Moving from the Midwest to NYC. Help!

March 16, 2008 11:33 AM

I'm trying to make a big decision about a big change in my life. If all goes well, I could be going from working at a giant corporation and living in the midwest to joining a small internet start-up in NYC. What questions should I be asking the start-up? And I know cost of living in NYC is high. I'm looking at tripling my rent--at least! How much do I need to earn to be comfortable, with money in my pocket and in savings?
posted by HeartAuntBee to work & money (20 comments total)

Ask about their finances. Ask as if you were an investor, because if it's a small startup, you are an investor (those stock options you're likely getting). Be polite, but ask how their business is going, what their burn rate is, what their prospects are, who their investors are, etc. You want to get a sense whether: a) they have a chance to make it big, and b) whether there's a good chance they'll fold in the next six months.

After that, ask about pay and benefits.
posted by zippy at 11:58 AM on March 16, 2008

To my mind the main question with a start-up is Do you have enough savings to carry you through to the next job if the startup folds.
Next question is, as zippy points out, how solid the start is.
Then worry about your living expenses vs pay.
posted by anadem at 12:10 PM on March 16, 2008

Read all of the posts from the last nine months about carrier planning and entrepreneurship from Marc Andreessen's blog. Twice. He is going to be a charter member of the Internet Startup Hall of Fame.
posted by shothotbot at 12:10 PM on March 16, 2008 [3 favorites]

Zippy's point about being an investor is definitely on target. More than just being an investor in terms of stock options, you're investing your time and energy into this particular company. You don't want to invest that in a company that's going to tank in a year because then you have the hassle of finding a job again. Don't take them at their word, either. Dig into the other companies in this market area and see what they're doing. Startups are more than a job, and it really helps if you believe that what you're doing is awesome.

Also, you'll want to calibrate your expectations about work load. Are they there 7 days a week for 10 hours? Some startups are run in a way that doesn't take over your life, but some early stage ones can be very demanding.

As for living in NYC, I can't help you much. Ask them about where they're living + how much you should expect it to cost. They'll probably be helpful. Do check up on benefits, too.

Good luck! Sounds like a lot of fun.
posted by heresiarch at 12:19 PM on March 16, 2008

when i was in new york, i thought that the minimum necessary to live simply but not ascetically without a roommate in a decent neighborhood and be able to go out on weekends and take a vacation or two, and be able to save, was $40K, depending on your goals and needs.
posted by thinkingwoman at 12:26 PM on March 16, 2008

and by simply, i mean a studio or small one-bedroom and no car (you truly won't need it--i didn't own one for 6 years).
posted by thinkingwoman at 12:28 PM on March 16, 2008

Seconding thinkingwoman, I think $40-$50k is a good minimum. If you want to fully fund a 401k and IRA then I think around $60k.
posted by charlesv at 1:29 PM on March 16, 2008

How much do I need to earn to be comfortable, with money in my pocket and in savings?

Bare minimum - to live on your own is 50k. Studios in Astoria are 850-900. One bedrooms in northern Manhattan (above 170 st) are 1250. Studios on the Upper East Side are 1300.

There are no walmarts here so your beauty/hygene/household goods are going to cost twice what they do in the midwest.

The cost of living in NYC is that everything just costs MORE - a lot more and you get a lot less for what you spend.
posted by Stynxno at 1:37 PM on March 16, 2008

If you do it smart -- Queens or Jersey City close to the train, with a roommate -- you can easily make it on $36k gross. The only real sacrifice you need to make is not eating out on your dime on weekdays -- eat on the office's dime if you're working late, or go home and cook dinner if you're getting out at a good hour.
posted by MattD at 1:47 PM on March 16, 2008

Remember, the cost of living is high in NYC, but a LOT can be made up in the fact that you don't need a car or any of its related expenses. My monthly commuting cost is $56 for an unlimited monthly metrocard (I get it pretax with work commuter benefits). Compare that to the cost of gas (never going down), insurance, maintenance, parking, etc, and you end up way in the positive.
posted by Mach5 at 1:54 PM on March 16, 2008

Stynxno has it right for the bare minimum definition -- if you want to live well and save a considerable amount, you'll want to aim higher. I've been reading the other answers with interest, but I think you need to take a good look at compensation and aim quite a bit above $36-40K, especially if this is not your first job.

There's absolutely no need to sell yourself short -- startups are high risk, and high risk should pair up with high reward. If you're working insane startup hours and in a pivotal position, the company should be taking care of you with either decent pay, perks, and profit-sharing. Barring those, you might be offered low initial pay but the possibility of a huge advancement and matching compensation down the road if the startup proves successful, and that's entirely up to you to decide if that option is for you. $40K is simply not enough to live on your own and be able to build up your savings in a meaningful way.
posted by mochapickle at 2:38 PM on March 16, 2008

What is your skill set? That will inform salary.

When you find out how many options your getting, also ask how many outstanding options there will be. If they give you 10,000 options than issue 1,000,000,000 options that's not worth all that much.

Find out their burn rate, as mentioned above, and their funding and see how long they can last in the worst case scenario.

Ask what their monetization plan is--i.e. how do they plan to make money? Does it sound reasonable to you? If you tell your friends and family the plan, does it sound reasonable to them? If it sounds absurd, it probably is. If it is advertising based, you really better make sure they know what they're doing.

