Twitter Worker Making $160K Struggling to Survive?

[kyphysics]

https://www.yahoo.com/finance/news/twitter-employee-making-160-000-193700556.html

And I was thinking I'd be happy with $75K where I live. lol

In the San Francisco Bay Area, even a six-figure salary can make tech workers feel poor.

A Twitter employee speaking on the condition of anonymity told The Guardian he's scraping by on a base salary of $160,000. The employee is in his early 40s, lives in San Francisco, and has had to borrow money in the past to "make it through the month," The Guardian reports.

"I didn't become a software engineer to be trying to make ends meet," the Twitter employee said. He added that his salary is a "pretty bad" income for trying to raise a family in the area.

 

[Ryan_m_b]

This has got to be a joke, a sick one at that. I live in one of the most expensive cities in the world on eight times less than that. I can't imagine what kind of wasteful lifestyle one would have to lead to have to borrow money despite that kind of salary.

 

[Greg Bernhardt]

It's the old saying, it's not how much you make, it's how much you spend. A guy making $50k who is able to save $500 a month is better off than a man making $100k and only able to save $100 a month.

 

[Ryan_m_b]

I just don't understand how you can spend so much as to not be exceedingly comfortable on that wage. I goggled a california tax calculator and on $160k he should be taking home $100k of that. In the article his rent is stated as being $3,000pcm for his house (that I can believe if property prices in san francisco are similar to London) but even if his bills, food and transport are also $3,000 that still works out to $28k a year for leisure/savings.

 

[Greg Bernhardt]

I just don't understand how you can spend so much as to not be exceedingly comfortable on that wage.

The bay area is like the new wall street. Money flows out of pockets.

 

[Nidum]

According to Mr.Micawber :

Annual income twenty pounds, annual expenditure nineteen pounds nineteen shillings and six , result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six , result misery .

Though he also said when in the depths of poverty and weighed down with debt :

Something will turn up !

 

[Ryan_m_b]

The bay area is like the new wall street. Money flows out of pockets.

To what though? As someone who does have to constantly worry about money and has had to borrow for rent in cases of unexpected costly events I don't grok how anyone could struggle with that income. I get that you could spend a lot on expensive stuff...but to me it's not struggling if the problem could be solved by cutting down on leisure and luxuries. In fact I find the notion insulting. "Struggling" is when you have to start cutting down on food or heating to make ends meet.

 

[Greg Bernhardt]

In fact I find the notion insulting.

Without knowing more information I think struggling is the wrong word used in the article.

 

[kyphysics]

This has got to be a joke, a sick one at that. I live in one of the most expensive cities in the world on eight times less than that. I can't imagine what kind of wasteful lifestyle one would have to lead to have to borrow money despite that kind of salary.

This isn't the first story I've seen like this, but is probably the first where the salary seemed high enough to live well.

I've seen stories of people making around 90K and claiming they were struggling to get by there.

But $160K? It sounds kind of crazy. lol. Maybe he's got massive student loan debt. Or, if he's supporting a wife and two children, then that's $40K/person. Still seems like it should be enough, but what do I know.

 

[Ryan_m_b]

Without knowing more information I think struggling is the wrong word used in the article.

But $160K? It sounds kind of crazy. lol. Maybe he's got massive student loan debt. Or, if he's supporting a wife and two children, then that's $40K/person. Still seems like it should be enough, but what do I know.

It certainly seems like the article should have had more information. Even if he is supporting his family with what we know he has $64k after tax and rent. That's more than the median US household income.

 

[mheslep]

I just don't understand how you can spend so much as to not be exceedingly comfortable on that wage. I goggled a california tax calculator and on $160k he should be taking home $100k of that. In the article his rent is stated as being $3,000pcm for his house (that I can believe if property prices in san francisco are similar to London) but even if his bills, food and transport are also $3,000 that still works out to $28k a year for leisure/savings.

