Re: Shed No Tears

1

I have some objections to your assumptions.


Posted by: Moby Hick | Link to this comment | 01- 5-16 8:24 PM
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On the college thing, you really went all in for the worst case. You seem to have assumed there would be no merit aid and no chance of going to a public university. And then you calculated college savings based on returns of 0%.


Posted by: Moby Hick | Link to this comment | 01- 5-16 8:27 PM
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Also, the kids' grandparents are probably going to kick in something. Or at least it's pretty common in the sorts of families that have earnings that high.


Posted by: Moby Hick | Link to this comment | 01- 5-16 8:31 PM
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$500k could be high, but not crazy high, I don't think. In-state University of Illinois cost of attendance today is about $30k. What's it going to be in fifteen or twenty years? Fair point about zero returns though.


Posted by: ogged | Link to this comment | 01- 5-16 8:34 PM
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And that's assuming no huge end-of-life medical costs.

Old people get Medicare. It doesn't pay for everything, but it pay for much more than what I've ever gotten. Long-term nursing remains a problem, but there is insurance. If you think of it when you are younger, I'm told it isn't prohibitively expensive.


Posted by: Moby Hick | Link to this comment | 01- 5-16 8:34 PM
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On retirement in generally, I'm fairly certain that people with higher incomes get employer matches. Anyway, I get a 150% match.


Posted by: Moby Hick | Link to this comment | 01- 5-16 8:36 PM
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Yes, 250k/year is probably not enough in high cost of living areas to feel like you don't have a care in the world.


Posted by: fake accent | Link to this comment | 01- 5-16 8:37 PM
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Not that I made close to $250k.


Posted by: Moby Hick | Link to this comment | 01- 5-16 8:38 PM
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9

Also, people with higher incomes are likely to be in the kind of jobs where you don't need to retire at 65 and are less likely to want to retire promptly. That kind of salary usually means relatively engaging work with some degree of power and somebody to push the shit-work off to. But, if somebody works past 70, they're very likely to live well past 80.


Posted by: Moby Hick | Link to this comment | 01- 5-16 8:41 PM
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4: Are you including room and board? Tuition certainly isn't that high.


Posted by: J, Robot | Link to this comment | 01- 5-16 8:45 PM
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Also, the big house payment (the interest portion, at least) and the expensive property taxes are tax deductible. And, while the parents have to kick in after-tax dollars for college savings, there are still huge tax advantages for doing so. Money you give your kids (up to $24,000/year if from a couple) earns interest or returns that are taxed at the kid's tax rate, not yours. And 529 plans mean the kids never pay taxes at all on it.


Posted by: Moby Hick | Link to this comment | 01- 5-16 8:47 PM
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In-state University of Illinois cost of attendance today is about $30k.

Christ, no wonder you're doing a coding boot camp. My older one is doing the community college for the first two years which is about 1900 a semester and then will transfer to the U of Utah, which is IIRC is about 4K a semester right now. She's living at home which is fine with me as cheap housing market where houses have full basements means lots of bedrooms and the kids staying at home while they're in school doesn't cramp my style or anything.

If you make $250k, you will get precisely zero financial aid for college

Yeah, my daughter got nothing based off of our 2014 returns of household income at about 105K. I don't imagine 250K faring better. But we never did the private school thing here and the property tax on our middle class house is under 2K a year.


Posted by: gswift | Link to this comment | 01- 5-16 8:55 PM
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Are you including room and board?

Yeah, total cost of attendance, based on a quick google.


Posted by: ogged | Link to this comment | 01- 5-16 9:00 PM
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Also, people are building really fucking big houses. I don't know who is buying them, but they sure are bigger than anything we ever had when I was growing up.


Posted by: Moby Hick | Link to this comment | 01- 5-16 9:01 PM
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Grant 11, disagree with 9. It's true you're less likely to need/want to retire at 65 if you're in a high-paying job, but most people still do.

And really, it's not worth doing the math in general, since situations and locations will differ so much, but I think the point stands that the things you expect to be able to pay for when you make $250k eat up a big enough chunk of your income that feeling like you have to budget is understandable, not incomprehensible, like Drum makes it sound.


Posted by: ogged | Link to this comment | 01- 5-16 9:05 PM
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they sure are bigger than anything we ever had when I was growing up.

There was a cool infographic going around twitter a while back showing that each member of the family now has as many square feet as the entire family had in the 1950s.


Posted by: ogged | Link to this comment | 01- 5-16 9:06 PM
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It's true you're less likely to need/want to retire at 65 if you're in a high-paying job, but most people still do.

I can't find good figures retirement age by profession, but nobody is going to feel sorry for a healthy white collar worker who has to work past 65 because he had to finish paying for his kids college. I mean, somebody might, but not nearly as many people as would for feel bad for the guy hobbling outside of Walmart.


Posted by: Moby Hick | Link to this comment | 01- 5-16 9:12 PM
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18

12: Send her up to me and it's 5K per year. But we still have a functioning public university system.


Posted by: Cala | Link to this comment | 01- 5-16 9:17 PM
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Though no near elderly white collar worker has ever tried to bust me for shoplifting.


Posted by: Moby Hick | Link to this comment | 01- 5-16 9:18 PM
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retirement age by profession

Some searching says 21% of doctors work past 65, but hospitals are moving to curb that, because it's probably not safe, and I know a lot of big law firms have mandatory retirement between 65 and 70. Nobody should feel bad for these people, but making anyone work into old age for money isn't great.


Posted by: ogged | Link to this comment | 01- 5-16 9:20 PM
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I'm a little suspicious of the $500,000 number personally, at least as far as how things look right now in dollar terms and so on. In our Trumptopic future who knows. It's not because people can be priced out of financial aid, but financial aid isn't just calculated straight based on income it has a lot to do with the actual cost of the college itself, whether or not the family is also covering another child's tuition and so on. Having two children in college simultaneously could save a lot of money compared to two in sequence, especially if we're talking 250K a year and fairly selective colleges. And since a lot of it is based on the expected amount they (people? who knows) think a family can reasonably provide in support the financial aid package is going to look a lot different depending on whether the college's full bill is in the 20K range or the 60K range.


Posted by: MHPH | Link to this comment | 01- 5-16 9:21 PM
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18: Ha, I looked into that but we're down in Sandy and I think the gas and wear and tear on her car would kind of offset the cheaper tuition. Plus, if her little beater car breaks down we have a light rail station only a mile from our house that she can ride right up to the U of Utah.


Posted by: gswift | Link to this comment | 01- 5-16 9:23 PM
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23

She could live somewhere else. I certainly wouldn't have lived with my parents while I was in college.


Posted by: Moby Hick | Link to this comment | 01- 5-16 9:28 PM
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24

Either there are a whole lot of rich people who manage their money really badly

Depending on how you define "rich," um, yes.


Posted by: Roberto Tigre | Link to this comment | 01- 5-16 9:31 PM
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25

I thought that in most states (except for certain professions) it was age discrimination to set a mandatory retirement age.


Posted by: Moby Hick | Link to this comment | 01- 5-16 9:32 PM
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26

a lot of why rich people don't feel rich is that the process of getting/staying rich is kind of expensive.

one thing rich people do is buy lots of convenience, always pay retail instead of shopping for deals/values. And they need to, since to get the 250k jobs you usually need to work stupid long hours.

Also, there is a good chance you went to a good college. So you need to buy the excessively expensive house to be in the 'good' school district or to buy private school, and the cost of college/grad school for yourself (loans) and kids (529 etc.)

Which isn't to say i feel sorry (restaurants, mansions/exclusive neighborhoods, maids, dog walkers, having interesting work, etc are great, or so i imagine), but the reasons being rich are expensive not just people who are buying luxuries. They are needed, or at least believed by the rich to be needed, to maintain class status. And a lot is working at a class level, like nimby-real-estate restrictions making it impossible not to pay hundreds of thousands to buy admittance to the right school. You still get to live in the house, but you don't feel like you have a choice, unless you are willing to let your kids fall down a rung.


Posted by: yoyo | Link to this comment | 01- 5-16 9:33 PM
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27

the big house payment (the interest portion, at least) and the expensive property taxes are tax deductible.

WRONG because of the kind of people Ogged is talking about are subject to the AMT.


Posted by: Roberto Tigre | Link to this comment | 01- 5-16 9:34 PM
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28

How much more expensive is college tuition than private school tuition? It seems to me like for many people in the situation you're describing college should be payable by just continuing current costs and downsizing you're house when you don't have kids living in it anymore.


Posted by: Unfoggetarian: "Pause endlessly, then go in." (9) | Link to this comment | 01- 5-16 9:37 PM
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29

Stupid autocorrect.


Posted by: Unfoggetarian: "Pause endlessly, then go in." (9) | Link to this comment | 01- 5-16 9:37 PM
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30

23: She could, but her work (part time gig as a medical assistant) is close to our house and she's seems to rather like it here. We get along pretty well.


Posted by: gswift | Link to this comment | 01- 5-16 9:40 PM
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31

I know a lot of people in this income range and I find this to be a headscratcher ($250k is a pretty normal total comp number at a major tech company, and we'll sometimes offer something in close to that for fresh PhDs even though we have the weakest compensation packages of any of our competitors except Amazon and regularly lose people to our competitors for that reason).

I can buy the cutting back part -- no matter how much money you make, you can always cut back. But I'd expect "don't have enough money to buy the things they need" to be very rare, not something 10% of people say yes to.


Posted by: sral | Link to this comment | 01- 5-16 9:42 PM
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32

27: I thought you still got at least the mortgage interest deduction with the AMT. It's limited to the interest on $100,000 in loans, but that's more than half a house even in the nice areas.


Posted by: Moby Hick | Link to this comment | 01- 5-16 9:44 PM
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33

Also, the AMT is effectively putting a floor on your taxes. It doesn't mean that you don't get deductions, it just means that the deductions stop counting after a certain point.


Posted by: Moby Hick | Link to this comment | 01- 5-16 9:46 PM
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34

you don't feel like you have a choice, unless you are willing to let your kids fall down a rung

This is the entirety of the issue.

In high-cost "coastal" areas, making $300,000 or so for a family with kids is not enough to comfortably buy all the trappings conventionally associated with upper middle class life -- a "nice" house or apartment, "good" schools, child care, college savings to ensure reasonably easy college attendance, pleasant vacations, and enough retirement savings to make that all at least sort-of possible through retirement. Thus, you will not only not feel "rich" on that income. You will feel constantly under threat of not quite being capable of providing the upper-middle-class lifestyle that seemed promised by television or obtainable by professionals at your level just a generation or two ago. Thus, if you're inclined to such things, you're faced with continual class anxiety of either not being sufficiently of the upper-middle class (in terms of consumption and status markers) or in danger of allowing you and your children to fall out of it.


