That's preposterous. $130k gets you quite a bit in SV, even a pretty nice 1BR apartment in SF if you want it. Yes, it's more expensive to live here than most other places in the US, but saying $130k isn't enough or is even marginal or crappy is ridiculous.
$75k in Texas probably does go farther, but that's not really comparing apples to apples.
You're right that you're not starving. But someone who makes $75k in Texas, Colorado, or Georgia isn't talking about how nice of a 1BR they can get. The expectations are completely different.
You can rent a fairly nice 3+ BR house in my neighborhood for $1500. That saves you $18k per year over the apartment you referenced, for a living situation that's viable for a family. Compared to a similar-sized rental house in SV, a house here saves around $42k per year. When you account for taxes (an extra $5-10k in state taxes and around $14k in federal taxes on the higher income) you can see how $130k in SV wouldn't get you "much" compared to $75k elsewhere. And you probably wouldn't make $75k elsewhere; $90-110k is more typical for the same sort of work.
Are you sure? I used to live in MV 5 years ago. Was in a decent apartment 20 minute walk from the Google campus. The rent used to be around 1700. I checked the price for the same apartment complex a few days ago on a lark ... over 3K! 2 bedroom apartments in the same complex range from 3500 to 5K. I assure you ... Texas is cheaper than this.
Before I got my big break, I did a combo of working at Whole Foods and the Post 9/11 Gi Bill to make ends meat, and I was able to live in Silicon Valley (Mountain View and Sunnyvale) from 2008-2013. In the latter case, I was able to rent a room in a house in Sunnyvale for almost three years. I can't fathom how you spend your money if you make 130K and can't find a room in Santa Clara County. Its like...seriously, people get by with a lot less than 130K dev salaries, and I'll be blunt and say you're doing something wrong if you cant.
"A room in Santa Clara County" is fine for you. What about your spouse and two kids?
I don't see why a single, healthy guy without a lot of debt can't live quite well in the Bay Area for $130K. But, if you have 4 mouths to feed, paying a couple grand a month for student loans, starting to have old-person health problems, and/or have extended family to support, I can assure you you're not living the Zuckerbergs lifestyle on $130K.
If you have four mouths to feed, you better not expect to be treated as royalty making 130K in the Bay Area. Get your spouse to work, or just admit that you need to scale your spending habits downward.
Yes. I live in SF right now, and have friends who live in MV, Sunnyvale, and Palo Alto (among other south bay/peninsula cities).
But you can easily pay for a $3k/mo apartment on $130k/yr, still have a good amount of disposable income, and still be putting money toward savings/college loans/stocks/whatever.
Even $4k/mo for rent is doable. That's $48k/yr, and if you can't live off the remainder (say $40k after taxes), my opinion is that you need to take a hard look at the crap you spend money on.
Of course Texas is cheaper than this. Not at all debating that. Money goes farther in some places than in others; this is not news. I'm merely addressing the assertion that $130k/yr doesn't get you "much", which is demonstrably false, and sounds like it was written by someone who hasn't lived here.
Whether or not you can do "better" elsewhere is a matter of preference. I personally would find the idea of moving to Texas (or a great many other places where the dollar buys you more) unappealing, regardless of what my financial situation would be there. Paying a premium to live in SF (while still sending 40+% of my software-developer salary right to savings/stocks/mutual funds every month) is worth it to me.
40% of a $130K salary is $52,000. $48K a year in rent brings the total up to $100,000.
You still haven't paid for food yet, or any other cost.
Assuming you're a silicon-lifeform that can subsist off of minerals leached from the ground, you'd still need a 22% or lower tax rate to make this work.
Which is to say, your math doesn't work, at all. Even assuming $3K a month in rent, your overall tax rate (remember, you're a silicon lifeform that doesn't eat) still needs to be ~31% to make it work out. This is definitely not the case in California.
Assuming you're human (and therefore need to pay for food, clothing, bills, such), you are nowhere near being able to take a $3K (much less $4K) rent on a $130K salary. The level of spending you're talking about is more appropriate for someone with a $130K income post-tax, which by California tax rates puts you in the $200-220K range, pre-tax.
Sorry, for the saving-40% figure I was talking about me, not the hypothetical person who makes $130k. I should have been clearer on that point. And I was also talking about 40% post-tax, not pre-.
Still, I'm not understanding how you think a $3k/mo rent isn't possible on $130k/yr. I personally know people who do that.
Let's be conservative and say 40% tax rate. That's $78k left. $3k/mo on rent is $36k/yr, which drops you down to $42k. If you can't eat, drink, and be merry on $42k/yr, and still save some money, I would seriously suggest you take a hard look at your priorities.
I wouldn't say that at that level you'd necessarily want to sock away 40% (again, post-tax), but that's even doable if you're living on your own and don't have dependents: 40% of your post-tax pay on $130k is $46,800. Subtract $3k/mo for rent, and you have just shy of $11k free. I'm not saying you're going to have tons of fun spending only $11k/yr on food and entertainment, but it's certainly possible. But instead dial it down to 30% or 25% or whatever. I bet at that level you'd still be saving more than the average American.
I did ignore children, fairly deliberately. If you do have kids, then hopefully there are two parents, both with income (yes, I know this isn't always the case).
Four people (two parents and two kids) will live much cheaper together than four people living on their own. Kids are expensive. I get that. That changes the equation quite a bit. I'm not particularly equipped to do that math since I don't have kids and don't know what they tend to "cost".
$130K in SV might get you a 1BR in SF, but you'll be paying close to half your take-home to do it. That's not smart or sustainable. My current salary in Boston is in that ballpark and I live in a prime location for about 25% of take-home, making about that salary.
So, I hear that touted as "conventional wisdom", but it's not particularly clear why. As long as you aren't spending beyond your means, what's wrong with allocating more money to housing? Say I want a bigger apartment, and I'm willing to drastically cut back on restaurant outings to make up the difference. How is allocating 50% to housing and 25% to food (assuming that 25% buys you healthy meals all year) less sustainable than allocating 25% to housing and 50% to food (talkin' 'bout some pretty nice food here)?
I think it's a reasonable comparison, yes, but not solely on monetary terms. Cost of living is certainly an important part of a decision on where to live, but it is not even close to the only consideration.
Put differently: the size of house you can buy is often low on the list of considerations.
$75k in Texas probably does go farther, but that's not really comparing apples to apples.