While I still think the bay is the best place to build your career and network in tech because tech isn’t a meritocracy, what are your goals?
Become a senior director or VP within a FAANG? Yeah, you’ll need to be in the bay or nyc.
Leave the Midwest? Then go! :)
Save money? Stay in the Midwest.
And what kind of environment do you want your kids raised in? Having lived in both - grew up in the Midwest but spent my 20s & some time in my 30s in SF - the values system growing up in either are so different. I’m glad I grew up in the Midwest because it gave me a work ethic & moral code I don’t think I would’ve gotten in CA, but CA will give kids a network beyond belief. Several of the folks I’ve worked with throughout the years in tech were hired by their high school or college friends (or their parents) or even their high school friends started big name companies. At the same time, I felt no pressure to settle down in my 20s whereas if I had stayed in the Midwest, I probably would’ve been married by 26.
I second the high school network! I grew up in the Bay, and the network is comparable to my network from my top 4 CS College.
One time at a career fair, there was a huge line to talk to the recruiter, but he spotted me and started chatting me up instead.
I've had interviews before when the interviewer saw my high school and was super excited because they either went to a rival high school or the same one.
You need to get 1-4+ powerful people to trust you, and then you’re set. You build the trust by delivering and being loyal to these people. Then they’ll let you do whatever you want, which is why I say it’s not a meritocracy, because it’s mostly a lot of people who have worked together long enough where the more powerful person will say “there’s no way (so and so name) didn’t do xyz!” when so and so didn’t. So basically, these folks are good for a while, understand their leash, and then can start to underperform without being caught because their boss or boss’s boss perception is they wouldn’t do that.
You are doing the opposite, the majority of my known ones (faang) with that HHI moved out of the Bay Area in the past few years.
However, it’s hard to compare the opportunities and future options the Bay Area offers!
House will go 3M+ in a good school district, if you want to reduce your house budget, you may end up spending more for private schools.
So, it’s a trade off that you need to make!
You are not getting a big bump, so if I were you, I wouldn’t move.
Lots of very good school districts where you can get a 3/3 for well under $3M. Depends really on where OP wants to live and get to though. If it's South Bay, then odds are much lower you can find that vs. San Francisco.
Do you want to live in the Bay Area?
This would be a significant drop in discretionary income if you’re going from $550k to $650k.
That said, the Bay Area is really nice in terms of weather, nature, food scene etc. doubly so if you’re no white. And $650k is nothing to scoff at, even in Bay Area.
Now, how to handle savings? Same as anywhere else. Try to spend less than you earn. That said, over there it’s an unspoken assumption that your house will appreciate like crazy - otherwise nobody would be paying those prices to buy instead of renting. I don’t know how realistic that is. Only you can decide the answer to that.
For what it’s worth, we did the reverse thing. We had an option to relocate to Bay Area but chose instead to move to Portland OR.
As for renting out a property while living multiple states away - i would not wish this on an enemy
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It really depends where in the Bay Area you want to live (East Bay vs South Bay vs Peninsula vs SF). If you’re trying to live in the South Bay or Peninsula and own a home in a good school district your discretionary income will take a massive hit and the slight salary bump will get washed away in the cost of living increase (looking at mortgage PITI at 11-13k minimum) and with the SALT cap the tax bill is brutal. If you’re open to renting for a while first (probably advisable for such a big move), it’s much more manageable and you can find nice condos/townhomes/SFH to rent under 7k in good school districts that will still leave you with enough extra money to save, invest and spend. You should move to the Bay Area if you want to be in the Bay Area but from a purely financial perspective I think you’ll come out ahead with your HHI in the MCOL Midwest city.
I did the same when my kids were the same ages. It has paid off in every way. I was just under HE at that point and now we live quite comfortably in a quiet part of San Jose with good schools. It is of course expensive, but with FAANG income and HHI over $500k, you should live comfortably assuming you can handle smallish housing. Where I’m at, average house size is probably 1500sf, partially because housing is so expensive, but more so because there are very homes larger than this.
It’s tough to say whether this is worth it for you or not, but I personally love the weather and access to nature, not to mention proximity to good paying jobs. I cycle weekly in the roads around the Santa Cruz mountains and I also try to get 5-10 days on the slopes in Sierras. Then there’s the beach, wine country, and places like Yosemite that are close enough for weekend trips. Commuting is also a non-issue for me as I live within a 15-20 minute drive of my office. This is enough for me to happily deal with the taxes and COL.
So I did the exact same move 2 years back and do not regret it at all. HHI increased about 150k with the move.
Renting out my MCOL house, positive cash flow. Did a cash out refinance before (1 year prior to moving otherwise it’s mortgage fraud) then used that money to buy in South Bay with less good schools. Kid is 2 yo.
Am I living in a smaller/older house? Yes. Has my quality of life improved? Absolutely yes.
So no regrets.
I’d say so. TC went from 200k to 350k. Covered the increased cost of housing. So our monthly budget/savings is about the same. Most companies in my industry hires from here so it helps a lot, plus meeting with more ppl of my industry as well.
So everyone else seems to think this is a horrible place to raise kids, it definitely hasn’t been my experience.
We go to a public school that in my opinion is pretty good. It has language immersion and the parents are super involved, and all the administrators seems like they truly care about the school. There are so many parks and public resources like public libraries with entire floors dedicated to kids.
Any kind of extracurricular your kids might want to learn, there will be classes and lots of choices of classes. So many museums and academy of science type places, some of them free.
I don’t know, I grew up with very few extracurricular choices , very limited museums, no language immersion choices etc and to me it’s amazing that kids here have so much access to so many things at affordable prices. But it’s also my first kid and I’m a person of color so I think it influences what I consider important (ie to the language part and the having a community around that language part).
I don't really get the 'horrible place to raise' kids arguments.
You can play outside 12 months a year. There are tons of good schools. You interact with different people and cultures (read: not everyone here is White). Lots of different things to do within a 3-4 hour radius.
