The Cupertino $90,000 Challenge (Bakersfield, Stanford: renting, new home, to buy)

[zombocom]

90,000 dollars a year is more than twice the median household income in this country. Sad that one would have to have so little just to live on that salary... But hey, I'm not too far off, either.

I have friends in other parts of the country that earn less than we do but can afford more stuff.

I would add, that it is generally recommended that at least 15% of your salary be saved for retirement.

If someone were to have an analogous job in say, Seattle or Austin, the pay would probably be less - but the cost of living would probably be even less.

[BellevueNative]

Originally Posted by NoMoreSnowForMe

So are you saying a software engineer in Seattle could make $90,000 and buy a home in Seattle for $250,000?

People tend to say things are more affordable here and there, but I don't see anybody laying down numbers so far. I'd appreciate it if you could provide some definable info. Thanks.

You could at least buy a decent condo for that. Or a run-down house in one of the more blue collar neighborhoods in Seattle proper. In the southern suburbs of Seattle, yes, you can buy a house for that. Not a really nice or large house, but a decent house. If you want popular neighborhoods in the city itself, or the north/east suburbs, $350k is more of a minimum, but if you can up your budget to about $500k there are a lot of options. And no state income tax.

[BellevueNative]

Originally Posted by zombocom

90,000 dollars a year is more than twice the median household income in this country. Sad that one would have to have so little just to live on that salary... But hey, I'm not too far off, either.

I have friends in other parts of the country that earn less than we do but can afford more stuff.

I would add, that it is generally recommended that at least 15% of your salary be saved for retirement.

If someone were to have an analogous job in say, Seattle or Austin, the pay would probably be less - but the cost of living would probably be even less.

Pay for software engineers is pretty similar here in Seattle vs the Bay Area according to my friends who've lived in both places. But the cost of housing (not necessarily COL in general, but definitely cost of housing) is much less here. And we have NO state income taxes in Washington, similar sales tax, lower or similar property taxes than what most people pay in California - that is, unless you're one of the folks grandfathered under the cheap property taxes law I understand y'all have in Calif., but I doubt most young families are getting that benefit.

[NoMoreSnowForMe]

Originally Posted by BellevueNative

Pay for software engineers is pretty similar here in Seattle vs the Bay Area according to my friends who've lived in both places. But the cost of housing (not necessarily COL in general, but definitely cost of housing) is much less here. And we have NO state income taxes in Washington, similar sales tax, lower or similar property taxes than what most people pay in California - that is, unless you're one of the folks grandfathered under the cheap property taxes law I understand y'all have in Calif., but I doubt most young families are getting that benefit.

Interesting.

As far as the cheap property taxes here, the deal is that your taxes stay based on the purchase price of your home. Back in the day, the govt could continually reassess your home and charge you taxes accordingly. Prop 13 changed that, so grandma who bought her home for $20,000, doesn't then have to sell her home because she couldn't pay taxes on her home anymore, which is now worth $600,000, and she was being taxed at the $600,000 value.

So young families who buy today get the same deal. The taxes will stay based on whatever their purchase price is.

I also heard of some people getting the govt to reassess their taxes to actually get them lowered, because of the housing bust. But, I coudn't swear to that.

[zombocom]

Originally Posted by NoMoreSnowForMe

Interesting.

As far as the cheap property taxes here, the deal is that your taxes stay based on the purchase price of your home. Back in the day, the govt could continually reassess your home and charge you taxes accordingly. Prop 13 changed that, so grandma who bought her home for $20,000, doesn't then have to sell her home because she couldn't pay taxes on her home anymore, which is now worth $600,000, and she was being taxed at the $600,000 value.

So young families who buy today get the same deal. The taxes will stay based on whatever their purchase price is.

I also heard of some people getting the govt to reassess their taxes to actually get them lowered, because of the housing bust. But, I coudn't swear to that.

The problem of course is that housing is much more expensive as a percentage of income. For example, my parent's house cost them 8,000 bucks when they bought it - a year's salary for my dad at the time, the same house is now valued at about 700,000 dollars... Which, unfortunately, is not what my dad makes in a year now.

