I know that it wasn't the point of your post, but I think the 10x comparison is a bit off (I'm also in SA).
On paper SA is supposed to have a purchasing power parity of around -50 to -60% [1] (so, things are on average that much cheaper here than in the USA). Of course, SF is significantly more expensive than other places in the USA (although typically not more than a factor of say, 1.5 to 2x). If we add all this up, we've still only got to (at the outer edge) a factor of say 2 to 4x more expensive, not 10x. One website puts this number at around 2.6x for an SF to Johannesburg comparison [2].
The other issue is that SA has an extremely bifuricated economy (see our GINI index score), and local prices definitely also reflect this. I'm not sure to what degree the PPP measurements reflect this - I believe the PPP number is a national average, and the average prices in SA are aimed at people living close to or below the poverty line. These prices are typically not available (geographically) to your average software developer, who in SA easily falls into the (upper?) middle class category for the country. Their costs are drawn from that environment, too. Even if you choose to be frugal, the shops you find in the suburbs here are much more expensive than what the national average may be. On a similar note, appliances and high-tech goods typically tend to be along the lines of "find the item on the 'net, convert from USD to ZAR, add 10 to 20%", so we're definitely not seeing PPP-level savings there. There are also some other factors which are relatively unique to SA, such as the need for additional security (monthly payments to armed response companies, etc), growing trend (or need?) to send children to private schools, etc.
Apart from the above price factors making the PPP number unrealistic, most people here also seem to have high expectations of standards of living, e.g. expecting to buy property quite early on, driving shiny new cars, having houses which are usually > 200 m2, come with swimming pools, have large gardens which need gardeners to be hired, cleaners to be hired, etc (this is all a bit strange to me, coming from an eastern European background where we have a far lesser sense of entitlement).
So really, all I'm trying to say is, we're definitely not ~10x cheaper here, especially if you consider typical suburb shopping prices and some of our more unusual, frequently ignored costs. The high standards of living can be considered things we do to ourselves voluntarily (and as you say, sacrifices can be made there).
Thanks. I'm in Cape Town and I was thinking of rent numbers - having heard that a room in a shared house might rent for 2000$/mo in SF vs. say R2000 on the cheap end here.
That rent number isn't based on fancy accoms but since I've been in the southern suburbs all my life some would say that I'm living an entitled lifestyle (CT Southern Suburbs =~ JHB Northern Suburbs). You could obviously halve your rent in some areas but then you'd be living (at least in CT) in places with serious infrastructure issues, cable theft etc.
But I'm interested... from your background and expectations of standard of living, do you think you could make do with R5000 - R6000 /mo in SA? The same restrictions probably apply, share a room, no dependents, cheapest Net access and forget about buying new equipment on that budget.
Rent prices are specifically incredibly high in SF (check the 2nd link I provided for the line-by-line breakdown), hence it being an obvious target for saving money.
For SA, R2000 per month for rent seems very cheap to me; was that including water & electricity? I'm in the Pretoria area, which is supposed to be slightly cheaper than JHB, but then it varies greatly by area. A few years back, friends were paying around R6000 to share a 3 bedroom duplex with a tiny garden (including water & elec). A 4 bedroom house in my neighbourhood is for rent at R10000, but I'm not sure if that even includes municipality fees. In my experience, municipality costs come to around R1500-2500 per month for a house that size, with winter months spiking to ~R4000 if you don't want to freeze.
To answer the R5000 / 6000 question, I can't really imagine doing that without both major cuts in standard of living AND cutting major corners with things like (health | life | disability | car | home) insurance, retirement, etc. I've already chosen to be frugal on some of these, e.g. opting for a hospitalisation plan instead of full cover (still ~R1100 p.m. for 1 person, although I'm not getting any special discounts there), choosing 3rd party for my car over (R200 p.m. vs R1200 p.m., but then you have to have paid off your car), but even then these costs add up very quickly. ADSL line rental + cheapest package is still going to be ~R200 per month. A visit to a doctor + medication is often around R500 to R1000. Even if you only budget R20 per meal (water + pap maybe?), that still comes to almost R2000, and we're already over the budget. Most of the software developers I know seem to have expenses in the R20000 to R30000 range. Some of the things which were optional in my 20s are non optional in my 30s, and this also changes the picture.
So yeah, it's perhaps feasible if you forgo almost all safety nets and luxuries, and do not put away anything for the future. Personally, I would (and have) taken a different approach involving part-time contracting work. At the cost of reducing your spare time (I'm assuming we're talking about creating startups here, not just basic survival), it can completely change the risks involved. Again, it varies greatly, but e.g. a R200+ per hour rate is achievable relatively quickly if you're productive, and would give a R16000 per month baseline at 80 hours, or half-employment.
A nice 4 bedroom house on 2 acres is easily 10 to 20+x as much in the Valley vs most of the US. Generally, when running the numbers people adjust for this and look at the housing people actually buy vs trying to do direct comparisons.
Cars on the other hand tend to be close to the same price anywhere you live. But, insurance vary's a fair bit.
So, while directly living a 35k lifestyle in India might cost 500k in the valley, most people are willing to make reasonable sacrifices. And thare are advantages to living in a major city.
"cars, having houses which are usually > 200 m2, come with swimming pools, have large gardens"
It's a sunny country with a tendency to be outdoors, a lot of space, limited public transport, and a colonial history (another conversation). If you're from a cold ex-soviet country then there is no comparison - Australia far better.
On paper SA is supposed to have a purchasing power parity of around -50 to -60% [1] (so, things are on average that much cheaper here than in the USA). Of course, SF is significantly more expensive than other places in the USA (although typically not more than a factor of say, 1.5 to 2x). If we add all this up, we've still only got to (at the outer edge) a factor of say 2 to 4x more expensive, not 10x. One website puts this number at around 2.6x for an SF to Johannesburg comparison [2].
The other issue is that SA has an extremely bifuricated economy (see our GINI index score), and local prices definitely also reflect this. I'm not sure to what degree the PPP measurements reflect this - I believe the PPP number is a national average, and the average prices in SA are aimed at people living close to or below the poverty line. These prices are typically not available (geographically) to your average software developer, who in SA easily falls into the (upper?) middle class category for the country. Their costs are drawn from that environment, too. Even if you choose to be frugal, the shops you find in the suburbs here are much more expensive than what the national average may be. On a similar note, appliances and high-tech goods typically tend to be along the lines of "find the item on the 'net, convert from USD to ZAR, add 10 to 20%", so we're definitely not seeing PPP-level savings there. There are also some other factors which are relatively unique to SA, such as the need for additional security (monthly payments to armed response companies, etc), growing trend (or need?) to send children to private schools, etc.
Apart from the above price factors making the PPP number unrealistic, most people here also seem to have high expectations of standards of living, e.g. expecting to buy property quite early on, driving shiny new cars, having houses which are usually > 200 m2, come with swimming pools, have large gardens which need gardeners to be hired, cleaners to be hired, etc (this is all a bit strange to me, coming from an eastern European background where we have a far lesser sense of entitlement).
So really, all I'm trying to say is, we're definitely not ~10x cheaper here, especially if you consider typical suburb shopping prices and some of our more unusual, frequently ignored costs. The high standards of living can be considered things we do to ourselves voluntarily (and as you say, sacrifices can be made there).
[1] http://en.wikipedia.org/wiki/Purchasing_power_parity
[2] http://www.numbeo.com/cost-of-living/compare_cities.jsp?coun...