Cost Of Living in Silicon Valley #4

Having explored many of the items that will show up on the expense side of the ledger, this last post will instead focus on the income column: what can you expect to get paid and how much cash will that mean you lay hands on at the end of each month?

Firstly, some good news: in most companies you will actually get paid twice a month, not once. That helps with cash flow and, if you can reach a balance point, means one bi-monthly payment gets consumed by housing costs with the other covering all other living expenses. However, that's easier said than done, as we shall see ...

For engineering positions, expect to see salaries in the range of $100k to $150k depending upon the company, seniority, experience etc. Usual caveats: your mileage may vary so just treat these as general guidelines, advice that applies double to the next section on deductions and taxes.

As always, the web has some great resources - here's just one example - to help you find positions and to figure out the going rates. (And it's worth noting that many companies maintain their own database of available jobs, accessible via their web sites. Start there if you want to work for only specific high-end firms such as IBM, Cisco, Adobe, etc.)

OK, so let's say you are making $120k per annum, equivalent to $10k per month. How far does that get you? The short answer is "it depends". Tax rates vary depending upon total pay, number of dependants, even on the state in which you live. Take California, for example, where state taxes on income can mean losing as much as another 9.3% on top of whatever the federal taxes will run you. Add to that the mandatory social security taxes, plus whatever your employer asks you to pay as a contribution to a health care scheme, and that $10k per month soon shrinks alarmingly.

As we've seen, the government is legally able to take money from you by force but it turns out that you can sacrifice even more hard-earned cash, should you wish to, in the form of contributions to a 401k retirement scheme. These deductions are tax-deductible, and there's a maximum you can contribute depending upon age. ($15k per annum if under 50, $20k thereafter.)

Long story short, out of that $10k per month, expect the federal tax plus social security plus health care contributions to run you $2k per month. State taxes will swallow another $900 and as I'm probably missing something, somewhere, let's call it an even $3,000 or 30%, even before the optional stuff is factored in. Further subtract from that housing costs of, say, $4,000 a month (see post #3) and you are down to keeping only 30 cents on every dollar earned just to starve to death because no one has bought any food yet or got transport to get to the supermarket.

Can you live here on $120k per annum? Sure you can, but the only point I'm making is that you won't be living life in the large.

As a final comment, though, let me say this. Silicon Valley is a great place to live. Indeed, if you are in high-tech or software, there's nowhere better. Add to that the northern California location, and frankly it all becomes a bit of a no-brainer. However, it's not for everyone, especially when families or significant others get to have their say. The educational system can be challenging for kids and the sacrifices you have to make to live in a premium school district may ultimately cause you to head home, or at the very least somewhere else in the USA.

Come here with your eyes open to the possibilities and view this as a unique opportunity to take advantage of all the Valley and California has to offer and you'll have no regrets, no matter how short your stay ultimately is. I've been here ten years and still have no desire to leave, despite all that the UK has to offer and indeed has afforded me in the past. And trust me, that's saying a lot!

Cost Of Living in Silicon Valley #3

Transportation, which out here means "going somewhere by car", is the next key thing to resolve. Even if you can find a place to live that is that 5 minutes easy bike ride from the office then you'll still need a car to do the weekly shopping, visit friends or even buy a newspaper and a pint of milk. The only exception might be if you live and work in San Francisco where you could manage quite well without one, but frankly that's about the only exception.

Good news: buying cars is much cheaper here than in Europe, and likely elsewhere in the world too. Bad news: insuring them isn't, especially as insurance companies treat new immigrants as though they've never caressed a steering wheel in their lives (what, you mean that's not normal? Huh ... who knew?) For even a modest family car, expect to spend up to $1,000 for six months initial fully-comprehensive cover, depending on your age and chosen location. Yes, you read that right. Sure, you can get it cheaper than that, especially if you are driving something older and you carry more of that risk yourself. However, be aware that anything related to car accidents can become very expensive, very fast, and that just for repairs. If lawyers & medical bills get involved then just run for the hills screaming because hell-on-earth is right on your heels. You've been warned!

Thanks to the wonders of WWW-goodness, you can buy a car over the Internet. We bought a pick-up truck that way, via Cars Direct, and the experience was utterly painless. Sure, you pay $500 in there somewhere to give them a margin but they, in turn, negotiate a good deal with, well, the dealer! (And even if you don't use them to actually do the deal, at least you have a benchmark price to take to Steven's Creek, or wherever else you go car shopping, you can use to start the haggling process.)