Car $800/mo. No car works in some cities, NY, London, but not in California. Clothes, furniture from scratch for many just out of college. If he wants to eventually buy instead of suffering that rent, he needs to be saving $10K/year minimum just for a modest Palo Alto house at $1M. Retirement savings, more.

 

[Ryan_m_b]

Car $800/mo. No car works in some cities, NY, London, but not in California. Clothes, furniture from scratch for many just out of college. If he wants to eventually buy instead of suffering that rent, he needs to be saving $10K/year minimum just for a modest Palo Alto house at $1M. Retirement savings, more.

Running a car was included in my speculation that his other costs in bills, food etc are equal to his rent. Savings I can see sure, but you're not struggling if you're saving thousands a year.

 

[StatGuy2000]

Running a car was included in my speculation that his other costs in bills, food etc are equal to his rent. Savings I can see sure, but you're not struggling if you're saving thousands a year.

It may not be so hard to believe if the Twitter employee has massive student debt or other forms of debt. Keep in mind that tuition rates for an in-state resident (i.e. those who are permanent residents of a given US state) in a public (i.e. federally and state funded) university can go from $5000-10000 per year, and more than twice to 3 times as much for out-of-state residents. And this would not include room and board and textbooks, so I could imagine a student taking on debt of about $100000 to $200000 in student debt by the time said student graduates. Given that the individual in question is in his 40s, it's possible that he may be in the last stretches of fully paying off that debt.

Combine that with the high cost of housing ($3000 is quite high to me, but not surprising for San Francisco), car costs, health care costs, insurance, cost of groceries to raise a family, etc. -- I could easily imagine someone earning 6 figures just getting by.

 

[Evo]

Car $800 a month? Even including insurance for a car for San Francisco (it's hilly) should not come close to that unless he's had so many wrecks/tickets he's almost uninsurable. Something's out of whack.

 

[Bandersnatch]

Struggling to survive my arse. Having to shop for groceries with a calculator because you can't get over budget is poor. Being financially drained by the high-standard lifestyle one thought their salary would afford them is being, at best, pecuniarily challenged.
The article makes me want to show these poor, poor tech workers a finger together with some heartfelt advice on better word choice.

 

[Aufbauwerk 2045]

Here is some context. According to USA Today, "the median household income in 2014 was $53,719, which means that half of American households make less than this amount, and half make more." That is total income. The average Adjusted Gross Income in 2014 varied from $34,940 for a single tax filer to $117,795 for married filing jointly.

Another USA Today stat: "Geographic location plays a big role in household income. To mention the two extremes, the median household income in Maryland is $70,004, nearly double that of Mississippi's $36,919."

You can read the whole article here.

http://www.usatoday.com/story/money...4/average-american-household-income/93002252/

Now for the main point. The well-paid Twitter employees are not the only ones complaining. There is a similar recent article about Facebook employees. My response is that these complaining employees should stop whining and consider the plight of the typical low-paid worker who can barely make rent payments in a bad part of town, who drives an unreliable old car, who can't afford adequate medical and dental care, and who can only dream about ever having the standard of living of one of these spoiled tech workers.

We could also mention the unemployed, the elderly, the children in foster care, the disabled, and even those foreign workers who assemble the flashy new cellphones the Silicon Valley types use to call each other and complain about their cost of living.

These tech workers might do better to think ahead, and cut their cost of living any way they can. Their highly paid jobs are far from secure. How are they going to handle being poor, when they can't even handle being well-off?

 

[Aufbauwerk 2045]

Of course there is a difference between income and net worth. One important figure is that in 2007 the top 1% had 34.6% of the wealth, while the bottom 40% had 0.2% of the wealth. Many of the bottom 20% actually have negative net worth. (Edward N. Wolff, Levy Economics Institute of Bard College, March 2010).

It's no surprise that, for the first time in recent US history, a self-proclaimed Socialist gained so many votes. I think Sanders is only the beginning.