Posted by: Roberto Tigre | Link to this comment | 01- 5-16 9:47 PM
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35

I'd expect "don't have enough money to buy the things they need" to be very rare, not something 10% of people say yes to.

10% isn't all that high, when you consider people who might be sandwiched between caring for kids and parents, especially if any of those people have unusual medical needs. Obviously, "things they need" is going to be very flexible here, but someone might say yes if they deferred replacing a furnace or something like that. Also, someone making $250k before 30 (or even 35) is going to be in a very different financial situation from someone making that for the first time at 55.


Posted by: ogged | Link to this comment | 01- 5-16 9:47 PM
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36

5 is kind of OTTMLHWTP unfortunately. Medicare doesn't pay for that much long-term care and the insurance on offer tends to be crappy too, I believe.


Posted by: Minivet | Link to this comment | 01- 5-16 9:48 PM
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37

Speaking hypothetically.


Posted by: Roberto Tigre | Link to this comment | 01- 5-16 9:48 PM
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38

You left out cars. I don't know why, but all doctors have to drive a Lexus.


Posted by: Moby Hick | Link to this comment | 01- 5-16 9:49 PM
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39

I have no sympathy for expensive cars. You want to live among people like you, I get that. You want your kids to go to good schools, I get that. But cars are really just about signaling, and you have to be better than that.


Posted by: ogged | Link to this comment | 01- 5-16 9:51 PM
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40

one thing rich people do is buy lots of convenience, always pay retail instead of shopping for deals/values. And they need to, since to get the 250k jobs you usually need to work stupid long hours.

This has been so fucking true over the past year of unprecedented household income. Also multiple spontaneous weekend vacations because work is stressful. My REI dividend for 2015 is going to be kind of alarming.


Posted by: anonymous suddenly UMC commenter | Link to this comment | 01- 5-16 9:51 PM
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41

OTTMLHWTP?


Posted by: Moby Hick | Link to this comment | 01- 5-16 9:52 PM
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42

I got as far as "only theoretically true" but I was making that up.


Posted by: ogged | Link to this comment | 01- 5-16 9:53 PM
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43

39 -- how about wanting to signal that you're not a total lameass?


Posted by: Roberto Tigre | Link to this comment | 01- 5-16 9:54 PM
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44

40: I'm currently trying to avoid buying a 800+ fill sleeping bag. But maybe I'll go camping in the cold someday.


Posted by: Moby Hick | Link to this comment | 01- 5-16 9:55 PM
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45

Also, someone making $250k before 30 (or even 35) is going to be in a very different financial situation from someone making that for the first time at 55

Yeah, good point.


Posted by: sral | Link to this comment | 01- 5-16 9:55 PM
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46

In the long run, it would save me money to buy this now.


Posted by: Moby Hick | Link to this comment | 01- 5-16 9:57 PM
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47

Yeah, what 34 said. I look at real estate back in the L.A. area and it's like they decided 2007 wasn't inflated enough. Honestly, where the fuck is the money coming from to support that market.


Posted by: gswift | Link to this comment | 01- 5-16 9:57 PM
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48

how about wanting to signal that you're not a total lameass?

You can keep your Cadillac, but you underestimate the Yankee joy of having a million in the bank and driving a Focus.


Posted by: ogged | Link to this comment | 01- 5-16 9:59 PM
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49

This would also be convenient.


Posted by: Moby Hick | Link to this comment | 01- 5-16 10:00 PM
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50

34 is right, but I'll push back just a tiny bit on the implicit accusation that this is "just" a psychological phenomenon. Those things are good things to have, and people making the median should have them, so the fact that people making five times the median feel pinched is another piece of evidence that things are very fucked up.


Posted by: ogged | Link to this comment | 01- 5-16 10:02 PM
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51

Economizing.


Posted by: Moby Hick | Link to this comment | 01- 5-16 10:03 PM
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52

48 - like what kind of Iranian even ARE you?


Posted by: Roberto Tigre | Link to this comment | 01- 5-16 10:03 PM
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53

There's another kind of Iranian who absolutely relishes being tightfisted and buying clothes on clearance at KMart. That's also not the kind of Iranian I am, and you probably haven't run into many of those in L.A., but I know a few.


Posted by: ogged | Link to this comment | 01- 5-16 10:08 PM
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54

Ok noted. I'll have to re-shade some boxes on my pipe factory chart.


Posted by: R Tigre | Link to this comment | 01- 5-16 10:14 PM
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55

Now that I think of it, the only Iranian guy I knew when I was growing up collected cars.


Posted by: Moby Hick | Link to this comment | 01- 5-16 10:16 PM
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56

I never did see him use a pick or shovel.


Posted by: Moby Hick | Link to this comment | 01- 5-16 10:17 PM
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57

I am one of these people, sort of. Not "Boo hoo, my life is so hard," obviously, but, "I've got a 98th percentile income and maybe theoretically someday I might be able to buy a house. Huh." Two kids in daycare sucks.

As a point of fact, though, Mint is telling me I can get by on $130K for in-state public school tuition (presumably in 2015 dollars).


Posted by: Yawnoc | Link to this comment | 01- 5-16 10:35 PM
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58

It only seems like daycare is forever. Before you know it, they're in school. And wanting a car if they are Iranian.


Posted by: Moby Hick | Link to this comment | 01- 5-16 10:57 PM
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59

Part of the problem is that, no matter what you make, you always know a bunch of people making more than you. That smarts.


Posted by: Spike | Link to this comment | 01- 6-16 5:09 AM
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60

The other thing about "need" is that you can get locked into high spending decisions. Someone who overbought on housing and has their kids in private school has exorbitant bills that aren't optional on a month-by-month basis. The sensible thing to do would be to unwind those bad decisions, but while they're in place, they're fixed costs and something else has to give.


Posted by: LizardBreath | Link to this comment | 01- 6-16 5:18 AM
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And I kind of sympathize with the described people. My spending/saving/planning instincts are way out on one side of the conservative spectrum, so while we make pretty close to the bottom end of the identified category, and have literally nothing to worry about money-wise, I, e.g., worry about college (as people here have seen me do) because it's a huge and kind of indeterminate bill coming up, am very conscious of keeping spending under control to maintain savings, and so on. I recognize that the only reason I feel pinched at all is comparing myself to people who are either much richer, or who value security much less highly, but if I were a little less self-aware about that I might say something like the surveyed people.


Posted by: LizardBreath | Link to this comment | 01- 6-16 5:41 AM
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62

The handy expense calculator at the Last Chance Community College website tells me that if you live at home you can do your first two years of college for $8,324, including books, fees and personal expenses. Most of your courses transfer over to any four year institution in Ohio. That's quite a deal.


Posted by: rob helpy-chalk | Link to this comment | 01- 6-16 6:12 AM
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63

Now that they blew up all the bars on High Street that didn't card, why not spend your first two years in Cleveland before moving to Columbus.


Posted by: Moby Hick | Link to this comment | 01- 6-16 6:22 AM
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64

We will report a household income of around $800,000 this year and earnestly feel like we're barely getting by.


Posted by: William McKinley | Link to this comment | 01- 6-16 6:38 AM
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65

A native informant! Can you explain?


Posted by: ogged | Link to this comment | 01- 6-16 6:47 AM
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66

You could have like three ex-wives and a regular family and a secret family on that kind of money.


Posted by: Moby Hick | Link to this comment | 01- 6-16 6:48 AM
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67

Or one family that really liked you, I guess.


Posted by: Moby Hick | Link to this comment | 01- 6-16 6:53 AM
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68

Or one family that sort of liked you and some really happy alumni associations.


Posted by: Moby Hick | Link to this comment | 01- 6-16 6:55 AM
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69

Or one family that hated you and millions buried in the yard to be found after your death by some kids playing pirates in the year 2078.


Posted by: Moby Hick | Link to this comment | 01- 6-16 6:57 AM
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70

That's it. Exhaustive list done.


Posted by: Moby Hick | Link to this comment | 01- 6-16 6:58 AM
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71

69- It's not like the kids are going to want dollars in the BitTrumpCoin economy of 2078.


Posted by: SP | Link to this comment | 01- 6-16 7:04 AM
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72

Likewise, our main concern is college- our plan is to shoot for a good state college unless they get in to a very top school and then find some way to make it work. But mid-level private schools for $60k are off the table. So if that's the case and someone asked me can I afford anything I need, would I say yes? Day to day certainly but long term I don't think I would.
Also our house, while owned and has appreciated and over half paid off, needs a fair amount of work- we put 60k into it last year which made it more livable but only involved one of the two floors. There's still lead paint (well contained but still there), knob and tube wiring, rotted wood gutters, driveway needs repaving, etc.
Somewhat OT but income-related: I've been doing some consulting, the first company was my former boss so I charged them X as a way to get into the field. Another company came along and I charged them 1.25X. In both cases there was no negotiation, they both said yup, that rate sounds great. Then another former colleague at a much bigger company asked me to do some work for them, and instead of asking what I charge like the first two, just sent me their standard consultant contract, which has a rate of 2.5x. So am I being taken for a total sucker by the first two? It's not like x is a small number in terms of hourly rates.


Posted by: SP | Link to this comment | 01- 6-16 7:12 AM
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73

I can get my head around people with 250K feeling like they're pinched, but 800k really strains my credulity. Say 300k in taxes, 50k in mortgage, 150k in childcare/college, 100k in savings, and that's still 200k left over for every day stuff.


Posted by: Unfoggetarian: "Pause endlessly, then go in." (9) | Link to this comment | 01- 6-16 7:14 AM
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74

72.2: I'd just think of it as the cost of getting into the business and gradually raise your rates with your existing clients.


Posted by: Moby Hick | Link to this comment | 01- 6-16 7:16 AM
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75

Part of the problem is that, no matter what you make, you always know a bunch of people making more than you. That smarts.

This really is a big part of it. Heebieville is not extremely poor, but it basically lacks an upper class. I know one family who flies their family on vacation more than once a year - otherwise it tends to be a special thing that people save for, or they drive very long distances. There is nothing in the way of fancy cars or fancy retail or restaurants.


Posted by: heebie-geebie | Link to this comment | 01- 6-16 7:16 AM
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76

Oops, I left off the conclusion. I couldn't figure out how to say it gracefully. But basically, relative to Heebieville, we're very wealthy and it's easy to walk around feeling relatively wealthy. Until I go into Austin, at which point I feel broke.


Posted by: heebie-geebie | Link to this comment | 01- 6-16 7:17 AM
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77

Austin City, limits.


Posted by: Moby Hick | Link to this comment | 01- 6-16 7:19 AM
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78

I once for several years had income in the range referred to in the OP (not that high but close enough), and that was the only time in my life felt like I had absolutely no money worries whatsoever. Need expensive daycare or to hire a nanny? Doesn't dent the budget. Need a new couch? Doesn't dent the budget. Expensive vacation? Doesn't dent the budget. Frivolous spending? Doesn't dent the budget. Part of it may be that I don't have expensive spending habits to begin with, but I honestly couldn't personally see feeling pinched at that level.

