> Disclaimer: I acknowledge that I’ve been very privileged, especially in the educational opportunities I’ve had.
This might sound reasonable from a US-centric perspective, but to me it reads like utter nonsense. The main privilege here is access to the US labor market and tax policy. There are no stories like this one where I live (in Sweden). Absolutely none.
The modern "progressive" thought-process is to feel guilty about having a good education. I went to private school in the UK and the only thing I feel is infinite gratitude to my parents for forking-out the money to send me there (they were not rich, they were both teachers).
There is a lot of encouragement of guilt in the USA today. In general, shouldn’t we embrace a value system that encourages good behavior? Eg honor those who do relatively well in life, given the circumstances they are born into?
The immediate leap to discredit the success of others through assertion of privilege seems like it would discourage doing well.
A better solution imho would be to celebrate success but to also encourage the successful to share their insights with others so as to spread the fortune - much as the author of this post has done.
I agree with you in general but a useful question to ask is: How easy is this to do outside of tech (and other competitive industries like finance)? Competitive industries have high upside but inherently have limited opportunities at the top.
You even see in this thread how people within tech but unable to pull FAANG salaries see this story as impossible. It's one viewpoint to think that it's possible for everyone to become skilled enough to work at a FAANG-like job (including passing the interview); probably correct so some degree. It's another (less rational) to think that every software engineer can work at FAANG-like jobs simultaneously; there just aren't enough positions.
This gets even more dire outside of tech. What job are you going to switch to every 3 years that nets you a 30% salary increase? If that kind of opportunity was wide-spread, there would be a lot less income inequality (or at least more social mobility).
> but to also encourage the successful to share their insights with others
laughing my ass off ... I expect the successful first and formost to share their success through actually paying taxes - then we can talk about their advice which won't be useful for the majority anyway b/c success in monetary terms is always defined by being focused on a minority.
I'm not sure where you live, but in the US, the government has done a terrible job with capital allocation and for every dollar given to the government in taxes what % do you think goes to helping those in need who deserve the help?
Completely agree. This guilt culture is little more than an attempt to retain the benefits of the "privilege" vs sharing the spoils with the less fortunate.
> A better solution imho would be to celebrate success but to also encourage the successful to share their insights with others so as to spread the fortune
Ideally yes. Though IME often the advice isn't applicable, so beyond a few fundamentals they break down. For example I cannot un-have kids, and getting a master's or doing a startup on the side would basically require neglecting them for too long. (Or quiting my day job and burning through our savings.) Lifestyle advice like modest living or moving far away also requires buy in from an SO or a painful break up/divorce. It's also a risk since they may change their mind early in the plan. Or they may decide the outcome wasn't worth the sacrifice and want to (or you to) return to the grind.
The only difference between myself and my other friends (who also have advanced degrees from top universities in the bay area) is that I abandoned my field of study and jumped into tech.
After 10 years, we have vastly different financial outcomes now.
A lot of hard working, well educated, dedicated people struggle financially around here, because they happened to not choose tech.
Add in the teachers and other under-appreciated careers, I do feel guilty that I should have so much, and they so little.
Part of working smart rather than working hard is seeing the salary signals the market is sending and responding to them strategically. This is worth more than mastering a skill that is saturated with competition relative to demand.
It took me a long time to accept this as I was wedded to the idea that hard work and skill alone should be well compensated. But that hard work and skill needs to be pointed in a good direction in the first place.
> This is worth more than mastering a skill that is saturated with competition relative to demand.
The job market is not an efficient market. It doesn’t respond to offer and demand signals.
Nurses have been in short supply in most of the developed world for the past three decades yet are still paid peanuts. It’s all about your proximity to the handling of money and historical trend. That’s why even people doing menial jobs in banking are well compensated while people working in heavy industries are paid relatively little compared to the complexity of their jobs.
If you had an advanced degree in math or physics, hedge funds in NYC was always an option to maximize your talent in exchange for money. But one also had an option to choose something different and still make an upper middle class living.
It seems these days, only the finance/tech offer such living. NOT choosing tech is choosing barely middle class living, and everyone else is delegated to hand-to-mouth living.
Where I live (DC) most people are not in tech and they still have an upper middle class lifestyle working for the Federal government or a contractor (in a non-tech role). Nationally, purchasing power has been declining for many years.
Besides Fed Gov, Tech/finance are the probably the only sectors left with large work forces, great margins, a culture of rewarding talent (vs health care for example), AND rooted in the USA (vs manufacturing and heavy industry). These factors combine to create a super class of tech/finance labor.
There is a difference between acknowledging privilege and feeling guilty.
I got a fantastic education at two of the best public universities in the US, mostly funded by public money. Do I feel guilty about it? No. But I acknowledge that it was only possible because of policy choices made by Americans who came before me.
"Good" education alone is not a meaningful predictor of anything, in Europe at least.
So the guilt is about receiving the correct credentials to be granted further access to jobs and opportunities. It seems in UK/USA, "good education" is used as a euphemism for "received privilege".
You are equating guilt with acknowledging privilege, and those aren’t the same. I feel privileged for having gone to MIT, and acknowledge that privilege. I feel privileged for having grown up Jewish and white-appearing, and acknowledge that.
I feel guilty for neither, and acknowledging that particular privilege takes nothing away from how hard I worked anyway. The son of two very poor Russian Jewish immigrants, I worked extremely hard to get to where I am. I also feel privileged for growing up in a loving and non-abusive family.
Lots of people don’t have those things, and I’m thankful I did. That’s not guilt.
> You are equating guilt with acknowledging privilege, and those aren’t the same.
This is one of those fundamental misunderstandings I see when discussing things with folks of a particular political persuasion. It's the same folks that belueve we shouldn't consider outcomes when evaluating processes. There's just something different about the way they think, I guess.
When someone says "check your privilege", they're saying that you've done something wrong and should feel guilty.
This shouldn't be downvoted. It's become a socially acceptable insult, in some circles (which basically means the receiver is less empathic / socially aware than thou) -- or at the very least, a thought-terminating cliché.
I know there's a bunch of nice and wholesome stuff it's supposed to mean (like the sibling commenter points out); but the way it's typically bandied about in modern discourse (as an STFU signal, more or less) -- it isn't what it really means.
No, they aren’t. They are saying you should consider if and how your privilege helped you out, because sometimes that isn’t transferable to other people; someone black in a job interview may not have the same experience someone white does, and that’s okay, but it’s important to recognize if and how being white helped so that someone who isn’t white can account for that and adjust.
> They are saying you should consider if and how your privilege helped you out
Yes, they are. "Check your privilege" is often used to say "you didn't do that."
Even if you assume that "privilege" is a big reason why you had an opportunity, there are almost always many people with the same "privilege" who didn't do said thing.
Moreover, it's almost always some skin color argument. There are many "don't look white" people who had privileges that I didn't have but I'm supposed to "check my privilege."
The idea is simply to acknowledge where your privilege helped you, and how others may not have had the same experiences or ease of access to certain things, etc.
The trope of “he’s black and rich, and I’m white and poor” is irrelevant, as there are different kinds of privilege. In rural Alabama, being white and poor is going to lend you a much closer set of relationships than being black and rich. In SF, it may be the other way around - the point is everyone should simply be aware of how various privilege has helped them.
And again: this takes nothing away from hard work. It simply acknowledges that another person who worked just as hard but had a different set of lived experiences and privileges may not have the same result. That’s not bad; just fact.
And again: it has nothing to do with guilt. You shouldn’t feel guilty about it; ~everyone has some kind of privilege. But ignoring it or pretending it doesn’t exist is the exact opposite of the point, which is, at the end of the day, an exercise in empathy.
Bull. I've seen "check your privilege" used to shut people down, to shame them, etc. I've never seen it used as a positive thing.
It's telling that you really want to say that no black person has privilege. You'd certainly never tell one to "check your privilege."
How much time have you actually spent in rural Alabama?
I say that because the most racist places in the US are urban, the NE and the coasts, not the south. Yes, there are racists everywhere, but the only places where blacks and whites interact productively at scale are in the south.
Calm down, and stop assuming malice where there is none, please.
Firstly, I never implied or said that no black person has privilege.
Second, my entire point that you seem to be missing is that everyone should recognize what privilege they do have and have benefited from.
I’ve spent plenty of time in the South; I am not implying there is no way for a black person to interact productively with white people in the South. I am suggesting that, generally, in a lot of rural areas of the South, being white lends you more “immediate credit” than being black.
And, to your point, that was but one example. I could have said “inner cities,” and made the same point. That does not, in any way, change the point; it only serves to reinforce it.
I get that you want to be a white knight but you're defending malice, said defense being that you can imagine that "Check your privilege" being used differently than it actually is.
And, you've yet to explain what good comes from said "recognition". What, exactly, do you want me to do differently because I benefitted from succeeding in a situation that actually was available to many? (I'm pretty sure that you won't be satisfied with me just saying "hey, I built on stuff that had happened before.")
Yes, there are lots of places where being white lends you more credit than being black. Similarly, there are lots of places where being black lends you more credit. So what?
My point is that the south tends has more successful interaction than the north. That's actually more true in the rural areas.
I don’t think we’re going to agree here, even though I’ve tried to find common ground a few times. The good that comes from recognition is being able to place yourself in someone else’s shoes and empathize better with their lived experiences, thus enabling you to better understand their situation. If you don’t find that worthwhile, I don’t think I can convince you to.
But, for what it’s worth, I’m certainly not trying to be any kind of “knight.” I’m just trying to have a calm and open discussion.
> I don’t think we’re going to agree here, even though I’ve tried to find common ground a few times.
You've repeatedly said that "check your privilege" is used in ways that it isn't used and denied that it is used the way it is used. My "ground" is reality.
> The good that comes from recognition is being able to place yourself in someone else’s shoes and empathize better with their lived experiences, thus enabling you to better understand their situation.
That's all well and good. The reality is that it has nothing to do with how "check your privilege" actually works.
I note that you didn't both to come up with anything other than your opinion to support your interpretation. Meanwhile, I've provided cites showing that you're wrong, by proponents of "check your privilege".
There's also the Atlantic article.
Can you point to ANYONE who interprets "check your privilege" the way that you do? (In fact, even you don't, as your refusal to use it with POC demonstrates.)
