Average earning/savings of a software developer in San Francisco area

[Spanky]

One possible way to reach FI early is working as a software developer or manager in Silicon Valley according to some of the discussion at What is the average savings of a software developer in San Francisco area? - Quora

37 single, $250k/yr including bonuses.
Net worth property $2.1m.

Overall net worth over $7m.
I still feel like I'm a small tadpole in a very big ocean maneuvering around to not get eaten to stay alive in this fast paced lifestyle.

Despite well-known high-tech compensation in the Bay Area, some of claims seem high, however.

Anyway, DD just started working as a software engineer there a year ago after graduation, making over $100K (just in salary) already. Cost of housing is very high (~2x average), but the pay definitely compensates it quite nicely.

 

[photoguy]

The last time I interviewed in Silicon Valley was 2012 (not as a software engineer though). I don't think 250k including bonuses (and stock) is unusual for a mid-level manager. It certainly depends though because start-ups pay less in salary and regardless of where you are, a big chunk will be variable.

Also keep in mind reporting bias -- those who make more may be more likely to report it.

 

[daylatedollarshort]

Median tech workers wages for the Bay Area as a whole are $123,497:

Bay Area Tech Wages Are The Nation's Highest At $123K, But Should Entrepreneurs Look Elsewhere As Costs Rise? | TechCrunch

 

[2017ish]

Eldest has been out there two/three years; not a "code monkey," but most of his friends are. Even mech-electrical pays well--but you have to really watch the spending.

Thanks in part to Roths in college, he's managed to get his net worth above his income, but deliberately lives like a student still. (no car, sharing 2 bdrm apt in SF with two others, etc.)

His friends at google will rapidly advance their savings if they take full advantage of the 401k options there.... Not a bad trade-off for giving up the chance of having options in company that is taken over or goes public.

 

[someguy]

Even better if you can find a high-tech company in the Valley or otherwise that allows remote working. You can collect the higher pay but live in a LCOL area and bank the savings.

 

[harley]

It would be interesting to see a map layout of where the various ER.org FIREd live. I wonder if it would be concentrated in high income areas like SV, NY, DC area, etc. Or if it would be more spread out. If it's concentrated that would indicate that those who believe a higher income is necessary to be able to FIRE are right. If it's more spread out it could indicate that those who say anyone can FIRE if they just LBYM are right. I think this could be an important study. Who wants to do it? Not me, I'm retired.

 

[rodi]

Just from casual reading of this board... my perceptions are that there are a lot of ERers from the windy city region (midwest) and from the lone star state (state).

And of course our little pocket here in San Diego area...

 

[Spanky]

It would be interesting to see a map layout of where the various ER.org FIREd live. I wonder if it would be concentrated in high income areas like SV, NY, DC area, etc. Or if it would be more spread out. If it's concentrated that would indicate that those who believe a higher income is necessary to be able to FIRE are right. If it's more spread out it could indicate that those who say anyone can FIRE if they just LBYM are right. I think this could be an important study. Who wants to do it? Not me, I'm retired.

I would think LBYM is the key. If one earns a high income and LBYM, achieving FI would be faster than one earns a lower income albeit LBYM. Unfortunately, people who have high earning power tend to spend a lot or more than their income.

 

[Spanky]

Median tech workers wages for the Bay Area as a whole are $123,497:

Bay Area Tech Wages Are The Nation's Highest At $123K, But Should Entrepreneurs Look Elsewhere As Costs Rise? | TechCrunch

That's salary only. With cash bonus and stock option, the actual pay could be significantly higher. The following examples from Google (from Glassdoor.com) illustrate this point.

Google Software Engineer Salary in San Jose, CA
Base Salary: $128,318
Total Compensation : $166,541

Cash Bonus: $24,908
Stock Bonus: $51,388
Profit Sharing: $22,554


Google Senior Software Engineer Salary in San Jose, CA
Base Salary: $162,568
Total Compensation : $242,449

Cash Bonus: $33,779
Stock Bonus: $69,979
Profit Sharing: $39,668

 

[haha]

That's salary only. With cash bonus and stock option, the actual pay could be significantly higher. The following examples from Google (from Glassdoor.com) illustrate this point.

Google Software Engineer Salary in San Jose, CA
Base Salary: $128,318
Total Compensation : $166,541

Cash Bonus: $24,908
Stock Bonus: $51,388
Profit Sharing: $22,554


Google Senior Software Engineer Salary in San Jose, CA
Base Salary: $162,568
Total Compensation : $242,449

Cash Bonus: $33,779
Stock Bonus: $69,979
Profit Sharing: $39,668

I am interested in comparing the factors behind COL in San Jose and other Valley towns where people who are compensated in the above range and who work in areas where software companies are clustered. I know SF has very high col due to a combination of high pay for software and other upper level workers, and also very effective anti-growth policies in the city, and I wonder about growth policies in the major Vlly centers.

