15 Interesting Facts About The Bay Area And Silicon Valley

The Bay Area is a supreme place to live. At least it was back in the 80s and 90s. Things have changed now. If you are new to the area or just curious about what this place is all about, Read On:

  1. Three major events helped to bring the bay area to a critical mass: The Gold Rush of 1849, the founding of Stanford and Berkeley, and the installation of military bases.
  2. Before Silicon Valley was founded, the bay area was known for fruit orchards and massive fruit canneries.
  3. The “greater” Bay Area refers to 9 counties and over 3 dozen cities with a population of 8 million people collectively.
  4. Silicon Valley gets its name from Silicon, a naturally occurring element from which computer chips are made.
  5. Silicon Valley geographically refers to the city of San Jose and bordering towns like Santa Clara and Sunnyvale where many high tech firms are located.
  6. San Jose is the unofficial capital of Silicon Valley although SF has more startups.
  7. The first tech company in Silicon Valley was Shockley Semiconductor founded in 1956.
  8. According to Angel.Co, there are appx 18,000 startups listed in San Francisco. South Bay has almost twice the number of startups as San Francisco does at 32,000.
  9. The median annual income of a person working in Santa Clara County is $100K.
  10. The median price of a home in Santa Clara County is around $1.1 Million.
  11. A normal 2 bedroom apartment in Santa Clara County will cost around $2,400/month.
  12. Bay Area weather is perhaps the most perfect. Daytime weather is usually crisp and nights are cool. We don’t get snow. Actually, we barely get any seasons.
  13. Most of the Bay Area, with the exception of SF, is extremely suburban in nature. Think plazas, Safeways, and Boba Tea shops all interlinked with one another.
  14. The City attracts mostly a younger, single crowd as its denizens. Most of these people hang out here in the weekends as the South Bay is virtually devoid of night life.
  15. SF to its residents is known as “The City”.
Silicon Valley Facts

Five Reasons Why Your Savings Account Is Being Destroyed

As you know Americans are notorious for not being able to save enough every month. We bleed out our savings every single month by costs that can be trimmed down. Let’s take a look at some of the biggest offenders:

Rent

This is your biggest expense but also a place where you can single handedly get your biggest savings from. You don’t have to move to a place with a higher homicide rate, you just have to avoid an extra fancy place. You may be tempted to move into a sleek glass skyscraper, or a newly developed gated condo community. Some people pay a huge premium to live in the core of the city. Choosing a sensible property is bound to save you thousands every year.

Car Payments

Car payments can easily be people’s second largest expense. Sports cars and luxury cars are so tempting, but they also kill the amount of money you can sock away every month. An option here is to buy a reasonably priced car on cash and go for a reliable machine so you don’t have to spend $1500 on a transmission job. I am not stopping anyone from getting their Porsche, but I’d definitely have my financial foundation solid first.

Eating Out

You really need to put a stop to this one which can be as bad as a car payment. If you read my previous article, you would know that James was spending $336/month eating out.  At my last startup, my engineer colleagues ate out every single day. These were single guys living alone. They just couldn’t be bothered to pack a home lunch. A simple lunch is an easy $10 bucks these days and you can shell out a few hundred bucks a month. Buy food from cheap grocery stores and prep it before the week starts.

Entertainment

People are in love with entertaining themselves on a whim. Movies on the weekend, $12. Caramel Frappuccino from Starbucks, $4, Drinks with the friends on the weekend, $30. A random coffee date, $15. A once in awhile concert ticket, $60. Eating out with friends and colleagues, $20. Do this for a year and now you’re out of a few thousand dollars. Watch your excess spending by setting up a spending limit for your entertainment category every month. If you exceed the amount, you’ll need to politely decline dinner invitations for the month.

Try a mechanism that you have a comfort level with. For example, you can have different envelopes for different expenditures. Seeing and visualizing cash as you take from it, can help reinforce strong saving habits.

