I'm a 31 year old entrepreneur. Here are my rough living costs. I've done them on a personal basis. The household costs (including my wife) are double this. I'm not saying I'm typical, but I am saying that it doesnt need to be as expensive as the article claims.
Rent/Mortgage/Prop Tax: $765 (single family home in SF, including office)
Utilities: $80 (fast Internet)
Insurance (car, home): $60 (free health plan through wife)
Transportation: $10 (bike)
Gas: $50
Food: $150
Fun: $200
Clothing: $50 (and it shows..)
Grand Total: $1365
Yup, but bear in mind that's between two people ($1300 per month), and after tax break (so looks like $2000 on paper, but is actually only $1300 out of pocket). It's on a 3.75% rate (7 year), and excludes principle repayment (which is not a cost). Includes property tax. So it's very comparable to rent.
While principle repayment is not a cost, it's a cash flow, so you can't exclude it when you're trying to figure out if you can cover your monthly nut. Similarly, you can't include the present value of expected future income from the sale of the business into your current estimate of what expenses you can cover.
Principle repayment is optional (when taking a loan). It only makes a small difference to interest rate [1]. So for the purposes of discussing cost minimization, it is legitimate to exclude it.
No, he's only counting interest on the loan, and his wife is paying half. It's not even remotely a fair comparison to a single founder living in the city.
A more realistic "cheap" lifestyle in SF is probably $2500 a month if you're living on your own. And renting is substantially cheaper than owning here, unless you play stupid accounting games to pretend that you're not actually spending money.
What games would those be? What I did was: a) exclude principal repayments (they are not a cost, they are an investment. They are also entirely optional - any house buyer can take an interest only mortgage). b) factor in the tax advantage (which is actual money in my pocket, either by paying less withholding, or by getting a check from the IRS at the end of the year).
Damn Dude. You cost double what I do in the same city. I live in a nice-sized apt in Manhattan, eat well, and go out.
- Get a roommate and cut out nearly half the rent and half the utilities (two bedrooms aren't much more in a walk up).
- You're clearly eating almost all your meals out. You could probably cut this by 2/3 if you went to a Trader Joes and ate 3/4 of your meals at home or made lunch.
- Cut out the maid. Buy a nice vacuum and some cleaning supplies.
New Total: $1,950. Just saved you $19k next year.
Pro-tip: Take dates to Thai restaurants in Manhattan. Many have great ambience and you'll spend ~$30 with a drink each.
Super Pro-tip: The girls you want to date in the long run will be happy to pay their share. :-)
This actually pretty accurate for manhattan. Though you've missed some biggies: health insurance ($300) and iphone: $110 and hosting,netflix (they addup) etc.
And the biggest expense in manhattan is :
taking dates out for dinner ($50 a pop usually so about $300 a month) + drinking and hanging with friends ($300 a month easily).
Comments
I'm a 31 year old entrepreneur. Here are my rough living costs. I've done them on a personal basis. The household costs (including my wife) are double this. I'm not saying I'm typical, but I am saying that it doesnt need to be as expensive as the article claims.
And I'm not living on Ramen!You have a home in SF for $765/month? That's ridiculously low. The rest of your expenses are low too, well done.
Pretty sure he said that with his wife, household expenses are twice that. Rent is more like 1530. Which is still create for a house in SF.
Yup, but bear in mind that's between two people ($1300 per month), and after tax break (so looks like $2000 on paper, but is actually only $1300 out of pocket). It's on a 3.75% rate (7 year), and excludes principle repayment (which is not a cost). Includes property tax. So it's very comparable to rent.
While principle repayment is not a cost, it's a cash flow, so you can't exclude it when you're trying to figure out if you can cover your monthly nut. Similarly, you can't include the present value of expected future income from the sale of the business into your current estimate of what expenses you can cover.
Principle repayment is optional (when taking a loan). It only makes a small difference to interest rate [1]. So for the purposes of discussing cost minimization, it is legitimate to exclude it.
[1] http://www.schwab.com/public/schwab/banking_lending/mortgage...
Pedantic nitpick:
Principal is the subject of a loan, or the leader of a school. Principle is an idea that people may hew to and argue about.
Could those who are down voting please explain why.
Im looking for apartments in SF right now and can't find anything (decent) under $1700 for a 1 bed 1 bath. Maybe I just have expensive taste:).
No, he's only counting interest on the loan, and his wife is paying half. It's not even remotely a fair comparison to a single founder living in the city.
A more realistic "cheap" lifestyle in SF is probably $2500 a month if you're living on your own. And renting is substantially cheaper than owning here, unless you play stupid accounting games to pretend that you're not actually spending money.
>unless you play stupid accounting games
What games would those be? What I did was: a) exclude principal repayments (they are not a cost, they are an investment. They are also entirely optional - any house buyer can take an interest only mortgage). b) factor in the tax advantage (which is actual money in my pocket, either by paying less withholding, or by getting a check from the IRS at the end of the year).
I'm jealous. 28 and in NYC here.
Damn Dude. You cost double what I do in the same city. I live in a nice-sized apt in Manhattan, eat well, and go out.
- Get a roommate and cut out nearly half the rent and half the utilities (two bedrooms aren't much more in a walk up).
- You're clearly eating almost all your meals out. You could probably cut this by 2/3 if you went to a Trader Joes and ate 3/4 of your meals at home or made lunch.
- Cut out the maid. Buy a nice vacuum and some cleaning supplies.
New Total: $1,950. Just saved you $19k next year.
Pro-tip: Take dates to Thai restaurants in Manhattan. Many have great ambience and you'll spend ~$30 with a drink each.
Super Pro-tip: The girls you want to date in the long run will be happy to pay their share. :-)
How much do you pay in rent and in what part of the city? Even a decent place in the city will cost you $1300 per person.
Upper East Side. $950 per person for a nice corner unit in a walk up.
Mostly I want to dispel the idea that New York is prohibitively expensive for startups. It's not if you're resourceful.
Cool. I'm looking for a June 1st apartment share - know anyone who might be looking for a roommate? Around $950 would be awesome.
My email is railsnoob at yahoo dot com.
Thanks.
you need a maid for your tiny studio? you spend $100 in clothing every month?
$400 dollars a month for said tiny studio? How about learn to pick up after yourself and pay someone $50 to clean the bathroom and dust once a month.
I think he means laundry + ironing service + some clothes.
This actually pretty accurate for manhattan. Though you've missed some biggies: health insurance ($300) and iphone: $110 and hosting,netflix (they addup) etc.
And the biggest expense in manhattan is : taking dates out for dinner ($50 a pop usually so about $300 a month) + drinking and hanging with friends ($300 a month easily).
I spend about 1/4 of that with same quality of life in Colombia (in a great city) and I lived in NYC.
Oh, and I'm 32.
This looks more like my expenses.