Cornell vs Cambridge vs SMU

It's more complicated than that. There is another group that doesn't dispute California's authenticity, but doesn't trust his conclusions i.e., he is deluding himself into believing that he is better off in Singapore to justify not making it in Silicon Valley. It's OK to help himself heal mentally, but not so good when giving advice to the majority who may not have his privileges - a rich family living in private housing with flashy cars

"Non sequitur" simi?

Beware this is a *Long* read:

I mentioned earlier to California that I might take a stab at evaluating working in SG vs. US as a fresh graduate. I'll try to stick to what is more common and perhaps in some ways what was applicable to me (so it may not be completely applicable to California’s situation). Please take note that both the US and SG have very different systems and you may have different priorities as well. My intention would be geared towards a Sgn with a longer term goal of eventually settling in SG and I’ve also used slightly higher but very possible salary estimates, should you come from a top graduate school, entering the “right” field. Where there is uncertainty, I will try to take a conservative estimate (ie, less $). I admit that I am discounting non-financial motivations for staying in the US or returning to SG (You might loathe/love having to live with your parents, for whatever reasons). Here's what I came up with:

Assume that you draw 75K USD/annum and receive a 5K USD signing-on/relocation/etc bonus. After subtracting tax exemption for single, unmarried individuals (5.8K) and applying the different tax rates across each relevant tax bracket (10% to 8.5K, next 15% to 34.5K, finally 25% onwards till 74.2K) you’ll be liable for 14,765 USD in federal taxes (according to the IRS website calculator, its actually estimated at a lower 13,675 USD for FY2011).

Next, we have state tax, this varies usually between 3-5% for flat rate taxes (I’ll use 5% for our purposes - 4K ). Quite a few places like California have a progressive structure, and for the current pay scale, you’ll be liable for 6% roughly in Cali using 2010 tables (which is 4.8K – much lower than I’ve expected, if I’m wrong please feel free to alter your calculations). You might also have other miscellaneous taxes but I believe they should be less significant.

Last, we have social security (SS) and Medicare (crucially, I believe, as a H1B/H1B1 work permit holder, you will not be entitled to any such benefits, lest you get a green card/citizenship, hence this is as good as tax). Employee contribution for SS was reduced to 4.2% from 6.2% ($3360) this year, Medi stays the same at 1.45% ($1160).

Thus, your take-home pay is (80 – 14.675 – 4 – 3.36)K USD = 56,805 USD (29% taxes paid in total) = 69780 SGD (using 1USD to 1.23SGD, a word of caution, this may not remain the same when one returns to SG, not to mention other transaction/relocation charges).

That was the “easy” part. Now comes the difficult part – would you consider rent and car expenses/depreciation (10-18K & 1-3K respectively) as key factors when comparing US to SG? If you do, what amount to use? Say we run with 15K combined (there are however ways to reduce it to 10K such as sharing an apartment and buying a cheaper car, being located in a less fancy area, etc), thus we have ~42K USD = ~51K SGD/annum. You could try and purchase an apartment but you will lose out on the mortgage liabilities (I’m assuming you’re cash poor), not to mention increased property risks (what if you can’t find a buyer?). But if you really (and I mean really) know what you’re doing, it is a possible avenue to explore. I’m motivated more by necessity - needing a car to get to work, needing to pay rent for a roof over my head, over anything else. How much you would price the premium of not living with your parents or not having to use public transport is entirely up to you. I’m not here to tell you how you should feel.

Now let’s look at it from the SG end. Assume that you draw 4K SGD/Month and 4K bonus (52K SGD total). You will contribute 10.4K to CPF (20%), while your employer contributes 8.06K (15.5%). The breakdown for Medisave, Special and Ordinary is 3.69K, 2.63K and 12.13K respectively. You will thus have 39.1K tax liable income. Using our tax brackets ($350 + 5.5c for every dollar over 30K up to 40K), you will only pay 851 SGD in taxes. This means in one year, you will take home 40.75K and accumulate 18.46K in CPF, for a total of 59.21K. Now, unlike in the US, you will have “limited” access to your CPF eventually, hence I have taken the liberty of not completely striking it off as a “tax” per say. SS/Medi conversely will essentially be worthless to you unless you stay in the US on a permanent basis.