Guilt is too strong of term. But it is very much used as a kind of penalty box, or way of distancing the receiver from the speaker. And as far as enlightening those who supposedly need uplifting to the higher, more evolved plane that the speaker inhabits -- it just doesn't do much.
I agree people often misuse it, in the same vein that people often misuse other “you are the other” type arguments like equating conservative with Trumper or liberal with “socialist” or pick your favorite.
But it’s misuse shouldn’t change the meaning of its intent. At least I hope it doesn’t, because I believe there is still value in empathy.
> But it’s misuse shouldn’t change the meaning of its intent.
The use is the intent. And it's used as a weapon.
Notice when it's used, and when it isn't. (You'd never say it to a black or brown person. Did I have "privilege" when I lived in a labor camp?)
> At least I hope it doesn’t, because I believe there is still value in empathy.
There is value in empathy, but "check your privilege" isn't empathy.
You know nothing about my "privilege". You have no basis for telling me to "check my privilege" and saying that only proves that you not only have no empathy for me, you have no interest in me except to accomplish your political goals.
I absolutely would, and have, said it to people of color when it applied. (Although, admittedly, I have never phrased it as “check your privilege” because of precisely this vitriolic response which defeats the purpose; I normally phrase it as a question about if any exists)
I didn’t say anything about your privilege. Were I to, I would be asking. There is nothing here to be defensive about.
I have no political goals here. We’re having a non-political discussion.
Privilege as a concept, and acknowledging what privilege one has, is what we’re discussing. The particular phrasing is less important than the idea, and that appears to be the disconnect.
Use whatever phrasing you want, and it doesn’t have to be politicized. But when describing an experience, and particularly when trying to provide advice to others to do similarly, or when trying to glean information from your experiences that might be applicable to others… yes, check your privilege to see how said privilege may not apply to others’ lives.
That is all. What we’re discussing isn’t, at its core, a “hot-button political topic.” You are making it that.
Privilege as a concept, and acknowledging what privilege one has, is what we’re discussing.
Actually we were specifically discussing the "check your ..." phrase in current usage, expressed as an imperative. Not privilege as a general concept.
And yes, the "phrasing of phrase" is the whole point of the phrase. Along with of course, who is saying it and to whom. Especially when the recipient most likely wasn't asking you to "provide advice" to them in the first place, now were they.
BTW here's what seems to be the definitive article on its origin:
I don’t think we’ll agree here, but point taken at the end - I shouldn’t have said “you are making it that.” Apologies - I was getting a little annoyed.
> But when describing an experience, and particularly when trying to provide advice to others to do similarly, or when trying to glean information from your experiences that might be applicable to others… yes, check your privilege to see how said privilege may not apply to others’ lives.
I teach people how to do things and "privilege" doesn't come into it. It is neither necessary nor sufficient.
There are always lots of folks with "privilege" yet the only thing that actually matters is whether you can do the work and actually do.
It does have something to do with guilt, because the ultimate concession of acknowledging privilege is that you didn't truly earn your advantages, which is a root cause of perpetuated injustice. That's where the guilt lives: being the beneficiary of systematic injustice. This doesn't make you a bad person, of course; pretty much anyone in a position of privilege will capatalize on it, as that is human nature.
Acknowledging privilege doesn’t imply you didn’t earn your advantages; it implies there were some that were handed to you. Plenty of others need to be earned.
It is rare, extremely rare, to meet someone with absolutely no privilege, and that isn’t a place to aspire to.
> The modern "progressive" thought-process is to feel guilty about having a good education.
This is what happens when there is a lack of religion and belief in God. In Islam, we know we're going to be asked about the blessings that were bestowed on us, no matter how small, so it's always in the back of our mind that we should be grateful to God, and to use those blessings in the ways of good, not evil.
The atheists are downvoting you but I find it pretty interesting. Can you link to more info / verses about getting asked about blessings? I assume this is after dying and being asked by God. Sounds like a form of gratitude.
Yes yes, in the end everyone's success can be distilled down to luck or environment (which we were born into so also luck) or inborn qualities (which are also luck). Merit does not exist and everything is luck.
Or we could notice that merit is still a useful concept, that good decisionmaking is a skill regardless of whether everyone is in a position to use it, and that the previous poster's parents made decisions that were highly beneficial to their child, above and beyond what other parents in comparable situations might have, and that the poster is quite right to be thankful for that. Which funnily enough is the only opinion they voiced, so it's rather a mystery what your needlessly nasty comment is replying to.
I don’t think anyone said that. Lots of people _do_ think you should feel guilt for privilege. Pretending those people don’t exist isn’t helping the progressive movement. It’s important for progressives to acknowledge and counter the people who wave the progressive flag but espouse the opposite of progressive ideals.
I disagree. I see vastly more people claiming that privilege acknowledgement is tied in with guilt who oppose the notion of "privilege" than I see "lots of people" espousing the notion of privilege guilt who actually think we should talk about privilege.
I don't personally believe in reparations as commonly framed, but saying that reparations ought to be paid is also not the same thing as saying people should feel guilty for actions they didn't take.
> It’s important for progressives to acknowledge and counter the people who wave the progressive flag but espouse the opposite of progressive ideals.
I think this can be taken too far. Disavowal can be important at times, but I find there is often a trend among the Right to highlight random views held by an extremely small minority of people (ie. a single tweeting American among 315 million Americans) and demand a disavowal of that rhetoric. I think this is in bad faith.
This comment thread, in my view, is emblematic of this in that simply by using the word "privilege" we are now being asked to disavow something that some nebulous "lots of people" attach to that word, even though the word was clearly not being used in that context here.
Frankly, it’s not a strawman. Look on twitter and you’ll find plenty of evidence of that kind of thinking.
> but I find there is often a trend among the Right to highlight random views held by an extremely small minority of people (ie. a single tweeting American among 315 million Americans) and demand a disavowal of that rhetoric. I think this is in bad faith.
Agreed. Where I disagree is that the left doesn’t do this exact same thing, or that these views are held by “a single tweet” and not, say, entire online communities.
For the record, I generally agree with you, but to the same extent that avowal can go too far, it is very easy to go too far in assuming all ridiculous positions on our side are strawmen. A lot of people do think that way. Nothing wrong with acknowledging privilege — but you don’t need to feel personally guilty over things out of your control like your inherited wealth or your skin color. I think we can all agree on that.
No it’s not. We’re debating about the ways people think about privilege. There’s no requirement that those ways are all expressed in this particular thread. It doesn’t terminate anything — the discussion can continue, but “I don’t see an example of that right here” is not a counter argument.
The opportunity described is only common in a handful of companies in handful of cities. Outside of this it is going to be rare even in the US. Since Sweden doesn't have a large presence of these companies you are going to have to move to for example Zurich or London for it to be common. It isn't a Sweden versus US thing, it's a "achieving a high level in a major company that gives you stock" versus not. The opportunity still exists in Stockholm but requires more achievement, effort and luck because it is less common in absolute terms.
That said it sucks to work in Sweden because it's all about making money through inheritance, housing, stocks or contacts. But I guess that is how it is in many places these days.
GP poster is also incorrect. Prior to his passing, famous DJ Avicii is estimated to have an estate of 50 million USD; well-off enough to never work again if he didn't want to. There's also, y'know, the Royal Family. GPs post would lead you to believe that Swedish society is flat, but there are absolutely bank managers (or something, I never got a chance to ask) running around driving Porsches while the rich plebs own thirty year-old cars, or don't own cars and take public transit. There are people who can skip the line to getting housing in Stockholm by buying a flat instead of waiting in line for years for a rental property. 20-year olds in the technology field are still much better off, economically, than someone who's chosen to be circus performer or artist.
However, a world-class DJ and the fact that some people are richer than others doesn't really contradict the claim that Sweden is much more egalitarian, and my previous points need to be examined within the broader culture of Sweden and Scandinavia in general. (Many Swedes commute daily into Denmark.) Having a car is convenient, but thanks to a world-class public transportation network in Stockholm, rather unnecessary. Car ownership is thus less of a deal compared to much of the US. While the privileged in Silicon Valley are trying to get "fuck you" money (more eloquently expressed as Financial Indpendence / Retiring Early - FIRE), the older Swedes I met still work, and are most proud of the days or week off their job affords and middle-class people are able to travel more than I see Americans (though a lot of that is cultural, but time off work and plane tickets+hotel is expensive).
Oh boy that is true. Honestly, everyone who is born in the US is kind of privileged compared to 99% of the world. Especially if you are willing to work hard.
The parent post to yours is actually true, being born in US indeed does wonders to ones access to opportunities, infrastructure, culture, soceity etc.
The USA really makes it easy for people to win. It can be hard to notice it if you've been there all life(or at least most of it), but people like me who have spent our whole lives outside USA(Indian Citizen) and then stayed in the USA for a couple of years(for work) and returned to our home countries can absolutely relate to this.
The difference is like night and day, and it's not even like remotely comparable, being born in the USA even in under privileged conditions gives you lots of edge compared to your peer group.
I'd argue that the US awards its less priviliged citizens much less oportunity than most other industrialized countries. There's a lot of poverty in the US, and huge differences between rich, middle class, the poor and the really poor. Most are in denial about these problems, and think this situation is fine because they like to compare to developing countries with even bigger poverty issues (in this case India), forgetting that most industrialized countries actually treat their poor people better.
Most self employed in Europe have access to similar tax policies. You could think about and approach things differently to attain a similar result.
I live in Belgium with similar high income tax rates to Sweden, but I know quite a few people that I grew up with who have done very well. Better than his story. All mid 30s and all came from nothing. Even as an employee. No excuses, man.
These stories might not be listed in the newspapers, but that does not mean there are none.
You know people in Belgium who make $600k a year as employed software engineers? Yea, sure...
In Sweden you can incorporate and work as a consultant. That lets you accumulate capital on the corporate side of the tax barrier so to speak. But the tax authorities can show up at any time, claim that your one man company is “overcapitalized” and force you to pay income taxes on your earnings.
You can't just work your way to wealth. You need to reinvest what you make into other assets and let them compound...
