This $2M 'Dump' in Palo Alto Is Why Top Candidates Need $250K in NorCal

It's official: If you make below $250K in the Palo Alto area, you are below the poverty line—and the photo above proves it. A run-down, one-bedroom bungalow the size of a motel room will cost you more than $2 million.

We regularly get calls from "new money" billionaires in Silicon Valley who get "sticker shock" when we tell them we place housekeepers for $150K with a full benefits plan and 401(k).

If you want a real-life "Pepper Potts" as an executive assistant, it will cost you $250K a year on the low end. Premier candidates with 10 years of experience who have worked for Family Offices and billionaires are in the $350K range. An EA with a master's degree and 15 years of experience could command a package in the $500K range. This, my friends, is the "new normal."

How to Calculate Salary for Top-Level Private Staff in NorCal

At the end of the day, even though these numbers are quite big, they can be solved with 2nd grade math skills. Here we go...

Monthly expenses in Northern California (and other major markets)

• Dwelling: $10,000
• Entertainment: $1,000
• Car/Gas/Insurance: $2,000
• Food: $1,000
• Student Loans: $1,000
• Rainy Day Savings: $1,000
• Retirement Savings: $1,000
• Phone/cable/misc: $1,000
• Utilities: $1,000
• Credit Card Payment: $1,000
• Child (Misc): $1,000
• Kid's music lessons/tutoring/misc: $1,000
• Savings for child's college tuition: $1,000
• Annual Vacation Savings: $1,000
• GRAND TOTAL: $24,000 a month

$24K a month times 12 months equals $288,000 on the low end. It goes without saying that we could keep going with the miscellaneous expenses. The numbers above are very conservative and still wouldn't allow enough for retirement.

The other thing to mention is that the $10K monthly payment on a dwelling is for a mortgage on the "dumpy" house selling for $2M. If the candidate had more than one child AND a "livable" two-bedroom home, these figures would be SUBSTANTIALLY higher—which is why the very best candidates are going to be in the $500K range.

Why the Family Office Pay Scales are Fundamentally Flawed

Investment banks that deal with Family Offices pat themselves on the back for creating "benchmarks" for household staff, such as House Managers, Executive Assistants, Housekeepers, etc.

The annual reports, however, are fundamentally flawed because they make blanket statements on salaries. Many executives at Family Offices follow these guidelines, which are so flawed that their maximum pay for a market like New York City is actually on the low end—not the other way around.

The age-old adage is STILL true: "You get what you pay for."