BUT, I nevertheless have a ton of sympathy for people that do feel pinched, because i took a big pay cut changing jobs, and even though I currently make what should objectively be a more than ample salary to live very comfortably (but nowhere near what I used to make), I feel constant monetary pressure. I still don't feel like we have expensive spending habits, but somehow keeping spending from outstripping earnings is a constant struggle. And it's something I feel stupid complaining about because, again, objectively, my comp. is pretty healthy. I guess I'm just terrible at managing money. (Actually being completely serious, I think my wife is terrible at managing money and I'm terrible at managing her spending, but that sort of amounts to the same thing at a household level.)


Posted by: urple | Link to this comment | 01- 6-16 7:22 AM
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79

And good god yes to 72... I can't even think about all the deferred maintenance on my house or how we're ever going to be able to deal with that, much less long overdue upgrades.


Posted by: urple | Link to this comment | 01- 6-16 7:26 AM
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80

Thinking about moving to Philadelphia is a very good way to focusing your mind on how to get the deferred maintenance done.


Posted by: Moby Hick | Link to this comment | 01- 6-16 7:27 AM
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81

Conversely, thinking about all the stuff you'd have to do to sell your house is a good way to focus your mind on jobs that aren't in Philadelphia.


Posted by: Moby Hick | Link to this comment | 01- 6-16 7:29 AM
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62 is true. To the extent that education is about the stuff you learn. A name like "Last Chance" -- unless you're in Helena, Montana -- indicates something else that's going on, in terms of the stuff identified by RT is 34.

It seems to me that plenty of people in this income category aren't getting it paid out in 26 equal installments, taxes withheld. And that a bunch of the things they are spending it on are not payable in 12 equal installments either. In such instances, it's not hard at all to imagine particular days when available cash on hand might not be sufficient for some given expenditure.


Posted by: CharleyCarp | Link to this comment | 01- 6-16 8:04 AM
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83

I would also like to know more about 64!


Posted by: heebie-geebie | Link to this comment | 01- 6-16 8:14 AM
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84

A large majority of that sum is a startup-related windfall. It is taxed as regular income because we couldn't afford to do the things up front to make it capital gains. After taxes, the startup money paid off most but all of our student loan debt. We're magnet school strivers out of a David Brooks column who went to the 'best' professional schools we could get into.

A majority of the remainder is Mrs. McKinley's salary from working reduces hours at a BigLaw firm that she desperately hates. Efforts to find her a nice job at the revenue have been unsuccessful. Now that we've taken a big bite out of our monthly student loan payments, once we're sure we're clear of the giant tax bill from the startup windfall we should *just* be able to get by for a while on my income alone while she tries to re-tool her career. That will require slashing most of the extra ended below, but we can do it.

In the meantime, we have a mortgage on a nice house, above average in our old-growth neighborhood of cops and teachers but not the nicest in the block. Not on the coasts. Local public schools are above average for the metro area but not best in the city, so not as nice as the ones we went to as kids. We have a day care aged kid with special needs who has been constructively (but not actionable) kicked out of three earlier day cares, and the one we've found that can meet her needs is very expensive. I'm estranged from my out of state parents and her single mother already cares full time for another needier member of the family, so we're largely on our own for childcare. We contribute some to supporting members of her family. We're both in weekly talk therapy to deal with the stresses of our respective startup and BigLaw careers, and we have a takeout budget of a couple hundred dollars a month. We drive Korean cars, and the cost to park both of them downtown during the workday is more than the payments.

So on the one hand, it really feels like things are going to even out this year and we'll start to feel solidly middle class. We're doing good and don't deserve any sympathy. On the other we basically won the lottery, and it certainly doesn't feel like that.


Posted by: William McKinley | Link to this comment | 01- 6-16 8:21 AM
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85

If I had made a million last year I could have afforded to not make so many typos.


Posted by: William McKinley | Link to this comment | 01- 6-16 8:26 AM
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86

Ah, so the point is that's not a yearly income, it's just an income for one particular year. That's an interesting point. We don't know how many of these 250K families actually make 250K every year.


Posted by: Unfoggetarian: "Pause endlessly, then go in" (9) | Link to this comment | 01- 6-16 8:26 AM
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87

Wait, you had over 300K in student loans? Hot damn.


Posted by: Unfoggetarian: "Pause endlessly, then go in" (9) | Link to this comment | 01- 6-16 8:28 AM
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||

Wow. NMM to Pierre Boulez.

|>


Posted by: Mister Smearcase | Link to this comment | 01- 6-16 8:29 AM
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Call the police and the fireman.


Posted by: Moby Hick | Link to this comment | 01- 6-16 8:30 AM
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Don't go to law school, kids.


Posted by: William McKinley | Link to this comment | 01- 6-16 8:32 AM
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84: I still don't get it. I mean, I don't mean to be a jerk, I'm just not understanding, but our highest earning year, back in my big-law days, we got over $250K, not to $300, in a high-tax state, and our expenses sounded pretty comparable. NYC mortgage, full-time nanny, professional school debt, supporting broke family members, cheap car but paying for a parking space at NYC rates. And it felt like Urple described: anything reasonable in terms of spending was offhandedly within reach -- nothing like feeling pinched.

Did you pay off a couple-hundred-thousand worth of student loans in one lump sum? That's the only way I can get from $800K to 'just getting by'.


Posted by: LizardBreath | Link to this comment | 01- 6-16 8:38 AM
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If you don't go to law school, how you can study the link between obesity and health?


Posted by: Moby Hick | Link to this comment | 01- 6-16 8:39 AM
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I mean, 'start to feel solidly middle class' is really throwing me as a description of the experience.


Posted by: LizardBreath | Link to this comment | 01- 6-16 8:40 AM
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Me also. If you through in "upper", it would make sense.


Posted by: Moby Hick | Link to this comment | 01- 6-16 8:41 AM
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"through" s/b "throw"


Posted by: Moby Hick | Link to this comment | 01- 6-16 8:43 AM
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91.last - exactly. We went down the list of loans in interest rate order, paying off whole balances in order to lower our monthly payments. We ran out of money before we ran out of loans.


Posted by: William McKinley | Link to this comment | 01- 6-16 8:45 AM
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Did you make a molehill out of a Denali?


Posted by: Moby Hick | Link to this comment | 01- 6-16 8:52 AM
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Okay, so $800K in income turned into maybe around ~$400K in spendable cash after taxes? And you put enough of that toward debt to make spending feel tight after it? That I get (while we had student loan debt, it was much less, and I never paid big lump sums, just made regular payments).


Posted by: LizardBreath | Link to this comment | 01- 6-16 8:58 AM
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Once you start being prudent, prudence starts to feel like a necessity. If you decide I have to put all this money aside in case my kids get into fancy expensive colleges, and I have to put this much money aside for when I retire, and before you know it, you're left with the same amount of spending money as a poorer person that would never consider being that prudent.


Posted by: peep | Link to this comment | 01- 6-16 8:59 AM
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99: You get me.


Posted by: LizardBreath | Link to this comment | 01- 6-16 9:01 AM
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would never consider being that prudent

Because it's not a realistic option. There's a band of income, and I'm not sure what it is, but around $250k seems right, where you can do all the things you're "supposed" to do, but it makes money feel tight. Below that, it's not even worth bothering.


Posted by: ogged | Link to this comment | 01- 6-16 9:02 AM
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We definitely are UMC. 'Solidly' and 'feel' are doing a lot of work above. We feel/felt really insecure, both because we knew that income level was unsustainable on a mental health basis and because generalized work-anxiety tunnel vision sets in and prevents you from clearly seeing or even being optimistic about alternatives. Objectivel, we were in much better shape than it felt at the time.

A fair response to 84 would be "it's all in your head!" Our response to that would be something like, "Yeah. It really sucks."

I am going to miss all the McKinley references - I picked the name because he sounded like a rich guy.


Posted by: William McKinley | Link to this comment | 01- 6-16 9:03 AM
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Of course he's rich, he's the principal of one of the biggest consulting firms.


Posted by: SP | Link to this comment | 01- 6-16 9:06 AM
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Three salient McKinley facts: He was President; Mt. McKinley was named for him, then named back to the native "Denali"; and he was assassinated.


Posted by: ogged | Link to this comment | 01- 6-16 9:07 AM
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Just because I'm an inquisitive person -- was the $800K year your first six figure income ever? That is, did you transition directly from student-broke to giant-pile-of-cash-that-all-goes-to-debt without ever having a period of having enough income to make payments on your student loans and still lead a middle-class life?

Tell me to get lost if I'm being too nosy, I'm just trying to get into where the feeling of insecurity comes from.


Posted by: LizardBreath | Link to this comment | 01- 6-16 9:08 AM
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92 was a Paul Campos joke. That's probably a narrower field than McKinley jokes.


Posted by: Moby Hick | Link to this comment | 01- 6-16 9:09 AM
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101: I'm definitely in the too poor to consider being prudent category. Another factor is the special case of my stepdaughter -- it's not clear to me that savings will do her any good and it could actually hurt her. There's no way my wife and I will ever make enough money that she's not always going to be dependent on aid from the state.


Posted by: peep | Link to this comment | 01- 6-16 9:09 AM
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The famous millionaire sex researcher.


Posted by: snarkout | Link to this comment | 01- 6-16 9:16 AM
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Not having kids or debt, and enjoying recreational luxuries (restaurants, travel, concerts) but not being particularly interested in a nice home or car, makes me feel like an alien in these conversations. I would feel carefree at an order of magnitude less than 800k.


Posted by: Criminally Bulgur | Link to this comment | 01- 6-16 9:16 AM
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Likewise too poor for prudence. But overall I shouldn't complain: no debts, no dependents, still quite young.


Posted by: Mossy Character | Link to this comment | 01- 6-16 9:22 AM
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Going back to the linked article and OP, the "Do you have enough money to buy the things you need?" question tops out at 90% at $120K, not $250K. That makes me think that there is some psychological hard cap, that something like 10% of people are incapable of feeling financially secure, unrelated to how much they have.

(Personally, I'm in the $250K+ household category, and my anxiety on this front comes from being unwilling to believe that it's going to stay this way. Sure, I can afford things now, my brain says, but what about next year when I get knocked back to the $40K income level I deserve?)


Posted by: Nathan Williams | Link to this comment | 01- 6-16 9:24 AM
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109, 110: You guys should try to build your own houses out of cob. It's perfect for people in your situation.


Posted by: Moby Hick | Link to this comment | 01- 6-16 9:25 AM
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You guys should try to build your own houses out of cob.