That said, I know self employed developers making 150-200k (EUR) gross per year as contractors. But I also know employees that get allocated a few 100k/year in stock options as part of their compensation.
Yes, you do need to be exceptional. And you need to be smart in the choices you make. I thought that was a given, since millions of dollars don't just come falling from the sky.
> That said, I know self employed developers making 150-200k (EUR) gross per year as contractors.
There’s nothing unusual about that. I was making that kind of money 15 years ago.
But one problem is, that’s about what I can make today as well. There is no upward mobility in pay. And it has nothing to do with ability. It’s a cultural thing.
(Also, the deal is typically that you sell your social career progression. So you’ll be doing the same kind of job endlessly.)
> You can't just work your way to wealth. You need to reinvest what you make into other assets and let them compound...
This however is where the real problem starts: there is no way to accumulate and reinvest capital (legally), without paying massive (70-80%) taxes.
Consumption yes. But how do you get to 70-80% for reinvesting? Corporate taxes are 20%, dividend taxes 30% on remaining 80? That gets you to 44% net tax. From gross to net. Income taxes are higher but still not 70-80%?
I agree income taxes are high throughout most of Western Europe, but the way to grow wealth is by acquiring assets that can grow without having to sell them and pay taxes.
An investment fund (or a property) can often grow for a long time and throw off cashflows that are taxed more efficiently. So can a business where you build up value in the equity. Cashflow keeps the lights on, but equity (even in a small business) builds wealth.
> Corporate taxes are 20%, dividend taxes 30% on remaining 80? That gets you to 44% net tax. From gross to net.
No, there are special tax rules for small companies (the so-called 3:12 rules). You can pay yourself a small dividend ($15k or so), but above that you’re taxed as if it was regular income.
> Income taxes are higher but still not 70-80%?
Payroll tax is 31% and then you pay around 55% marginal tax on what’s left.
It’s debatable how you should count VAT in this context. Your consultant invoices will have 25% VAT on them that you have to pay the government. Your customers can get that back from the government, but will have to pay VAT on any value your services create. Since the name of the tax is value added tax I think it’s fair to say you are adding the value with your labor and are in fact the one paying the tax, but others may disagree.
Move to Russia with its low tax of 13% (could go as low as 7.5% if you establish a company and enjoy some additional benefits) and work remotely. Or any other country with low taxes and low cost of living.
> There are no stories like this one where I live (in Sweden). Absolutely none.
Swedish tax rates on income makes this two to three times as difficult (approaches 60% plus 30% social paid by the employer this includes RSUs as well, plus 25% VAT) but it’s nonsense to claim this doesn’t happen. I am Swedish and have made significantly more in tech than the author. So has many of my friends.
With that said, the only reason I’m still in Sweden is family. The public sentiment about the future is uncomfortably racist and increasingly hostile about fortune making. If you have the mobility my advice is to move. Good luck.
> I am Swedish and have made significantly more in tech than the author. So has many of my friends.
I’m not saying there is no path to financial independence in Sweden, I’m just saying that the path the author has taken / is advocating is not one.
I too know people who’ve made significantly more than the author. I’ve come close myself. But that generally involves starting a company and having other people work for you.
How did you make mor? i worked in Sweden and my compensation was 4x less than it is in America. Unless you got extremely lucky or were much more senior it’s impossible, case in which you would have made far far more in the us anyhow
Absolute majority through RSUs, which is why I’m objecting the GP’s claims. The vested stock I’ve reinvested through an ISK in a somewhat broader portfolio over time.
If you’ve made over a million dollars in RSUs after taxes then I must admit… I’ve never heard of anything like that. Are you sure you’re not talking about stock options in a quickly growing company/ startup?
No, I’ve had stock options too but they’ve turned out worthless.
I don’t know what your seniority is and what you’ve seen but I can assure you it exists, and it’s not unique exceptions. Maybe a good opportunity to interview if you’re feels it’s unattainable where you are now. Plenty of US companies hiring remotely too…
I just moved back to Sweden from the US, and at least for my part of industry there seems to have been a notable shift (covid?), where roles/salaries that previously required moving to SF are available remote in CET hours.
You pay hella more tax on them though, but I mean the reason I left the US was also like.. related to all this. I want the things those taxes pay for, it feels incredible to be back somewhere with functioning healthcare, functioning child care systems.
With the effective marginal tax rate at 67% for regular income in Sweden, excluding VAT and other point taxes, the only real possible method is to start a company.
So just doing some cursory research - and I admit, I'm not Swedish - 67% seems to be on the high side as far as EMTR estimates go. So I think you'd need to make a pretty hefty amount of money in Sweden to pay that much. Wikipedia, for instance, claims that the EMTR for an income of over 675 000 SEK is only 60%; Glassdoor tells me the average software engineer in Stockholm makes ~500 000 SEK (though Glassdoor estimates can be questionable).
I bring this up because I don't think taxation has much to do with this. In NYC I was paying around 50% of my income towards taxes (federal, state, and local); when you factor in what I was paying towards things that the Swedish social system provides, I'm sure it amounted to very close to 60% (maybe even more!). But NYC is full of plenty of engineers or similarly well-paid professionals who've achieved financial independence. And, well, at least per Glassdoor (caveat emptor), the average software engineer gets paid literally twice as much in NYC than in Stockholm. IMO that probably has more to do with it.
>In a similar vein as above, I hear that it is almost impossible for talented software developers to earn similar amounts in any country besides USA. If early financial independence is a priority for you, strongly consider moving here. The easiest way to do this is probably to take a 1-year hiatus from work, and enroll in a Master’s degree in USA. Though I have also met others who moved here on a work-visa
Downvoted because, if there are many stories like this in "poorer" Spain (my home country), I'm sure there's a non-trivial amount of stories like this in any other richer European country:
Sure, there are paths to financial independence in Sweden too, just not this one. I’d say most such stories probably involve starting a company and having others work for you. Some probably “succeed” by being extremely frugal. But nobody negotiates and job hops themselves to $600k a year.
It's a bit of a myth that it's easy for people from European countries to emigrate to the US. Generally speaking there are no special visas available. You would either have to look into getting an H1B or one of the O1 visas. The O1 route is difficult, and the H1B route, while attainable, is a big PITA, and leaves you in a rather insecure position (especially if you have a spouse).
While I completely agree the H1B is a PITA, it has been and continues to be the primary vehicle for the huge % of tech-employed immigrants to attain the sort of independence referred to in the OP.
The US doesn't have explicitly racist immigration laws. Being white might give you some kind of an advantage (even though it obviously shouldn't), but you'll still have to go through the same process as anyone else.
Not directly racist, but there's a huge difference in effective waiting times for employment based green cards by country, mainly due to the per-country cap.
Roughly speaking, for similarly qualified folks applying in the EB2 category in 2021, Indian immigrants (worst case), approval can take 15+ years, while immigrants from Sweden will take 2-3 years at most (was less than a year pre-COVID).
That's true. However, even getting to the point where you can apply for a green card is not a straightforward process. And if you are on an H1B it is still the case that your spouse cannot work in the US until you are (at least) in the process of getting your green card. So I would say that few people in Sweden would have a "fairly easy" time of immigrating to the US (though it is certainly possible).
Not explicitly; I agree. I meant that while it is a myth, it is a myth perpetuated by elected officials in the US and what they say when they hold power and especially the campaign promises they make to win power.
If I could give my younger self some advice it would probably be: slack off, or leave.
If you are talented and enjoy slacking off then you can have a pretty nice lifestyle in Sweden. Most of the exceptionally talented engineers I know work part time as consultants.
I have no experience with trying to get into US but I know the situation of my friends who came to EU. Generally you can forget about it without a good degree (e.g. Eng, Msc or MD).
Of course you could also come as a student and finish your education within EU. In some countries you can even do it for free.
Just some anecdotal experience from talking to several French people that worked at the USA company I was at on visas, USA is pretty much the hardest (of the desirable places) in the world to emigrate to.
Several of them ended up going to Canada because it was significantly easier and had a reasonable tech scene in the Toronto area
Yeah I d say he s been dealt very bad cards, had no problem being independent growing up in Normandy, France. I think we're priviledged by not being in the US and that guy is at the top of a turd pile...
One of the biggest tragedies, in my view, is what a lovely place Europe is to live, and what utter lack (seemingly for no great underlying reason) of class mobility exists there.
What an absolute joke. The United States has terrible class mobility compared to the Netherlands or Germany for example. You don’t have anything to support what you said other than a skewed perspective created by American centric media.
Given my experience in NL, I would disagree. I see a very clear class divide here, which is just mostly ignored by the middle/upper classes and government.
Most of the population spend the majority of their income on rent, commuting, and essentials. Students also have lots of debt over the past decade (15k on average). Owning a car is expensive, but so is public transport (esp. for a family). Renting is expensive, but so is buying a house.
Income tax brackets range from ~40-50%, while corporate and dividend taxes are minimal - 15-20%. VAT is regressive and applies on almost all goods incl. groceries, ranging from 5-21%. There is no capital gains taxes, so this obviously benefits the economically active upper/elite classes who have assets/savings to invest - while middle class families do not own much at all.
Since the Mobility Index rankings focus on lower -> middle class mobility, it shows the Netherlands in a positive light. However, the income divide between the two classes is actually not as pronounced as the USA, while the gap between middle to upper is incredibly massive (like most of the world).
I guess what I'm trying to say is that despite the expected policy differences and rankings, NL is quite strongly divided economically. In my experience, the average Dutch don't mix with the poor, nor show off their riches, nor think too deeply about the elite classes. This mindset is essentially ignorance - neglecting poorness, brushing off government corruption, and assisting the funneling of taxes & wealth.
You forgot to mention you do have a wealth tax. For wealthy people, those tend to be one of the "worst" taxes, because it is payable regardless of whether your investments do well or bad.
You’re right, I missed commenting on the Wealth tax.
However, it’s equally ineffective - there are multitudes of ways to avoid paying it, as the wealthy here continuously do. Further, the percentage itself is quite small:
- 0.58% for 30k-100k
- 1.34% till ~1MM
- 1.68% afterwards.
It is hilarious to me, that 30k is considered “wealth”. This means saving for your children’s studying expenses (rent, food, etc), would require exceeding 30k and paying taxes.