Prices? $15,000 to $20,000 will get you a perfectly respectable commute car or family runabout. But before you do the happy dance on that price, don't forget to add on all the other costs involved: purchase tax at 8.25%, CA registration fees ($300 to $400), delivery costs if new ($700) and even paperwork fees just for "drawing up" the standard forms they'll make you sign at length and in triplicate. If leasing is more your thing, figure on $300 to $400 per month before tax depending on the vehicle, mileage, lease term, your credit rating etc.

Oh yes, credit rating. Because you are clearly a perfidious foreigner, be prepared for the run-around until they can find some way to run a credit check. Waste no time: as soon as you leave the airport, get a credit card. If possible, do so before you take the bus to the rental lot. Trust me - cash is no longer king but rather a minor serf located in some out-of-the-way corner of the land where he's viewed with deep suspicion. (I was lucky: I moved here on an inter-company transfer and my employer was able to help with an introduction to a bank in order to get a checking account & credit card sorted. Priceless.)

Petrol is currently around $3.40 per (US) gallon, and believe me when I say you'll drive more miles doing next-to-nothing than you would believe possible. I don't do much more than commute, a 20 mile drive each way, yet still rack up close to 15,000 miles per annum.

So that's about it for cars, other than to say that if you are married then obviously just double everything above because both of you will need a way of getting around!

Lastly, we'll take a quick look at what sort of income you might expect in order to offset all those pesky expenses.

Cost Of Living in Silicon Valley #2

Housing. Let's start with the biggest thing first, shall we?

Whatever you have read about the high cost of housing here is true. The macro level data from post #1 starts to hint at the issue but doesn't give the whole story by any means. Basically, $1m doesn't go that far in Silicon Valley these days. That's not to say you can't find houses or apartments to buy for less than that figure because you clearly can. However, choice of where in the Valley to live drops once you go below that level and competition to buy the good stuff therefore rises.

Right now the whole US is in a housing recession, even here on the West Coast. However, don't make the mistake that this must therefore impact all of Silicon Valley equally, because it doesn't. Houses under $1m will fare better than those over $1m, and by the time you get to $5m then the impacts of what has happened in the mortgage market will fall away again. However you cut it, though, housing will be the most expensive aspect of living here and likely as not the most frustrating to deal with, at least in the first instance. Buying a house is a competitive sport, and one that entails a lot of paperwork and allied complexity. Be warned - it's also expensive. Expect to pay 3% of the purchase price in fees to buy a place here.

Fortunately, the web has some excellent resources to help you get your head around the various locations, pricing, inventory etc. available. Personally, I tend to stick with one site that has served me very well: MLS listings. Once you have figured out, based on acceptable commute times, school districts etc., a set of areas where you might want to live, MLS will show you pretty much everything available in your price range, allowing you to browse the market in comfort and get a feel for the price/reward ratio of various locations before jumping in and finding a realtor (a.k.a. an estate agent) to work with.

Just by way of comparison, $750,000 gets you just over 1,000 square feet of detached house "as is" (i.e. somewhat ratty condition) in Cupertino, one of those districts where prices have been driven up because it's known as being a good school district. In Campbell, an OK area to live in the South Bay, this gets you a much newer property, in "move in" condition, with almost 50% more floor space. As we say in the UK, "you pays your moneys and takes your choice".

Assuming you want to buy and not rent (where I freely admit I have less experience) what might a mortgage run you? Here's an example that's based on buying a place for $750,000 against which you put down $300,000 cash. That leaves you needing to fund a $450,000 mortgage, running over 30 years (the typical period here), at say a 6.5% interest rate, on which the payments would run you just over $2,800 per month. Again, the web offers a number of different mortgage calculators so you can play with these numbers at will. Of note, though, is that for your principal residence in the USA you can set mortgage interest payments fully against taxes on your annual return. Assuming a marginal tax rate of 35% percent then there's at least a couple of hundred bucks a month you can effectively knock-off that figure.

However, depending on where you come from then prepare for another shock. Property taxes here are a flat percentage of the purchase price you pay for your house or apartment, typically 1% to 1.25% per annum. Pay that $750,000 dollars for your home, therefore, and you can expect to also fork over another $8,000 or so per year in property taxes depending on the county in which you end up living in. (However, property taxes too can be set against annual income when figuring out tax liabilities.)

Other housing-related costs include insurance (figure $2,000 or so per year), utilities ($200 per month minimum) and possibly home-owner association fees if those are applicable in your development or condominium.