I'll know I've made it when I can pay someone else to do it.


Posted by: Criminally Bulgur | Link to this comment | 01- 6-16 9:40 AM
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Like ubik, cob is the solution to everything!


Posted by: DaveLMA | Link to this comment | 01- 6-16 9:43 AM
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I could fit a cozy, albeit redundant, cob house in my apartment.


Posted by: Mossy Character | Link to this comment | 01- 6-16 9:48 AM
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What is your income like in a non-windfall year? If your spouse is a law-firm associate, it can't be that meagre.


Posted by: urple | Link to this comment | 01- 6-16 9:51 AM
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105 to 116. My theory, to make this make sense, is that they've had no or at least very few years of professional income before the windfall: went straight from broke students to windfall without much intervening (maybe a couple of years in which student-loan maintenance, paying off creditcard debt, and buying the described house left them feeling strapped, but not long enough to get past sort of grownup setting-up costs).


Posted by: LizardBreath | Link to this comment | 01- 6-16 9:57 AM
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Or they're used to $250k and were caught off guard that they didn't get any extra breathing room at $800.


Posted by: heebie-geebie | Link to this comment | 01- 6-16 10:11 AM
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But they've effectively spread 500k out over the next ten years by paying off debt. Also, was the debt at a terrible interest rate? Why not refinance?


Posted by: heebie-geebie | Link to this comment | 01- 6-16 10:12 AM
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Big Law associate money is also something of a windfall. It might continue for 4 or 5 years, maybe 8 or 9. Beyond that is a lottery win.

Start-up lottery money is, it seems to me, probably going to include a lot of deferred comp as well.


Posted by: CharleyCarp | Link to this comment | 01- 6-16 10:21 AM
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Even if it was a 2% interest loan that had the payments spread out over 20 years, paying off $400k in loans means getting rid of over $2000 in monthly payments. That's pretty significant. And obviously if the interest rate were higher or the repayment period shorter, then it would be all that much more significant.


Posted by: urple | Link to this comment | 01- 6-16 10:22 AM
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Especially a reduced hours associate.


Posted by: CharleyCarp | Link to this comment | 01- 6-16 10:25 AM
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$250k is a pretty normal total comp number at a major tech company,

Shit, I should work for a major tech company. I even have a PhD!


Posted by: nosflow | Link to this comment | 01- 6-16 10:26 AM
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I hear Twitter is easiest. It probably counts as "major".


Posted by: Moby Hick | Link to this comment | 01- 6-16 10:28 AM
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Yeah but … gross.


Posted by: nosflow | Link to this comment | 01- 6-16 10:31 AM
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. . . gross

That's what they pay all the money for.


Posted by: CharleyCarp | Link to this comment | 01- 6-16 10:35 AM
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Since twitter expanded the allowed number of characters, they need neb to teach all their users how to be more loquacious.


Posted by: SP | Link to this comment | 01- 6-16 10:36 AM
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I bet neb could find quinces in December (or whatever the fuck it was) with $250k/year.


Posted by: Stanley | Link to this comment | 01- 6-16 10:37 AM
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127: It is difficult.


Posted by: nosflow | Link to this comment | 01- 6-16 10:40 AM
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It was seville oranges!!!


Posted by: nosflow | Link to this comment | 01- 6-16 10:40 AM
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Without going too deep into income history, 117 has it largely right. Most of the pre-windfall anxiety came from feeling like we could not long endure in grueling jobs we hated while feeling like we couldn't afford *not* to work those jobs, when the loan payments were our largest household expense by a wide margin.

In retrospect, we would have felt much more secure if we had both tried to maximize liquid income right out of school, made standard loan payments, built up a big cushion of cash savings, and delayed buying a house (and possibly children) until we felt like we were on sustainable career paths. But "We have a household income of $300K+ and unattached yuppie lifestyle feels pretty great! #blessed" would be a much less interesting story.


Posted by: William McKinley | Link to this comment | 01- 6-16 10:41 AM
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You aren't supposed to buy children.


Posted by: Moby Hick | Link to this comment | 01- 6-16 10:42 AM
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Yeah, its better to rent.


Posted by: Spike | Link to this comment | 01- 6-16 10:44 AM
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131: Eh, psychologically weird as it is, you've got your loans paid way down, and assuming your income remains reasonably high even if nowhere near the windfall year next year, things should start feeling much much easier from here on out.


Posted by: LizardBreath | Link to this comment | 01- 6-16 10:46 AM
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People sometimes make their own, like an Etsy thing except with more blood.


Posted by: Moby Hick | Link to this comment | 01- 6-16 10:46 AM
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I felt more financially secure before I took a 20% pay cut but it's still sort of fine. My main luxuries are eating out a lot and living in the worst real estate market in the country and I afford them through the terrible sacrifice of not having children, which is coincidentally also on the luxury list. Needless to say, this all takes place well south of 250K.

And honestly if I had a windfall of 800K I would buy a house outright somewhere normal and retire or at least take 20 years off.


Posted by: Mister Smearcase | Link to this comment | 01- 6-16 10:47 AM
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Yeah, the thing about kids is not just that they're expensive in themselves, but that they ratchet up your appetite for security like you wouldn't believe. And security is super expensive.


Posted by: LizardBreath | Link to this comment | 01- 6-16 10:53 AM
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I've heard that you can fake the sensation of security with Xanax, but I've not tried it.


Posted by: Moby Hick | Link to this comment | 01- 6-16 10:55 AM
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But a lot of times, people substitute in symbolic security - private schools or the right school district, social aspirations, hyper-fixation on kids' diet - instead of dealing with the actual terror of the abyss of uncontrollable death and accidents and hurt feelings. It's a mystery why.


Posted by: heebie-geebie | Link to this comment | 01- 6-16 10:57 AM
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Yeah, 'cause that would be expensive.


Posted by: Turgid Jacobian | Link to this comment | 01- 6-16 10:57 AM
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Have you seen what terror of the abyss insurance costs? Its outrageous.


Posted by: Spike | Link to this comment | 01- 6-16 11:04 AM
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||

OT: A 17 year-old developed a new, simpler, test for Ebola?

|>

On-topic, my experience is fairly close to Criminally Bulgur, "I would feel carefree at an order of magnitude less than 800k."

With the added caveat that uncertainty really is a significant mental weight. I've been at the same job for 10 years now (I'm somewhat surprised to realize) but, during that time, my income has varied, and overall the job would become much less table if we lost a major client, and finding a new job wouldn't be simple -- doable, but might require moving. As it turns out things have gone well -- there was a period of time when it looked like we might lost that client, but then then ended up expanding their business with us a couple of years later.

All of that makes it hard to feel carefree even during good years.


Posted by: NickS | Link to this comment | 01- 6-16 11:06 AM
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Shit, I should work for a major tech company.

Certainly somewhere where they pay you a lot. You're relatively young (sniff) and have no dependents. This is the time to bank some cash.


Posted by: ogged | Link to this comment | 01- 6-16 11:09 AM
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Socioeconomic peer pressure on kids is real too, no? I have a mortal fear of sending my daughter to a GoodSchool(TM) with a peer group of richer girls with whom she will quickly identify. So far, it doesn't look like this will "have" to happen, but I remain vigilant. (I also remember my parents encouraging me to hang out with the daughters of the parents who made them comfortable and felt like peers, and it never took, and then there was stress when they discouraged me from playing with those lowlife girls who were actually friendly and loyal. Also a pattern I really REALLY do not want to replicate as a parent.)


Posted by: lurid keyaki | Link to this comment | 01- 6-16 11:22 AM
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137 gets it right. Since this is mostly about psychology, it's oddly vastly cheaper, for reasons that aren't entirely clear to me, to dwell in the mental space of a professional upper middle class person without kids than with kids. All you need is a nice enough and decently furnished 1 bedroom apartment in a cosmopolitan locale and enough money to eat out regularly, travel pretty well, and maybe have dry cleaning or (if you are not a lameass) a niceish, 3-series level car. As for long term security ... it's nice but who's sweating it, all that happens is you get old and can't move and die no matter what and a Kindle is cheap. Easily doable on $100k/yr anywhere in the US except maybe NYC or if you insist on living specifically in the City and County of San Francisco. With kids all of a sudden the equivalent markers of upper middle classitude suddenly become like 10x more expensive -- bigger house in nicer area (or private school), retirement saving a bigger deal, college saving a bigger deal, frivolous expenses seem frivolous. I mean, boo hoo hoo, but that's just the report from the front.

Ironically given the fact that being high-income and having kids tend on average to make Americans conservative, most of the things that lead aspiring UMC families to feel stretched in the US -- good schools, relative employment and retirement stability, surprise health costs, child care -- are things that are free or heavily subsidized in socialist Europe.


Posted by: Roberto Tigre | Link to this comment | 01- 6-16 11:33 AM
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I get gloomy when I realize how much more money I could be making in another life.


Posted by: Spike | Link to this comment | 01- 6-16 11:39 AM
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Like maybe, in another life, $599 for an Oculus Rift wouldn't seem so steep.


Posted by: Spike | Link to this comment | 01- 6-16 11:45 AM
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"98-99.25 percenters with families in coastal areas for massive increases in social insurance and more public spending on things like good free public universities" doesn't exactly have the emotional zing of "we are the 99%," but it is how those people should vote.


Posted by: Roberto Tigre | Link to this comment | 01- 6-16 11:52 AM
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I get gloomy when I think how different my finances would be if I had been married to another professional earner since my early thirties.

We're not hurting, because of small cheap house. But it feels like I'd be swimming in money if I'd had another person making what I make contributing for the last fifteen years.


Posted by: Megan | Link to this comment | 01- 6-16 11:54 AM
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41/42: "Other than that, Mrs. Lincoln..."


Posted by: Minivet | Link to this comment | 01- 6-16 11:55 AM
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148: Yep. My democratic-socialist politics are completely self-interested.


Posted by: LizardBreath | Link to this comment | 01- 6-16 12:01 PM
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Is "OTTMLHWTP" the shortest string for which Google searching only brings up results on this site?


Posted by: dalriata | Link to this comment | 01- 6-16 12:03 PM
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Is "OTTMLHWTP" the shortest string for which Google searching only brings up results on this site?

IKIMHMHB?


Posted by: NickS | Link to this comment | 01- 6-16 12:21 PM
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99: Once you start being prudent, prudence starts to feel like a necessity. If you decide I have to put all this money aside in case my kids get into fancy expensive colleges, and I have to put this much money aside for when I retire, and before you know it, you're left with the same amount of spending money as a poorer person that would never consider being that prudent.

True enough if you adopt this rather narrow definition of prudence. Certainly it's not the case that people earning a median income aren't prudent, and don't take prudence to be a necessity, indeed make it a habit.


Posted by: parsimon | Link to this comment | 01- 6-16 12:22 PM
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IKIMHMHB?