The wealthy are wealthy. It doesn’t seem to affect them at all. Instead, people like you and I have to think about the arbitrary amount of money the gov wants to extricate from our small savings.
> Most of the population spend the majority of their income on rent, commuting, and essentials. Students also have lots of debt over the past decade (15k on average). Owning a car is expensive, but so is public transport (esp. for a family). Renting is expensive, but so is buying a house.
> Income tax brackets range from ~40-50%, while corporate and dividend taxes are minimal - 15-20%. VAT is regressive and applies on almost all goods incl. groceries, ranging from 5-21%. There is no capital gains taxes, so this obviously benefits the economically active upper/elite classes who have assets/savings to invest - while middle class families do not own much at all.
I hate to tell you, but the US practically invented all those issues. Average Americans pay a far larger percentage of their income in taxes than the wealthiest Americans or corporations do. You say VAT, we say "sales tax," and, yes, it's still just as regressive. Rent, student loans, etc.... yeah, that's all bad here, too.
I don’t believe that the Netherlands has inherited these ideas from the USA. In fact, NL invented capitalism and stock markets.
Every Dutchie I speak to about the inequality here, loves comparing themselves to the USA memes. It’s that whataboutism and the ignorance that bothers me.
> I don’t believe that the Netherlands has inherited these ideas from the USA. In fact, NL invented capitalism and stock markets.
Of course, I'm aware that NL invented stock markets and pioneered a lot of ideas behind modern capitalism. That wasn't where I was going with it.
Not to turn this into some weird anti-pissing contest of "my country is worse than yours," but, if you look at the numbers, the US fares worse than NL on:
Gini coefficient [0]: US 41.4 vs NL 28.1
Global social mobility index [1]: US 70.4 vs NL 82.4
Human development index [2]: US 0.92 vs NL 0.944
Now, I don't think capitalism is the best system for maximizing any of the above, but, if you look at the tables, it's pretty clear that the Nordic model of capitalism is basically as good as capitalism gets. When you look at some of the things that go into these indices, other than stuff like "GDP per capita," it's pretty clear why: having a strong safety net and other social programs for workers makes people better off.
If nothing else, reducing the consequences of failure from "total personal and financial ruin" to something more manageable is more likely to encourage people to take chances that may or may not pay off. That's what economic freedom really is. That's also the part of capitalism the US didn't pick up, so, that's what I was getting at when I was saying that the US invented those issues. Again, not to get into an anti-pissing contest, but, that's why the US recently got compared to Jurassic Park [3] on here. I don't see anybody comparing NL to a land where dinosaurs will eat you if you're not always vigilant.
> Every Dutchie I speak to about the inequality here, loves comparing themselves to the USA memes. It’s that whataboutism and the ignorance that bothers me.
I'm not sure what you mean here, but I'd like to know. Are you just saying that people you talk to are saying what I said, but without the facts and figures?
> Not to turn this into some weird anti-pissing contest of "my country is worse than yours,"
Fair enough, though I wasn’t trying to imply that either.
> it's pretty clear that the Nordic model of capitalism is basically as good as capitalism gets
I can agree from the data and personal experience, that the QoL for the lower/middle classes in the EU is better than most of the world.
However, I don’t think that it’s as pronounced as the local EU politicians would have you believe, when they advocate for higher taxes every year.
That’s essentially the divide I’m talking about in my comments - the broken capitalist dystopia of it all. They set the benchmark somewhere in between the USA and the post-colonial world, and act like they’ve solved everything.
> reducing the consequences of failure from "total personal and financial ruin" to something more manageable is more likely to encourage people to take chances that may or may not pay off. That's what economic freedom really is.
Yes, I agree that this sounds intuitive. Unfortunately, the EU has one of the least risk-taking people I’ve ever seen. People don’t startup nor attempt businesses.
> Are you just saying that people you talk to are saying what I said, but without the facts and figures?
Not exactly, but rather, they are unaware of the situation outside their social bubble in NL. And see memes about the USA and think they’re doing great.
I can’t speak for the OP, but usually QoL refers to essential things like housing, food, education, etc. Outside of that, the average Dutchie has very little disposable income.
This means that the extra money they make in the USA, is still quite useful since you can spend it on all the other stuff that gives you joy in life.
What do Medicare supplements cost, like $100-$500/month? If health insurance is your primary reason to leave the US, it might make sense to spend years working in a job that offers health insurance after you retire, or moving to a lower COL area within the US (medical costs in rural Texas are drastically cheaper than San Francisco, for example)
I don’t think that measurement of social mobility makes much sense in this context.
Sure, moving from lower working class to upper middle class is probably easier in Sweden than in many other countries. But the thing is: it doesn’t make much of a difference.
I have a sneaking suspicion that the Nordic welfare state kind of games the social mobility score in this way, by having such a compressed income distribution. If you go from $20k after taxes to $35k after taxes you’ve moved through more or less the whole income distribution, but your life is pretty much the same.
The report itself [0] notes many of the contradictions in the US:
> "Despite scoring high on the Work Opportunities (83.0) pillar—because of its low unemployment rate—as well as on the Technology Access pillar (90.2), it has the lowest score in the region on the Fair Wages pillar (43.8 against an average of 64.6 for the region). With an incidence of low pay (less than two-thirds of median wages) at 24.9, it has one of the shares of low-paid workers among OECD countries. The lack of effective social protection in the United States also translates into a low score on the Social Protection pillar (61.7). The minimum guaranteed income benefits for a family with two children (where one partner is out of work) is only 20% of median income. The United States could also improve on the Health pillar, where it performs quite poorly compared to peers in its region (75.8) due to a low healthy life expectancy at birth (66.6 years)."
When you average things down to a single number, you lose a lot of nuance.
For the US, the data the report collected generally supports something like 'You have the opportunity to succeed greatly, and be rewarded extremely well, but this requires financial resources at birth.' While also being true that 'If you are less successful, there are few and poor support nets for you, and serious pitfalls to avoid (f.ex. health care costs).'
No, it is not. The opposite would be that it requires financial resources of the class you want to be part of to be part of a class.
Which wasn't what I (or the report) said: the idea is that it takes some level of financial resources as a prerequisite for a chance at top-level success.
> If you go from $20k after taxes to $35k after taxes you’ve moved through more or less the whole income distribution, but your life is pretty much the same.
100% agreed - my sibling comment about NL also implies the same.
I’m kinda surprised by these numbers. My impression of the us is that many immigrants will be unskilled and have low incomes, but that their children will be much better off in comparison. So a few reasons these numbers could be this way:
1. My intuition is wrong
2. There are lots of people in low income groups where there is little i regeneration along mobility for structural reasons, or maybe immigrants children who often see the biggest improvements are excluded for some reason.
3. The chart talks about reaching mean income. Particularly in the US, mean income is higher than median income so even if achieving the latter is easier, achieving the former could be harder. To some extent the metric may disadvantage countries where the highest-earning few percent of the population earn a lot more than the median person.
That graph, and "social mobility" analysis in general, shows the movement from low income to average. This is good for a country overall, but it's irrelevant to the discussion that people are having in this thread. Most people here are more interested in the median to rich movement. Unfortunately this movement is practically impossible in countries like Sweden and NL (for an employee).
Let's take a typical profile that HN users would be interested in, a top10% engineer working for a big company. This person would never become rich in NL, but almost always become rich in the US.
>Most people here are more interested in the median to rich movement. Unfortunately this movement is practically impossible in countries like Sweden and NL (for an employee).
Same in Germany why I assumed the diagram would be appropriate. But you are 100% correct and I agree with
> This person would never become rich in NL, but almost always become rich in the US.
I moved from Europe to the US, and so have a lot of other people who aim to become rich. In europe most rich people inherit everything, mobility to upper class is basically non existent. Here it’s Very much possible
I have friends who started out in middle-class families and sunk lower. I also have friends who started out middle-class and rose.
IMHO, the biggest factors seem to be raw intellingence, willingness to move & chase money, and some 'luck' factors. But I can't imagine a world where nobody could change fortunes given reasonably common circumstances.
>In Germany, it would take a child whose parents' earnings are in the bottom 10 percent of the population six generations or 180 years to reach the average national income.
>The average across the entire OECD, a group of 37 industrialized countries, is five generations. Children in low-income families in Denmark would need two generations, while children in the United States would need five generations.
Seemingly it's easy to reach the middle class, or even upgrade into upper middle class (assuming you started with middle class parents). But then there's this big gap.
And people in the middle are squeezed from the both sides.
I do not understand why articles like these consistently score poorly on HN? Of course it’s all based on luck, but that doesn’t make it an uninteresting read. I admire the diligence of the author, and how well they played the lucky cards they were given.
I am frequently in awe when reading technical articles on HN, with people advancing the state of the art in some technology. Those people also are incredibly lucky, because they were born with massive talents that, through sacrifices and education, they transformed into life achievements.
As an average software engineer I was not lucky enough to be born with cognitive skills that will ever allow me to reach those technical highs, but that is not a reason to crap on it saying “Just luck! Just genetic/environmental luck!”.
Similarly, I don’t typically read from others: “It’s easy for you to rewrite the Linux kernel in JavaScript over a weekend, your work is just luck because you were born a genius in a developed country so all your achievements need to be discounted and you have no merits!”.
I suspect when it comes to compensation talk people tend on average to get more bitter than they should otherwise be.
Maybe I take this to heart because I made significant sacrifices to immigrate to the US and, while I was immensely lucky to succeed in the endeavor, most people I know would have never taken those uncomfortable steps (leaving family behind in a different country, sacrifice personal space by frugal living in a HCOL area as opposed to a LCOL area with a house and backyard for the kids, …), yet they will happily “complain” that my compensation is much higher than theirs, and that there is no merit to it, rather than simply admitting that they willingly chose a different path in life, but they could have chased my same opportunities with largely the same financial outcome.
If I was reading this article and I was not a tech worker in the US but interested in getting those compensations, my first reaction would be “damn, let me research what are the options for legal immigration to the US and let me start down a path that has good odds of me landing a tech job over there within 5-10 years”. It would not be “let me complain on HN how the country I am a forever-prisoner in has a 90% effective tax rate so that I feel good about my situation”.