As always, "your mileage may vary" but at least this will give you a starting point for figuring out your own outgoings. Likely as not, 50% or more of your take-home pay will get swallowed up by housing and associated costs. Certainly, do take a look at renting in the first instance. Right now, with the market as soft as it seems to be, there's not any rush to jump in and buy if you find yourself here in the next few months or so. Expect to spend anything from $2,500 to $3,500 a month for a modest apartment or house in an OK area. And no, there's no tax relief for rental payments!

Next up, let's take a look at another of the mandatory costs associated with life out here, transportation. In the next post, that is ....

Cost Of Living in Silicon Valley #1

Over the past few months, I've received a couple of questions around what's the cost of living in Silicon Valley sent, presumably, by people contemplating a move here. Since I just went through collecting some of the relevant stuff together for tax purposes, I thought I'd do a post or two laying out the various components of what it takes financially to live in the Bay Area.

(For those of you who already live in the area, please feel free to post whatever additional information you may have based on your own experiences. Every little helps, after all, and I remember my own move here being something of a leap of faith, mostly because I didn't have any real idea of what that first pay check would look like or how much buying a house and having a mortgage would run us.)

Some basics: Silicon Valley is, from a living standpoint, a widely-spaced collection of individual districts, each with it's own set of pros and cons, few of which I'll discuss here just now. Depending on where you work and how much tolerance you have for commuting as to where you'll end up looking. Not much I can add to that other than to say some people are perfectly happy living in San Francisco and working as far south as San Jose, a distance of some 60 miles, while others will want to bike there in less than 5 minutes and avoiding all main roads. Let's start, then, by using those two places as end points for the sake of making an easy initial comparison.

Let's start at the top-most level: how does SV stack-up when set against other major world cities? The above graphic covers how New York compares with other places (in 2005 at least, & thanks to the Economist) and a quick poke at the Internet shows that San Francisco's cost of living index is approximately 80% of that in New York. That makes it about the same as, oh let me look here, Johannesburg, "car jacking capital of the world" .... which is interesting in itself.

So that's one end of the Valley taken care of, what about the other? Again, the interweb comes to our aid and it looks like San Jose runs about 70% of San Francisco in terms of cost. Hmm, not sure I completely agree (rents are the most likely driving this difference so it might actually be reasonable thinking about it a bit more) but whatever, it's a starting point.

Next up, we'll look at mortgage costs and housing. But that's for the next one ....

Wet Weekend In The West

Not much to report. Weekend was a washout but we did pick up close to 3 inches of additional rain which should help us close-in on the typical annual total up here. NWS threatened us with worse than we actually got - winds were strong elsewhere, but not at our house - so things were easier than was the case for the January 4th storm.

Given that I couldn't do anything else, collating what's needed for that annual ritual of tax time here in the USA seemed like a good thing to do. Makes me feel I've accomplished something at least, even if I don't much like the results! Dogs hate it though. They get bored both with bad weather and with me not paying attention because I'm staring at indecipherable bits of paper.

And talking of washouts - or maybe wash-ups? - Ralph Nader's running again. Are the Republicans paying him to do this? They should, because it's good news for them. Last time out he garnered 3% of the vote and was widely credited for putting Bush into the White House because the bulk of those votes were culled from the Democratic candidates.

Will we see the same thing in '08? Probably not. That 3% largely reflected the weak choice of alternate candidates on the left, a situation that surely won't be repeated this year. Oh, and Nader is also on the list of things dogs don't care about. They may have this one spot on.

Microsoft Deserves To Lose .. If Anyone Was Fighting

I mean, what's wrong with Redmond these days? They can't even get the fix right that enables the main fix to work that is supposed to fix Vista. This would be embarrassing if it wasn't so sad and pathetic.

With a few more miles under my belt running Vista, I'd have to say that this is by far the worst OS release I've seen since the old 3.1 days. Compared with XP, it manages to be slower and way more unstable, seemingly with large swathes of the stuff suffering from the most rudimentary of problems. Yeah, maybe some of it is down to Toshiba and their installation, but frankly I doubt it. Microsoft should hang their heads in shame at ever having shipped Vista in that state at all, let alone it being this way for what, a year or more now?

In the words of Bart Simpson, Vista manages to suck and blow all at the same time. As and when I get a chance to try out SP1 I'll let you know if it makes any major improvement to this thing but meanwhile avoid it like the plague it surely is.