Looking at the general numbers once again based on our assumptions... In the US, you generate 70K SGD w/o rent/car, 51K SGD w rent/car. In SG, you generate 41K SGD w/o CPF, 59K SGD w CPF. There are still other issues not mentioned - not locking up your $$ in CPF in SG (an astute investor should outperform CPF returns), furniture/household upkeep in the US, etc etc which can affect your final analysis to a measureable extent. My opinion is that the US 80K/annum option would marginally beat the SG 4K/month option using current circumstances (based on my priorities). But of course changes to US laws such as returning SS back to 6.2% can tilt things back. Try to see if you can obtain a margin of safety, ie, if you seem to only be able to secure 65K USD/annum (40K SGD w rent/car) undergrad Engineering positions in the US, and seem a shoo-in for a 4K SGD/month finance/consulting sector position in SG, then it is likely that you might want to go with the latter (if you were in my shoes).

Ultimately, what might be more important is your long term goals/prospects. Are you planning to stay in the US indefinitely? Are you planning to remain an engineer your life (US/SG)? Are you willing to take a pay cut when/if you choose to return to SG as an engineer? The truth is that there are a lot of grey areas and I hope this can serve as a rough guide to others who are weighing their options. I'm exhausted.

Don't understand why you are so long winded. From your calculations, you have S$3,187 in disposable income after taxes. Forget CPF. Most young people don't care about something they get 35 years later.

Using the California paycheck calculator, I get USD4,469 or S$5,582 in paycheck, tax withholding included. You earn almost double in California.

To me there is no comparison, when cars are 5-6 times more expensive in Singapore and condos have hit $1,000psf even in outlying areas.

You must be nuts to think anything else.

Singapore is good for day-to-day life, food, travel locally. Maybe even medical expenses are lower.

But, in the long run, u need a car and a house. Both these things are overpriced and more than eat all or more of what u save in other aspects.

I am an engineer who started from scratch with a graduate degree. I dont work in Singapore ritenow. But I know that once I factor in car, house and the crowd in Singapore, it loses its attraction. On top, there are not many engineering positions unless u get in Finance sector which pay well. Despite this, I feel that I enjoy my day-2-day life in Singapore more with good food, entertainment, etc.

But if u see why most expats leave Singapore for Aus or the West, its mainly bcus Singapore cant compete on financial grounds. Even though life wise , it suits chinese and indians more.

Unless, Property prices become more affordable and the crowd is reduced, Singapore cant be compared to many other places. And , does any one u see that happening. I dont.

Why? To ensure that people will not misconstrue my posts, which you still evidently did. No comparison? If you read the first paragraph, I mentioned I was gearing my analysis for a person who would *still* face those high car/housing prices bcz of his/her long term intention to eventually return to SG. The reason for not simply quoting paycheckcity.com is to allow someone who has never done such an analysis to understand the nuances between the US SS/Medicare tax vs. the SG CPF system. If you choose to remain permanently in the US your life, then SS/Medi will come into play and you have to re-balance your comparison (as well as re-evaluate purchasing power) bcz they are no longer simply govt. "taxes" that only removes $$ from your pay. Take home pay may be crucial but it is not everything and that is the over-sight one invites if one uses a paycheck website without really understanding what all these terms mean.

You may choose to ignore CPF, that's up to you. I don't know what most other young people think but I'm not about to present a half-baked comparison by ignoring selective aspects bcz of my own personal bias. In fact, I'd prefer to put everything out there for each person to judge for themselves based on their ideals and goals. You must be nuts to think that others must only share your views, we're not talking about 1+1 here.

cont'd...

To clarify further, "I'd prefer to put everything out there for each person to evaluate their *own* circumstances for themselves based on their ideals and goals. " Not everyone receives 80K USD/annum offers or gets to work in a $4-8K/month finance position back home.

[California]

Originally Posted by Unregistered

Caliornia - welcome to the Singapore Internet community, a place full of cynics and skeptics who are yes-boss cowards by day and virtual heroes by night.