Well, ultimately it's about the advice here. If someone asks you how to achieve financial independence and you tell them to just make half a mil working at FAANG, your advice is going to get filed under the "no shit" folder. I also don't quite follow how the author claims to have achieved financial independence while relying on a $600K/yr salary from Amazon. This isn't the type of content folks usually expect. I think for most people it'll be about using their salaries to their potential via smart investing and compounding, while focusing their free time on generating alternative streams of income which will supplement their existing salary. I think this is the foundation of most "financial independence" stories. With that said, I do think that the article is very inspirational to most engineers on here. I'm a fellow immigrant who has achieved a bit in my life in the US, but not nearly as much in terms of salary. I'm still grateful and very content knowing that the ceiling is as high as I pretty much want it to be.
The reason why I think these articles score poorly is because I think my reaction is like most reactions (not all, but most). I read the article, saw the salary table, did an eyeroll, and then skimmed the rest. The article can be summed up as "get a high paying job in a career that requires technical skills, save more than you spend, and invest what you save". Did I miss anything in that summarization?
There's some other tactical advice which is self-evident if you spend any time working in tech but for outsiders it might not be clear.
For example he talks about interviewing every 3 years, and keeping your interview skills sharp. Specifically he says Practicing your interview skills is the best financial investment you can make
This IMO is the best way to grow your compensation, the way companies structure their compensation is often at odds with inflation and market conditions. If you're not regularly checking your market value via interviews, you will become underpaid.
Again I didn't learn anything I didn't know already, but I think this does a good job of giving tactical advice to someone unfamiliar with the concept of a achieving financial independence via high tech.
This strategy too has some limits, its not like you can keep interviewing forever.
Most companies will flag you eventually if all you've done in your career is write a 100 line bash script and leave every six months, in fact if they are a serious shop they'll likely not want to touch you with a 10 foot pole.
The next problem of course is ageism, you are likely to enter that issue as soon as you are in your late 30s. Of course starting a family in your late 30s, or buying a home, getting fit just keep harder and harder with age. And being known and being used to being a drifter wont help much as you get older.
Let's be honest this kind of a lifestyle demands making some lifestyle priority choices and getting very lucky early life, but even that has a cost as you age and its not exactly good.
And also, the article says "don't buy a house". I put both of these into the principle of save more than you spend. Some of us consider those necessities in life, however, and we're willing to make the necessary tradeoffs.
The article doesn't say "don't buy a house", it says there are pros and cons to home ownership, which is true.
Buying and selling homes is extremely expensive - it doesnt make sense for someone who wants to have the ability to move with little friction. Its also putting a lot of one's financial resources into a single asset. A housing market downturn could be financially ruinous, a series of expensive repairs could easily cost far more than an entire year's of rent. Property tax, maintenance, and potential HOA fees mean that even after paying off your mortgage, you're never actually free of ongoing housing expenses.
However, if you have kids or other ties to an area, owning housing can help make your expenses both lower and more predictable than renting. Over long enough periods of time, the housing market also tends to go up, which means it can be a good investment.
I mean yeah, step one is almost always "make more money than most people on earth", which is obviously not an attainable goal for most people. if you're already on the right track, it's not terribly interesting to read. but being a disciplined saver and making reasonable investment choices is surprisingly uncommon even among people who do actually have the prerequisite income.
something about it just doesn't click in the minds of some people. I have a buddy that's been poor (like, rice and beans and still missing rent) his whole life. yet somehow whenever he receives some sort of windfall, he spends thousands of dollars faster than I do on a >$150k salary. he finally got a good job making ~$80k and his first thought was "I'm gonna get a nice 3BR apartment". he lives by himself with no children or pets! maybe if enough articles like this popped up in his feed, he would understand the issue with his approach.
The part where their salary wasn’t very good in the salary table; you have to play the market, which is currently favorable toward software engineering.
I’m not sure what people are expecting. Eating rice and beans on $100k is still less than $100k savings.
"I do not understand why articles like these consistently score poorly on HN?"
Because the article pisses me off. This is not something helpful to us average peasants. No shit you can become a multimillionaire if you're pulling in over half a million per year. Maybe some of the advice I'd good, but it would be worth more coming from someone who actually is average so we can see it as evidence. Otherwise it's some rich person telling us what works based on their theory and an experience that's nothing like our's.
The implication of the article, that such compensation is reasonably possible to a moderately competent software developer working for big companies in the United States, seems pretty reasonable to me. Another thing one could note is the bump in compensation in recent years, which could be a combination of stock going up, more experience making the author a more valuable employee, or market rates for software engineers at large software companies have gone up.
None of the numbers strike me as particularly unusual for the author’s circumstances, so if they strike you as unusual (and you are able to work in the US), then it might be worth considering trying to get yourself into similar employment, if that’s what you’d want. If you can’t work in the US, things are different and potentially a lot worse, but the other thing the OP states is that a professional on a more modest income ought to be able to do well making sensible investments[1] and cutting costs. I think that’s true in basically any developed country.
You claim that the author’s route was not average, but I think it probably was reasonably average for a software engineer working at large US tech companies in NYC/SF/Silicon Valley. The less average thing is perhaps saving lots of money, making reasonable investments, and not having a load of expensive kids.
[1] e.g. 60% of the increase in net worth between 2020 and 2021 comes from investments rather than the ‘earning half a million dollars a year’ and those investments came from earning less than that (obviously such incomes still generally aren’t available to people who aren’t software engineers at big US tech companies, and it may be reasonable to complain that a path that >100k people follow is unreasonable but within this path I think it’s pretty reasonable).
"I learnt that even an average engineer with a five-figure salary can become a millionaire by her late 30s, through financial discipline and investment planning."
Then why doe the article mention average as part of the target audience?
"The implication of the article, that such compensation is reasonably possible to a moderately competent software developer working for big companies in the United States, seems pretty reasonable to me."
I'm moderately compentent and work for a large company. Why do I make under $100k? It seems your perspective might be skewed as it is not common, as evidenced by the median dev salary of about $105k.
"None of the numbers strike me as particularly unusual for the author’s circumstances, so if they strike you as unusual (and you are able to work in the US), then it might be worth considering trying to get yourself into similar employment, if that’s what you’d want."
Again, I think there's a drastic perception issue here. These number are by definition unusual or rare given the median. It's simply not possible for an average person like me to make that kind of money.
"60% of the increase in net worth between 2020 and 2021 comes from investments rather than the ‘earning half a million dollars a year’ and those investments came from earning less than that (obviously such incomes still generally aren’t available to people who aren’t software engineers at big US tech companies, and it may be reasonable to complain that a path that >100k people follow is unreasonable but within this path I think it’s pretty reasonable)."
And again, the majority of the US devs fall at or below the median, putting them right around or under that $100k number.
So yeah, use "normal" people get a little pissed off with people telling us that it's not unusual to be making multiple times our salaries and we could easily achieve this too if only we were "moderately competent".
"It's simply not possible for an average person like me to make that kind of money."
Putting these sort of limitations on yourself, from my experience, will dampen the effort that you put in to achieve new levels, if you even try at all. That reduced effort will result in exactly what you predicted for yourself.
So, begs the question, what sort of effort have you put in to increase your pay past the median dev salary.
Masters, extra hours, working above my level, taking on extra responsibility, volunteering for initiatives at work, working on personal projects in my own time, multiple certs, business acumen certs, etc.
The number of opportunities to make significantly more money are exceedingly rare. Especially with family constraints like not being allowed to move or no longer able to work extensive unplanned extra hours due to childcare responsibilities.
I interview well. I'm slow at the code screen since I don't get to specialize in any language/stack (working 8 or so apps in multiple languages/stacks). It seems they just pick random languages too.. like my last code screen was in JS, which I haven't used in 5 years (other than to brush up 2 days before the interview). My soft skills are generally good.
There aren't a lot of opportunities in my area (Philly region). Even many remote jobs are not worth applying to (only going to switch if it pays at least $100k).
Exactly half of US devs earn at or below the median. Which also means half earn at or above it (ignoring the small percentage at exactly the median). I don’t know where you’re statistic comes from but obviously for most of the companies in the OP, salary is only part of the compensation with stock being another part. So someone with a salary of $105k at such a company probably earns more than that when you include stock/bonus.
A median being much lower than the numbers reported by the article could be explained by a few things:
1. That compensation is bimodal
2. That there are more people at more junior levels than at senior levels (either more people coming into the field or older people leaving or more experienced people changing roles to e.g. management at some companies and no longer counting towards the ‘software engineer’ category)
I think it’s a bit of both, but good data is hard to come by.
I don’t know about your circumstances. I don’t know what your constraints are. If you are in the United States, I would encourage you to suppose that a path like the one described in the article is reasonably achievable for a software engineer in the United States[1]. If you think it is true and that you are therefore unfairly treated, then maybe you would re-evaluate your opportunities and consider interviewing (yes this process sucks…) to try to find out whether or not it really is true, as you’d have a lot to gain and not much to lose. If you think it’s true and that you are in an acceptable position then you can avoid having an emotional reaction to threads where people state that the thing you think is true is true. If you think it’s false and it turns out that you were wrong, you may regret not acting sooner. If you can’t participate in the US labour market, that’s quite different. For example many experienced software engineers in the U.K. will earn less than $70k though I don’t have statistics to hand. Larger companies offer higher pay now but the market seems quite different from the one in the US.
I hope you don’t think I’m attacking you. I’d like you to feel like you’re able to make deliberate, informed decisions rather than that it is all luck.
[1] If you believe it is achievable for someone working at these big tech companies, consider that there aren’t that many software engineers in the United States and that a rough low lower bound for the number of engineers employed by companies meeting the above description would be 100k (I think the real number is >3x higher, but this 100k number could be found by looking at a small number of companies) so in percentage terms, it can’t be too uncommon to work at such places.
A second thing to say is that high compensation in the US does not require you to live in Silicon Valley or New York. Many well-paying large tech companies have satellite offices in smaller metros offering only slightly lower pay, or offer remote work with either no cost of living adjustments, or an adjustment that still allows for high compensation.
A third thing is that opportunities aren’t equal, for example hardware engineers, game developers, and possibly people in the embedded space tend to be paid (potentially much) more poorly than more general software engineers.
