How much does it suck to live in silicon valley?

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BRUTE
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Re: How much does it suck to live in silicon valley?

Post by BRUTE »

how much house does $1m buy in silicon valley? probably not much.

Tyler9000
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Re: How much does it suck to live in silicon valley?

Post by Tyler9000 »

A nice little starter home. Better get back to work! ;)

When I explained to people that my old home back in Texas was three times as large and one fifth of the price of a typical home on the Peninsula ("your down payment here would pay for it in full and you'd have no mortgage"), people used to look at me like I was from another planet. The typical response was "but why would I ever want to leave here?" followed by a lot of bitching about work. Neurons take time to connect.

I have good memories of SV, though. If money was no object it's a really nice area, and I probably wouldn't be where I am today if I hadn't followed the opportunities that pulled me out there. But ERE woke me to greater possibilities that my previous career-obsessed self never even knew existed, and moving on was absolutely the right choice.

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Sclass
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Re: How much does it suck to live in silicon valley?

Post by Sclass »

Just got home from Los Altos. Nice to see my old friends. I had some insights I'd share.

I always thought the old guys had it good. Cheap homes. A booming industry. Semiconductor stock options.

But I got to take a hard look at friends this time. We talked a lot about the lifestyle since my departure was still recent news. I saw my fifty something friends struggling to hold on to their jobs while young techies were nipping at their heels. Pinched between average careers and mortgages/college tuition. They were chained to the treadmill. Not happy.

One wife started to cry when I said I was never coming back to that trap. She was no slouch either, she was middle management at a major software services biz. But she knew exactly what I was talking about. It looks really different at 50.

Another 70 something was bragging about her $3M Palo Alto home. But I had to wade through weeds to get there because she and her husband were too poor to hire a gardener. He was an EE PhD. But now he's just a guy trying to cut his freaking lawn with a cord trimmer. The lady knew I dealt in vintage watches and tried to get me to sell a Rolex for them on consignment. I tried to explain I am not a Rolex dealer and cannot move a gold president. When I told her to use a dealer or eBay she said they couldn't give her enough. We did a completed auctions search on my phone and found it would fetch $4000. She said, "that's the problem, I need at least $6000. The consignment stores offered even less." Right, unlike me they expect to make a profit off this. I politely excused myself.

It isn't pretty if you weren't handed a pile of eBay, Intel, Oracle etc options back in the day. I had HP and they turned out worthless. Most people there are survivors. Not winners. And the endgame is not pretty. You can brag all you want about your $3M home but I know cash poor when I see it.

I literally had to assure guests at a dinner that I hosted that I was paying before they RSVPed. Seriously?! Either they hate me or they cannot afford dinner. Then at the dinner I hear how underwater their businesses are and I want to slip out the back door before the IOUs start coming out.

I have my friends who hit the options lottery. I can count a dozen. Yes, Qualcomm, VMware, EBay, Intel, Google, Apple, etc minted them millions.

But the rest? They're sad. They're old. And they're in debt. That place has had many gold rushes. You will not be the first to be disappointed. But few seem to get it.

Make your enhanced salary. Save as much as you can by living cheap. Then get out. A winning hand of options should just be the bonus jackpot.

Edit - oh yeah. I stopped by Stanford to get a mug. Omg it is an RV lot on El Camino Real. Smart guys.

https://www.paloaltoonline.com/news/201 ... camino-rvs

bryan
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Re: How much does it suck to live in silicon valley?

Post by bryan »

> Edit - oh yeah. I stopped by Stanford to get a mug. Omg it is an RV lot on El Camino Real. Smart guys.

Would love to see some census of (RV and) van-dwellers... for the most part people are completely blind to vans being lived in or even RVs parked around. Once you start learning about van-dwelling etc. it's the Baader-Meinhof phenomenon where you start seeing them everywhere (in the Bay Area). My guess is it's mostly people that can't afford to live in an apt/house since the RVs and vans are mostly in poor condition. When I looked for parking for my van, I tried to avoid parking near other vans and RVs.. except for in SF where there is just this one great area for vans..

edit: did James ever move into a van in SV? Would be down to meet up if so.

NPV
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Re: How much does it suck to live in silicon valley?

Post by NPV »

Sclass wrote:
Thu Jun 29, 2017 4:57 pm
Another 70 something was bragging about her $3M Palo Alto home.
...
You can brag all you want about your $3M home but I know cash poor when I see it.
Why on Earth would they not sell the $3M house and either move to Florida and live well-off lifestyle there or (if staying in the area is critical) just move into a smaller place in Bay Area and free up $1.5m+ for cash-generating investments or even just cash to spend? Just resistance to change?

