k in a good school district is 3 stories, 5 bed and 3 bath with an acre in the back. Also, the beer and slopes are nicer here.

Re: Why Silicon Valley Works

#235

Post by Balgair »

WalterBright wrote: post #170
Balgair wrote: post #65

Earlier quoted context omitted.

On the living part: My folks live in Concord and their next door neighbor just moved into assisted living at 95. Her house sold within a week for 700k to a young couple. It's a 3 bed 1 bath single story in Concord with drainage problems, mind you. Lets do the math here shall we: What is the mortgage and taxes(thanks prop13) on a place like? Well, at 4.05%, good credit, and 15% down, it's 2857.80/month just on the loa…

> sold within a week for 700k > got the house for 70k in the 70's For perspective, the S&P 500 was at 68.56 in 1975 and began 2014 at 1848.36, a 27 fold gain. You also wouldn't be paying ongoing real estate taxes, etc. So the house bought in the 70's wasn't that great of an investment, long term. http://www.1stock1.com/1stock1_141.htm

Pop is a mechanic and will likely die under a car (we've come to accept this). His know-how of the S&P is suspicion at best as he has no formal algebra-2 training (due to Vietnam and all). He did not buy the house to generate a return, he bought it because he needed a pot to piss in, a bed to sleep in, and a house to raise a family in. Our home is not worth only money.

Re: Why Silicon Valley Works

#236

Post by Balgair »

muzz wrote: post #127
aantix wrote: post #98

Earlier quoted context omitted.

I think they are. I've worked here in SF as a Rails consultant for the past four years. It's quite obvious that the work force skews younger. My best friend just became a CTO and his bosses are both 20. He's 41. :-0 When you look to start a family, the pressures of working in the valley are going to bubble to the surface. You can either endure a 60 minute drive (that should really only be 20 based on distance) to a c…

The data tell us that some people leave California in search of cheaper housing. A much larger number come from other countries (India, China, etc) for high-paying jobs. Net migration from Mexico has been very low recently.

source? Thanks!

Re: Why Silicon Valley Works

#237

Post by WalterBright »

Balgair wrote: post #235
WalterBright wrote: post #170

Earlier quoted context omitted.

> sold within a week for 700k > got the house for 70k in the 70's For perspective, the S&P 500 was at 68.56 in 1975 and began 2014 at 1848.36, a 27 fold gain. You also wouldn't be paying ongoing real estate taxes, etc. So the house bought in the 70's wasn't that great of an investment, long term. http://www.1stock1.com/1stock1_141.htm

Pop is a mechanic and will likely die under a car (we've come to accept this). His know-how of the S&P is suspicion at best as he has no formal algebra-2 training (due to Vietnam and all). He did not buy the house to generate a return, he bought it because he needed a pot to piss in, a bed to sleep in, and a house to raise a family in. Our home is not worth only money.

My intent is not to judge your pop, but to put the 10 fold increase in the value of the house in perspective.

BTW, when I work under my car, I put two sets of jack stands under it, and don't work alone. When I was a kid I jacked up my car and put cement blocks under it to hold it up. Before I slipped under it, the blocks crumbled and the car collapsed onto the ground. Yikes! Glad I was able to learn that lesson the easy way. Best regards to your pop!

Re: Why Silicon Valley Works

#238

Post by mathattack »

Spooky23 wrote: post #146
mathattack wrote: post #71

Earlier quoted context omitted.

Having lived in NYC too, the greed there trumps the greed in Silicon Valley. The greed in NYC is money for it's own sake. The greed in Silicon Valley at least has the pretense of creating good products. The greed in Silicon Valley requires creation of value in addition to capturing it. NYC is all about capturing in. A $4,000/month apartment in Silicon Valley gets you a good school. A $5,000/month apartment in NYC get…

Huh? High schools in NYC are merit-based. If a kid is in a school where kids can't read, it's not the city's fault.

High schools are. K-8 are of dubious merit. It's based on IQ testing of 4 year olds, a very weak science, especially in the backdrop of prepping. It is very much a system of haves and have nots.

Re: Why Silicon Valley Works

#239

Post by mathattack »

cylinder wrote: post #221
mathattack wrote: post #71

Earlier quoted context omitted.

Having lived in NYC too, the greed there trumps the greed in Silicon Valley. The greed in NYC is money for it's own sake. The greed in Silicon Valley at least has the pretense of creating good products. The greed in Silicon Valley requires creation of value in addition to capturing it. NYC is all about capturing in. A $4,000/month apartment in Silicon Valley gets you a good school. A $5,000/month apartment in NYC get…

Why are you comparing the suburbs (SV) to the city (NYC)? You know NYC has suburbs with great public schools too?

I would say very good in NY suburbs - I wouldn't go as far as great. (Without going into too much detail, I've done quite a bit of research)

The difference is that Silicon Valley has a lot of jobs, and is the area of the original story. If you're in the NYC suburbs, you are likely commuting into NYC for a good job.

Re: Why Silicon Valley Works

#240

Post by usaar333 »

nostrademons wrote: post #227
usaar333 wrote: post #222

Earlier quoted context omitted.

Having always lived in the Bay Area, I find it hard to imagine it is tough to live on a combined income of $250k. That's at least top 10% of household incomes in the Bay Area. No, you won't get any neighborhood there is, but 80+% of places are open to you. First, $5900/month is a huge amount to spend on housing. Large houses on the peninsula rent for around the $4500 range; you only hit $5900/month for 4 bedrooms in…

Not entirely sure that owning a $1.1M home (now) is a form of retirement savings; I wouldn't be surprised if, by the time I retire in 40 years or so, Silicon Valley looks like Detroit. A bunch of parallels are there: single-industry region, large amounts of shoddily-built tract housing, and a mobile, transient worker population chasing the latest hot industry.

If you believe this, you should not buy a house in the Bay Area.
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