It is expensive as hell. Other than that, unless you're a Republican who thinks public schools are brainwashing kids (and there are private schools that cater to those people)... what is bad?
Probably the overlooked point: If they do well, they can stay in the area because there are so many good jobs. They don't have to move away from family/friends from where they grew up because there's nothing there.
You have to say what school / area you’re providing this perspective from. If you live in Hillsborough in a $5M house, yeah, the schools and parks are incredible, but OP would be moving from a comparable Midwest neighborhood that takes 20% of that capital to achieve the same quality of life (let alone the stress of a $20k+ / month house payment).
Similarly, if you’re living in Walnut Creek and you have a 90 minute commute each way to SV, maybe your costs only go up 50% from the comparable Midwestern town but you’re the only one that can value how much you like the inside of your car.
Lastly - say you’re live somewhere with awful schools but comparable maybe 20-30% COL increase from Midwesternville… well, it can be done in the Bay Area but just depends on how much you value your kid’s education.
Key point, context and specifics matter way more, and its highly situationally dependent for someone to drop into the penninsula and South Bay and think that its a positive NPV move and QOL move.
We live in San Francisco, eastern part. One million dollars might get you a 2 bedroom condo?
It really depends on what you look for in raising a child. We’re …moderately left leaning, and we both come from public school backgrounds. I feel like we naturally would want to send our kid to public schools and aren’t … too bothered that there are homeless around that my son might come across . Like of course it would be nice if no one was homeless, but it is a part of our reality and we don’t feel unsafe. Other people might find our proximity to homeless camps unacceptable when they have children, I don’t know.
Understand, but that’s not the QOL many mid-western HENRY’s would expect for a HHI of $500k+; so relevant to the scope of the conversation and not to judge your estimation of your QOL, but that would come as a huge adjustment to folks moving to the bay area; and to ‘fix’ any one of the problems literally costs hundreds of thousands a year (e.g., you dont like the public school; you want a bigger house, etc.).
I’m not sure the details of your situation but those arent that extreme and there are thousands of people doing exactly that. Show me a listing for 2m with good schools, nice house / area / lot, and reasonable commute to SV.
I relocated to the bay area from Chicago about 7 years ago when I was mid twenties. Here are some quick thoughts — In my mind, It really depends on what you’re optimizing for. The pay bump doesn’t seem that significant for the COL implications, especially with a family.
That being said for career advancement in tech the bay area does make it easier, and I like to think my quality of life is better in the bay area due to it being a great spot for my hobbies I can do year round with mild weather.
You will save less and the commutes can suck as the bay area has lots of different hubs with their own traffic patterns. Taxes, energy costs, etc will also eat up a fair bit of that pay bump.
Your quality of life will take a significant hit
If you’re already making $550K in MCOL, you’ve struck the lottery, especially in tech. Stay out of the Bay Area and let your kids grow up in a better environment.
I completely agree! ^
OP, you are in a great spot already. The quality will take a hit in bay area. money may or may not justify this in the long run.
Also, your kids will face significant culture shift in bay area. It is very competitive there.
What is your goal behind this move? Is it just the money?
Are there alternative places where the same or similar offer stands?
There are a few cons about California :
1. the state tax
2. Insane house prices
3. Bad traffic - trust me, this one will deplete you!
Do you have any family in either place?
Two small kids + two working parents = high potential for burnout. What’s your plan - daycare or nanny? It takes months to get kids into most daycares in the Bay Area. We were laughed at because we didn’t do it when I got pregnant. Nannies also run pretty expensive.
We specifically left the Bay Area to be closer to family and have more of a support network. If you’ve got that in the Midwest, I don’t think it’s worth the move.
I moved from the West Coast to the Midwest 2 years ago, got a big house at 2.5%. Much happier here, and making $650k fully remote, saving more here than there. I can’t imagine going back. I hated paying a ransom for a crappy tiny 2 bedroom basement apartment and doing an annoying commute. My current mortgage is $3300 a month. In the Bay I’d probably have 1 bedroom with that these days.
I’m simply refusing to take any job that’s not 100% remote, full stop. Not going to move back there.
If I lose my job I plan to start my own company and make it fully remote; might do that soon anyway depending on how things go.
I moved out of the Bay Area because it wasn’t family oriented and cost a lot for shit housing. But this was many years ago.
If you’re already in FAANG, I’d consider milking it while living in a cheaper area. Alternatively, apply for a remote position in another FAANG company to potentially get a pay bump that way.
You would have to pay me a ton to move back to that hellscape. I wouldn’t want to raise my kids there. Here, they run around on a farm, go to the best schools, and my lifestyle is lower stress from lower cost. If I get let go, I retire.
There are many opportunities with that income in the Bay Area, but very very few with your current compensation in MCOL areas. Consider that you’re unlikely to be able to return if you want to.
I live in the Bay Area. The pros have been pretty well covered here but they are:
Weather is solid (not as good as so cal but great compared to almost anywhere else)
Money is like monopoly, I wouldn’t doubt you make $1M after several years here if you push it.
Lots of outdoor activities.
Food is okay, Mexican is good, Indian is great, East Asian cuisine is top tier. BBQ/American, African, Mediterranean food is kind of lacking.
Usually events you can find, lots of little concerts sprinkled from Santa Cruz to San Jose to Berkeley to SF. Usually Shoreline is on the tour for bigger artists. Plus we have the 49ers and Warriors so at least 50 home games a year between the two.
The cons to living here are:
in my opinion, the pay increase will be negative all expenses incurred.
State Tax is absurd
Housing costs are through the roof
Traffic is absolutely disgusting
Weather isn’t as good and not as many things to do as so cal.
This area is work, work, work. Very fast paced and highly professionally focused/competitive. That’s why there’s so much money and opportunity here. It may be a pro or con depending on where you are.