Interesting that the salaries are the same, I wonder why people come to the bay area, then - I suppose career advancement/opportunities may still be greater here.

[BellevueNative]

Originally Posted by zombocom

Interesting that the salaries are the same, I wonder why people come to the bay area, then - I suppose career advancement/opportunities may still be greater here.

There are still more tech companies in the BA than Puget Sound area, so there are more jobs. And the gray skies here can be tough for people to get used to if they didn't grow up with it. But we do have a ton of California transplants here.

[cardinal2007]

Originally Posted by BellevueNative

Pay for software engineers is pretty similar here in Seattle vs the Bay Area according to my friends who've lived in both places.

I wonder why my friends at Amazon and Microsoft tell me if you move from place to place they will do a cost of of living adjustment then, sounds like they would quickly lose people after they move up to Washington in that case, maybe they don't really get anyone doing that, or approve it, I guess, and it is more of trying to lure people to work in the Bay Area. I honestly don't know what Google does though.

[fashionguy]

I can attest that pay in the bay area and Seattle are not that different for software engineers, at least for entry level positions, if you work in the same company. Usually only 10k~20k more in base to cover the state tax here in CA. RSUs, bonuses, etc. are all the same. For google I think even the base is the same. However, most people still prefer Bay area. Why? Because bay area is where most of the startups born. Most software engineers working in the big name companies hope one day they can join a promising startup at early stage or even start their own for a complete life changing experience. One can dream, right? I don't even think Seattle is the second most popular destination for software engineers. The second most popular, I think now belongs to another ridiculously expensive location, New York City.

Seattle is usually the place where the companies will open a second office after they become big, e.g. Google, Facebook, Salesforce etc. so it is perfect for people who are prepared to settle in one company and tired of the bay area price. So you can go to Seattle later if you want, but at your early stage of the career, bay area is still the place to be. If you don't want to climb the corporate ladder ,and instead wanna work as an engineer for the rest of your life, finding next exciting opportunity after a while is the only way you can get yourself properly paid and your career advanced. Staying in one company for a long time will eventually render you underpaid and quickly lose out to inflation.

Originally Posted by cardinal2007

I wonder why my friends at Amazon and Microsoft tell me if you move from place to place they will do a cost of of living adjustment then, sounds like they would quickly lose people after they move up to Washington in that case, maybe they don't really get anyone doing that, or approve it, I guess, and it is more of trying to lure people to work in the Bay Area. I honestly don't know what Google does though.

[spicydreamt]

Originally Posted by fashionguy

Most software engineers working in the big name companies hope one day they can join a promising startup at early stage or even start their own for a complete life changing experience. One can dream, right?

How do they plan to achieve that? And how about the golden handcuffs?

I'm sincerely interested, I've made that transition myself a couple of times, but I've observed that generally it's either a "forced" transition (refused promotion or loss of job or following a loved one) or shadowing an already successful entrepreneur (gotta manage the risk, right?) - it's never successfully applying to a co-founder job thanks to the big name company on the resume.
My understanding is also that companies like Google have all internal incentives aligned to diminish the appeal of independent entrepreneurship - you stand to lose too much unless you can turn it around in a couple of years and get the mothership to buy your company.
My own reasoning why a wannabe entrepreneur would prefer the bay area is - this is where angel funding, incubators and eventually VC funding prefer to allocate capital, close to home. But what a long shot this is, unless you're a well-connected Stanford graduate.
In my view, most people prefer the bay area either because in the event of a loss of job this is where it's easiest to rebound, or (for the so inclined) this is the best place to play the job-hopping pay raise game...

[raydius08]

Originally Posted by NoMoreSnowForMe

No I didn't, although I mentioned $500 could be saved without a car payment.

I don't pay for my health insurance, so I'm not up on what it costs these days. Could you give a budget amount? Hubby will be working for Apple, so am wondering if insurance would be paid by employer?

Apple is a pretty big company. Did you figure bonuses into account as well as stock options? Those things can significantly increase your earnings and long term savings.