- Wealth is elusive in Silicon Valley, and one software engineer told Mercury News how he determines whether someone is wealthy: Do they have to work to live?
- Despite earning a combined annual income of about $US400,000 with his wife, the engineer said he doesn’t qualify.
- That’s because the cost of living in the area has skyrocketed, and even families earning a solid six figures might not be able to send their kids to a top school, live in a larger home, buy a new car, and save for retirement.
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Silicon Valley does not settle when it comes to innovation, disruption, or money.
In the golden era of tech, the goal posts are continually shifting. As far as being “wealthy,” the threshold is as elusive as ever.
One Palo Alto-based software engineer recently shared with Mercury News his litmus test for whether someone is wealthy: Do they have to work to live?
The engineer, Marvin Chan, earns $US400,000 a year in combined income with his wife, Mercury News’ Leonardo Castañeda reported, and he doesn’t consider his family wealthy by his own standard.
“I know that, given our income, we would be considered wealthy in other parts of the nation,” Chan told Mercury News. “But in the Bay Area, I think we’re just kind of middle class. We have a good salary, but we have a lot of expenses.” Chan drives a 12-year-old Nissan and usually takes his family on camping trips for vacation, Castañeda reported.
“We have a mortgage. We know that there will be more expenses in the future,” Chan said. “I don’t think we have the luxury of not working.”
Chan isn’t alone in feeling like his mid-six-figure income doesn’t count for much in Silicon Valley.
The Palo Alto Weekly, a community newspaper published in Palo Alto, California, surveyed more than 250 residents in late 2017 and early 2018, and found 81 people who said they earn up to $US400,000 a year and defined themselves as middle class, Business Insider previously reported.
To be sure, the financial markers to be considered middle class in Silicon Valley and Bay Area cities are higher than other parts of the US. By the Pew Research Center’s definition, middle-class Americans earn 67% to 200% of the median household income. In San Francisco, that’s annual earnings between $US67,809 and $US203,428 – anything above that figure is technically upper class, but the figures aren’t adjusted for cost of living.
Helen Dietz, a certified financial planner and the director of wealth management for Aspiriant, told Mercury News that most families earning about $US200,000 wouldn’t be able to send their kids to a top school, live in a larger home, buy a new car, and save for retirement – something has to give.
Costs don’t let up the closer you get to the heart of Silicon Valley. Goods and services in the San Jose metro are about 27% more expensive than the national average, making it the most expensive place to live in the US, Business Insider previously reported. And it may be about to get worse.
Silicon Valley is on the brink of millionaire mania, TheNew York Times’ Nellie Bowles reported. Several tech startups have gone public this year, or are gearing up to, and the cash infusion to employees and early investors will turn thousands of people into millionaires virtually overnight. Likely to follow, Bowles wrote, is an unprecedented “housing madness” and “spending wars.”
Ultimately there isn’t one net worth or income figure that symbolises wealth in Silicon Valley, Dietz told Mercury News: “Wealth isn’t necessarily a number. Wealth translates into health and happiness and freedom – and choices.”
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