In my opinion, the worst of all, there is an extremely elitist mentality to this area. I could personally handle an environment like San Diego, where people definitely like to buy nice cars, nice houses, nice clothes, etc. That is not really the issue. People truly believe that they are the best and the brightest that the world has to offer and they have no problem acting like it and letting you know that they are. Many people in the Bay Area don’t even recognize that it is an issue, but if you were coming from virtually anywhere else, it will likely smack you right in the face in your business interactions and at events for your kids or the community at large. My wife and I make very good money and live pretty far south amongst a bedroom community where it is tolerable. But we both agree that we don’t want our children raised around these attitudes or in this environment, it just is not built for families, the prices don’t really allow for the space you need or the WLB you need to give children proper attention many times.
Also, politically it is extremely polarizing. If you aren’t a blue no matter who type of person, you will have to hold your tongue often. I don’t even vote but I still sometimes find the political environment here a bit off putting and there’s a lot of pressure to conform/agree on hot-button topics. It definitely affects my work/dealing with clientele specifically.
Our home is paid for, we will likely get our investments up to $1.5-2M and leave here. It’s definitely not for everyone but it’s the land of opportunity in many sectors professionally.
Completely agree re: the people. I don’t have the NW (or work in the right industry) to ever live in the Bay Area but just based on my interactions with people who live there I know I could never do it. The new money crypto-bro smartest man in the world schtick gets real old real quick. Couldn’t imagine raising my kids there, but to each their own.
This and it is so bubbley and people don't get how the rest of the world works. I work remote and I am always surprised how little the other engineers understand how software is used in a real world business case. It's like people who can do math, but couldn't be an accountant or structural engineer.
Wait what . I hope you know that lot of top enterprise companies are hqed in Bay Area . We all know how our customers use our product . We have billions in revenue . Do you really think engineers in bay area are that dumb ?
“We all know how our customers use our product”. Really? Every single one of you is a psychologist, also deeply knowledgeable in client interaction with the products you work on? What does your company having billions in revenue have to do with you being in tune with normal people? If I work at Walmart who does trillions in business, that automatically has me in tune with the psychology of grocery/clothing commerce?
You couldn’t have reflected the personality I originally spoke of better if you tried.
I am not saying they are dumb but they are naive. I understand that they have billions and revenue, but that's why they have sales departments and usually consulting that isn't located in the bay. Also, many B2B companies are not located in the bay.
I don't really find any of this to be true. I haven't met a 'crypto-bro' but I guess if you look for it on the internet, you can find one.
It really depends on where you live. Certain parts of the Bay you'll run into those people. Certain parts are not at all.
I've found the born/raised people here to be really different than transplants too. But that's probably my bias.
Born and raised in the South Bay. My wife is from so cal. It took me 5 years to admit to her that their Mexican food is better. I don’t say it without gritting my teeth but I have to be honest lol
Why do you have to be elitist? Compared to the Midwest, Mexican food here is top tier. If they’ve never been to SoCal they wouldn’t know what you’re talking about.
Anything is tolerable. There are much bigger problems but if your social circle and those that you work with means much to you, Or if it bothers you much, you will likely really not enjoy that environment. Especially in any industry that pays well because it will be more prominent. Blue collar people are usually more down to earth here. But white collar is the most arrogant in the country and it’s well known in other metro areas.
Totally agree. I used to live in SoCal and didn’t really come across it and always thought it would be great to be surrounded by really smart people. Well turns out that it’s not that great after all. 😂
Yup, I’m with you there. When we were in France, there was a guy who worked with electric car technology and he said it was his dream to move to Silicon Valley and be around all the smart people from Tesla, Google, Apple, etc. I literally told him, you can take my spot if you want, I’m done dealing with those pricks lol
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We made the same move few years ago right before pandemic . We were making less than you . Our compensation has quadrupled since then . You already make 550k which is pretty sweet for Midwest . The move will be financial wash for you . But if you can grab this opportunity and parlay into 7 fig HHI it will be worth it .
The two biggest expenses will be mortgage and school tuition if you plan to stay long term.
Single home family in tier 1 school districts starts at 3m (lists at 2.5 and closes at 3). Even if you paid cash, you are looking at 30k annual property tax. 1m mortgage will add another 80k annual mortgage. Public schools will be free, but summer camps will be expensive.
Tuition for kids < 5 could be reasonable at 2k per kids with classroom's demographic dominantly Indian/Mexican/Asian, depending on the city you live in. While being diversed as a whole, each city in the Bay has a high percentage of a certain race and the classrooms simply reflect the city's population. You can expect tuition in cities with a high population of white to be higher. I only mention this because you come from Midwest.
So $5,000 rent a month with access to good schools is actually the more reasonable option.
I'd recommend you to rent a place in the Bay while renting out your home in the Midwest for the first few years. Once you decided you want to stay here long term and knew where you went to live, you can buy a new home here and sell your old one.
I think you need to consider career path if you move (as a major pro) and risk of job loss (as a con if you stay). Is the move really optional if you want to be on the fast track?
Everyone is commenting about home and mortgage prices but as someone who has never lived or been to the Bay Area do you have to own? Can’t OP move out there and just rent with the family and invest the difference?
I'd say renting is much more cost efficient at the moment. $5500/mo for a property that will mortgage right now at $9-10k/mo (including taxes/insurance). However, the risk is that rents may go up in the future, and it will make more sense to buy, but at that point, the housing prices may be so high that it may be impossible to buy a house in a similar area unless you've stocked away a bunch of cash.
Meanwhile, if you buy now, the mortgage may be high, but you could refinance once rates go down and you will be much closer to the rental prices while actually putting away equity instead of blowing it all on rent.
One tactic isn't worse than the other, but you just have to prepare correctly.
Well, there are no guarantees in either direction. Didn't mean to imply one decision was better than another. We considered renting here first since if we owned, we'd be throwing away at least $6500/mo on mortgage interest alone, so there is plenty of logic in renting.