I understand that there are people who so strongly believe Singapore is a horrid place to be with no opportunities; where you're doomed for failure regardless of how smart/hard working you are -- it's fine. The sad part is, even if they win (the debate), they lose (stuck in a country they believe to be terrible). But again, it just gives an upper hand to those who can spot and exploit the opportunities that do exist. In a way, it's a self-fulfilling prophecy. So believe whatever it is that you want and you'll be right

Originally Posted by Unregistered

it is actually very disappointing to know that people from the tech side are jumping ship to finance.

have people really lost interest in science and engineering? given california good credentials and opportunity offered to him(studying in a college in silicon valley virturally gives one all the opportunites that they can crave for if they want to be involved in tech industry.) and there is another member who said that he got stuck at senior researcher level.

im just a student, and its kind of depressing to see this. is a tech career such a monetary unrewarding one, till the extent u prolly have a problem keeping ur job or have advancement?

It's nothing new for people to go the engineering (undergrad) -> work in finance (then possibly MBA) route. Banks LOVE the quantitative skills and structured thought process of engineers. And from a biased point of view, I find it easier to teach an engineer finance than a business major engineering (or at least the highly quantitative math skills). That aside, if you really love engineering you can definitely find success in it, but the relative ease of such success will vary depending on location, type of engineering, personality, etc.

Tech careers can be very rewarding, as you can see how many young guns are living the big life nowadays (though don't assume this to be the norm). For the average joe, a career in tech will at least give you a good, stable pay and comfortable life (though much more so in Silicon Valley than in Singapore, but it can be done). And at least compared to finance, I don't think engineers have much of a problem keeping their jobs :P

Please don't take my story to mean that I lost interest in, think less of, or 'gave up' on engineering. I have too many unique and personal circumstances to really give a good comparison, and one of the deciding factors for me was that Singapore is a finance hub, not a tech hub. I still believe tech is an awesome career path and will never really close the door on those opportunities in the future, regardless of what sector or job I'm in. IMHO, do what you want, and do it well. People can make ridiculous amounts of money doing the most obscure things, as long as they have the passion (and of course skill) to excel at it and the insight and vision to monetize it.

Originally Posted by Unregistered

It's more complicated than that. There is another group that doesn't dispute California's authenticity, but doesn't trust his conclusions i.e., he is deluding himself into believing that he is better off in Singapore to justify not making it in Silicon Valley. It's OK to help himself heal mentally, but not so good when giving advice to the majority who may not have his privileges - a rich family living in private housing with flashy cars

First off, I don't know why people are assuming that I 'didn't make it' in Silicon Valley. Yes, I had to come back and do NS, but my company is as strong as ever and I always have the option of going back (and not just to the company, there are various others who still contact me, checking when I'll change my mind and go back). Plus I have my stake in the company so I'll still 'make it' if we succeed regardless of my location. Staying here was a choice, and it's a choice that I continue to make every day. Regardless, even if I were to be deluding myself into thinking I'm better off here, I'd rather be happy and carefree than live in regret and pessimism. I'm lovin' it here, but the second I think the US holds considerably better long-term opportunities, I'll be on the next flight out

That aside, I'll address your latter point, which I feel is very valid. The last thing I want to do to is to give advice that is not sound / give a false sense of hope / encourage people to take unnecessary risks with little upside. This is why I've always qualified my opinions with cautionary disclaimers:

Originally Posted by California

Again, I want to reiterate that all of the experiences and opinions I've given, on jobs and especially with regards to the social life, are not applicable to everyone. I've always qualified my claims with the caveat that it applies to people with elite achievements / positions (e.g. "if you are a top performer", "if you are confident in excelling", etc). For the average person that wants to live a normal life, work a normal job, and doesn't care about making millions or feeling like a rockstar, you would get the best bang for your buck / effort in the US. But for the privileged few who want all that glitters and more, and have/think they have what it takes to make it, Singapore is a pretty sweet place to be.

Originally Posted by A Lot Of People

<insert debates about US vs. SG salary here>

We don't need to split hairs over calculations, the point is that the pay gap isn't as big as many are led to believe (myself included, when I first came back). I'd also like to point out that we are comparing starting salary, but in the long run I believe a talented individual can quickly overcome the pay inequality. For one, the taxes are much much lower here, and the more you make, the more it affects you (not to mention no capital gains tax). At your starting salaries, the tax advantage Singaporeans enjoy is not as apparent; but after you really start to build your career, it becomes much clearer.

