{"id":3924,"date":"2013-06-03T11:09:25","date_gmt":"2013-06-03T18:09:25","guid":{"rendered":"http:\/\/canary.kcprod.info/blog\/?p=3924"},"modified":"2022-01-11T17:12:43","modified_gmt":"2022-01-12T01:12:43","slug":"cost-of-living-silicon-valley","status":"publish","type":"post","link":"https:\/\/canary.kcprod.info/blog\/cost-of-living-silicon-valley\/","title":{"rendered":"The Advice You Need, Not The Advice You Want"},"content":{"rendered":"

Last week\u2019s post, You Need Equity To Live In Silicon Valley<\/a>, generated quite a bit of emotion from our readers. A number of people missed the point of the post, which explains the economics of living in Silicon Valley. We pointed out that it\u2019s hard to make the numbers work if you don\u2019t own equity in a business that could be worth something in the future.<\/p>\n

Unfortunately a number of people misinterpreted the article as a condemnation of Silicon Valley. Real estate is expensive in the Valley because so much wealth is created here. You can waste your time making a value judgment about whether it\u2019s good or bad that the wealth we create, combined with a low inventory, drives home prices into the millions in good school districts. The alternative to judging is figuring out how to cope.<\/p>\n

The average home price in Santa Clara County this spring is $800,000, and in the neighborhoods that are desirable because of good schools, you\u2019d be hard-pressed to find a home for less than $1.5 million. You cannot afford those home prices even on a pair of very good, upper-middle-class professional salaries, while you save for retirement and your kids\u2019 education.<\/p>\n

Equity is an attainable goal<\/h2>\n

To fill the hole, there\u2019s really one viable way that is open to anyone: equity. (You could count on inheriting money, but I wouldn\u2019t advise that).<\/p>\n

Some commenters parsed the spreadsheets we made available to look for ways to trim their budgets. But the hole \u2013 which, depending on your circumstances, could be as much as $600,000 \u2013\u00a0is just too large to address with spending cuts. Some commenters seemed to find the pursuit of an equity win tantamount to buying lottery tickets.<\/p>\n

That is far from the truth. Over the course of the first 20 years of your career, you\u2019ll probably work at five different companies. If you have reasonable judgment and prioritize choosing a company that is likely to be successful<\/a> over the seniority of your position then the chances are very good you\u2019ll earn an equity stake worth the money you need at one or more. Is an equity win a sure-fire prospect? No, but nothing in life, is. People who are comfortable living in Silicon Valley embrace risk \u2013 not blind risk, but carefully measured risk. Our unique tolerance for failure comes from the fact that we know failure is an inevitable side effect of risk.<\/p>\n

Rules of thumb no longer cut it<\/h2>\n

I didn’t intend for my post to be easy to read. I meant it to encourage you to take the risks you need to meet the goals you\u2019ve established \u2013 and I wholeheartedly support the goal of living in Silicon Valley. Nowhere in the world can you find the incredibly innovative people you find here. It\u2019s that incredible talent that makes success so prevalent.<\/p>\n

At Wealthfront we aspire to write blog posts that offer data-driven actionable advice to reach your goals. As you have seen from many of our posts, the data we present does not always line up with classic rules of thumb. Rules of thumb don\u2019t cut it in today\u2019s world. Data rules. That\u2019s what sets us apart. We promise to keep on giving you the advice you need rather than the advice you want to hear.<\/p>\n","protected":false},"excerpt":{"rendered":"

Last week\u2019s post, You Need Equity To Live In Silicon Valley, generated quite a bit of emotion from our readers. A number of people missed the point of the post, which explains the economics of living in Silicon Valley. We pointed out that it\u2019s hard to make the numbers work if you don\u2019t own equity […]<\/p>\n","protected":false},"author":4,"featured_media":7270,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1374,1278],"tags":[1328,1697,1386],"coauthors":[99],"class_list":["post-3924","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-career","category-planning","tag-career-planning","tag-financial-planning","tag-silicon-valley"],"acf":[],"yoast_head":"\nEmbrace Measured Risk In Your Budget<\/title>\n<meta name=\"description\" content=\"Cost of living in Silicon Valley is high, but taking measured risk should enable you to meet your goals for retirement and your children's education.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link 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