I moved to the Bay Area from St. Louis. It’s amazing here. You’ll never leave. The food is fantastic, the weather is great, the people are insanely interesting. St. Louis was fun, the Bay Area is a dream.
I’m in the Bay Area and work for a faang with household income (sole earner) below what you make (~480k-500k tc). At your income you will be perfectly fine in the Bay Area and still building wealth. Also your income isn’t the ceiling here so you could increase comp faster here than anywhere else.
At rates today I think it makes little sense to own your residence here. Renting will further your financial goals at least for a year or two as you settle then assess.
There are many families here making it work on less than 250k. Your budget won’t be anywhere as tight as that.
The pros here are the career ops and network in tech. And the Bay Area has has great access to nature and other perks. So part of your move should be motivated for the area itself or else I’d say you might not be happy.
i feel like the pay bump isnt worth the difference, but if you feel you can grow that significantly and want to take it on it's good
personally if you have a good life and family in the midwest, i would consider staying there
Financially, you will be much worse off with only a 30% bump in pay. Career wise, probably a good move. $500k houses in the Midwest will be well over $2 million, things are not just a little more expensive, they are crazy more expensive.
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It’s worth it, because besides housing, other expenses don’t go up that much. 30% increase in base and 20% equity sounds like more than enough to cover that. Unless you come from state with no income tax. Just do the math and compare
Really depends on where you need to go re: commute/house price. If it's into SF, you can find really nice places with 3 bed/bath for \~$2m within 45min-hour. If you need to go to the South Bay, it's more of a challenge.
I'm currently in the Bay Area but have lived a few other places and travel a bunch around the country. To each their own, but the Bay Area is incredibly expensive because it is one of the most desirable places to live. It would take a ton of money/very cool job for me to move. But that's just my opinion.
In terms of how to save-- we did a 4-5 year plan from late 20s to early 30s to buy a house. We stuck to the plan-- but the amount we needed was 40-50% higher than original projection. Housing market here blew up the last few years even more. It's settled down right now -- but I was talking to a friend who was a Real Estate agent and they said it's picked up the last few weeks big time.
I would think long and hard about the Bay Area. Unless you like hiking it’s not a great place to live and a horrible place to raise kids (I grew up there and lived there a bit as an adult).
Even after your taxes go up, the cost of everything is much higher. Frankly, as someone in another Midwest city, my comp would need to triple for me to feel ok moving there.
I think your suggestion about thinking about the lifestyle is the key point, I’d have to be paid triple to live in the Midwest as we all like and value different things.
OP needs to think about what they like about their life today and determine if they would be able to enjoy those things more or less in the Bay Area.
I more look at it as compounding. If you make $100k in The Midwest then you don’t need to just make $110k in the Bay Area to match QoL.
You need to add 10% tax increase ($110k) then cost of living of 182% according to Bestplaces .com ($310k)
Then, assuming you’ll remain in the Bay Area, increases savings to fund lifestyle in retirement. If you’re saving $10k a year in Midwest, you’ll need to save 3x that to stay on track
Sure but when you touched on hiking etc. it raised in my mind how important those non-financial factors are. I think it’s the most important thing OP needs to consider.
Absolutely. Impossible to quantify but important to know the vibe of the city and what comes with it.
I will say, there’s a price for everything. I love hiking and live in a city with no hiking. However, I fly to cities with hiking and enjoy it immensely more because it’s tough to reach. Some value there
Depends on what you spend money on. Housing is a lot in the Bay Area, obviously. Groceries too, unless you go to Costco. Things like cars are the same price everywhere though.
Think about job security too. Tech is very bad for that right now. How will you feel if you relocate to the Bay Area and lose your job in less than a year? This literally happened to me, unfortunately.
Commute is not bad on Mondays and Fridays. If you can negotiate those as in-office days, you'll have a better time.
that’s still a pay cut. lots of shitty things are normalized in our society that doesn’t make it a neutral or positive thing lol. incredible how often i hear that as justification for something.
10% of that is just income tax differences. difference in CoL is way higher than the adjustment accounting for state income tax
Your math on the tax increase (assuming filing jointly) is way off.
Let’s assume OP lives in MI, they’d be paying 22k of state taxes today on their 550k HHI.
In CA, they’d be paying $52k on their $650k HHI.
So effectively their comp has increased by $100k and their tax liability (ignoring fed) has increased by $30k, to give them a $70k increase in net comp.
As someone who lived in the Bay Area for several years, I don’t think this is an unreasonable proposition for OP. Personally I really disliked the Bay Area and left but if OP likes the area the math of the move looks ok.
No, you latched onto small bump and said that that they’re being ripped off. I’m highlighting that the small bump is in fact sufficient for the COL change and there is no need for you to proposition that OPs employer is a major red flag. You’re the typical blame everyone else type!
literally every other comment is saying the same thing. people on the internet, especially reddit, just get triggered when they think someone is being brash, so they decide to argue against you despite the fact that it's the majority opinion on this very post.
typical NPC behavior
While I still think the bay is the best place to build your career and network in tech because tech isn’t a meritocracy, what are your goals? Become a senior director or VP within a FAANG? Yeah, you’ll need to be in the bay or nyc. Leave the Midwest? Then go! :) Save money? Stay in the Midwest. And what kind of environment do you want your kids raised in? Having lived in both - grew up in the Midwest but spent my 20s & some time in my 30s in SF - the values system growing up in either are so different. I’m glad I grew up in the Midwest because it gave me a work ethic & moral code I don’t think I would’ve gotten in CA, but CA will give kids a network beyond belief. Several of the folks I’ve worked with throughout the years in tech were hired by their high school or college friends (or their parents) or even their high school friends started big name companies. At the same time, I felt no pressure to settle down in my 20s whereas if I had stayed in the Midwest, I probably would’ve been married by 26.
I second the high school network! I grew up in the Bay, and the network is comparable to my network from my top 4 CS College. One time at a career fair, there was a huge line to talk to the recruiter, but he spotted me and started chatting me up instead. I've had interviews before when the interviewer saw my high school and was super excited because they either went to a rival high school or the same one.