Secondly, I believe you can really grow your salary much faster and higher in Singapore than in the US (again, with regards to those 'high flyers'). In the US, even if you get a high $100k p.a. starting pay as a graduate, in 5-10 years you're probably looking at $125-150k, and you'll probably 'peak' at about $200k. You start high, but your growth rate slows over time. This is if you're really good -- $100k a year is already a very high salary in the US regardless of age. In Singapore, I see smart people doubling their salaries within 1-2 years. Though this may still be 'lower' than the $100k p.a. (depending on how you want to calculate it), it's possible to keep a similar momentum and continue to grow your pay at a substantial rate (couple this with the tax rate and you've really got something). Within a few years you can surpass what you would have drawn in the US (if you hadn't already), and after that you have the potential to really widen the gap. I think numbers speak louder than words, so just refer to the salary.sg articles on Singapore's mean vs. median salary -- it's quite absurd IMO. The rich are really ridiculously rich. So once again, I'll say that if you want to live an average, comfortable life, go ahead and migrate. But if you're really shooting for the stars, there's some very nice advantages here~

Originally Posted by California

I understand that there are people who so strongly believe Singapore is a horrid place to be with no opportunities; where you're doomed for failure regardless of how smart/hard working you are -- it's fine. The sad part is, even if they win (the debate), they lose (stuck in a country they believe to be terrible). But again, it just gives an upper hand to those who can spot and exploit the opportunities that do exist. In a way, it's a self-fulfilling prophecy. So believe whatever it is that you want and you'll be right

Keke. Actually, the keyboard heroes here are more than likely extremely successful and rich chaps who are more or less retired and so bored that they like giving the padawans like you some grief.

Originally Posted by California

Secondly, I believe you can really grow your salary much faster and higher in Singapore than in the US (again, with regards to those 'high flyers'). In the US, even if you get a high $100k p.a. starting pay as a graduate, in 5-10 years you're probably looking at $125-150k, and you'll probably 'peak' at about $200k. You start high, but your growth rate slows over time. This is if you're really good -- $100k a year is already a very high salary in the US regardless of age. In Singapore, I see smart people doubling their salaries within 1-2 years. Though this may still be 'lower' than the $100k p.a. (depending on how you want to calculate it), it's possible to keep a similar momentum and continue to grow your pay at a substantial rate (couple this with the tax rate and you've really got something). Within a few years you can surpass what you would have drawn in the US (if you hadn't already), and after that you have the potential to really widen the gap. I think numbers speak louder than words, so just refer to the salary.sg articles on Singapore's mean vs. median salary -- it's quite absurd IMO. The rich are really ridiculously rich. So once again, I'll say that if you want to live an average, comfortable life, go ahead and migrate. But if you're really shooting for the stars, there's some very nice advantages here~

California, after this bit of nonsense, I'm sure you didn't go to Stanford. Even Cal is a stretch. Perhaps it was University of San Francisco

Singapore does not compare to NY or Boston (for fund management) as a financial center by any stretch of the imagination. Bigger deals go down there and in finance you compete with the best in the world. As Frankie said about New York, "If you can make it there, you can make it anywhere".

Whether you are in IB, CF or a sellside analyst, you can earn many many times in the US what you could possibly earn in Singapore. You also work on more complex deals with much smarter people. It is the experience doing the complex deals that builds your value.

The only truth you have is that because Singapore's tax rate is low, if you earn A LOT of money, you can save at a very high rate. But don't you think the Bulge Bracket IBs have figured this out already an apply "tax equivalence" to their employees across their offices. Low level front office and back office people are paid differently in NY and Singapore. High Level front office people are paid largely on the revenue they bring in and if you are in NY, you will bring in far more revenue as it is a vastly bigger market than the red dot. Top level investment bankers adjust their residence for the best tax treatment, but they all work in NY.

For talented Singaporeans going to top US Universities, the best option is to cut your teeth in New York or London and when you have been promoted to a senior level and have acquired the experience of a top flight investment banker, THEN move to Singapore. That is the fastest way to reach the upper echelons of Singapore investment banking. Understandably, there was a recession and unemployment is high, but investment banking in the U.S. is coming back strong and it would be wise to get in now.