Grim picture for those with a large mortgage and career runway ending for sure... But if the house is paid off and one is retired, option value does not look too bad.

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Sclass
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Re: How much does it suck to live in silicon valley?

Post by Sclass »

NPV wrote:
Thu Jun 29, 2017 8:13 pm
[quote=Sclass post_id=146753 time=<a href="tel:1498773430">1498773430</a> user_id=2163]
Another 70 something was bragging about her $3M Palo Alto home.
...
You can brag all you want about your $3M home but I know cash poor when I see it.
Why on Earth would they not sell the $3M house and either move to Florida and live well-off lifestyle there or (if staying in the area is critical) just move into a smaller place in Bay Area and free up $1.5m+ for cash-generating investments or even just cash to spend? Just resistance to change?

Grim picture for those with a large mortgage and career runway ending for sure... But if the house is paid off and one is retired, option value does not look too bad.
[/quote]

I wonder about the same thing myself. They have told me silly things like "but where would we go?" I've actually heard the same thing from a lot of house rich retirees on the Peninsula. I think these folks derive a lot of self esteem by saying they have millions while complaining about the high cost of everything else. Like having their kids living nearby.

The 70 yo couple wants to give their home to their son who cannot afford to live in Palo Alto. They own the home free and clear. The fifty somethings have a way to go on their mortgages - they bought upmarket when they were promoted in their 40s.

I don't get it. But then, I'm the guy who left. I don't think it's worth living there unless you are drawing good pay. But everyone I know who gets a big raise moves up to a more prestigious home. I guess it is emotional with these folks. Having lived in the community since 1992, I can say part of the culture is always saying how wonderful the place is. You need to do this when the mortgage consumes an entire salary for a working couple. After you tell the same lie too long you start believing it.

A good friend of mine recently gave up on building a dream home in Maui. He ran out of cash. I asked why he didn't just sell his $2M home since he no longer worked and he replied "I cannot do that, where will I stay when I come back?"

I dunno a hotel? Delusional response. This is what happens when you play too many mental games with yourself to soldier on.

As for the RV living,I knew two people who did this in the late 90s. They saved up big bank accounts but later went on to piss the money away and end up poor. Not that you cannot be the exception. If you are disciplined and invest your rental savings away it can be brilliant. Especially if you're drawing a sw engineer's salary at Facebook.

BRUTE
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Re: How much does it suck to live in silicon valley?

Post by BRUTE »

with an engineering salary at Facebook, it should be trivial to achieve a 50-70% savings rate even without living in an RV, as long as mortgages stay out of it. FB engineers are too busy to spend their money anyway, traffic and roads are too bad for a nice car, fancy clothes are frowned upon. sure, a few hundred per month for gadgets and toys, but where will the rest of the money go?

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Sclass
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Re: How much does it suck to live in silicon valley?

Post by Sclass »

To your investments of course. It's a sliding scale. Maybe you want to retire even faster. Maybe you want a bigger factor of safety. Maybe you want an extravagant retirement. Maybe you want to grow your net worth in retirement. More money generally took me in the direction goodness.

It depends on what you want out of this thing. Brute is tougher than Sclass.

Edit - I'm clearly out of my zone on this. I just pulled "Facebook" engineer out of my rear and wrote it down. For all I know there may be social pressures in there that will make van dwelling difficult. At HP in my youth I was scrutinized by my peers and management for living in a basement given my income. It bothered people. Not sure how this would go over at a younger company.

It may be pure fantasy that one can get a juicy salary while living on El Camino in an RV. The folks out there did not look like they had a lot of income to buy air for their tires.

bryan
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Re: How much does it suck to live in silicon valley?

Post by bryan »

> It may be pure fantasy that one can get a juicy salary while living on El Camino in an RV. The folks out there did not look like they had a lot of income to buy air for their tires.

Yeah, that's what I was getting at. I never did find "my people" (e.g. “Thoughts from Inside the Box.”). The closest I came was going to music shows and being surprised at the number of people who have done it (so age now matches, but income does not).

It's not pure fantasy; it's pure easy-mode ERE.

NPV
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Re: How much does it suck to live in silicon valley?