Cable/Internet/Subscriptions

You most likely have subscription to Cable, Wi-Fi, Netflix, Hulu or some other type of pay for service feature. Cut your cable all together and check out Republic Wireless or Simple Mobile for as low as $15/month. It’s a network that’s based off of only wi-fi service. You can then subscribe to a Netflix and Amazon for $20/month.

Verdict: Trim these expenses every single month and you’ll notice a healthy bump in your savings account.

How To Save More Money When You Make Less

A middle aged man I know makes a big five figure salary each month as a specialized Doctor. He has no sizeable savings and a very small retirement account. How can someone blow through such a massive salary? To be honest, you just have to make stupid decisions and keep on repeating them. He has a mortgage on a million plus dollar house, pays property tax, he has 3 car payments, and blows money on random novelties. He lives day to day.

Nearly no paycheck can support a decadent lifestyle that does not respect money.

Jack vs James

Let me illustrate a simple point using the chart below. James makes more money but has an extravagant lifestyle while Jack makes less money yet lives simply. James lives in a nice part of town in a newer high rise condo. James also eats out at work for lunch every day and also eats out on the weekends. He also likes fast German cars so he leased a BMW with his good credit and high salary. For entertainment, James goes out to concerts, movies, dates and in general likes a good time. He also likes to buy branded clothing at trendy stores.

James makes more, but he also spends more too. Jack comes out ahead in the long term.

At the end of every month, James saves $2,146 and Jack saves $2,539. Even though James makes considerably more money, it is Jack who saves nearly $400 more every month. If you stretch that over one year, James has been able to stash away $4,700 more!

There are so many people in the world living like either Jack or James. The person that makes more money seems to be more financially secure but what is not apparent is that he has a very low savings rate. This is an illusion as it is just the perception of being more well off. The fact is that overspenders are simply better at looking wealthy rather than being wealthy. I am not for living a minimalist or austere life. But in the beginning you must sacrifice so that in the end you have a financial foundation. Otherwise you are living paycheck to paycheck.

Here is a little infographic for you to understand the differences…

Higher Income Doesn’t Always Translate To More Savings

Verdict: A person with a lower paycheck can put more in their pocket every month over an extravagant spender. It is better to save now and spend later, otherwise you are only living paycheck to paycheck.

Why Its Insanely Important To Save in Your 20s and 30s

The Facts

The fact of the matter is that when you are young, time is on your side. And the more time you can set aside for yourself, the more money you can save. If you started saving at 35 instead of 25, you would have lost 10 years of massive savings. Your savings rate would need to be much higher to have the same savings as that smart 25 year old. Just take a look at this simple article from Business Insider that shows the ending savings balance of a 25 year old vs a 35 year old. The difference is staggering.

It’s All About Habits

If you are in your 20s, chances are that you aren’t earning much. But you probably don’t have many expenses either. Saving in the beginning will be painful. And many times you will go back to your old habits of wastefulness. But I assure you, that if you are resilient and you keep fighting the urge to burn your cash, you will eventually enter a lifestyle where saving will become a part of your personality. Once your savings build the urge to continue will increase. Losing weight is a concept that is almost identical to saving money. You start, you stop, you start, you stop. But once you do it for long enough, only then do you see a slimmer self. Habits are best formed earlier in life. They are stored in a deep part of the brain which we don’t forget.

What You Should Do

Every time you earn a dollar, the first thing you need to do is to deposit it in your bank. If you make these small deposits on a continuous basis, you have now created a habit. You will need to reinforce this habit until you are living a continuous life of a smaller footprint. Most expenditures are wasteful: TV, cable, internet subscriptions, eating out (huge one!), random frappucinos, clothes shopping, makeup shopping, shoe shopping, and gadgets shopping. We all splurge on something that we really love. A bunch of small cost savings amount to a big number at the end of the day.

Verdict: It is painful to begin saving. The harder you try the quicker you will develop this skill. Bite the bullet and save now so that you can live comfortably later.