Finally, maybe everything will change. I don’t have a great reason for software engineers to be so highly paid and there might be some big crash or other correction that stops that being the case.
> such compensation is reasonably possible to a moderately competent software developer working for big companies in the United States
The author made $625k in compensation this year. Even for large US tech companies, that's far above the "moderately competent" level. According to levels.fyi, this is approximately what a Principal SWE makes at Amazon, the third highest compensation level listed.
You're looking at take-home, while levels.fyi shows granted amounts. AMZN and GOOG have both ~tripled since early 2018, so if you joined with a large stock grant (and as the other user mentioned, amazon's are backloaded), you'd be getting 3x the modelled amount. So someone who joined with a 160K salary and 400K stock grant at Amazon, which is modelled compensation of just a bit over 250K would take home 160K + .4 * 400K * 3 = 640K this year. That translates to the high side of L5 or low side of L6 at amazon, which is to say well within the "Senior" band.
The average joe who'd write this blogpost wouldn't be an average joe anymore. The reality is that most of us in tech can aspire to the author's outcome, with high probability of success. The odds are stacked in our favor. If we're willing to do the moves and do the "sacrifices", most of us can pull it off. But in the end you need the right attitude, and some advice about good strategies, like the author is giving out.
I think the cynical perspective is entirely exaggerated in the software industry. It's also an awful way to look at things, almost guaranteeing a self-fulfilling prophecy.
"The reality is that most of us in tech can aspire to the author's outcome, with high probability of success."
This simply isn't true. Most people cannot retire after 12 years of working, even in tech. The median software dev salary in the US is about $105k. You cannot reasonably earn $2.4M when you make about half of that during those 12 years.
It's not hard to move up the quantiles if you put the effort. It doesn't require ivy league education, a rich family, or a particularly genius mind. The mean salary is useless in quantifying wether you, as an individual, have any agency in influencing your outcome. Your attitude toward it, however, has a lot to do with it. And surely starting with the assumption that it's impossible doesn't put the odds in your favor.
In any case, 105k median income just goes to tell how big the opportunity is.
I'm not going to change your mood but I hope someone else reading this interaction early in their career will come out of it with an optimistic mindset instead of a cynical one. It pays off better.
I'm early in my career and I'm bullish on myself, but I would never go around preaching that there's a "high probability of success" of a SWE making >$500k because clearly there is not.
I'm bullish because I have evidence to support that possibility. Most people have zero evidence that they would ever make >$500k, let alone having a "high probability of success".
But you don't need to pull 500k/y to end up with >1M$ after 12y. Just compound interest will get you there rather quickly if you save half of your 105k median dev salary. Of course doing so isn't comfortable, but I'm sure you can agree it's doable.
Also while 500k/y is a stretch and usually occurs due to stock appreciation (not salary), you can reasonably assume that landing a job at big tech will lead you to a 300k total comp within 12y. If you care enough to play the career game.
I hope they are realistic. I was optimistic but was repeated crushed. It would be better they prepare for the disappointment and negative outcomes, because life is an endless parade of them.
Keep in mind you can be disappointed in more than one way. Either you tried the impossible with an optimistic mindset and failed anyway, or you failed at something doable because you took pessimistic choices.
It's not actually obvious which category this is in.
Yes, but the optimistic mindset would probably have a better outcome than the latter regardless if they failed to meet their original expectations or not.
That's what an optimistic person would say. A pessimistic person might believe they have a better outcome because of hedging against the pessimistic possibilities.
It seems we should need objective data to filter through the bias.
There's research supporting the optimist strategy but I'll be lame in that I can't link you to it without searching for it longer than I can dedicate time for. I think Codex Alpha talked about it fwiw. Personally, I'm in the "shoot for the stars, hope for the moon" camp. Pragmatic optimism or realistic optimism? Some such.
> I learnt that even an average engineer with a five-figure salary can become a millionaire by her late 30s, through financial discipline and investment planning.
I can collect enough pennies to have a million dollars too. What do you trade for that and how likely is it that you will have the resources to live it out? His living expenses are put at 0 with a network of whatever his salary was. No rent, no car, default employer health insurance, 600/mo to eat ramen and cover utils, no kids, etc.
> There's research supporting the optimist strategy
The statistical evidence supports the pessimist strategy. In theory, theory and practice they are the same...
These blogposts feel like clickbait to troll. It inevitably leads to people arguing past each other with the predictable outcome of neither being wholly right, but the optimists blowing sunshine like it's a useful fairy dust and the premise remains laughably unrealistic, regardless. I know plenty of dirt poor optimists.
My guess is some of the push back is because these kinds of articles seem tantalizingly prescriptive yet often bake in assumptions or choices that are unattainable for most.
Things like be born smart enough to land 6 figure job (or high 5 figures 20yo), be born into the middle/upper class, don't have extended family dependencies, don't have kids, don't have an SO or find one willing accept all the constraints, accept living in modest accomodations for the duration, or that now is roughly the same as when they started.
> rather than simply admitting that they willingly chose a different path in life, but they could have chased my same opportunities with largely the same financial outcome.
Let’s suppose everyone did this, how do you see it turning out?
I don’t want to dismiss your question, but to be honest I don’t know how to answer it. Maybe if everyone did it new arbitrage opportunities would arise so that it would become more lucrative to move somewhere else where there is a demand for services that nobody is doing anymore? But I am not an economist so I am not interested in reading 50 pedantic comments about how my previous sentence is inaccurate.
I do not concern myself with non-practical (in my opinion) matters because I know that the vast majority of people will not take that path, so it’s likely not an issue.
> rather than simply admitting that they willingly chose a different path in life, but they could have chased my same opportunities with largely the same financial outcome.
But then you also say
> I do not concern myself with non-practical (in my opinion) matters
I find your comment incredibly pedantic (just my opinion, no offense).
In my opinion, a practical matter is a single person (specifically, one of my peers in my home country complaining about my compensation without taking any action) deciding to make sacrifices to immigrate to the US.
A non-practical matter is worrying about everyone in my home country deciding to do the same.
> Do you believe someone who were to try to take the same path as you could have the same financial outcome today?
Yes, I do believe that, the odds of legally entering the US with a CS degree are still largely the same of when I entered a few years ago and are reasonably attainable with enough perseverance over a few years, there are different academic and worker visas that can all be used to get a foot in the door. Also, the job demand is significantly higher today than it used to be a few years ago. New grads can make $200k+ compensation, my comp as a new grad was like $35k and I still did fine.
Naturally going down this path will require significant sacrifices, as per my original comment. You need to be willing to be very frugal and likely move away from parents, friends and family, and not knowing for many years what your final immigration status will be (as you move from temporary visas to permanent visas to green card etc.). In my case, it also means no kids, no car, etc. (similar life as the author, I assume).
My whole point, let’s please not forget, is that on average people are not willing to make the above sacrifices but they still like to loudly complain when folks share articles like this one.
> How would it change if they couldn't get to the USA?
The odds are good they will, in my opinion. If they won’t, there are other options. Sampling my friends:
- if you are slightly more entrepreneurial, move to another tax-favorable country like Malta (similar tax rates as US) and contract with American companies, with financial outcomes largely similar to mine.
- if you just want a typical employee experience, Canada is also a really good option that many of my European friends who didn’t want to go through the US immigration gauntlet chose, and they are doing very well.
Once again, all these decisions take sacrifices but they are relatively attainable.
>I do not concern myself with non-practical (in my opinion) matters because I know that the vast majority of people will not take that path, so it’s likely not an issue.
Vanguard index funds are basically meme stock status in large part because of articles like this. So arguably it's already happening and distorting prices.
It already is. Along with the companies. The top tier paying companies are flooded with candidates and difficult to get into because of articles like this.
People are already doing all this. Probably about as many that ever could. It’s why the interview process is so ridiculous and keeps getting more difficult.
I'm a typical average joe, but I love reading these because I'm learning from them what to do when I have such resource.
Yeah, there're people luckier than me, but I'm increasing my odds in a variety of endeavors and improving my skills. I'm far from my goal yet, but results are very encouraging so far.
As a fellow immigrant who never hit these kinds of incomes I agree. It’s an interesting read, the author is humble enough to realize his result involved a good portion of luck.
I judge my own progress by where I was 10 years ago, not where some random internet author is today.
Your flip comment seems to belie the fact that he's only earned at least a half a million dollars for one year. Most of his years he earned substantially less than that.
The majority of his NW comes from investment and savings, not income.
The point of the article is that cutting expenses, saving, investing wisely, and aggressively pursuing pay raises can yield a few million well before retirement age.
These sort of casual dismissals negate the educational value of the post.
> The point of the article is that cutting expenses, saving, investing wisely, and aggressively pursuing pay raises can yield a few million well before retirement age
Most people will have nowhere near the same results as the author by implementing these things.
The biggest factors here are:
1) Earn a lot of money
2) Don't spend it all
I don't think this post has much educational value at all because I think most people already understand those points, they just can't execute on them in a meaningful way.
> Your flip comment seems to belie the fact that he's only earned at least a half a million dollars for one year.
I would say $475k is close enough, in all honesty.
> The majority of his NW comes from investment and savings, not income.
Sum of (earnings - spent) over the career is $2,611,000. Net worth by the end is $2,400,000. In order for investment returns to be above savings on income, taxes would have to be 42.3% of lifetime earnings, which would be a bit surprising.
Tech stock is taxed at around 50% when you get it and then 20% of the upswing. So $475k total comp is more like $250k in your bank account in practice.
If you are going to include the tax rate on the capital gains, then you should include the capital gains in the amount in your bank account.
You should also hire a CPA or at least spend some time reading about strategies to minimize taxes if you are paying close to an effective 50% income tax on $500k of income.
If you earn more than $523,600 and are single, then your tax rate is not 50% but 37%, which is still meaningful amount that is often not considered when looking at those big numbers.
https://www.manafld.com/blog/2021/2/26/rsus-no-sell-tax
If you are in California, then your employer will not give you all your RSU but sell 40% and give you 60%. So you don’t have a big scary surprise when it’s tax season. https://blog.myrawealth.com/insights/rsu-tax-rate
> If you earn more than $523,600 and are single, then your tax rate is not 50% but 37%
The federal income tax rate only for income above $523k is 37%. Only for income above $523k.