 

[jtbell]

Car $800/mo. No car works in some cities, NY, London, but not in California.

If he lives and works in SF, he probably doesn't need a car to get to work, or for most activities inside the city in fact. Maybe for chauffeuring the kids if they're too young to get around on their own. But they have Uber and Lyft.

Food is probably expensive by the standards of "flyover country," though, even if it comes from grocery stores and not restaurants or Starbucks.

If the wife works, and the kids are young, they need daycare (expensive). But then her salary should be able to cover that, at least, assuming she has a decent job, not as a barista or something like that.

 

[Borg]

It's the old saying, it's not how much you make, it's how much you spend.

Exactly. The real story is most likely about how the person isn't living within their means.

 

[russ_watters]

Yeah, I'm not buying it either; he's probably "struggling" to live a wealthy lifestyle.

 

[russ_watters]

I think this is a dead giveaway for poor budgeting/lifestyle management:

“Families are priced out of the market,” he said, adding that family-friendly cafes and restaurants have slowly been replaced by “hip coffee shops”.

Why is that a consideration here? Eating out costs several times what eating at home costs. So if you are borrowing money to get through the month, eating out shouldn't even be part of the conversation!

And different person:

“We will be unequivocally better off [in a different city] than we are now.” He said he won’t miss some of the more mundane day-to-day costs, like spending $8 on a bagel and coffee or $12 on freshly pressed juice.

Duh, Mr. Hipster, why are you spending $400 a month on breakfast alone, that you could be getting for $40 at the grocery store? Sheesh!

 

[TeethWhitener]

While I agree that this very well may be a case of massive overspending, allow me to play devil's advocate for a second.

Based on my own household's experience (large, expensive metro area; two earners in top 10% or so of income, two young kids, modest starter home in the 'burbs), making sure your money is all going in the right direction can be a big concern, even when you're making the right decisions. A 15-year mortgage (even at 2.5% interest) can easily eat up $30-40k (in some places, renting a 1-bedroom place could cost this much), daycare for 2 kids can approach that much (especially where I live--daycare expenses are a serious problem here), maxing out retirement accounts (401k + IRA) will run nearly $25k per earner, and adding what we can to a college fund (remember: right now, not to mention in 15 or so years, tuition + room & board at Harvard is $90k per year. No, that's not a typo). These expenses easily top $100k, and I don't think any of them could be considered particularly unwise financial decisions. And we don't have any debt to worry about. I could easily see adding tens of thousands a year to this figure if you have a student loan or if a younger you racked up a bunch of credit card debt.

My point is, while we certainly can't say we're "struggling," it certainly doesn't "feel like" we're high-income. That's not a problem for us: we've never needed superfluities to make us happy. (Obviously: we chose to earn $25k/yr in grad school for the better part of a decade.) But If you're expecting that a six-figure income will allow you to live lavishly, you could be in for a shock (either that, or you're about to be massively in credit card debt). I'd actually say I probably lived more lavishly in grad school than at any point since then. But I wasn't saving any money and I had no real responsibility to anyone other than myself.

 

[mheslep]

If he lives and works in SF, ...

Perhaps but I doubt it. The tech jobs in the area are mostly south in Palo Alto and Sunnyvale. Twitter HQ is in SF, but also has a Sunnyvale office.

 

[Dr Transport]

The individual made the choice to take the job with that specific company and move to that location, they should have considered the risks. No sympathy...

 

[Ryan_m_b]

My point is, while we certainly can't say we're "struggling," it certainly doesn't "feel like" we're high-income. That's not a problem for us: we've never needed superfluities to make us happy. (Obviously: we chose to earn $25k/yr in grad school for the better part of a decade.) But If you're expecting that a six-figure income will allow you to live lavishly, you could be in for a shock (either that, or you're about to be massively in credit card debt). I'd actually say I probably lived more lavishly in grad school than at any point since then. But I wasn't saving any money and I had no real responsibility to anyone other than myself.