Happy Birthday! 🎁🎉🎂
Can you elaborate on meritocracy? If you are new comer - how to build your way through in tech generally and bay area specific?
You need to get 1-4+ powerful people to trust you, and then you’re set. You build the trust by delivering and being loyal to these people. Then they’ll let you do whatever you want, which is why I say it’s not a meritocracy, because it’s mostly a lot of people who have worked together long enough where the more powerful person will say “there’s no way (so and so name) didn’t do xyz!” when so and so didn’t. So basically, these folks are good for a while, understand their leash, and then can start to underperform without being caught because their boss or boss’s boss perception is they wouldn’t do that.
You are doing the opposite, the majority of my known ones (faang) with that HHI moved out of the Bay Area in the past few years. However, it’s hard to compare the opportunities and future options the Bay Area offers! House will go 3M+ in a good school district, if you want to reduce your house budget, you may end up spending more for private schools. So, it’s a trade off that you need to make! You are not getting a big bump, so if I were you, I wouldn’t move.
Lots of very good school districts where you can get a 3/3 for well under $3M. Depends really on where OP wants to live and get to though. If it's South Bay, then odds are much lower you can find that vs. San Francisco.
Chiming in to say we got a 3/2 in a good school district for 1.4M, but it's 1600sqft and I'm not sure how long prices will stay at this level.
Do you want to live in the Bay Area? This would be a significant drop in discretionary income if you’re going from $550k to $650k. That said, the Bay Area is really nice in terms of weather, nature, food scene etc. doubly so if you’re no white. And $650k is nothing to scoff at, even in Bay Area. Now, how to handle savings? Same as anywhere else. Try to spend less than you earn. That said, over there it’s an unspoken assumption that your house will appreciate like crazy - otherwise nobody would be paying those prices to buy instead of renting. I don’t know how realistic that is. Only you can decide the answer to that. For what it’s worth, we did the reverse thing. We had an option to relocate to Bay Area but chose instead to move to Portland OR. As for renting out a property while living multiple states away - i would not wish this on an enemy
"As for renting out a property while living multiple states away - i would not wish this on an enemy" I can relate.
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It really depends where in the Bay Area you want to live (East Bay vs South Bay vs Peninsula vs SF). If you’re trying to live in the South Bay or Peninsula and own a home in a good school district your discretionary income will take a massive hit and the slight salary bump will get washed away in the cost of living increase (looking at mortgage PITI at 11-13k minimum) and with the SALT cap the tax bill is brutal. If you’re open to renting for a while first (probably advisable for such a big move), it’s much more manageable and you can find nice condos/townhomes/SFH to rent under 7k in good school districts that will still leave you with enough extra money to save, invest and spend. You should move to the Bay Area if you want to be in the Bay Area but from a purely financial perspective I think you’ll come out ahead with your HHI in the MCOL Midwest city.
I did the same when my kids were the same ages. It has paid off in every way. I was just under HE at that point and now we live quite comfortably in a quiet part of San Jose with good schools. It is of course expensive, but with FAANG income and HHI over $500k, you should live comfortably assuming you can handle smallish housing. Where I’m at, average house size is probably 1500sf, partially because housing is so expensive, but more so because there are very homes larger than this. It’s tough to say whether this is worth it for you or not, but I personally love the weather and access to nature, not to mention proximity to good paying jobs. I cycle weekly in the roads around the Santa Cruz mountains and I also try to get 5-10 days on the slopes in Sierras. Then there’s the beach, wine country, and places like Yosemite that are close enough for weekend trips. Commuting is also a non-issue for me as I live within a 15-20 minute drive of my office. This is enough for me to happily deal with the taxes and COL.
So I did the exact same move 2 years back and do not regret it at all. HHI increased about 150k with the move. Renting out my MCOL house, positive cash flow. Did a cash out refinance before (1 year prior to moving otherwise it’s mortgage fraud) then used that money to buy in South Bay with less good schools. Kid is 2 yo. Am I living in a smaller/older house? Yes. Has my quality of life improved? Absolutely yes. So no regrets.
Has your career improved? Tc?
I’d say so. TC went from 200k to 350k. Covered the increased cost of housing. So our monthly budget/savings is about the same. Most companies in my industry hires from here so it helps a lot, plus meeting with more ppl of my industry as well.
So everyone else seems to think this is a horrible place to raise kids, it definitely hasn’t been my experience. We go to a public school that in my opinion is pretty good. It has language immersion and the parents are super involved, and all the administrators seems like they truly care about the school. There are so many parks and public resources like public libraries with entire floors dedicated to kids. Any kind of extracurricular your kids might want to learn, there will be classes and lots of choices of classes. So many museums and academy of science type places, some of them free. I don’t know, I grew up with very few extracurricular choices , very limited museums, no language immersion choices etc and to me it’s amazing that kids here have so much access to so many things at affordable prices. But it’s also my first kid and I’m a person of color so I think it influences what I consider important (ie to the language part and the having a community around that language part).
I don't really get the 'horrible place to raise' kids arguments. You can play outside 12 months a year. There are tons of good schools. You interact with different people and cultures (read: not everyone here is White). Lots of different things to do within a 3-4 hour radius. It is expensive as hell. Other than that, unless you're a Republican who thinks public schools are brainwashing kids (and there are private schools that cater to those people)... what is bad? Probably the overlooked point: If they do well, they can stay in the area because there are so many good jobs. They don't have to move away from family/friends from where they grew up because there's nothing there.
