How I saved 90% of my income working at Facebook

When you're young and single with little family responsibilities you have an unfair advantage to live as cheaply as possible. This is what I did and I recommend it to everyone.

I didn’t technically pay rent until I was in my mid-20’s.

This is when I moved to the Bay Area to work at Facebook. For the first few years after college, I lived and traveled 100% of the time for work. I worked at a consulting program where they paid for almost everything. Housing, food, flights, and travel. I saved nearly 100% of my income. My only expenses were my student loans, clothing, and alcohol … lots and lots of alcohol. My early 20’s were a fun time. I pretty much quit drinking 5 years ago and my life has improved substantially (but, that’s for another post).

But now, as I moved to the region with the highest cost of living in the world, my excitement was also faced with a heavy dose of reality. I was stunned by just how expensive it was to live. During those consulting years, I had been living in upscale apartments, out of a suitcase in nice hotels, and I was able to live by myself. But in San Francisco, I would have to pay almost $4,000 to have a place to myself. Going from paying $0 in rent to $4,000 is a tough pill to swallow.

At this point in my life, I was really focused on continuing to save, invest, and grow my money. My girlfriend at the time (and now, wife) was going to move to San Francisco in a couple years, so I decided while we were long-distance dating I would make small short-term sacrifices for long-term gain. I put my ego aside, found roommates, and lived in an area that most of the young tech people wouldn’t go near.

I found a house in East Palo Alto with four other roommates. When people think of Palo Alto, they think of the homes of Venture capitalists, billionaires, and the Tech elite. You may have seen the cool coffee shops and nice downtown area on the show Silicon Valley. Palo Alto is beautiful.

East Palo Alto is definitely NOT Palo Alto. East Palo Alto was the complete opposite of that. But, because the Bay Area housing situation was so disastrous, those homes in East Palo Alto were still worth a minimum of $1M. Regardless, I was able to move into one room in a house with 4 other roommates I found on Craigslist and pay a total of $1,200 a month. Which is the lowest I’ve ever heard of someone paying rent in the Bay Area.

While my housing situation was figured out, there’s a lot of other expenses that could pile up. Fortunately, I took advantage of the benefits of working in tech.

At Facebook, you had all you can eat food. While this was typical in Silicon Valley and Tech, it was extremely surprising to me. I remember my first interview at the Facebook campus felt like I was visiting Disney World for grown-ups. The weather was beautiful, the campus was packed with people in their mid-20’s, everyone was dressed down in t-shirts, and I saw at least 50% of people eating ice cream. It felt like my college tour all over again. But this time, I actually got to make money.

You see, in my previous company I was used to shitty salads in Aramark cafeterias in the middle of nowhere in Ohio, Connecticut, and Alabama. Now, I had the luxury of 5-star chefs cooking breakfast, lunch, dinner, and all the snacks I could ever imagine. And I ate it all up. The only time I spent money on food was on Saturdays when I would go to Whole Foods in Palo Alto and get a few meals to cook for the weekend.

Instead of getting a fancy gym membership, I used the Facebook gym for free. I bought a used car that I paid $300/month for. I never really bought any clothes. I stopped buying all of the new gadgets and toys that I loved getting so much, because I realized I didn’t really need them.

My only real expenses were on books and traveling to New York to visit my girlfriend every few weeks for a weekend.

For almost two years, I made sacrifices in my living situation and lived a frugal lifestyle because I knew I had a small window to be able to make those sacrifices. When you get married, you don’t want to live so frugally and you definitely don’t want to live with roommates you don’t know. So I knew by making these choices for a couple years, I would be able to live more comfortably when I was married.

So how impactful was this? Here’s a breakdown of my actual monthly expenses during those years.

$3k a month. In the Bay Area. Unheard of. All of those savings I accumulated during these years provided a strong foundation for compounding returns, various investment opportunities, and most importantly: freedom and flexibility.

Now that I’m married, my wife and I still keep a general sense of what we spend so things don’t get out of hand. But we’re able to live a lifestyle that’s not only optimized around being cost-conscious.

Moral of the story? Take advantage of your youth. When you’re graduating college you’re already accustomed to a life of living with roommates, not living in the nicest place, and making some general sacrifices because of money. Keep that going while you’re young. Live inexpensively, save money, take advantage of all the opportunities that are available to you, and take smart risks. It will benefit you greatly within a few years and for the rest of your life.

The other thing I did during those two years was not waste any time outside of work. I knew I wanted to start my own business so I learned and tried a bunch of different things. But that’s for another post.