Some Sordidity In My Future, But Not Much Murder

Thanks to the image archive here, I've learned that there may be sordidity ahead in my future! Not exactly sure what that means, but it can't be all bad, right? Alas, I think I also worked out that I'm a dollar short and a cent shy of riches, and that I'm a bit under-served on the depravity front. However, and rather thankfully, I'm also apparantly without any signs of future murders being writ large on my right hand, which is good. Oh, and despite the supposed tendency towards sordidity, somehow I seem to have missed getting a signal that there's any chance of adultory ahead, which seems to go against the grain somewhat if I understood what being sordid actual entails?

Unimpressed, I'll stick to phrenology instead as a way of predicting future events. That, and believing everything politicians promise during the candidate selection process of course ....

BMW's iDrive Package: Does Anyone Care What I Think?

Now I've had about six weeks using this thing, I thought I'd pen a few notes on the good, bad and indifferent aspects of the main way in which BMW thinks you should interact with their cars: iDrive.

First off, I like the whole idea of "de-cluttering" the dash and moving all those buttons onto one, centralized control mechanism. Most of these functions you work with just once on a set-and-forget basis, and so anything that stops the inside of the cabin resembling a 1960s jet fighter cockpit, festooned with buttons and switches that require a check-list in order to remember what they do, is a definite plus. However, what then do you do with the stuff you actually do want to change more frequently, like the entertainment system or climate control settings? Well, given that you've already decided to centralize this stuff, you, well, centralize it into the same interface of course. And now the fun starts.

The iDrive controller has become simpler of late, having now only four directions you can push it to move across the display (the cardinal compass points) but still having the ability to rotate freely either clockwise or counter-clockwise; in addition, you can push it down to provide a "click" function. It quickly become intuitive and half the time I can now use it without taking my eyes off the road ahead. The home screen collects things into four main groups: communications, navigation, entertainment and climate, with a further information category (basically, in-car functions) available through a push-to-click. (However, having said all that, I still think Audi have done the same thing better: they have an button at each of the 4 main directions that you can use to directly call up each of the specific functions without having to return to the main upper screen and select the new option.)

I won't bore everyone to tears by slogging through each option in all it's Germanic glory, but rather just highlight a few features and why they suck or don't.

The display has basically two windows you can set up: a main information screen and an assistance window. Coming at this from Silicon Valley, it's hugely frustrating to have the assistance window be so limited in what it can show or do. Mostly, it seems to be designed to provide navigation information such as directions or a moving map. However, it's only about a third of the display in width (nope, can't change that) and so is only marginally useful for the map piece., though sort of adequate for using arrows to show where to go and when.

In the main navigation window, I end up having the traffic reports displayed which means I have two thirds of the screen showing text and one third the map (in the too-small assistance window). This is completely arse-over-end and I have no idea why BMW reckoned this made sense. Furthermore, the traffic incidents, listed in descending order by which ones are closest, scrolls automatically when new ones pop up. This means that if you glance quickly at the screen then the stuff closest has often slipped up and off the display, something that's only hinted at by a small arrow on the right hand edge. Oh, and one other thing: it lists everything that's going on in the area, regardless of whether or not you care. This means that incidents continue to be listed even as you drive away from them, and there's no hint given that you can ignore any particular entry because of this. Net-net is that you keep checking to see if the mileage given alongside any incident is growing or shrinking before you decide if that particular one matters or not. Very poor usability then for this feature, leading me to conclude that no one actually tries to use these things in anger before they stamp them as "good to go" because it's so glaringly wrong headed. I mean, it's just software for crissakes: allow people to choose functions that give maximum flexibility as to how you use the features provided. If it offends some German sensibility then at least please give us stupid foreigners the option to have things behind us, that we are moving away from, be listed italicised or something. Sheesh.

Next up: one of the good things about this system is the range of entertainment (i.e. audio) options you have. However, unless you are in the display mode for the radio or iPod then the screen won't tell you what track or song is playing despite that fact that this data is now uniformly sent by satellite and terrestrial providers alike. I'd much rather see that information than, for example, be told today's date when on the navigation screens (my default setting.) But no, customizing even the contents of minor fields like the date thing isn't allowed.

Here's what I want: give me a web site I can log into and on which I can set up the display and vehicle settings that best fit my needs. Then have this configuration information loaded down to the car via the built-in cell phone connection. Simple, effective and highly-differentiated over the competition. The basics are there already, BMW themselves having demonstrated an integration with Google maps and destination & routing data getting sent to the navigation system from an Internet-connected PC.