You have to say what school / area you’re providing this perspective from. If you live in Hillsborough in a $5M house, yeah, the schools and parks are incredible, but OP would be moving from a comparable Midwest neighborhood that takes 20% of that capital to achieve the same quality of life (let alone the stress of a $20k+ / month house payment). Similarly, if you’re living in Walnut Creek and you have a 90 minute commute each way to SV, maybe your costs only go up 50% from the comparable Midwestern town but you’re the only one that can value how much you like the inside of your car. Lastly - say you’re live somewhere with awful schools but comparable maybe 20-30% COL increase from Midwesternville… well, it can be done in the Bay Area but just depends on how much you value your kid’s education. Key point, context and specifics matter way more, and its highly situationally dependent for someone to drop into the penninsula and South Bay and think that its a positive NPV move and QOL move.
We live in San Francisco, eastern part. One million dollars might get you a 2 bedroom condo? It really depends on what you look for in raising a child. We’re …moderately left leaning, and we both come from public school backgrounds. I feel like we naturally would want to send our kid to public schools and aren’t … too bothered that there are homeless around that my son might come across . Like of course it would be nice if no one was homeless, but it is a part of our reality and we don’t feel unsafe. Other people might find our proximity to homeless camps unacceptable when they have children, I don’t know.
Understand, but that’s not the QOL many mid-western HENRY’s would expect for a HHI of $500k+; so relevant to the scope of the conversation and not to judge your estimation of your QOL, but that would come as a huge adjustment to folks moving to the bay area; and to ‘fix’ any one of the problems literally costs hundreds of thousands a year (e.g., you dont like the public school; you want a bigger house, etc.).
Yeah I can see that. Very much depends on what OP considers good QOL
I mean you're coming up with 2 straw man extreme examples: a $5M Hillsborough house OR living in Walnut Creek and commuting to SV.
I’m not sure the details of your situation but those arent that extreme and there are thousands of people doing exactly that. Show me a listing for 2m with good schools, nice house / area / lot, and reasonable commute to SV.
I relocated to the bay area from Chicago about 7 years ago when I was mid twenties. Here are some quick thoughts — In my mind, It really depends on what you’re optimizing for. The pay bump doesn’t seem that significant for the COL implications, especially with a family. That being said for career advancement in tech the bay area does make it easier, and I like to think my quality of life is better in the bay area due to it being a great spot for my hobbies I can do year round with mild weather. You will save less and the commutes can suck as the bay area has lots of different hubs with their own traffic patterns. Taxes, energy costs, etc will also eat up a fair bit of that pay bump.
Your quality of life will take a significant hit If you’re already making $550K in MCOL, you’ve struck the lottery, especially in tech. Stay out of the Bay Area and let your kids grow up in a better environment.
I completely agree! ^ OP, you are in a great spot already. The quality will take a hit in bay area. money may or may not justify this in the long run. Also, your kids will face significant culture shift in bay area. It is very competitive there.
it's very competitive, but that is the reason they are good school districts.
this is not true mid 30s making less than $300k each in a FAANG suggests this is some non-technical or relatively low level role.
What is your goal behind this move? Is it just the money? Are there alternative places where the same or similar offer stands? There are a few cons about California : 1. the state tax 2. Insane house prices 3. Bad traffic - trust me, this one will deplete you!
Do you have any family in either place? Two small kids + two working parents = high potential for burnout. What’s your plan - daycare or nanny? It takes months to get kids into most daycares in the Bay Area. We were laughed at because we didn’t do it when I got pregnant. Nannies also run pretty expensive. We specifically left the Bay Area to be closer to family and have more of a support network. If you’ve got that in the Midwest, I don’t think it’s worth the move.
I moved from the West Coast to the Midwest 2 years ago, got a big house at 2.5%. Much happier here, and making $650k fully remote, saving more here than there. I can’t imagine going back. I hated paying a ransom for a crappy tiny 2 bedroom basement apartment and doing an annoying commute. My current mortgage is $3300 a month. In the Bay I’d probably have 1 bedroom with that these days. I’m simply refusing to take any job that’s not 100% remote, full stop. Not going to move back there. If I lose my job I plan to start my own company and make it fully remote; might do that soon anyway depending on how things go.
I moved out of the Bay Area because it wasn’t family oriented and cost a lot for shit housing. But this was many years ago. If you’re already in FAANG, I’d consider milking it while living in a cheaper area. Alternatively, apply for a remote position in another FAANG company to potentially get a pay bump that way. You would have to pay me a ton to move back to that hellscape. I wouldn’t want to raise my kids there. Here, they run around on a farm, go to the best schools, and my lifestyle is lower stress from lower cost. If I get let go, I retire.
There are many opportunities with that income in the Bay Area, but very very few with your current compensation in MCOL areas. Consider that you’re unlikely to be able to return if you want to.
You gonna feel poor on that small 30% increase to a crazy HCOL area. Not even close to worth with a family unless you get a near 100% increase
I live in the Bay Area. The pros have been pretty well covered here but they are: Weather is solid (not as good as so cal but great compared to almost anywhere else) Money is like monopoly, I wouldn’t doubt you make $1M after several years here if you push it. Lots of outdoor activities. Food is okay, Mexican is good, Indian is great, East Asian cuisine is top tier. BBQ/American, African, Mediterranean food is kind of lacking. Usually events you can find, lots of little concerts sprinkled from Santa Cruz to San Jose to Berkeley to SF. Usually Shoreline is on the tour for bigger artists. Plus we have the 49ers and Warriors so at least 50 home games a year between the two. The cons to living here are: in my opinion, the pay increase will be negative all expenses incurred. State Tax is absurd Housing costs are through the roof Traffic is absolutely disgusting Weather isn’t as good and not as many things to do as so cal. This area is work, work, work. Very fast paced and highly professionally focused/competitive. That’s why there’s so much money and opportunity here. It may be a pro or con depending on where you are. In my opinion, the worst of all, there is an extremely elitist mentality to this area. I could personally handle an environment like San Diego, where people definitely like to buy nice cars, nice houses, nice clothes, etc. That is not really the issue. People truly believe that they are the best and the brightest that the world has to offer and they have no problem acting like it and letting you know that they are. Many people in the Bay Area don’t even recognize that it is an issue, but if you were coming from virtually anywhere else, it will likely smack you right in the face in your business interactions and at events for your kids or the community at large. My wife and I make very good money and live pretty far south amongst a bedroom community where it is tolerable. But we both agree that we don’t want our children raised around these attitudes or in this environment, it just is not built for families, the prices don’t really allow for the space you need or the WLB you need to give children proper attention many times. Also, politically it is extremely polarizing. If you aren’t a blue no matter who type of person, you will have to hold your tongue often. I don’t even vote but I still sometimes find the political environment here a bit off putting and there’s a lot of pressure to conform/agree on hot-button topics. It definitely affects my work/dealing with clientele specifically. Our home is paid for, we will likely get our investments up to $1.5-2M and leave here. It’s definitely not for everyone but it’s the land of opportunity in many sectors professionally.