Post by NPV »

Not sure there is much of a reason to live in RV as a SW engineer in the Bay Area. Sharing an apartment with multiple roommates is perfectly socially acceptable, more convenient and probably comparable in costs unless I am missing something. Can probably go for a cheaper apartment (e.g., sharing it with a few Berkeley students on tighter budget rather than a few colleagues) and just frame it as "I am living with roommates" without too much detail as again such situation is very common and perfectly acceptable in Bay Area for young professionals.

BRUTE
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Re: How much does it suck to live in silicon valley?

Post by BRUTE »

brute would argue that, if free or stealth camping is possible, the Bay Area is probably one of the few locales where an RV actually makes a lot of financial sense. even with roommates, humans are hard pressed to pay less than $1,000/mo, and that's with a 1h commute by train. brute has paid more than that for a bunk in a basement with 5 humans in the same room.

given that vehicle costs are relatively fixed across location (due to them being mobile), but rent/ownership in the Bay Area is easily 3-5x higher than in Real America (tm), it could actually make a lot of sense.

brute would suggest that the hippie-workaholic-city lifestyle in SV is actually pretty useful for van-life. most humans don't spend much time at home anyway, all of them have some sort of weird living arrangement, almost no humans <35 own homes or have mortgages, it's perfectly acceptable to spend all day at work, companies provide gyms and dinner and yoga..

if humans arrange to basically only sleep in the van, and solve the parking issue, it would be a great deal.

NPV
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Re: How much does it suck to live in silicon valley?

Post by NPV »

Agree if one wants to really maximise short term savings rate. I would argue that for a high paying job such as FB software engineer the societal perception trade-offs might not be worth it. If you are a FB SW engineer with say $10k per month after tax income, the ~$500 per month difference between roommate living and RV living if a 5 p.p. difference in savings rate. This can easily be negated by e.g. the wind of your unconventional living preferences getting to your co-workers which boosts unconscious bias in your boss's mind that moves you one rung down in your annual performance review and hence your bonus & progression. This outcome has to be probability adjusted of course but even short term financial impact can easily outweigh the $500 per month savings.

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Sclass
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Re: How much does it suck to live in silicon valley?

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BRUTE wrote:
Fri Jun 30, 2017 10:35 pm
$1,000/mo, and that's with a 1h commute by train. brute has paid more than that for a bunk in a basement with 5 humans in the same room.
:o :o :o :o

While I salute this effort to save money, it is example of the extreme behavior in SV that some people accept. The dark side of my older professional friends is they do this but on another level. I guess I'm saying they make raising a family on the Peninsula possible by buying a tiny home in the best school district that eats up a salary. They pay out a good fraction of the second for day care. Then they live financially stressed for years with the only asset for retirement being their home. Folks convince themselves it is for their kids. You would be surprised how many cash poor professionals live in Los Altos - it gets revealed at the most awkward times.

I'm not saying bunking for $1000 is the same thing but it has a common element. You,did it to build FU money, my friends tightened their belts to make a mortgage in "the best school system" because "they had to." It's important to keep a clear and logical view of the goals when making this kind of sacrifice.

I know you guys are younger but all my friends were young techies once and somehow life degenerated into what they have now. It kind of started with that "let's see how we can make this work" attitude. It is dangerous because nothing is forever.

Hey that being said I know what you're getting at and saving big expense of housing was key to my early retirement. Just be careful what mental games you play on yourself to get there.
NPV wrote:
Sat Jul 01, 2017 12:14 am
This can easily be negated by e.g. the wind of your unconventional living preferences getting to your co-workers which boosts unconscious bias in your boss's mind that moves you one rung down in your annual performance review and hence your bonus & progression. This outcome has to be probability adjusted of course but even short term financial impact can easily outweigh the $500 per month savings.
Yes. I recall a boss and boss squared who were very uncomfortable about how I lived. Boss squared didn't like how I lived in a better home than his closer to the Los Altos Country Club albeit in a basement. He was a clod and couldn't disguise his disdain. The boss kept insisting I buy a home, that the best bet in SV prior had been to get as much as you can afford and hold it as it appreciated. Later when a rockstar employee quit the same boss said about him, "I'm shocked, we had him, he bought a home, he had a baby. We had him." Pretty disturbing. Boss didn't want any FU ability in his young recruits.

Everyone was watching everyone else. I stood out because as I recall, I was the only one who didn't buy a home. It came up many times. Then the topic of the basement would come out.

BRUTE
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Re: How much does it suck to live in silicon valley?

Post by BRUTE »

hm. brute hasn't ever gotten that vibe at any of his jobs. maybe it's a different company culture, times changed, or maybe brute is just oblivious to that type of behavior. of course it's always possible that a boss will subtract bonus points for deviant lifestyle choices.

