How Much Annual Salary Would You Have To Make To Be Considered Well-off In San Francisco?

How much annual salary would you have to make to be considered well-off in San Francisco?We all know that San Francisco is an expensive place to live. San Francisco is second only to Manhattan (not New York City) as the most expensive area in America.

So much do you have to make in San Francisco to feel well-off? For example, the Department of Housing and Urban Development (HUD) says that a family of four making less than $100,000 a year is considered low income.

Defining Well-Off In San Francisco

Let’s define “well-off” as upper middle class. Here are some features of the upper middle class:

  • Having a job that can comfortably, not extravagantly, support a family.
  • Being able to afford a safe car to commute to work and reduce injury and fatality from accidents.
  • Being able to take 2 – 4 weeks of vacation a year with the family.
  • Being able to retire when Social Security kicks in at 62.
  • Being able to save enough in your pre-tax retirement accounts in order for Social Security to be enough.
  • Being able to contribute money to after-tax investment accounts to help generate some passive income along side your active income.
  • Being able to send your child to college, since college is fast becoming a minimum educational requirement to get many different types of jobs.
  • Being able to go out on dates and see friends once a week without feeling immense financial strain.
  • Being able to care for aging parents when they need assistance.
  • Being able to eat healthy to avoid being one of the 60 percent who are overweight in America.
  • Being able to pay no more than 5X your household income for a two bedroom house given the national median multiple is 5X.
  • Does all of this sound fair for being “well-off”? If so, here is the budget of a household of three (dad, mom, child) earning $300,000 in San Francisco.

$300,000 essentially gets you to this well-off lifestyle we all feel we deserve. It’s not an extravagant lifestyle by any means, but it is comfortable. Check out this detailed chart I created highlight a family's budget on $300,000.

Living a middle class lifestyle on $300,000 a year

For more details of the budget see: Why Households Need To Earn $300,000 A Year To Live A Middle Class Lifestyle Today

Once you start earning about $500,000 a year as a household, you’re feeling pretty good living in San Francisco. You can save more for retirement, pay for private school, and live in a bigger house.

Life isn’t cheap in San Francisco. But at least the pay is relatively high, otherwise, nobody could afford to comfortably live here!

Time To Invest Elsewhere

Let's be real. Consistently earning $500,000 is hard to do. You'll probably eventually get burned out. It's easier to make $500,000 between two people. But if you have a family to take care of, then at least one of you will want to be a stay at home parent.

What's the point of having a child and then paying someone $36,000 a year to take care of him or her? That's just silly.

I am seeing obvious signs that people are moving away from San Francisco and other expensive coastal cities to the heartland of America. Why pay $4,500 in rent for a two bedroom apartment when you can get a 4,000 sqft luxury home for less in Austin? Technology has allowed us to be mobile.

I’m putting my money where my mouth is and sold an SF rental house for 30X annual rent and re-invested $550,000 of the proceeds in various real estate crowdfunding projects in the Midwest and South with much lower valuations and 3X – 5X higher net rental yields.

Good luck surviving and thriving in San Francisco folks! I would make your fortune and relocate to a lower cost of living area. America is a huge place to explore and enjoy.

There is plenty of investment opportunity outside of San Francisco. The key is to find the next San Francisco and invest early before everything gets to crazy expensive!

Check out my favorite real estate crowdfunding platform, Fundrise. They were founded in 2012 and are the creators of the innovate eREIT investment fund. They are free to sign up and explore.

About the Author: Sam worked in investing banking for 13 years. He received his undergraduate degree in Economics from The College of William & Mary and got his MBA from UC Berkeley. In 2012, Sam was able to retire at the age of 34 largely due to his investments that now generate roughly $250,000 a year in passive income. He spends time playing tennis and taking care of his family. Financial Samurai was started in 2009 and is one of the most trusted personal finance sites on the web with over 1.5 million pageviews a month.