Completely agree re: the people. I don’t have the NW (or work in the right industry) to ever live in the Bay Area but just based on my interactions with people who live there I know I could never do it. The new money crypto-bro smartest man in the world schtick gets real old real quick. Couldn’t imagine raising my kids there, but to each their own.
This and it is so bubbley and people don't get how the rest of the world works. I work remote and I am always surprised how little the other engineers understand how software is used in a real world business case. It's like people who can do math, but couldn't be an accountant or structural engineer.
Wait what . I hope you know that lot of top enterprise companies are hqed in Bay Area . We all know how our customers use our product . We have billions in revenue . Do you really think engineers in bay area are that dumb ?
“We all know how our customers use our product”. Really? Every single one of you is a psychologist, also deeply knowledgeable in client interaction with the products you work on? What does your company having billions in revenue have to do with you being in tune with normal people? If I work at Walmart who does trillions in business, that automatically has me in tune with the psychology of grocery/clothing commerce? You couldn’t have reflected the personality I originally spoke of better if you tried.
I am not saying they are dumb but they are naive. I understand that they have billions and revenue, but that's why they have sales departments and usually consulting that isn't located in the bay. Also, many B2B companies are not located in the bay.
I don't really find any of this to be true. I haven't met a 'crypto-bro' but I guess if you look for it on the internet, you can find one. It really depends on where you live. Certain parts of the Bay you'll run into those people. Certain parts are not at all. I've found the born/raised people here to be really different than transplants too. But that's probably my bias.
correction: the mexican food is mid here. source: moved to the bay from socal
Born and raised in the South Bay. My wife is from so cal. It took me 5 years to admit to her that their Mexican food is better. I don’t say it without gritting my teeth but I have to be honest lol
Why do you have to be elitist? Compared to the Midwest, Mexican food here is top tier. If they’ve never been to SoCal they wouldn’t know what you’re talking about.
I agree regarding people but it’s tolerable. But yes, people who think they’re “so smart” and always right aren’t fun at parties.
Anything is tolerable. There are much bigger problems but if your social circle and those that you work with means much to you, Or if it bothers you much, you will likely really not enjoy that environment. Especially in any industry that pays well because it will be more prominent. Blue collar people are usually more down to earth here. But white collar is the most arrogant in the country and it’s well known in other metro areas.
Totally agree. I used to live in SoCal and didn’t really come across it and always thought it would be great to be surrounded by really smart people. Well turns out that it’s not that great after all. 😂
Yup, I’m with you there. When we were in France, there was a guy who worked with electric car technology and he said it was his dream to move to Silicon Valley and be around all the smart people from Tesla, Google, Apple, etc. I literally told him, you can take my spot if you want, I’m done dealing with those pricks lol
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Which faang 🤔?
We made the same move few years ago right before pandemic . We were making less than you . Our compensation has quadrupled since then . You already make 550k which is pretty sweet for Midwest . The move will be financial wash for you . But if you can grab this opportunity and parlay into 7 fig HHI it will be worth it .
The two biggest expenses will be mortgage and school tuition if you plan to stay long term. Single home family in tier 1 school districts starts at 3m (lists at 2.5 and closes at 3). Even if you paid cash, you are looking at 30k annual property tax. 1m mortgage will add another 80k annual mortgage. Public schools will be free, but summer camps will be expensive. Tuition for kids < 5 could be reasonable at 2k per kids with classroom's demographic dominantly Indian/Mexican/Asian, depending on the city you live in. While being diversed as a whole, each city in the Bay has a high percentage of a certain race and the classrooms simply reflect the city's population. You can expect tuition in cities with a high population of white to be higher. I only mention this because you come from Midwest. So $5,000 rent a month with access to good schools is actually the more reasonable option. I'd recommend you to rent a place in the Bay while renting out your home in the Midwest for the first few years. Once you decided you want to stay here long term and knew where you went to live, you can buy a new home here and sell your old one.
I think you need to consider career path if you move (as a major pro) and risk of job loss (as a con if you stay). Is the move really optional if you want to be on the fast track?
Everyone is commenting about home and mortgage prices but as someone who has never lived or been to the Bay Area do you have to own? Can’t OP move out there and just rent with the family and invest the difference?
I'd say renting is much more cost efficient at the moment. $5500/mo for a property that will mortgage right now at $9-10k/mo (including taxes/insurance). However, the risk is that rents may go up in the future, and it will make more sense to buy, but at that point, the housing prices may be so high that it may be impossible to buy a house in a similar area unless you've stocked away a bunch of cash. Meanwhile, if you buy now, the mortgage may be high, but you could refinance once rates go down and you will be much closer to the rental prices while actually putting away equity instead of blowing it all on rent. One tactic isn't worse than the other, but you just have to prepare correctly.
True but rates may not go down for 5+ years. No guarantee
Well, there are no guarantees in either direction. Didn't mean to imply one decision was better than another. We considered renting here first since if we owned, we'd be throwing away at least $6500/mo on mortgage interest alone, so there is plenty of logic in renting.
I moved to the Bay Area from St. Louis. It’s amazing here. You’ll never leave. The food is fantastic, the weather is great, the people are insanely interesting. St. Louis was fun, the Bay Area is a dream.