AISIMHB (which was what I was thinking of originally, but for some reason my search for "hat band" turned up the other one first).


Posted by: NickS | Link to this comment | 01- 6-16 12:24 PM
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154 is correct. What I was calling i prudence is false prudence.

The only true prudence is indifference to material circumstances.


Posted by: peep | Link to this comment | 01- 6-16 12:26 PM
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Repeating this portion:

and before you know it, you're left with the same amount of spending money as a poorer person that would never consider being that prudent.

This is what bothered me, I believe. How poor are these poorer persons? What's "spending money"? The formulation in 99 makes it sound as though people making $250k are exactly the same as people making $45k, but the former are more prudent. I doubt this is true, and it's annoying to hear it.

Sorry. I knew I shouldn't have delved into this thread.


Posted by: parsimon | Link to this comment | 01- 6-16 12:31 PM
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156.2 is a joke, I'm sure. I ... am not going to get mad.


Posted by: parsimon | Link to this comment | 01- 6-16 12:33 PM
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"Prudence" there just means "buying long term financial (relative) security" which, unsurprisingly, is something that is very expensive and not available to poorer people.


Posted by: Roberto Tigre | Link to this comment | 01- 6-16 12:34 PM
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Not that I want to derail the conversation about income and class with silly acronyms -- this has been a fascinating thread.

I get gloomy when I realize how much more money I could be making in another life.

I had that thought recently* and decided that I shouldn't worry about it. But that's contingent. If he had lost the client I mentioned above, perhaps I would feel much more regretful.

* I'm trying to find a previous comment, but google isn't turning it up right now.


Posted by: NickS | Link to this comment | 01- 6-16 12:39 PM
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This is what bothered me, I believe. How poor are these poorer persons? What's "spending money"?

FWIW, I think I've had the experience that was being described in the comment that you quoted -- when I was making $25K, I lived frugally but reasonably, but I wasn't saving anything and that didn't weigh on my mind because it just wasn't possible to save enough to make a difference.

But, when I was making more money suddenly saving was something I worried about and which made me anxious.


Posted by: NickS | Link to this comment | 01- 6-16 12:41 PM
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159: I know. It's a specialized definition of prudence, that's all. Any suggestion that it's the only form of prudence relevant to material circumstances is absurd and insulting. Maybe people suffer from a failure of imagination in this regard.


Posted by: parsimon | Link to this comment | 01- 6-16 12:46 PM
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162: I was using a false and narrow definition of prudence. I apologize.


Posted by: peep | Link to this comment | 01- 6-16 12:50 PM
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Just be more careful in the future.


Posted by: Moby Hick | Link to this comment | 01- 6-16 12:51 PM
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164: I will try, but I'm just not a prudent man.


Posted by: peep | Link to this comment | 01- 6-16 12:53 PM
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Thanks for making that explicit.


Posted by: Moby Hick | Link to this comment | 01- 6-16 12:53 PM
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My democratic-socialist politics are completely self-interested.

I think mine tend to go against interest. Like, if I try to think of what Obama policies there have been that personally benefit me, the answer is "not much."

I mean, I'm a good liberal and I'm all for a more inclusive health care system and social justice and gay marriage and gun control and open borders and whatnot and I'm even in a union. But I'm a straight, professional, white guy with an employer-supplied health plan, and when you look at how I personally have benefited from liberalism in recent years, there's just not a lot there. Stuff I believe in has been supported - and people I care about have benefited - but materially its really not made a difference in my life. Its actually been negative if you count the way my family has been impacted by Obama-era K-12 educational policy.

In fact, you could make a pretty good case that my economic self-interest runs in the other direction and I should be voting for Republicans who will keep my taxes low and let me enjoy my white male privilege in peace.


Posted by: Spike | Link to this comment | 01- 6-16 12:59 PM
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I'm a straight, professional, white guy with an employer-supplied health plan
But will you always be all of those things?


Posted by: SP | Link to this comment | 01- 6-16 1:22 PM
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Are you hitting on him?


Posted by: Moby Hick | Link to this comment | 01- 6-16 1:23 PM
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SP's after my health insurance.


Posted by: Spike | Link to this comment | 01- 6-16 1:32 PM
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It would be imprudent to hook up with him: it'll cost you a bundle.


Posted by: parsimon | Link to this comment | 01- 6-16 1:38 PM
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Well, I've been known to go against my economic interest...


Posted by: Spike | Link to this comment | 01- 6-16 1:45 PM
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It is true that Obamacare makes my prospective early retirement a bit more feasible. Got to get the kid through college first, though.


Posted by: Spike | Link to this comment | 01- 6-16 2:06 PM
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172: As have I.

Meanwhile, the death of Pierre Boulez has caused some reflection in these parts. I saw him in -- 1985? -- in Boston conducting one of his own pieces for prepared piano. The story goes that his prepared piano pieces were challenging enough that any given orchestra was unprepared, as it were, to deliver the goods. He presented the piece(s) himself.

The general idea is here, but that refers to 2015. Can't find any references at the moment to what he was presenting back in 1985.


Posted by: parsimon | Link to this comment | 01- 6-16 2:07 PM
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security is super expensive

Especially when we've made it into a finite pie to fight over. Somewhere above, middle-class expectations are defined as something like ``a safe neighborhood and decent schools''. But it's harder and harder to have a safe neighborhood when we just assume that no-one lower than (upper) middle-class will have a safe neighborhood. It's a public health problem. Danger *leaks*.

You'd think this, plus the example of really dangerous countries where the rich live in walled guarded compounds and expect kidnappings for ransom, would make socialism more appealing.


Posted by: clew | Link to this comment | 01- 6-16 2:17 PM
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167

I have the opposite experience with Obama. I've always been pretty far to the left so I was sort of lukewarm about him, but his policies have benefited me far more than I ever expected. I get free healthcare because of him, including dental and vision (thanks Obama!). There are lots of ways it could be improved, but it's a major step in the right direction. Now I don't have to pay 30% of my salary for health insurance.

175

I've always wondered that too. When people say they want to live with limited government and no welfare state, my response is always, "no one's stopping you from moving to Somalia."


Posted by: Buttercup | Link to this comment | 01- 6-16 2:38 PM
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Somewhere above, middle-class expectations are defined as something like ``a safe neighborhood and decent schools''. But it's harder and harder to have a safe neighborhood when we just assume that no-one lower than (upper) middle-class will have a safe neighborhood. It's a public health problem. Danger *leaks*.

This is one of my hobbyhorses, but something that makes middleclass expectations of security so expensive is false beliefs about danger. I do live in a safe (safe enough, nothing's perfect) neighborhood, that does have people in it who aren't upper-middle-class. There are dangerous areas in the US, but it's just not true that safety on the streets is only available to the upper middle class. (Not that I think that's what you believe, it's just that people's perceptions of what they need for security are often pretty far from what's accurate.)


Posted by: LizardBreath | Link to this comment | 01- 6-16 2:42 PM
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175: I'm not completely certain, but I think the comment you quote (from 137) actually refers to economic security, rather than physical. The two may be linked, of course.


Posted by: parsimon | Link to this comment | 01- 6-16 2:42 PM
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But you're dead square right about how a decent social welfare state makes life safer and pleasanter for everyone, including people who aren't getting much in the way of direct social welfare benefits.


Posted by: LizardBreath | Link to this comment | 01- 6-16 2:43 PM
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First you have hobbyhorses, next it's polo ponies.


Posted by: Moby Hick | Link to this comment | 01- 6-16 2:44 PM
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When do I get a destrier? I'd like one with the fringy stuff around the ankles, please.


Posted by: LizardBreath | Link to this comment | 01- 6-16 2:46 PM
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I think if you throw a carrot or apple to a warhorse it will become tame.


Posted by: nosflow | Link to this comment | 01- 6-16 2:48 PM
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You've been playing Nethack again?


Posted by: LizardBreath | Link to this comment | 01- 6-16 2:50 PM
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I don't know that Obama's regulatory policies have specifically made me financially better off (though good lord just getting rid of the pre-existing condition requirement for health insurance is a gigantic psychological relief, and I don't even have a pre-existing condition). On the other hand, not being a complete David Cameron/Angela Merkel style austerity jackass on the macro-economy has almost certainly made me better off. But the kind of social insurance necessary to make relative financial and social security available for objectively-rich-but-somehow-not-rich Americans like me goes well beyond anything Obama has ever proposed and well into Socialist Yurp territory.


Posted by: Roberto Tigre | Link to this comment | 01- 6-16 2:54 PM
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183: yep! 3.6.0 was just released, you know.


Posted by: nosflow | Link to this comment | 01- 6-16 2:55 PM
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143: that's basically what I'm doing because programmer compensation is at a level that makes no sense to me (at least at the upper end). I don't see why compensation shouldn't return to the level it was at five years ago, or for that matter, fifteen years ago.

I wonder how many people who are at the $250k level don't expect to stay there indefinitely.


Posted by: sral | Link to this comment | 01- 6-16 2:58 PM
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177.2: fair enough, but that there are plenty of really unsafe neighborhoods is enough to make everywhere else more expensive, and eventually unsafe.

Also unsafe includes traffic and pollution.


Posted by: clew | Link to this comment | 01- 6-16 3:22 PM
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175/179: The fact that a really large number of people don't see how it would be better for them to live in a decent welfare state even when it wouldn't involve them personally getting the state support is continually baffling to me.

It's like when John Schnatter threw a fit about having to give his employees health insurance. He was opposed to the idea of having any additional restrictions on how exploitative he could be - I get that. But to not realize the problem with loudly, and publicly announcing that he was opposed to people preparing and serving food having access to healthcare just blew my mind. I mean, of all of the "everyone having this benefits even the people who would have it anyway" things healthcare has got to be the most screamingly obvious.

Also I'm also in the position of 176.1. Holy crap did it make a difference for me.


Posted by: MHPH | Link to this comment | 01- 6-16 3:26 PM
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I don't know if people included daycare, but my hospital subsidizes it, and it's still over $500/ week.


Posted by: Bostoniangirl | Link to this comment | 01- 6-16 3:28 PM
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I wonder how many people who are at the $250k level don't expect to stay there indefinitely.

I've been through that cycle before... from $72k a year at age 23 to $600 a week at 25. Get it while you can.


Posted by: Spike | Link to this comment | 01- 6-16 3:33 PM
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Now that they blew up all the bars on High Street that didn't card

If you were masturbating to Bernie's, Moby, cut it out.


Posted by: High Street | Link to this comment | 01- 6-16 3:48 PM
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186, 190: no foolin'. Coworkers will make fun of you for not getting a jumbo mortgage against your options (or 2015 equivalent). The leverage may pay off for a few of them. Try not to mock the rest when they're underwater.

Hanging out with grad students keeps ones hedonic treadmill flat.