Did
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Re: How much does it suck to live in silicon valley?

Post by Did »

Drifting off topic but I recall buying my first new car at 33 when I worked out my paralegal had a better car. I didn't care myself, but it looked weird on retreats etc when I rocked up in me trusty old shitheap. Sometimes to get the promotion you need to look the part if nothing else.

bryan
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Re: How much does it suck to live in silicon valley?

Post by bryan »

NPV wrote:
Fri Jun 30, 2017 5:21 pm
Not sure there is much of a reason to live in RV as a SW engineer in the Bay Area. Sharing an apartment with multiple roommates is perfectly socially acceptable, more convenient and probably comparable in costs unless I am missing something.
NPV wrote:
Sat Jul 01, 2017 12:14 am
Agree if one wants to really maximise short term savings rate. I would argue that for a high paying job such as FB software engineer the societal perception trade-offs might not be worth it. If you are a FB SW engineer with say $10k per month after tax income, the ~$500 per month difference between roommate living and RV living if a 5 p.p. difference in savings rate. This can easily be negated by e.g. the wind of your unconventional living preferences getting to your co-workers which boosts unconscious bias in your boss's mind that moves you one rung down in your annual performance review and hence your bonus & progression. This outcome has to be probability adjusted of course but even short term financial impact can easily outweigh the $500 per month savings.
With roommates you can spend ~$1200/mo on rent (median-ish), then add on bills. Living in a van feels more like $250/mo rent, with lower (different) bills. I have maintained that living in a van isn't worth it if you could find an acceptable place for ~$650/mo.

At least in SV living in a van is not a bad thing socially or professionally. In SV (and most of the Bay Area) it is generally a positive signal (similar to "Red Sneakers Effect"?). Other "unconventional living" practices are also held in high regard. If there is anywhere in the country where you can safely let your freak flag fly, it is in (most of) the Bay Area.

NPV
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Re: How much does it suck to live in silicon valley?

Post by NPV »

bryan wrote:
Sat Jul 01, 2017 5:47 pm

With roommates you can spend ~$1200/mo on rent (median-ish), then add on bills. Living in a van feels more like $250/mo rent, with lower (different) bills. I have maintained that living in a van isn't worth it if you could find an acceptable place for ~$650/mo.
Is the differential really that high?

A data point I would offer is a 2 BR apartment in Northern Berkeley (one of my favorite places in the world to live by the way) at $3k per month all utilities included. You could split this 3 ways easily with everyone having their own room to sleep (living room becomes a bedroom in this case) - many students there do. Hence $1000 all in. I would imagine if you are willing to live in a less nice (e.g. Oakland) / more remote (e.g. Walnut Creek or Richmond, still easy to commute by BART) area you could cut this further down by >20%.

On the other hand, what is included in $250 per month RV/van living cost? Capital outlay (what is the cap rate and payback)? Legal place to park it (e.g., RV park)? Utilities? Feels to me it should be more but won't assert that as didn't really consider this type of living arrangement.

bryan
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Re: How much does it suck to live in silicon valley?

Post by bryan »

Getting to SV from Northern B. or even Oakland is quite a trek. Of course there are cheaper places in Hayward, Fremont, etc. But is it worth saving a few bucks to live in such boring, commuting-hell places (maybe OK if your hobbies are home-centric)?

Van expenses can be found on various websites, like C40s. Ignoring RVs since I don't recommend it relative to vans. Off the top of my head, my van expenses were mainly 1) mail forwarding service, PO Box, 2) gym membership, 3) fuel 4) increase in restaurant/coffee shop spending. Assuming boondocking, no propane, no solar.

~$12k per year is pretty good savings to me. It gives you a useful vehicle for future hauling/travelling usage (unless you want to sell it to recover most of your capital) and the lifestyle is pretty nice (I've parked to sleep near $$$$ views, work, bars, etc). Probably a good learning experience as well. The drawbacks were not having a toilet (fixable), shower (fixable), not suitable for certain hobbies, and generally not having some sense of permanence, belonging (like a neighbourhood) since it is so easy to park around the Bay and explore and take advantage of time/place flexibility (e.g. free events).

NPV
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Re: How much does it suck to live in silicon valley?

Post by NPV »

I meant commuting to SF downtown, not SV of course. Where would you park the van for free?

slowtraveler
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Re: How much does it suck to live in silicon valley?

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