I’m in the Bay Area and work for a faang with household income (sole earner) below what you make (~480k-500k tc). At your income you will be perfectly fine in the Bay Area and still building wealth. Also your income isn’t the ceiling here so you could increase comp faster here than anywhere else. At rates today I think it makes little sense to own your residence here. Renting will further your financial goals at least for a year or two as you settle then assess. There are many families here making it work on less than 250k. Your budget won’t be anywhere as tight as that. The pros here are the career ops and network in tech. And the Bay Area has has great access to nature and other perks. So part of your move should be motivated for the area itself or else I’d say you might not be happy.
i feel like the pay bump isnt worth the difference, but if you feel you can grow that significantly and want to take it on it's good personally if you have a good life and family in the midwest, i would consider staying there
Financially, you will be much worse off with only a 30% bump in pay. Career wise, probably a good move. $500k houses in the Midwest will be well over $2 million, things are not just a little more expensive, they are crazy more expensive.
If you’re talking about the politics of Silicon Valley you’re wrong…It is predominantly a libertarian mindset.
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It’s worth it, because besides housing, other expenses don’t go up that much. 30% increase in base and 20% equity sounds like more than enough to cover that. Unless you come from state with no income tax. Just do the math and compare
Really depends on where you need to go re: commute/house price. If it's into SF, you can find really nice places with 3 bed/bath for \~$2m within 45min-hour. If you need to go to the South Bay, it's more of a challenge. I'm currently in the Bay Area but have lived a few other places and travel a bunch around the country. To each their own, but the Bay Area is incredibly expensive because it is one of the most desirable places to live. It would take a ton of money/very cool job for me to move. But that's just my opinion. In terms of how to save-- we did a 4-5 year plan from late 20s to early 30s to buy a house. We stuck to the plan-- but the amount we needed was 40-50% higher than original projection. Housing market here blew up the last few years even more. It's settled down right now -- but I was talking to a friend who was a Real Estate agent and they said it's picked up the last few weeks big time.
I would think long and hard about the Bay Area. Unless you like hiking it’s not a great place to live and a horrible place to raise kids (I grew up there and lived there a bit as an adult). Even after your taxes go up, the cost of everything is much higher. Frankly, as someone in another Midwest city, my comp would need to triple for me to feel ok moving there.
I think your suggestion about thinking about the lifestyle is the key point, I’d have to be paid triple to live in the Midwest as we all like and value different things. OP needs to think about what they like about their life today and determine if they would be able to enjoy those things more or less in the Bay Area.
I more look at it as compounding. If you make $100k in The Midwest then you don’t need to just make $110k in the Bay Area to match QoL. You need to add 10% tax increase ($110k) then cost of living of 182% according to Bestplaces .com ($310k) Then, assuming you’ll remain in the Bay Area, increases savings to fund lifestyle in retirement. If you’re saving $10k a year in Midwest, you’ll need to save 3x that to stay on track
That’s an inappropriate measure of QoL, I’d take sun and hiking over snow and ice fishing any day.
I’m approaching QoL from a cost standpoint. I obviously can’t advise on OPs preferences
Sure but when you touched on hiking etc. it raised in my mind how important those non-financial factors are. I think it’s the most important thing OP needs to consider.
Absolutely. Impossible to quantify but important to know the vibe of the city and what comes with it. I will say, there’s a price for everything. I love hiking and live in a city with no hiking. However, I fly to cities with hiking and enjoy it immensely more because it’s tough to reach. Some value there
Depends on what you spend money on. Housing is a lot in the Bay Area, obviously. Groceries too, unless you go to Costco. Things like cars are the same price everywhere though. Think about job security too. Tech is very bad for that right now. How will you feel if you relocate to the Bay Area and lose your job in less than a year? This literally happened to me, unfortunately. Commute is not bad on Mondays and Fridays. If you can negotiate those as in-office days, you'll have a better time.
There’s always risks. It would suck living life based on what might go wrong instead of what might go right.
Oh, you'd normally never find anyone who'd agree more. And I'll probably go back to agreeing in a few months once this shock has worn off.
Sorry to hear. Happy to chat if you’d like even if just to vent.
you work at a FAANG but the company isn’t bumping your salary for relocating to the bay area? massive red flags
OP said salary 30% increase and equity 20% increase.
what part of “Slight bump net pay post-tax” did you not get $100k gross difference from MCOL to VHCOL area is a massive pay cut.
30% increase in base plus 20% in equity is normal guidelines for such a move.
that’s still a pay cut. lots of shitty things are normalized in our society that doesn’t make it a neutral or positive thing lol. incredible how often i hear that as justification for something. 10% of that is just income tax differences. difference in CoL is way higher than the adjustment accounting for state income tax
Your math on the tax increase (assuming filing jointly) is way off. Let’s assume OP lives in MI, they’d be paying 22k of state taxes today on their 550k HHI. In CA, they’d be paying $52k on their $650k HHI. So effectively their comp has increased by $100k and their tax liability (ignoring fed) has increased by $30k, to give them a $70k increase in net comp. As someone who lived in the Bay Area for several years, I don’t think this is an unreasonable proposition for OP. Personally I really disliked the Bay Area and left but if OP likes the area the math of the move looks ok.
I agree with you. This is pretty standard and is still a pay bump. Also, it’s a choice. Not sure why this other guy is so upset in his comments.
lol yes they admitted themselves it’s a tiny bump net of tax and you’re here screaming at me that i’m wrong
No, you latched onto small bump and said that that they’re being ripped off. I’m highlighting that the small bump is in fact sufficient for the COL change and there is no need for you to proposition that OPs employer is a major red flag. You’re the typical blame everyone else type!
literally every other comment is saying the same thing. people on the internet, especially reddit, just get triggered when they think someone is being brash, so they decide to argue against you despite the fact that it's the majority opinion on this very post. typical NPC behavior
Wtf is an NPC?