I appreciate the post but I remain solidly unconvinced (and unsympathetic). You own property you plan to pay off in 15 years, you're putting twenty five thousand dollars into a retirement fund every year and your kids have a college fund that aims to hit six digits. I think we have very different definitions of what it means to live lavishly.

 

[TeethWhitener]

I think we have very different definitions of what it means to live lavishly.

My point was that I don't think we do. Our kids wear hand-me-downs, I drive an old beater to work and my wife takes the train (reimbursed by her employer), we go shopping for clothes maybe once a year, we go out to restaurants maybe twice a month (which is too much), and we probably go out with friends about once every 3 months or so. I doubt anyone would call this lavish. The point remains that if you're expecting more than this from six figures, and you want to fulfill a set of standard fiscal responsibilities, you'll be in for a rude awakening.

Edit: maybe there's a miscommunication here. To some people, "lavish" means making a lot of money. To me, "lavish" means spending a lot of money.

 

[Ryan_m_b]

My point was that I don't think we do. Our kids wear hand-me-downs, I drive an old beater to work and my wife takes the train (reimbursed by her employer), we go shopping for clothes maybe once a year, we go out to restaurants maybe twice a month (which is too much), and we probably go out with friends about once every 3 months or so. I doubt anyone would call this lavish. The point remains that if you're expecting more than this from six figures, and you want to fulfill a set of standard fiscal responsibilities, you'll be in for a rude awakening.

And my point was that with respect: you do live an incredibly privileged life which from many people's perspective could be considered lavish. You have a large pension fund, you own property and you have savings in the form of a college fund with five figures worth of money in it. Sure maybe you're not living a constant life of consumerist luxury because you're making smart choices, but I don't consider this in any way struggling and reiterate the point made earlier that it would be almost insulting to suggest it's so given how much of the population enjoy so much less.

What is sad is that what you're describing is the standard middle class cultural narrative (I am from the UK but I suspect the US and UK are in line on this one). Forty years ago home ownership, savings, pension funds etc were all pretty standard even if just one partner was working in a standard job. Now, especially in cities, this is a pipe dream for anyone who isn't earning significantly over the average.

 

[TeethWhitener]

And my point was that with respect: you do live an incredibly privileged life which from many people's perspective could be considered lavish with a large pension fund, you own property and you have savings in the form of a college fund with five figures worth of money in it. Sure maybe you're not living a constant life of consumerist luxury because you're making smart choices, but I don't consider this in any way struggling and reiterate the point made earlier that it's almost insulting to suggest it's so given how much of the population enjoy so much less.

What is sad is that what you're describing is the standard middle class cultural narrative (I am from the UK but I suspect the US and UK are in line on this one). Forty years ago home ownership, savings, pension funds etc were all pretty standard even if just one partner was working in a standard job. Now, especially in cities, this is a pipe dream for anyone who isn't earning significantly over the average.

Though it might not sound like it to you, I think we're actually in agreement for the most part. One minor point. I specifically said we aren't struggling. The main advantage to a six-figure income is that you don't have to worry about money. This of course doesn't mean that you don't have to be disciplined with your money. Just looking around at my colleagues, I think a lot of them struggle with this distinction, especially if they're new. I imagine the subject of the OP's article falls into this category.

 

[Ryan_m_b]

Though it might not sound like it to you, I think we're actually in agreement for the most part. One minor point. I specifically said we aren't struggling. The main advantage to a six-figure income is that you don't have to worry about money. This of course doesn't mean that you don't have to be disciplined with your money. Just looking around at my colleagues, I think a lot of them struggle with this distinction, especially if they're new. I imagine the subject of the OP's article falls into this category.