Posted by: clew | Link to this comment | 01- 6-16 3:58 PM
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Larry's was my only bar on High Street, which I learned here closed years ago.

It was good preparation/background for Jimmie's in Hyde Park.

Loved them both.


Posted by: idp | Link to this comment | 01- 6-16 4:08 PM
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One of my favorite college bars was torn down to make room for an "Entrepreneurship Hub" where students can meet, get input from a "Business Accelerator," and participate in "hack-a-thons." My other favorite bar recently burned down. Everything turns to shit in the end.


Posted by: Roberto Tigre | Link to this comment | 01- 6-16 4:14 PM
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There's more dignity in going out in flames.


Posted by: Moby Hick | Link to this comment | 01- 6-16 4:25 PM
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I have a lot of well-meaning friends (B-school grads, mostly) who are super enthusiastic about the sort of things mentioned in 194, and it makes me want to cry.


Posted by: urple | Link to this comment | 01- 6-16 5:33 PM
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But that enthusiasm is a symptom of the same kind of insecurity we've been talking about. If people thought they could have comfortable lives that they could pass on to their kids by keeping solid jobs for decades, most people would do that. But people feel, not without some reason, that they have to roll the dice and make it big.

This is not to say that the unironic embrace of any business jargon isn't bizarre.


Posted by: ogged | Link to this comment | 01- 6-16 6:28 PM
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186: in a way the compensation at the upper end makes more sense to me; the amount of resource multiplication available to a really strong software engineer keeps going up.

but as someone making a lot more than $250k it seems obvious that this can't go on forever; even if the company is willing to keep paying me, my tolerance for the amount of work required is already wearing thin. may as well bank the cash and convince myself that i'm still financially limited rather than risk the prospect of having it all then losing it.


Posted by: James Monroe | Link to this comment | 01- 6-16 6:56 PM
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the amount of resource multiplication available to a really strong software engineer keeps going up

I'm not sure I know what this means.


Posted by: ogged | Link to this comment | 01- 6-16 7:08 PM
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Covered in week two of boot camp.


Posted by: Moby Hick | Link to this comment | 01- 6-16 7:09 PM
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199: Probably talking about all the starry eyed drones being churned out of boot camps.


Posted by: gswift | Link to this comment | 01- 6-16 7:11 PM
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Its worth recognizing that for a long time tech firms were colluding to keep a lid on programmer wages. Five years ago programmer salaries were artificially depressed because all the tech companies had agreed not to poach employees from each other. Now that the gummint has put a stop to that, companies may find that they need to shell out more to keep competitors from recruiting their best people.

But, also too, froth.


Posted by: Spike | Link to this comment | 01- 6-16 7:26 PM
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199: I'm guessing that refers to the increasing scale at software companies. One plausible argument is, AWS is growing at 80% a year, Azure at 100% a year, etc. If you're some optimization guru who can reduce costs by 1%, the value of that doubles every year. You can also make a similar argument about being a product guru in winner take most markets. I can think of maybe five-ish plausible arguments for why programmer compensation has gone up, and should continue to go up.

And yet, the whole thing, taken altogether, still strikes me as implausible.


Posted by: sral | Link to this comment | 01- 6-16 7:28 PM
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but as someone making a lot more than $250k

Dammit, once the next recession is past, I'm going back to the private sector.


Posted by: Spike | Link to this comment | 01- 6-16 7:28 PM
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204: Why not now? The tech job market is the best it's ever been, and it's possible it will never be this good again. Of course it's possible that it will be even better after the next recession, but if that happens, going to the private sector now doesn't hurt you.


Posted by: sral | Link to this comment | 01- 6-16 7:30 PM
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||

Buck's fruitcake may be the densest food product I've ever held.

|>


Posted by: nosflow | Link to this comment | 01- 6-16 7:31 PM
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Of course it's possible that it will be even better after the next recession, but if that happens, going to the private sector now doesn't hurt you.

Well, like I said in 190, I've been around before when the music stopped; its not pretty. Right now, I've got job security out the wazoo.


Posted by: Spike | Link to this comment | 01- 6-16 7:35 PM
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Also, I think there might be alcohol in it.


Posted by: nosflow | Link to this comment | 01- 6-16 7:40 PM
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I suppose it depends on how long it is before things blow up, but in today's market, it's pretty common to get a signing bonus of $100k, and that isn't going to get clawed back.

If we see a crash as bad as the 2000/2001 tech crash, it's possible that your equity package will end up being worth something close to zero even if you're at a well established company. But if you get a year with a respectable salary plus a $100k signing bonus, that's not too bad even if the rest of your compensation package is worthless.


Posted by: sral | Link to this comment | 01- 6-16 7:54 PM
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Meanwhile, my current organization has just announced that, going forward, it will be giving raises every two years instead of every year. The jump definitely looks tempting.


Posted by: Spike | Link to this comment | 01- 6-16 8:07 PM
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199: didn't know how to phrase it. one engineer plus computers can do an incredible amount these days; more than before.

it used to be that in order to make a crazy amount of money you needed to have a bunch of people working for you or at least at your disposal so that you could siphon off a bit of their pay.

the amount of stuff you can do if you're good at making computers do what you want is large and increasing.

203.last: agreed! in individual pieces it can kind of make sense but in the large scale it seems nutso.


Posted by: James Monroe | Link to this comment | 01- 6-16 8:08 PM
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Ah, ok.


Posted by: ogged | Link to this comment | 01- 6-16 8:16 PM
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in today's market, it's pretty common to get a signing bonus of $100k

What size of company and what level of job are we talking here? I haven't seen anything even close to that; OTOH I've been looking almost exclusively at startups.


Posted by: Josh | Link to this comment | 01- 6-16 8:33 PM
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Large companies like FB, Apple, Google, MS, etc., senior band (T5 at Google, L63 at MS, etc.)

"Senior" is a bit of a misnomer, since AFAICT senior just means that you're capable of figuring out what needs to get done and making your own work, and people often make senior after only a few years.

For lower pay grades, I know that we sometimes give out signing bonuses in the $50k range to fresh PhDs. As with the previous number, all of this is contingent on having competing offers.


Posted by: sral | Link to this comment | 01- 6-16 8:45 PM
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In 214, often might be too strong a word. But it's not rare.


Posted by: sral | Link to this comment | 01- 6-16 8:46 PM
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214: Yeah, that's what I figured. And yeah, "senior" has IME basically lost all value; the joke I made to someone was that kids right out of school are saying "well, I was *a* senior last year, so that's what my title should be!"... and getting it.


Posted by: Josh | Link to this comment | 01- 6-16 8:54 PM
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You guys are scaring me. If it's this overheated, it's all going to collapse before I'm even out of bootcamp. "Look, honey, I made this awesome site that tracks how fucked we are!"


Posted by: ogged | Link to this comment | 01- 6-16 9:00 PM
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is senior getting devalued or are we just getting old?


Posted by: James Monroe | Link to this comment | 01- 6-16 9:17 PM
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[I]t's pretty common to get a signing bonus of $100k, and that isn't going to get clawed back.

I'm just shaking my head over hear. I believe that's true and it still sounds utterly preposterous. And aggregating.


Posted by: NickS | Link to this comment | 01- 6-16 9:21 PM
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hear here


Posted by: NickS | Link to this comment | 01- 6-16 9:21 PM
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I'll stop now. I'm just embarrassing myself.


Posted by: NickS | Link to this comment | 01- 6-16 9:22 PM
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Let me put it this way. There are the Doonesbury strips in which Rick Redfern is being profiled by David Halberstam and he finally cracks and says something to the effect that he doesn't understand why he's supposed to be special, he's just a guy with a typewriter and "a modest reputation for getting his facts right."

That's more or less how I view myself and my career* and the sorts of money that sral** is talking about and people are nodding their heads at, seems totally out of whack.

* perhaps I'd be more productive if I switched from a typewriter to a computer.

** which isn't to blame sral, I know that money is out there, I just can't wrap my mind around it.


Posted by: NickS | Link to this comment | 01- 6-16 10:10 PM
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This thread is just bizarre. In every industry, for the last 30 years employers have been ruthless at a level not seen in generations, with regard to never giving raises, never giving promotions, taking away benefits every year, constantly pursuing mergers to make people redundant, making sure that employees are as interchangeable as possible so they can be fired at will, making sure that no negotiation over salary and benefits takes place, trying as hard as possible to not let employees know what other employees are making. In literally every industry except one for some reason.


Posted by: Cryptic ned | Link to this comment | 01- 6-16 10:38 PM
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202 to 223. It's not that companies in the tech industry were less ruthless about exploiting their workers than companies in any other industry; if anything, they were more, but they were so explicit about it that they got caught violating some of our few remaining labor protection laws, so now they're actually competing for highly skilled labor at a time when they're also making a lot of money. It won't last, of course.


Posted by: teofilo | Link to this comment | 01- 6-16 10:54 PM
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224 I know 202 must be a significant factor but does that explain all of it? That seems implausible to be but if so then wow, holy shit.


Posted by: Barry Freed | Link to this comment | 01- 6-16 11:15 PM
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And it's not like this sort of situation is unprecedented even in the modern American economy. Three years ago petroleum engineers were making the same kind of money; now they're all unemployed.


Posted by: teofilo | Link to this comment | 01- 6-16 11:16 PM
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225: Well, 202 itself acknowledges that froth is also a factor, and I'm sure actual programmers like Spike know way more about how the industry works than I do. It seems pretty obvious to me that the wage fixing thing was a big deal, though, and directly related to the huge salaries people are talking about now.


Posted by: teofilo | Link to this comment | 01- 6-16 11:19 PM
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What means froth?

||

It's my birthday and I've taken the day off and I'm going to go take myself to see The Revenant and Bone Tomahawk. I've also taken the next week off and Chani is coming to visit. They're very generous with leave here.

|>


Posted by: Barry Freed | Link to this comment | 01- 6-16 11:24 PM
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Happy Birthday. Tomorrow.


Posted by: CharleyCarp | Link to this comment | 01- 6-16 11:33 PM
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228.1: Bubbles, I presume.

228.2: !كل سنة وانت بخير


Posted by: teofilo | Link to this comment | 01- 6-16 11:39 PM
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I agree with everyone that it's utterly preposterous. But I also agree with teo that it's not unprecedented. Up until 2000, electrical engineering looked like a better bet than computer science, and optics was incredibly hot. When I was in school, people would get job offers after a 30 minute interview at a career fair. And then the bottom dropped out of the market. EEs still do fine, but they do approximately the same as other engineering fields (unless they take a job at one of the aforementioned software companies). And the optics job market still hasn't normalized. You need a PhD to get an entry level job, and that entry level job won't pay as well as an entry level job for someone with a BS at Intel, and that position at Intel will pay maybe 1/2 to 2/3 what an entry-level job at a "good" software company will pay, depending on how good the person is at negotiating.