Seattle has high pay, (though lower than SF or SV). You get different stories from whoever you talk to, but it appears to me that Seattle is pretty free regarding high rise and multi-occupant building, certainly relative to San Francisco. I live in the most densely settled residential area (downtown per se is very dense, but much of it retail and office.) Recently there has been a spate of Apodment building, very small 150sqft+ units often with no or shared kitchens and rarely garages or parking spaces. I think this is (belatedly IMO) being slowed down or stopped. IMO it is completely negative. Otherwise, zoning is strict, but nothing like SF. The central city is full of cranes, and most of it outside of downtown is residential or residential with ground floor retail.

What this fairly free building (free relative to SF anyway) allows is expensive but not outlandish rents for young, well paid workers. It sucks for ordinary workers. I know a few Trader Joe workers, and they are constantly looking for new apartments, new sets of roommates, new possibilities for living farther out. But it is very unhandy to be a retail worker and live at all far from work, because of the irregular hours, split shifts, etc..

Any building booms for residential property down on the peninsula now?

Ha

 

[FIREd]

Any building booms for residential property down on the peninsula now?

SF is is the middle of a building boom if I ever saw one. I can see no less than 15 cranes from my windows. Five or six new residential high rises near downtown, and a dozen medium-rise residential buildings near the new UCSF campus in Mission Bay.

There is no doubt that income for techies can reach very high levels in this area. Including bonuses and stock options, it's quite easy to reach the $250K/yr level - though you'll take a pounding on taxes. DW works in biotech and incomes for mid-level managers exceed that.

 

[photoguy]

Seattle has high pay, (though lower than SF or SV).

I have a few friends that recently interviewed with both amazon and google out of grad school. They reported that amazon compensation offer was the same as at google. I attribute this to people considering amazon/seattle a less desirable place to work. Obviously just an anecdote based on a few junior hires.

 

[Shawn]

Although not specifically Silicon Valley or San Francisco, my SF Bay Area organization has about 600 employees with job classifications related to software development. Based on the salary distribution from a few years ago and projecting forward using average raises, 2015 salaries at given percentiles are ...

10%: $120K
25%: $135K
50%: $153K
75%: $175K
90%: $206K

Bonuses are either $0 or insignificant, but benefits are good. About half the employees are in a very generous DB pension program. The other half are in a 401k with the employer matching ~10% of salary (i.e., an additional $10K-$20K a year).

 

[Aiming_4_55]

I'm not a software developer, but in the tech field. I'm experiencing the higher income opportunity as I moved from MN to CA recently. I'm in LA. My base salary was about 15% more with bonus/stock option potential. With bonus, stock options, RSU, etc. I have the potential of doubling my total income next year as they vest. I do run the risk of stock performance.

Rental cost is about double for housing, but we have a modest apt to start and living frugally within reason. Spending more, but OK with it.

Still undecided for long term tho.

 

[MRG]

I'm glad for what I'm learning. I just had former co-w*rker just move to that area for salary enhancement. His renting an apartment for himself. His wife is staying in the midwest and they're trying to live remotely.

They have 2 DS, first is in MIT. Not sure where DS2 wants to go, but they want to minimize the student loans for their children.

I'm hoping that when DS2 is on his own his DW can go be with him. She's an excellent developer too, his a$$hat manager didn't want him as English wasn't his native language. The manager was unwilling to spend a few more minutes with him to ensure they both understood each other. Seems like there should be a law.

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[Katsmeow]

It would be interesting to see a map layout of where the various ER.org FIREd live. I wonder if it would be concentrated in high income areas like SV, NY, DC area, etc.

Well, if I just go by postings I see quite a few people from Texas (where I am) and a fairly startling number who are not that far away from where I live (that county immediately north of Houston).

 

[FIGuy]

I work for a SF Tech company as an engineer, but live remotely. High pay is not the problem out there, but my coworkers out there frequently complain about the cost of living and don't seem to save much on the whole. I know a few live cheaply and I suspect save a fair bit of course. Overall, the mentality seems to be "get into a VP role" as the ticket to financial success. Doing it on even a 150k (base) director level salary doesn't seem to be perceived as possible.

I figured what our ~30k (post tax) / year expenditures for my wife and I would be if we moved out there a few years back and came up with about 75k when considering taxes and everything. This shifts the savings game upward more than one might expect when you consider that CA has progressive income taxes just like the feds do and you lose 50% of every top dollar to taxes. We decided not to move after I failed to get the cost of living adjustment out of megacorp.

