Having a six figures salary at Facebook still cannot provide a luxurious lifestyle in the Bay Are
A six-figure salary may seem like the solution to all financial troubles to most working class families. To top that, if you get to work for the world’s largest online social networking service, Facebook, it is like a dream come true. Anyone would imagine working for Facebook and drawing a six-figure salary would allow one to live a luxurious and comfortable life in the Bay Area.
That’s not true. According to Matt Kulka, a former engineer at Facebook, after serving the company for five years had to quit the job. Reason? Didn’t he like working at Facebook? No. The reason was that he couldn’t afford to live in the Bay Area anymore, even on his generous six-figure Facebook salary.
Initially, a resident of Arizona, Matt moved to Silicon Valley along with his wife and infant daughter in 2010 after he got a dream job at Facebook to work on the site reliability operations team.
Dreamt of working in Silicon Valley
As a teenager in the 1990s, Matt was always fascinated and dreamt of working in the Silicon Valley with him having images of people spending their free time in front of computer screens just to get the darn thing to do interesting things. Back in those days, it was very uncommon for people to have access to computers.
When Matt was just 17 years old, he got his first job in tech at a Cleveland-based internet service provider. In the year 1998, Matt developed great admiration for companies such as Yahoo, eBay, Sun Microsystems, and Apple that were formed during the early commercialization of the internet.
Finally, the pull of Silicon Valley became too strong for Matt to resist and he moved to San Francisco in 2004 with only his computer and a few cardboard boxes. At the age of 23, he was making a decent sum for himself by working remotely for a company based in New Jersey. But, he soon realized that the actual living costs add up if you’re not living under a rock and he started looking for a new job with an increase in salary. However, as the valley in a recession at the time, he wasn’t even able to get an interview.
As a result, Matt relocated to Arizona again, found some new work, and honed some of his system administration chops in the intervening five years.
It was in 2009, when Matt for the first time got too close for working for a Silicon Valley company when he was hired by PayPal to be a part of its Scottsdale, Arizona, network operation centre.
Working at Facebook is like Disneyland for tech folk
When Matt was offered the Facebook job, there were lot of questions surrounding the same such as will he able to survive in a place where almost everyone is imported top-tier talent, or what if this job too turns out to be a failure like the one in San Francisco? Finally, after weighing the benefits and concerns with his wife, and with his 3-month-old daughter in tow, Matt decided to take up the dream job at Facebook and be a part of the pre-IPO company.
While working at Facebook, Matt realized the offices are like Disneyland for tech folk with huge open stretches of adjustable desks and large monitors, micro kitchens filled with rotating snacks and beverages daily, games like chess and ping-pong, and, of course, an army of culinary staff that cook up daily menus and operate mini restaurants across its main campus, all free operating as a benefit. Matt along with his another employee was able to make an on-site arcade that became one of the more popular stops on campus tours.
The only drawback: It’s difficult for a family of four to live in the Bay Area on just one income even if it’s a generous one
The tremendous costs of living (primarily real estate) in top-tier markets such as Silicon Valley, New York City, Seattle, Boston, London was a major drawback, as the social media giant has made the strategic decision to only open engineering offices in places like these where it believes it can attract the best talent.
The company requires you relocate to a city with an engineering office unless you are joining in as a top-level engineer at the company. While Facebook pays well in absolute terms, but base salary for a single-income family in relative terms means living somewhat economically in any of those areas.
The first year or two living-wise was a little rough, as Matt’s salary was about on-par with what he was making at his last job in Phoenix. However, housing costs were significantly different. He had an infant and thankfully one of his friends got to roommate with them in a house until they got more settled. Not the best living situation, but a small sacrifice for a “dream job”. This continued until late 2012 when the lock-up period expired post-IPO and Matt had some liquid cash.
Matt could finally rent a house suited to the needs of their family, no roommate. While it was great, it also meant even larger housing costs. In order to afford that, selling stock became necessary every quarter it vested.
However, the sum of money that Matt got from the FB stock wasn’t life-changing. During his entire 5 years, his full allotment of stock numbered only in the thousands of shares. In order to be able to change his family’s living situation, Matt sold a large chunk of those shares that had vested over his first few years at the first opportunity when the stock hovered at its near lowest, $20/share. That was a very volatile time; he would rather have had some money in pocket than risk FB stock catering even lower.
For those unfamiliar, companies tend to use stock grants as a carrot to get new employees on-board; so, your initial grant is typically the largest. You get refresher grants, but the number of shares included in those is calculated by the stock price when they are issued. So, as Facebook’s stock price increased, the benefit to those grants gets smaller and smaller.
Fast-forward to 4 years in, the last of Matt’s initial grant vested and the additional money he was getting from those grants started to dry up. He was faced with the real estate market of 2015 in the Bay Area. In order to just continue onward, Matt realized that he needed to make some downgrades in his quality of living.
As a result, Matt was left with very few options: either move to a bad part of town where rents are cheaper, move into an apartment, relocate to another city with a Facebook engineering office and an equally expensive housing market, or leave the best job he may ever have and return to Arizona, where his wife and he were happiest living.
For a lower-mid range worker like Matt, his dream job couldn’t make up for the cost of living in the expensive areas that Facebook dictated him to live, and at the same time maintain his middle-class lifestyle. Matt decided to return to Arizona along with his family (which now included a second child) while the real estate is still higher than much of the country. However, the real estate there still had the possibility of ownership someday for him.