I think that programmers are having a period of incredibly good luck, and if I had to bet, my guess is that it won't last.


Posted by: sral | Link to this comment | 01- 6-16 11:47 PM
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AFAICT, during the wage-suppression era, FB was giving out good offers. Companies that might have bid up employees, like Google, Apple, and MS, simply didn't bother because they didn't need to with the agreement in place.

From the offer numbers I know of and the way bidding gets run up, my impression is that FB is still the company driving up prices for programmers, and the main difference is that all of the other major tech companies now have to raise compensation and put in serious bids for employees if they don't want FB to hire away anyone they want.

It's easy to imagine a future where FB's product line becomes the next myspace, or FB's ad revenue tanks. That alone would have a significant impact on programmer compensation at the upper end. If there's some kind of broader ad-blocker-pocalypse, that would damage more than just FB and have an even larger effect on compensation.

There are a number of other scenarios I could imagine wiping out the developer job market. Each individual scenario seems unlikely, but not so unlikely that I'd be surprised if any of them came to pass.


Posted by: sral | Link to this comment | 01- 7-16 12:24 AM
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if I had to bet, my guess is that it won't last.

This is a pretty safe bet. If only there were some way to make these bets pay out! But the other side is all hedge, right?


Posted by: lurid keyaki | Link to this comment | 01- 7-16 12:32 AM
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Surely there's still some irrational exuberance out there.


Posted by: teofilo | Link to this comment | 01- 7-16 12:34 AM
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Also happy birthday Barry! Enjoy the break!


Posted by: lurid keyaki | Link to this comment | 01- 7-16 12:43 AM
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Thanks!

Of the two malls playing the Revenant I chose the one not playing Bone Tomahawk but had no way of finding out before because the websites are such shit so no double bill for me. Oh well.


Posted by: Barry Freed | Link to this comment | 01- 7-16 12:49 AM
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206: And your jam is lovely, at least the one jar I opened. "Blenheim" must be a kind of apricot?


Posted by: LizardBreath | Link to this comment | 01- 7-16 5:20 AM
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My impression is the big signing bonuses from big companies are a substitute for (low probability) billions you get from startup equity. You are unlikely to make big money from your GOOG options these days: still plenty of upside but not "Congrats, you're a billionaire!" level. Also, random people walking in off the street aren't getting these bonuses AFAIK; it's MS or PhD types in CS, or particularly needed equivalents in other fields.

A lot of big companies are also trying to hold down software engineer wages on the lower end of the scale by getting more and more H1B visas. These have the "advantage," beyond low wages, that the employee is effectively a chattel as the visa is good only for the one company.


Posted by: DaveLMA | Link to this comment | 01- 7-16 6:18 AM
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Things have certainly gotten more frothy since I started at a large tech company five years ago (just barely missing the formal wage-suppression era and related settlement), but I have to say that "$100k signing bonus" sounds insane to me. Signing bonuses at all sound insane, in fact. I may check with some of my more recently-hired co-workers to validate or refute this.


Posted by: Nathan Williams | Link to this comment | 01- 7-16 6:19 AM
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I'm doing a job interview today. I'll be reasonable and ask them for a $50,000 signing bonus.


Posted by: Moby Hick | Link to this comment | 01- 7-16 6:22 AM
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A lot of big companies are also trying to hold down software engineer wages on the lower end of the scale by getting more and more H1B visas.

Hi, from the lower end. Kind of. Here the administrative costs for the employer are still relatively high compared to the wages, so you don't see too much of it.


Posted by: Moby Hick | Link to this comment | 01- 7-16 6:23 AM
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The last time we dealt with it, the fee was in the lower five figures. I'm not sure who gets the money. Maybe China needs paid-off for what they put into the employees schooling?


Posted by: Moby Hick | Link to this comment | 01- 7-16 6:34 AM
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Maybe China needs paid-off

If you talk that way in Philly, no one will understand you.


Posted by: JRoth | Link to this comment | 01- 7-16 7:47 AM
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241,242: Most H1Bs are getting scarfed up these days by temp companies like Infosys. They then provide them as (usually) long-term "temps" to other companies. That reduces the admin expenses for the ultimate "employer."


Posted by: DaveLMA | Link to this comment | 01- 7-16 7:47 AM
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Universities don't do that. At least not that I've ever seen.


Posted by: Moby Hick | Link to this comment | 01- 7-16 7:49 AM
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244: I think universities are exempt from H1B limits, but I might be mistaken.

228: Happy birthday.


Posted by: ydnew | Link to this comment | 01- 7-16 7:55 AM
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Happy Birthday, Barry!


Posted by: peep | Link to this comment | 01- 7-16 7:56 AM
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I don't know about the limits, but I'm pretty sure universities aren't exempt from the fees.


Posted by: Moby Hick | Link to this comment | 01- 7-16 7:58 AM
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Good luck Moby, if you're non-jokingly interviewing.
Happy birthday Barry!


Posted by: Mossy Character | Link to this comment | 01- 7-16 8:01 AM
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I might make a joke or two. It's just a preliminary phone call.


Posted by: Moby Hick | Link to this comment | 01- 7-16 8:04 AM
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Right, universities are exempt from the limits. (For research universities the fees are insignificant relative to the costs of a tenure line. In the sciences they're even dwarfed just by upfront startup costs. SLACs can be affected by the fees as can universities for staff positions.)


Posted by: Unfoggetarian: "Pause endlessly, then go in." (9) | Link to this comment | 01- 7-16 8:07 AM
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248 was referring to staff positions. I'm not involved in hiring faculty.


Posted by: Moby Hick | Link to this comment | 01- 7-16 8:09 AM
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It's easy to imagine a future where FB's product line becomes the next myspace, or FB's ad revenue tanks.

FB and Trump are sort of similar in this regard.


Posted by: heebie-geebie | Link to this comment | 01- 7-16 8:26 AM
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it's MS or PhD types in CS, or particularly needed equivalents in other fields.

It's worth reiterating that these are a minute fraction of the people entering the developer labor market.

People in my bootcamp are going from being 40-50k lab techs or content marketers to 65-85k junior devs at startups or other small-to-midsize shops (In Austin. In the Bay Area, it's 100-115k ). That's an amazing life transition in this economy, but it's not quite the numbers that people are talking about above.


Posted by: Criminally Bulgur | Link to this comment | 01- 7-16 8:41 AM
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I still don't understand how those a wage difference of that size persists. I understand that the junior develop in Austin might not be working at quite the same level as the one in the Bay Area, but that's still a huge difference. I have colleagues at UCSF. I always wondered what they make, but I'm too shy to ask. Does NIH allow them to pay 2x what they pay here?


Posted by: Moby Hick | Link to this comment | 01- 7-16 8:50 AM
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I've been wondering about cost of living stuff in this thread, too. I started out feeling virtuous and prudent at the beginning, but then wondered if we're effectively making 250K for this town. I poked around and found some statewide and large city level that implied there is a 20% gap between the cheapest and most expensive places in the US, but I don't know if Heebieville is cheaper than a cheap city. Probably not. Probably about the same, actually.


Posted by: heebie-geebie | Link to this comment | 01- 7-16 8:54 AM
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junior develop in Austin might not be working at quite the same level as the one in the Bay Area,

The same person applying for jobs in both cities will get offers in those ranges, so it's really just local market price for labor.

I would think the public sector or higher ed is going to show a lot less variance.


Posted by: Criminally Bulgur | Link to this comment | 01- 7-16 8:57 AM
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Huh? There is MUCH more than a 20% gap between the cheapest and most expensive places in the US. Even limiting it just to cities.


Posted by: urple | Link to this comment | 01- 7-16 8:58 AM
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Then I don't understand how higher ed runs itself in the Bay Area. Maybe they only hire spouses and partners of software people?


Posted by: Moby Hick | Link to this comment | 01- 7-16 8:59 AM
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259 to 257.


Posted by: Moby Hick | Link to this comment | 01- 7-16 8:59 AM
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259: Does the UC system own housing in the area that they can lease/sell to faculty members cheap? I thought that's how it works for most universities in NYC.


Posted by: AcademicLurker | Link to this comment | 01- 7-16 9:03 AM
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I'm hope I'm not the only person who has had "No More Tears" running through my head on a continuous loop while reading this thread over the past few days.


Posted by: urple | Link to this comment | 01- 7-16 9:03 AM
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The junior dev salary differences are really all about rent. My 1-bedroom in San Mateo used to be $1200/mo., but now it looks like the cheapest 1-beds there are $2000. Quick search on Craigslist says the cheapest Austin 1-beds are about $800. Difference over a year is about $15k, which is pretty much the difference in starting offers.


Posted by: ogged | Link to this comment | 01- 7-16 9:07 AM
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Looking at just rental housing, average one-bedroom in Austin is $1236 / mo. vs. $2896 / mo. in San Francisco.

That's a $20,000 difference in itself.


Posted by: Criminally Bulgur | Link to this comment | 01- 7-16 9:08 AM
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Doh!

Written before seeing last.


Posted by: CB | Link to this comment | 01- 7-16 9:09 AM
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$20,000 is quite a bit less than $45,000. Trust me. I math.


Posted by: Moby Hick | Link to this comment | 01- 7-16 9:09 AM
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Even if you figure marginal tax rates, that's still over $10,000 difference.


Posted by: Moby Hick | Link to this comment | 01- 7-16 9:11 AM
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"Blenheim" must be a kind of apricot?

The best kind!


Posted by: nosflow | Link to this comment | 01- 7-16 9:12 AM
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I will say that your labeling is enigmatic. I have enough faith in your jam-making skills, particularly after the first jar, to assume that the other jars will also be good, but they're all a little mystifying.


Posted by: LizardBreath | Link to this comment | 01- 7-16 9:16 AM
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255: The federal government does pay different salaries in different locations for the same work. It looks like about a 20% difference between Pittsburgh and San Francisco.

https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/2013/general-schedule/

I believe these differentials also apply to NIH grants, etc.

Anecdata: The differentials are really insufficient. A federal judge of my acquaintance based in Danville, Virginia is clsoe to the richest guy in town, while a federal judge in Manhattan makes less than a third year associate.


Posted by: unimaginative | Link to this comment | 01- 7-16 9:18 AM
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And yet there are more federal judges in Manhattan than Danville. Probably.


Posted by: Moby Hick | Link to this comment | 01- 7-16 9:20 AM
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I'd assume that these salary differences are driven primarily by an industry that's still not particularly interested in making a quarterly profit. As long as VC funding/stock price is sufficient, it doesn't matter as much whether you pay your programmers in SF 2x what they could get in Austin for the same work, because you're all about building the glorious future when you will be the dominant thing in some niche, and at that point will start acting like a normal company, so letting comp match rents or expectations is nbd. Of course, at some point the musical chairs stop and the industry starts behaving like a normal industry, unless it doesn't.