 

[kramer]

If you are a single and renting, you can save a lot working as a Engineer in the Bay Area, since your expenses are so much lower than your salary.

When I left in 2007, just 6 weeks after my early retirement, I was paying $1000 per month for a great, well-located one bedroom apartment in downtown San Jose. Of course, the price has gone up since then. I think I was paying as much or more in California state taxes than rent and my federal taxes were probably more than my entire after-tax living budget. So I was banking most of my income.

 

[JoeWras]

It is interesting, and I wonder how long it is sustainable.

My Megacorp is centered there. All the money is going to SF area. There's no money to be distributed elsewhere in the corp for salaries. I'm not complaining, just observing.

Thing is, in classic "gold rush" fashion, everyone is gravitating there. You are nobody if you are not in SF area. Developers are bidding companies against each other. Wages are bubbling.

At my OMY stage, I don't care. However, if I were a kid, I'd probably join the rush and move out there and live with a bunch of other geeks all stuffed in an apartment (to save cash) and make as much as I could.

30 years ago when I started this career, pay was more out there. But nothing like the differential now. It is nearly 2x on average, which is pretty significant.

I love visiting the Bay area. And if you live there now and are prop 13'd in, all power to ya. But I'd find some serious barriers of entry at this moment.

 

[daylatedollarshort]

If you are a single and renting, you can save a lot working as a Engineer in the Bay Area, since your expenses are so much lower than your salary.

When I left in 2007, just 6 weeks after my early retirement, I was paying $1000 per month for a great, well-located one bedroom apartment in downtown San Jose. Of course, the price has gone up since then. I think I was paying as much or more in California state taxes than rent and my federal taxes were probably more than my entire after-tax living budget. So I was banking most of my income.

That was smart. We are trying to tell our kids to do something similar.

Kiddo #1 lives quite well on modest means in a rented apartment in a beach location. We've pointed out that even spending $1K more a month post college but otherwise keeping the same quite pleasant lifestyle while earning a Bay Area IT salary could provide $12K of extra fun and travel money while also setting enough aside to fund ER at a relatively young age.

We have many friends that managed to get into financial trouble despite two Bay Area IT salaries. LBYMs is still the key to financial security regardless of income.

 

[FIREd]

I think that the bull market in equities is inflating compensation right now as those stock options granted over the past 5-6 years are deep in the money. People should enjoy the extra income while it lasts. I know that, personally, we are one bear market away from a big drop in income.

 

[daylatedollarshort]

We've seen a number of boom and busts over the years. When we moved here decades ago SV was actually in a job and housing slump compared to the rest of the Bay Area. Who knows what the future will hold for any particular area over the long term. New York is still a world wide financial hub, but Detroit has sure changed over the last couple of decades.

 

[kramer]

That was smart. We are trying to tell our kids to do something similar.

Kiddo #1 lives quite well on modest means in a rented apartment in a beach location. We've pointed out that even spending $1K more a month post college but otherwise keeping the same quite pleasant lifestyle while earning a Bay Area IT salary could provide $12K of extra fun and travel money while also setting enough aside to fund ER at a relatively young age.

We have many friends that managed to get into financial trouble despite two Bay Area IT salaries. LBYMs is still the key to financial security regardless of income.

For quite a few years after college I lived with roommates even though I had a high income. If I lived in a lower cost of living area I wouldn't have done it, but it just made sense in high rent Silicon Valley. In fact, all the way through the tech bubble, the most I ever paid in a month for rent was $675 when most of my friends were paying over $2000 per month for an apartment. When prices came down to earth, I got my own place. It was definitely a 6 figure decision, in that it saved me over $100K when I combine savings and the investment return on those savings.

 

[JoeWras]

We've seen a number of boom and busts over the years. When we moved here decades ago SV was actually in a job and housing slump compared to the rest of the Bay Area. Who knows what the future will hold for any particular area over the long term. New York is still a world wide financial hub, but Detroit has sure changed over the last couple of decades.

Interesting you should bring up Detroit.

Back at Megacorp, this discussion comes up frequently on our internal forums. Usually it goes like this: "We like Palto Alto because of the schools, we're looking at a fixer upper for $2.2M. This will put a strain on us. We come from the midwest and are not sure this is a good price. There's no danger of a crash or anything, is there?"

Answer: "Nah, this isn't Detroit. We're different than Detroit. Go ahead and buy now. Might as well bid 2.3 and get it. Our Megacorp is different, we're ruling the world in case you didn't notice. Nothing to worry about. Besides, even if there is a tech blip like 2001, we came back fast from that."

Yes, I paraphrase, but the general tone is real. I honestly don't know where this ends up.

 

[EastWest Gal]

I remember this photo from the 90s. It needs updating. The price should be $1,999,995.


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