> If you are in California, then your employer will not give you all your RSU but sell 40% and give you 60%. So you don’t have a big scary surprise when it’s tax season.
Withholding amounts seem irrelevant when discussing effective tax rates.
> If you are in California, then your employer will not give you all your RSU but sell 40% and give you 60%.
That is entirely irrelevant. You will get taxed the same no matter what they sell and give you. If your tax rate should be less than 40% (true for me, and probably most people here), you'll get the money back as a refund.
You do miss out on any appreciation, but if you know your marginal tax rate is < 40% (just look at your previous tax returns to figure it out), you can simply spend the delta to buy the stocks you should have gotten and you'll still get the appreciation (and the cash in the tax refund to compensate you for doing this).
This doesn't line up with my experience. I have the option of having anywhere from 22-37% of my RSUs withheld to pay taxes. The IRS only forces you into the 37% supplemental withholding rate if you make more than $1,000,000/year which alas is a problem I've never had.
I calculated 42% effective on lifetime income, and I suppose the writer was not taxed at 42% on their 100k income from the first years, so the tax rate for later years must have been higher.
Bogleheads forums or whitecoatinvestor. Even just 401k, HSA, 529, and megabackdoor roth should help bring down effective tax rate (for the $500k income being discussed).
You will not get as low as someone with their own business or S corp, but the tax advantaged savings account should help.
So you have to not enjoy the best years of your life and spend time and energy keeping track of investments to... get bored as hell later because your brain is so used to just work and save and nlt enjoying life that you will feel guilty spending that money?
I want to retire at 55 but I'm really skeptical about the FIRE community, especially by the ones in their 20's
Your flip comment seems to belie fact that he's only earned at least a half a million dollars for one year.
475k == 500k for all practical purposes. The guy averaged 525k for 3 solid years (not "one year") -- which makes the parent comment rather less flip.
These sort of casual dismissals negate the educational value of the post.
The bottom line is that while saving and investing is certainly smart -- you better damn sure be earning 98 percentile income as well if you want to get as far ahead of the game as this guy has.
$100K first job which is around £74K in the UK… you aren’t likely to get anywhere near that as a grad masters or not here but after taxes and student loan payments (which are deducted from your income in the UK) and all other deductions you’ll end up with £42,908.26 per year, that’s $56K.
And this is where this breaks down for people in tech outside of the US at least.
In the UK the path was at least until IR35 kicked in was to slave for about 10 years and become a contractor at which point you’ll charge per day nearly as much as you used to get per week if not per month…
You can do a lot of it without moving to the US or working as a small but niche consultancy outfit (I get 200+ euro/hour from and in the eu); wfh for a US company, as a company in a cheap EU country that has favorable tax for companies. Then optimize. For instance, a UK company can deduct a lot of things especially work from home, you just need to optimize for them. Works fine for programmers at least. I do not think people who 'work jobs' know how much they can optimize their position; which is comparable to the US in rights really in many EU countries.
That’s part of the issue, with consulting you’re forced to act and think like a company rather than an employee. It requires more research or hiring professional advisors. There’s potential tax benefits, but also corresponding legislation to ensure you and your clients aren’t dodging social security contributions. I’m sure once you have some experience it’s simple, but from the outside looking in, it seems slightly risky.
Well here in the EU you can have jobs with almost 0 risk but less than US money, or a bit of risk (which you would also have in the US; easy to fire people there I think?) and make US money with Healthcare etc intact even if you lose a client. No more stupid interviews (they are hiring a company, not a person; I never had to do one because of that) and you have a safety net in the EU whatever happens anyway... Maybe I should write something about it as I have been doing it for 30+ years.
You should reconsider your worth and attempt to re-negotiate pay.
I started out 6-7 years ago at £30k and am now at £100k + options (worthless). Have only ever worked at startups. You can 1.5x that easily at a big tech (some FAANG jobs exist in London).
You then end up paying London rent…
You won’t be able to afford to rent a luxury London flat on 100K or even 150K but a 2 bed in any decent area is £2-2.5K council tax and utilities would be another £200 p/m easily.
You are probably better off making £80K in Manchester as a senior dev than £100-110K in London.
Newcastle has also a decent tech ecosystem tho it is very much focused around Sage.
Not any more I’m on £150K base and total cash comp of around £200K with bonus, car allowance and some other perks.
Whilst it’s true that I probably won’t find a pay like this outside of London it’s also quite hard to get it within London if I lose my job it’s more likely that I’ll have to take a pay cut than not.
In fact once you get to 6 figures in the UK outside of contracting it’s not uncommon to essentially bounce up and down by as much as 30% between jobs.
Looking at the more median salaries especially post COVID the pay gap has shrunk considerably.
Finance/Fintech is still very much London centric and those places pay the most in uk tech outside some senior FAANG roles but not everyone is lucky enough to land those.
It’s even not about being good or asking for more it’s really about just landing a job with an employer that is able and willing to pay that much and being able to justify that to them and it’s not as easy as it seems to be in SV.
In fact just before the pandemic I was looking to make a move and I went to a few recruiters and their honest advice was pretty much stay where I was (less than what I get now but 20% (5/15 split) pension and very very good benefits).
I did managed to move in early 2020 to my current role but that was through my network.
Overall considering it the loss of pension I probably came out even it was more of wanting to do something new in a different setting than the pay.
Maybe. We own our flat in Zone 1 (Soho, 48k down payment, 12k closing costs) after 5 years saving, mortgage is 2.29% ~ 1900 a month. Save about 2500 a month. The one thing I will say is that the "single tax" certainly exists in London, and I find my situation affordable because I have no kids, and my partner brings in an other £35k or so. If we wanted a 3 bedroom or something, forget about it. That's when it becomes absurd to live in central and totally prohibitive.
Also, my experience with London companies + recruiters in the last 3 months has been that permanant remote roles have been cropping up. I would say its about 50/50 of whether a job requires any on prem time, and about 90/10 that the job requires 1-2 days a week on prem.
For a 2019 purchase there is no way that’s more than a studio maybe maybe a tiny 1 bed, if I want to buy where I rent now (W2) I’m looking at 1M+ for any two bed that isn’t a 50sq/m lower ground closet, the non council is a given I don’t think there are any council properties in Soho…
The 2 bed flat I’m renting got recently evaluated at 1.7M it’s very nice and very large (for London)but the lease remaining on it is 68 years and the Victorian building it sits in would need a lot of work very very soon so the buyers are looking at 350-400K bill within a few years of buying the flat (leasehold renewal and building repairs) on top of that which also is why the current landlord is looking to sell.
As it stands now if you want to buy a property for £600K you are looking at £60K deposit, £20K stamp duty and probably another £20K for misc costs.
£600K is a below what an average new build in a Zone 3 would cost you these days outside of the few units they reserve for HTB. If you can save £3K a month you’re looking at 3 years of saving. Since most people / couples would struggle to save even £1K a month especially in their early careers they are probably looking at a decade of saving for a property or even more if the house prices keep on rising as fast as they are now.
I stayed at my ex's flat in W2 around twenty years ago, the estate was selling 2-beds for 240K then - are you suggesting those flats are over £1M?? I dare not look at prices.
Edit: Reader, he looked at the prices
Found almost identical flat at 499,999K, so coming in at less than Millbank flats were going for in 2016. Those flats are only £25K more now. This seems perfectly doable for software engineers who have a good permanent job or are contracting.
We lived in NW1, W1H and SW1 for fifteen years and it was totally doable with two earners even starting on a perm salary of 35K, and as the income increased we stayed, but within three years of kids arriving, it was clear that we needed to make a choice. Stay with a two-bedroom in Zone 1 - and pollution etc - or jet to Zone 4 and triple our space.
Five years later I think it's more feasible to stay in Zone 1 or 2 with kids as the air becomes cleaner and you should have saved up enough to find a bigger place. A friend travels from Zone 1 to 4 every on the train for the school run, so it's perfectly doable given flexible working.
At my last company we hired new computer science graduates at more than $100k per year.
A friend of mine has a son that just got a job offer right out of a medium tier computer science school with total compensations more than $200k per year.
IR35 hasn't really affected that path, you can find contracts that are outside of the legislation and as long as your working practices are also outside you're fine, there are also insurances now for these things.
There is also nothing -- literally, nothing -- to prevent you from finding a remote work contract with a US company, and billing them at a rate appropriate for the US market. From your point of view, there is no VAT chargeable on B2B services supplied to a customer located outside the EU, and you can get paid easily using a Wise account. From the client's point of view, give them a W2-BEN-E and they can effectively consider you as 1066 status.
A lot of companies don’t hire contractors under their own LTD anymore they only take those that come through an umbrella company that pays them under PAYE.
USA salaries are really unbelievable. That £74,000 which seems to be a poor salary in the USA judging the the OP would be a really very good salary in the UK
Are UK salaries quoted post-tax? USA salaries and wages are usually quoted pre-tax. Obviously not a 5-10x difference, but that still makes comparison more difficult with regions that usually discuss post-tax earnings.
Quoted before income tax and employee national insurance (50%ish) and after employer national insurance (13%). Most people seem to forget about that extra 13 since it disappears before the 'gross' number on the payslip.
Hahaha I wish these numbers were quoted post-tax... unfortunately UK numbers are in my experience all quoted pre-tax, just like in the US. So yes, that £74,000 really is before ~22% tax (income tax + national insurance).
In the UK, the stronger drag on wealth accumulation for the poor is the absurd taxation on the middle incomes (50K+), especially given the very low level of service of public schools, healthcare system, childcare, etc…
Not making a judgement call on which is better (its all trade offs), but this is what Americans don’t get - all those social benefits have a cost and a good portion falls on the middle to upper middle class.
I think a lot of Americans envision finding a European style social safety net by only taxing billionaires.
I think the UK managed to strike the worst possible compromise between the Europeans and the Americans. The NHS provides some basic service, but if you want a French or Italian style healthcare, you’ll end up spending thousands of pounds per year, assuming you are relatively healthy. Childcare is nonexistent, nurseries cost in the order of 1500£ per month per child. State schools are so bad that it’s normal to send your child to a private school. Unemployment benefits are offensive.
