A Silicon Valley software engineer says there's an easy way to determine who's rich and who's not

bay areaJustin Sullivan/Getty ImagesWealth is elusive in Silicon Valley.Justin Sullivan/Getty Images

  • 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 an annual income around $400,000, the engineer says 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.
  • Visit BusinessInsider.com for more stories.


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 $400,000 a year in combined income with his wife, reported
Mercury News' Leonardo Castañeda, 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. 

Palo Alto Weekly, a community newspaper published in Palo Alto, California, surveyed more than 250 residents in in late 2017 and early 2018 and found 81 people who said they earn up to $400,000 a year 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 $67,809 and $203,428 - anything above that figure is technically upper class, but the figures aren't adjusted for cost of living.

Read more: What life is really like in the most expensive place in the US, where the typical home costs $1 million and it feels like everyone works in tech

Helen Dietz, a certified financial planner and partner and director of wealth management for Aspiriant, told Mercury News that most families earning around $200,000 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 could be about to get worse.

Silicon Valley is on the brink of millionaire mania, reported the New York Times' Nellie Bowles. 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 symbolizes 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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