Who is the competition? Why is your startup going to be better than them?

Finally, find out about the other people. Is this the CEO's first startup or his fifth? What about the other guys. Are they smarted than you or dumber than you? I just left industry to go to a startup and one of the huge convincing factors was the awesome caliber of people I was going to be working with.

And remember: only 1 in 3 startups succeed.
posted by jeffamaphone at 2:49 PM on March 16, 2008

And if that doesn't work out, there are a metric tonne of start-ups in Silicon Valley. If you have the skills, start looking that direction.
posted by jeffamaphone at 2:50 PM on March 16, 2008

I'd say the 40k to 60k range depending on what sort of commute you are willing to have, whether you are ok with having roommates, and how much of a fan you are of the nightlife and eating out. However, I do have one friend who lives off 24k, but she lives way out in Brooklyn, has a roommate and lives with him bf, and works constantly and eating spaghetti every night, and still I don't know how she does it.

For savings and living comfortably? I've been told it's more like 55k to 80k. Don't forget taxes are really high NYC, so take that into account when looking at an offer.
posted by whoaali at 2:56 PM on March 16, 2008

In my (about five-year) experience, when people say that living in NYC is expensive, they really mean that:

a) Rent in any given neighborhood is much higher than it would be in a similar (safety, atmosphere, amenities, convenience of commute) neighborhood in another city.

b) Eating out is so convenient that it's almost understood that you'll do it constantly, and means that you'll spend a lot of money on food.

c) New York is full of interesting things to do, many of which cost money. Presumably, part of the reason you're here is to do those things, so you will spend money on them (plays, bars, concerts, etc.).

d) Income taxes are high.

However...none of this is written in stone. If you live in the ghetto, commute for 90 minutes in each direction, cook all your own meals, and never go out on the town, you'll be fine making less than $30k. But then, the argument naturally goes, what's the point of living in New York?

Another personal observation that I'd like to pass along. There are a lot of really, really rich people living in NYC, and the more money you make, the more you realize just how steep the curve is. I make well over 80k, and there are plenty of places here that I am too poor to live, plenty of restaurants that I am too poor to eat at often, plenty of stores that it depresses me to shop in because of how little I can afford.

When people talk about making enough money to be comforable in NYC, part of that comfort is really psychological... most people who live here are heavily invested in the cult of NYC as the greatest city on Earth. If you don't buy into that cult (and I guess I'm rare in that I still don't, after all this time), then it's hard to feel like you're making enough money.

It is difficult for me to imagine how anyone can live 'comfortably' in this city and also have savings, unless they were earning well over 150k. But if your definition of 'comfortably' is substantially different from mine, all the best to you. But I'm from the midwest too. :)
posted by bingo at 3:36 PM on March 16, 2008 [2 favorites]

One thing to keep in mind regarding start-ups is that the benefits often suck. So consider that you may be paying for pretty much all of your own health insurance, and saying goodbye to things like vision and dental plans, retirement plans, TransitChek, etc.

And be very wary of shitty small company accounting practices: I worked at a tiny place years back that fucked up my withholding so dramatically that I'm still getting angry letters from the IRS about it.

All of these things cost money, of course.
posted by emmastory at 6:44 PM on March 16, 2008

Though, if you have health insurance now, you can keep it for 18months under Cobra (generally -- ask your current HR department for details since I am not an expert) as long as you pay for it. If your start-up doesn't have a health plan, you can ask for them to reemburse your Cobra payments.
posted by jeffamaphone at 7:20 PM on March 16, 2008

Wow!
A lot of good information so soon! I love you, MetaFilter!

I should have mentioned that I think this start-up is going to be a pretty safe bet. You can't really count on anything in a start-up, I know, but they have good, solid investors and great products. And really, how much can you count on employment in a big corporation? You never know when they might decide to do massive layoffs.

As for comfortable living . . . I'm by no means high-maintenance. I just don't want to have to worry about whether or not I'll be able to pay the bills next month. I want to be able to live without a roommate. And if I'm living in/around New York, I want to be able to enjoy it. As for savings, I'm mostly thinking saving for trips and presents for holidays. I'm taking the risk that the start-up is going to pay off and I can use that for retirement.

The Andreesen site had a lot of interesting information. COBRA sounds great, but I'll have to do some more research. I don't think I qualify for that if I'm leaving the company.

Thank you everyone for your help. But keep it coming--I've got a wall of Post-Its that I'm trying to map out for my next conversation with the company!
posted by HeartAuntBee at 8:14 PM on March 16, 2008

jeffamaphone:If your start-up doesn't have a health plan, you can ask for them to reemburse your Cobra payments.

If a startup doesn't have the resources or desire to provide a health plan, I can't possibly see them reimburse cobra payments.
posted by dr_dank at 8:29 PM on March 16, 2008

If a startup doesn't have the resources or desire to provide a health plan, I can't possibly see them reimburse cobra payments.

Nope, I have first hand knowledge of start-ups that do this. Getting a health plan setup is a pain in the ass and takes time. If you need to hire good people, and hire them now, and they need health insurance, this is a simple solution for everyone involved.
posted by jeffamaphone at 9:20 PM on March 16, 2008