Yeah I appreciate you were playing devils advocate and weren't claiming you were in the same position as the twitter worker. I think it's worth expanding though on what it means to "worry about money", with the lifestyle that salary affords you don't have to worry about:

- Rent price increases forcing you out of your home
- Having to go into debt to pay bills due to an unexpected cost (like your laptop breaking when you need it for work)
- The crisis you would face if you lost your job because you live hand to mouth

Etcetera. That's struggling. "Struggling" to manage all of your money is a problem so vapid it makes me furious, and I'm by no means one of the poorest in society (I do have money available for leisure for example). My income might be very low but I still enjoy the benefits of being solidly middle class with the large family/friend support network that brings. Unfortunately that's not true for a huge swathe of society.

 

[infinitebubble]

I know many people who live on boats and pay rent (slip fees/mooring) that is 1/3 the cost of renting an apartment... the costs are way less in this lifestyle if one is single, even a couple living this way is far better than the average apartment costs in some major cities. I did just that myself in Seattle... rents were $1600-2000/mth... bought a sailboat in Everett, WA and my slip fees were $205/mth with electric costs averaging $35/mth. All the amenities' of a small studio and the luxury of living on a boat! Costs were less since most meals were prepared on the boat and the occasional go out to restaurants with friends... Many people in San Francisco are doing just that so anyone making $165k/yr and not making it is foolishly spending what they can't afford.

 

[TeethWhitener]

A couple more things, and then I'll lay off it.

Having to go into debt to pay bills due to an unexpected cost

Without being overtly political (keeping in mind that I'm in the US)...*whispers* "Medical bills" *ducks for cover* But seriously, in the US, a serious illness can cost tens to hundreds of thousands of dollars, depending on your insurance. According to at least one study, medical debt is responsible for over 60% of personal bankruptcies in the US (or was in 2007, before the ACA. Afterwards, the studies I was able to find became highly politicized.).

The crisis you would face if you lost your job

In households with a single earner, this might still be a valid concern, even with a relatively high salary. And especially if you 1) work in a field with downward wage pressure and 2) don't have a strong support network.

 

[Vanadium 50]

But seriously, in the US, a serious illness can cost tens to hundreds of thousands of dollars, depending on your insurance.

Yes, but the person referenced in the article is not saying that he's in financial trouble because of medical bills. He says he is in trouble because of rent. Like others in this thread, I think he's really in trouble because of the $8 bagels.

 

[Ryan_m_b]

A couple more things, and then I'll lay off it.Without being overtly political (keeping in mind that I'm in the US)...*whispers* "Medical bills" *ducks for cover* But seriously, in the US, a serious illness can cost tens to hundreds of thousands of dollars, depending on your insurance. According to at least one study, medical debt is responsible for over 60% of personal bankruptcies in the US (or was in 2007, before the ACA. Afterwards, the studies I was able to find became highly politicized.).

Man I didn't include that because it just never comes to mind but yeah. I can't imagine what it would be like to have to pay so much for healthcare.

In households with a single earner, this might still be a valid concern, even with a relatively high salary. And especially if you 1) work in a field with downward wage pressure and 2) don't have a strong support network.

To be sure I'm not saying that these concerns would be totally gone, they're just more pronounced. If you have savings you have some time in which to be unemployed. If you don't...well you're in trouble.

 

[Borg]

When I first moved to the DC area over 20 years ago, I was making well under the median and average income for the area. So, instead of going stupidly into debt, I purchased a modest mobile home and paid a few hundred a month for lot rent. I also always made sure to fully contribute to my 401Ks and put money into savings. I did tend to eat out more than I should have at the time but I wasn't struggling. The main point is that I made a conscious effort to live well within my means and not spending everything so that I had to live paycheck to paycheck.

 

[infinitebubble]

$12 for pressed juice? There is but one of the reasons of his lifestyle that needs to change... no reason a carton of orange juice for $3.50 will not suffice for several day's worth... similar to consumers who spend $5-8 for lattes... I have no affinity to this sort of spending nonsense... so of course unless the person living on $165k/yr does not change their spending habits they'll be no goal for saving or for that matter their future.