Posted by: Roberto Tigre | Link to this comment | 01- 7-16 9:25 AM
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270: The Pittsburgh/Philadelphia difference is very small. That's part of the issue for me as my personal difference in housing costs will be much larger. In Pittsburgh, I'm paying 2003 housing prices but if I move I have to pay current ones.


Posted by: Moby Hick | Link to this comment | 01- 7-16 9:30 AM
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In Pittsburgh, I'm paying 2003 housing prices but if I move I have to pay current ones.

A possible solution would be to obtain a time machine.


Posted by: Spike | Link to this comment | 01- 7-16 9:33 AM
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273: Does selling your 2003-purchased house now make up for that?


Posted by: LizardBreath | Link to this comment | 01- 7-16 9:37 AM
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I'd sort of hoped to pocket that.


Posted by: Moby Hick | Link to this comment | 01- 7-16 9:40 AM
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Really, there's only been about 20% appreciation. Take out the cost of paying the realtor and the transfer taxes, you've barely got moving expenses (if you include the mortgage initiation costs of the next house).


Posted by: Moby Hick | Link to this comment | 01- 7-16 9:49 AM
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you're all about building the glorious future when you will be the dominant thing in some niche

It can even be weirder than that. This company built a service that saved Home Depot a lot of money, and so Home Depot bought them so that no one else could have the service. But the service doesn't require much ongoing maintenance or extension. They're value to Home Depot is mostly in their non-compete. So now they're basically Home Depot Parc.


Posted by: Nony | Link to this comment | 01- 7-16 9:55 AM
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I worry that I'd have to go the bootcamp tech route to stay in the Bay Area, and if I want to continue to do work similar to what I'm doing and have a chance of owning some kind of home, I probably should work on setting myself up for getting a job elsewhere in the next couple of years.


Posted by: fake accent | Link to this comment | 01- 7-16 10:07 AM
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I'd sort of hoped to pocket that.

It's tough to fit a whole house in your pocket. Even one of those new-fangled tiny houses.


Posted by: Stanley | Link to this comment | 01- 7-16 10:08 AM
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In the Bay Area, you need 20% bigger pockets for a house of the same size.


Posted by: fake accent | Link to this comment | 01- 7-16 10:14 AM
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239: Most engineers suck at negotiating and you'll have to find someone who had multiple offers and poked all the relevant companies to raise their offers. If you talk to someone who's involved on the hiring side of things, they can probably give you a better view on this than any individual engineer.

On the cost of living thing, we recently got involved bidding for someone; the companies involved were the usual suspects in the bay area, the Austin Apple office, and Microsoft in Redmond. In the end, all the offers came in at the same absolute level. This also happened when I was looking for work.

This is weird, since Texas and Washington don't have state income tax, and there's a significant cost of living difference. But I think this is driven by companies having lost too many people to bay area companies that are willing to offer an extra $x a year, for some $x that doesn't even come close to covering the cost of living difference.

But, companies that aren't in the small set of companies that will all match each other's offers won't even attempt to pay at the same level. In Austin, AMD, IBM, NI, ARM, etc., will all pay you less than half of what you can get if you talk to Apple or Google (well, if you can find an open req at Google in Austin, which is hard to do) and get them to match an offer from some company that will move you out to the bay and pay market rate out there.


Posted by: sral | Link to this comment | 01- 7-16 10:33 AM
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In 282, I don't mean to imply I don't suck at negotiating. I suck!

The last time I was looking for work, when I got my first offer from a company that pays well, and was waiting to hear from some other companies, I talked to someone who's involved in hiring and sees a lot of offers. They suggested that I ask for a lot more (I don't remember the exact number, but I think it was something like $80k/yr more). The previous number didn't sound obviously low, either; it matched what I was making at Google @ "senior".

I thought that was absurd and I argued with this guy for about two hours about how absurd it is to ask for an extra $80k/yr. And then the company turned around and said yes basically immediately (although they didn't move on salary at all and only adjusted the signing bonus and equity numbers).

My takeaway from this is that companies regularly pay people a lot less than market rate because people don't know what market rate is. But if you call them out on it and have even a minimal amount of leverage (pending incoming offers from other companies), they'll bump things up by a much larger amount than most people would expect.


Posted by: sral | Link to this comment | 01- 7-16 10:51 AM
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Anecdotally, Amazon is another one that matches Apple or Google offers, and vice versa, for the reason in 282.3, except you don't really need to add the words "bay area." It's just that a lot of the we'll-match-anybody companies are headquartered there.


Posted by: DaveLMA | Link to this comment | 01- 7-16 10:56 AM
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Amazon will match the offer, but they'll only pay moving expenses if you subscribe to Prime.


Posted by: Moby Hick | Link to this comment | 01- 7-16 10:58 AM
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269: I am always available to answer questions.


Posted by: nosflow | Link to this comment | 01- 7-16 11:00 AM
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My friend is a recruiter (formerly Google, now Apple) and once she sets her sights on someone, it is incredible what she'll do to poach them. Pulling strings to get a candidate's kids enrolled at the school of their choice and a year of tuition? Sure. The non-monetary assistance is pretty stunning as well. Cello teacher for the spouse? No problem, she will find that too. Her pay for each successful hire is one year of that person's salary.

She will occasionally ask me, do I know any Ph.D.'s in material science who also practice contract law and speak Cantonese and Portuguese? Not so much.

It gets mildly awkward to talk to her about money, since the scale of money she thinks about is so incredibly higher than mine. She doesn't feel any closer to accomplishing her financial goals than I do. I tell myself that taking the dog to the river is free and lovely and most of what I want anyway.


Posted by: Megan | Link to this comment | 01- 7-16 11:44 AM
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Also, I could totally have answered that question about Blenheims. I planted a Royal Blenheim in my backyard.


Posted by: Megan | Link to this comment | 01- 7-16 11:44 AM
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Cello teacher? They used to call them "tennis pros."


Posted by: Moby Hick | Link to this comment | 01- 7-16 11:47 AM
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It's all about the catgut.


Posted by: LizardBreath | Link to this comment | 01- 7-16 11:50 AM
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Her pay for each successful hire is one year of that person's salary.

Holy shit. Is that standard? That seems like it could get pretty high pretty fast. Not to mention, it, uh, "aligns incentives" between the recruiter and the recruited to push for a higher salary, in a way that I would think the company would be very useful happy about.


Posted by: urple | Link to this comment | 01- 7-16 11:50 AM
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My takeaway from this is that companies regularly pay people a lot less than market rate because people don't know what market rate is. But if you call them out on it and have even a minimal amount of leverage (pending incoming offers from other companies), they'll bump things up by a much larger amount than most people would expect.

This information asymmetry is why I've come to believe that it's almost impossible for a salary request to be too high, at least in industries where hiring and retention are difficult/expensive.


Posted by: Sifu Tweety | Link to this comment | 01- 7-16 11:51 AM
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287 reminds me of the time a friend of mine was interviewing in 2008, which was the worst the tech market has been since maybe 2001. He wasn't able to sell his house for obvious reasons, so the company bought his house from him so that he could move. This was a finance company and not a pure tech company, but it still blew my mind.


Posted by: sral | Link to this comment | 01- 7-16 12:37 PM
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287 reminds me of the time a friend of mine was interviewing in 2008, which was the worst the tech market has been since maybe 2001. He wasn't able to sell his house for obvious reasons, so the company bought his house from him so that he could move. This was a finance company and not a pure tech company, but it still blew my mind.

I mentioned reading this book a while back and that claimed that was somewhat common practice among companies which required their employees to move frequently.

On-topic of this thread I'll quote my prior comment:

one of the things that struck me was how little, from my perspective, many of the people were getting paid to put up with that life-style. 120K would be multiples of what I make now, but that wouldn't be close to enough to make up for a job that required me to move every couple of years.

Posted by: NickS | Link to this comment | 01- 7-16 12:54 PM
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I move every few years for my job. If I was willing to move a bit more often, or to shittier places, I'd be advancing farther up the ladder than I have. We get paid decently (or rather, I'd feel it was a lot more decent if I didn't imagine I could be making $200K or whatever at Google), and there are a bunch of other benefits that come with it, but part of the justification for the salary is shit like having to move a lot, or living in a place where your spouse isn't able to work.


Posted by: Spike | Link to this comment | 01- 7-16 4:13 PM
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It's still pretty damn hard to get hired at the top tier big companies, right? You can't work there just because you're a programmer and decide you want to.


Posted by: ogged | Link to this comment | 01- 7-16 7:20 PM
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Yes and no. I think that you can prep for it, and that most programmers could probably pass the interview process if they spent a few months on prep, even if they had little to no background going in. It varies by company, but at the big companies I've interviewed at (and for), you mostly just need to know how to solve algorithms problems and reason through some design questions.

If you can, just for example, easily solve this set of algorithms competitions problems targeted at high school students, you'll smoke the interview process for most jobs. There are exceptions. Sometimes you'll draw an interviewer who asks an absurd question. A friend of mine who's pretty good at this sort of thing got asked a question from Google Code Jam world finals in a phone interview, which is completely absurd. And there are other ways you can get unlucky. But, overall, I think the system is game-able the same way the SATs are game-able. There isn't really any magic involved. You just need to study if it's not something that comes naturally to you.

I think the way interviews are done is silly, but that's a different topic.


Posted by: sral | Link to this comment | 01- 7-16 8:15 PM
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I have had two interviews at big companies! Once I was offered the job but declined it to be a philosophy VAP, once I didn't get past the phone screen by a contemptuous-sounding man.


Posted by: nosflow | Link to this comment | 01- 7-16 8:21 PM
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To be fair, I couldn't clearly answer the interviewer's questions.


Posted by: nosflow | Link to this comment | 01- 7-16 8:23 PM
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262: Same issue, different song.


Posted by: Mr. Blandings | Link to this comment | 01- 7-16 9:06 PM
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Always interesting to read about professions where the interview is designed to reveal something more than the question of "is this person so socially inept or horribly self-presenting that it will be awful to work with him/her."


Posted by: Roberto Tigre | Link to this comment | 01- 7-16 9:59 PM
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Apparently, the "awful to work with" screen sucks enough that I can find work.


Posted by: Moby Hick | Link to this comment | 01- 7-16 10:37 PM
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This is the song I hear when I see the post title.


Posted by: teofilo | Link to this comment | 01- 7-16 11:28 PM
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303: Me too.


Posted by: Penny | Link to this comment | 01- 8-16 1:42 AM
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Ditto


Posted by: Spike | Link to this comment | 01- 8-16 4:05 AM
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303: aye.


Posted by: Sifu Tweety | Link to this comment | 01- 8-16 5:37 AM
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