1) You don’t aspire to own a home here, as that will eat easily 100% or more of your savings.
2) You plan to spend your savings in a cheaper place.
USD is a convenient shorthand for purchasing power, but breaks down under huge regional COL differences. A $200k savings account in the Bay Area is like a $50k savings account elsewhere: about enough to think about setting up a middle-class grown-up lifestyle.
Unless you're talking about a home, 200k in the bay is more than 50k almost anywhere else. There are very few things that cost 4x more on regional differences, and housing may actually be the only one. (Other major expenses, like food, transit/gas, and leisure activities like travel or vacations are much less price elastic, 0-30% more)
Not really. 200k is a down payment on a million dollar home. Double that is a 2 million dollar home, which will let you buy in most places.
Thats achievable in 5 years for someone who is working towards that goal specifically, less if you have a partner who also works. Anecdotally, I know two couples (out of not many total) that purchased within 2 years of moving to the bay. One had some savings, and that plus the first years stock vests was enough for a down payment on a condo. The other took ~2 years to buy a home from very little prior savings, which was possible because both had decent incomes.
So I'm dubious as to the doom and gloom, at least for married professionals.
(Of course, this ignores the reality that for anyone not working in tech or 1-2 other fields, these are wholly out of the picture, and that's hugely problematic! But for the calculation of CoL for someone who is picking between tech companies, I think people overestimate the costs of the bay, and I'm not really sure why)
Sure, dual tech income families are doing fine. But with gender ratios as they are, not many of those can exist.
Remember that, as you save, housing appreciates. I've run the numbers; the lines only intersect at all for more conservative % increases, between 8 and 12 years out.
Both good points that I forgot to mention. I implicitly assumed most people would eventually move away from SV, but if you plan to stay there your whole life, then you'll have a much more difficult time buying a home and/or retiring. And having children adds a whole new dimension of financial difficulties.
It also adds a bunch of social difficulties, unless you try to pull of the entire make-bank/move-elsewhere cycle before they reach elementary school age. Once they are in school, they start making their own friendships and relationships, and it becomes much more impactful for everyone to make that move to the new low-cost area, leaving everything they know behind.
1) You don’t aspire to own a home here, as that will eat easily 100% or more of your savings.
2) You plan to spend your savings in a cheaper place.
USD is a convenient shorthand for purchasing power, but breaks down under huge regional COL differences. A $200k savings account in the Bay Area is like a $50k savings account elsewhere: about enough to think about setting up a middle-class grown-up lifestyle.