Oh, and one other beef while I'm at it. Why can't I get a custom seat fitting rather than having to put up with the lowest-common denominator design that's optimized for a Mr or Mrs Average somewhere in Lower Saxony? Sure, there are 5 different axes around which you can move the various parts but that's a bit like having a park bench you can adjust: fine, but it's still basically very uncomfortable regardless of how you set the back rest or seat height. I'd happily pay $1,000 for a seat that I can sit in on a daily basis without feeling like I need to be booking in with a chiropractor every Friday just so I can walk upright again.

But then what do I know? I'm just a customer, after all, and not even a German one at that. No one asked before they rolled it out; no one has asked me after I took delivery either. And isn't that part of the problem? I'm tired of pointless surveys car companies here make you answer to see if the sales or service department gets paid, because they are worthless. Everyone knows that 5 is the only passing grade and in every case I've been coached by either the sales guy or the service chief ahead of time that unless you give the maximum score that they will be banished to a dealership in North Dakota selling Chevy Geos at best. No one - but no one - ever calls to ask how the car could be made better, what's missing from the package, likes and dislikes or anything at all to do with usability. And that's a huge opportunity wasted.

Time To Say Goodbye To An Old Friend

I finally got round to replacing my work laptop. For three years I've been using a Fujitsu-rebadged-as-a-Dell machine that, until recently, has served me well. Alas, in the past six months it has slowly started to sink into old age and decrepitude, taking over 20 minutes to boot to the point where I can run applications. When using it during the day, I can actually watch the cursor stutter as I move the mouse. To say this is frustrating is a severe understatement, as the whole office will attest ...

Don't ask we why things got as bad as they have. Don't even ask me why I've stuck with it for so long. Loyalty? Debt of service? Stubborness? Probably the last one, but none of this matters as I focus on shifting my allegiances to my new workmate: a Toshiba Portege R500.

How's the transition going? Not badly, just slowly. Really, I wish Microsoft would come up with a way to reliably move applications without having to try and resurrect from disk or soft-drive - i.e. my brain - how on earth I set half this stuff up in the first place. Add to that the challenge of Vista ... oh yes, this baby has her vices ... and before you know it entire days have passed in order just to get things up and running that work perfectly well right now on my old machine, albeit glacially slowly.

Initial impressions of the Toshiba are that it's light, weighing in at less than 3 lbs, with a decent keyboard and a screen that's very good, if not quite at the level of what the Sony Vaio can deliver. Power consumption is also a strong point, seeing me get 3 hours or so of use out of the standard battery, and using the "performance" power profile rather than any of the ones that are designed to be more frugal with the juice. However, I can't for the life of me work out how to have the thing switch power profiles when I go from mains input to battery use. Used to work fine on my old machine under XP, so go figure. (Please post me a comment if you are an owner who *has* got this to work!) But now for the bad news: the two "mouse click" bottons either side of the touch pad would disgrace a five buck plastic kid's toy. They only give any tactile feedback of a "click" if you hit them dead centre, anywhere else and it feels like the things have got stuck. Very poor design on a high-end laptop that's over $2k once configured with a decent amount of memory.

Vista? Still buggy. In just a couple of days of incidental use I've got apps flaking out, the machine getting stuck in a loop when trying to sleep and some weird networking behaviour that I still haven't got to the bottom of. I'm hoping that SP1, now due in March, fixes most of these but even so it really is embarassing to Microsoft to have these basic, low-grade annoyances in an OS release that's been out something like a year. Not good, but something you can get away with if you have > 90% market share I suppose.

On the plus side, one feature in Vista that does seem worthwhile is ReadyBoost. Just throw-in an external storage card and Vista can use this as additional cache, significantly speeding up applications that crave memory space such as, to pick a couple of examples at random, Lightroom and Photoshop! Well worth the $25 I dropped on a high-speed 2 Gb SD card.

All-in-all, then, from a hardware perspective - mouse buttons aside - it seems like a decent buy so far, but Vista is no way ready for prime time. Microsoft should hang their heads in shame at shipping such a buggy release, especially after God only knows how many man years were sunk into the development & testing of this thing. I'll stop now before my blood pressure goes off scale ...

Plasma Stout Anyone?

Melt A Frickn' Beer Bottle! - video powered by Metacafe
So I'm impressed - who knew you could generate plasma in a microwave with no more in the way of tools than a beer bottle and a blow-torch? And now that I do know it, I can't think of anything to do with that fact either.