All this while everybody with a professional job faces a 40% marginal tax rate (plus NI).
I don’t think the UK has a European style safety net, they don’t tax enough people for that the first £12.5K of your income (below £100K) are income tax exempt the UK has the narrowest tax base in Europe.
Agree that the stronger drag is the cost of childcare, but the poor don't earn 50k+
In fact, if you earn 50k as a single without dependants (or if you are a couple with 2x50k income) you're definitely richer than the majority of folks.
Also, the UK tax system is incredibly generous to high income folks: 40k+ tax exempt pension contributions, 20k ISA allowance, 12k cgt allowance. It means that you can accumulate a good chunk of capital before you'll even have to start paying taxes
You start to lose your income tax allowance at £100K that more than offsets the CGT tax allowance and puts you in a hidden 60% tax rate.
Childcare is expensive as fuck and you lose your childcare allowance at £50K in fact if you share a household with anyone who claims it and you earn more than £50K they’ll deduct that from you…
Living on wealth in the UK is as easy as in the US I would agree to that perhaps even easier since there are no property taxes and probably even more tax schemes to leverage than in the US but getting to that point under PAYE even whilst earning well above the median wage isn’t easy especially if you want to have children and have to live in London for that pay.
The main issue is just how depressed many of the wages in the UK are and thus just how narrow the tax base is.
My point is that if you start your career owning nothing and work hard, you pay an insane amount of tax on it. Even if you make 100000£ per annum, it will take 20 years to accumulate as much wealth as a guy who inherited a 60 square meter flat. In the meanwhile this other guy hasn’t paid a pound of tax and is maybe receiving some benefit.
I should have specified that the problem is the taxation of work-related income (the main source of income of the poor) compared to the taxation of wealth. On this respect I find particularly egregious the NI hike (an increase of the income tax or the introduction of a property tax would have been more appropriate).
this is a huge factor that influences almost every other decision he listed there:
- living with roommates or renting a cheap apartment
- not wanting to buy an apartment
- having the time to do side hustles
- even changing career paths is challenging when you have a family to take care of
- saving the majority of his annual compensation
I don’t want to say his advices are bad, just keep in mind that it’s not applicable to everyone
This is the fallacy with this approach IMHO. Yes you can save a ton my living on minimal spend with no kids. That’s also not a life many/most people desire to live.
I’ll all for saving and do broadly follow a similar approach. With kids I won’t be retiring in my 30s or 40s but I’m investing in life now so that when I do retire it’s a much more well rounded and wholesome experience.
To each their own, but most of the “I’m not gonna have kids and just save all my money” types I know say later they made a poor life choice that’s hard to fix once that realization is made.
The main advice I do agree with is just because you start earning more doesn’t mean you should start spending more. Living comfortably below one’s means is a good way to build wealth over time. I just don’t recommend the “extreme” version of this.
To each their own, but most of the “I’m not gonna have kids and just save all my money” types I know say later they made a poor life choice that’s hard to fix once that realization is made.
You can make the same sweeping generalization with parents who raise kids that are ungrateful and/or complete disappointments.
I know plenty of parents that feel abandoned by their children, who only get a courtesy call once or twice a year. Or worst, children who are continuing to be a financial burden in their 20s/30s/etc.
Very few parents will admit to the fact they regret having children. But the regret is there.
The difference is that those parents are usually assholes and deserve everything they got (or don’t get). People who chose to not have kids and just Scrooge their way to FIRE aren’t necessarily going to be the same people.
By all accounts - if you are certain that you don’t want kids, you’re not going to be a decent parent, or you have some severe issues then yeah maybe don’t do kids. But often what I see is a deeper issue of cheapness/scarcity/whatever that could be addressed with therapy and then happy children with happy parents could emerge from that.
Truth is - if you’re in SV and under 35 - you’ve likely had incredible parents. The overwhelming majority of my younger colleagues in SV love their family and were raised somewhat decently. They’re not the meth heads you’ll find scattered throughout rural America.
With that income? Sure, if kids came into the picture during the last day 3-4 years it would increase his expenses, but he’d presumably also have another income, at least for a few years?
I don’t disagree that for middle income earners kids are a huge expense, but when you’re making $350,000+ each year, $30,000 for childcare isn’t a dramatic expense. Same with all the incidentals.
The biggest expense is college, at least in the U.S. If you retire before they apply, you may want to be conservative and set aside the cost of the most expensive college. MIT is $77k/year [1]. For two kids, that's $616k. And it increases faster than inflation, estimate 6%/yr. If you have enough money in the bank that you're financially independent, they won't qualify for need based aid, you'll have to pay the sticker price.
Columbia is more expensive.
And if one of them wants to become a doctor or lawyer, now you need to pay for grad school too.
Not going to lie, but Americans paying 100% of their kids college is kinda weird as an immigrant.
My kid can take out loans and sure I’ll help, but hell no I’m not bank rolling multiple kids at full private school tuition.
At least where I grew up a solid public school college was not an impediment to a good career.
I’ve notice Americans tend to hyper-optimize - I love it when parents tell me they bought in Palo Alto because the public school was rated a 9.3/10 versus San Mateo at 9.1/10.
“ Americans paying 100% of their kids college is kinda”. As a non immigrant it’s weird to me too.
There are a class of parents who obsess about “the best”. Best schools, best tutors, best nutrition, best ‘experiences’, best neighborhood. It’s a hedonistic treadmill in the making.
Seriously. I went to public school, and the 2022 estimated cost of attendance, including tuition, room, food, books, transportation and personal expenses is around $30k/year. Certainly not cheap, but over $20k of that is just the living expenses. Tuition is relatively affordable.
Every time I see things like this it makes me so grateful that we have a state scholarship (HOPE). I pay like $200 a semester on tuition, then around $1000 on other school fees.
If I don't have to relocate for job opportunities (currently in Atlanta), I plan to stay here and encourage any future children to stay in-state. That's of course assuming that the state doesn't kill off HOPE by then.
I'm living with my son and girlfriend with a roommate. It's doable if you are open minded, know open minded people and don't care too much what society thinks a family should look like. An honestly, it's great to have a buddy right at home in these social isolation times.
Whenever anyone offers any advice on any subject at all, I find it essential to determine whether they have kids or not, because the with-kids solution set seems to be entirely different to the without-kids solution set.
Also, advice depends on the generation the author is part of. Millennials have more difficulty getting to financial independence than, say, baby boomers or Gen-Xers had.
It’s also worth noting that the OP did most of these things at a young age, when most people don’t have kids anyway. Though they may find that that $2.4m won’t generate sufficient income if they do have kids, but then I think they could probably just go back to work if necessary.
To have 1 MM USD/EUR at the end of your thirties given an average 4 % yearly return on investment, you need to save around 4.000 USD/EUR per month starting at age 25. In Europe, if you earn around 100k EUR per year your free income will be around 5.000-6.000 EUR per month. Saving 4.000 EUR / month is doable with that but you'll have to live very frugally, not traveling much and you better not start a family unless you have a partner who will supplement your income.
And regarding the authors' experience: Yeah, if you happen to be employed in the area that ranks in the top 0.05 % quantile for engineering salaries worldwide you will easily become wealthy, especially if you're lucky enough to be paid in company stock during a stock market bubble.
European countries usually don't pay 100k for 15 year olds, also after tax it is (well depending on country) 4.5k in Germany. If you live frugally you can save 3k.
Not to mention some places (Ireland) kneecap your gains by taxing even unrealized gains via a rule called deemed disposal. Nevermind 52% income tax that kicks in extremely low.
Yeah I don’t get how their outgoings are so low given where they must live… rent or buy it simply doesn’t fit even if they are renting a room and living of cup noodles based on rent in the Bay Area some of their outgoings are suspiciously low.
So I think getting a house gifted by your parents is also a requirement for their path.
Their outgoings aren't particularly low. I guess early on they were, but that's "living with roommates". Their current col is very much in the "rents a two bedroom apartment and spends whatever they want on food" category, but they probably don't own a car.
My personal expenses are a tad lower than theirs, and I rent an apartment in San Francisco that I live in alone.
Not really. An appartment alone is $2000 a month according to the post. That's 24% of your income at $100k, and not even 4% at $620k. I don't know how much people in the US usually spend on rent/housing, but anything under 30% of your income seems low to me.
Maybe HN is more likely to be in that quantile than the general population of developers; “more likely than not” implies that most people on HN are in that quantile which I kind of doubt but I don’t have data to support either way.
> If you’re still a student or open to attending grad school, do everything you can to gain admission into a top-5 Master’s program
I think you are over-estimating the impact of a "top 5" master's program vs an average master's program. I had a very similar trajectory to you and went to an average master's program.
The major difference between you and me is that I never wanted to work for a Google, Amazon, or Hedge Fund and wanted to work at smaller companies. Salary suffered because of my reluctance to even compete for those jobs.
> The biggest boost in my career earnings came when I transitioned from a Computer Hardware engineer to a Software Engineer
I also disagree with this. The biggest boost in your career earnings came from working at (1) financial companies and (2) working at FAANG. I don't think you have enough data to say that your area of focus is what to lead to this, and I personally think it is wrong. Maybe it opened doors for you however
Beware that many masters programs from top schools are degree mills and the undergrads who went there know this and actively loathe them (based on their experience sharing classes with them). At least for my particular school. I remember helping out with resume screening at a job fair and we would sort everyone who went to that masters program to the bottom of the pile. A handful of them turned out to be good candidates on second pass, but it sucks that they probably would've had a better chance just leaving off their masters.
> Beware that many masters programs from top schools are degree mills and the undergrads who went there know this and actively loathe them (based on their experience sharing classes with them).
Thank you for mentioning this. So many people don’t realize that masters programs can be fairly worthless even from elite schools.
For multiple reasons (scarce supply and large demand of visas, unfair stereotypes, etc) international hires need more objective criteria to stand out, even if it's just window dressing
Salary suffered because of my reluctance to even compete for those jobs.
The article talks about how to gain Financial Independence as a software engineer. Choosing to not work at FANG or unicorn co's, will severely limit your ability to achieve FI. Whether you like it or not, people do make judgements off of where you went to school.
I've had several managers at FANG talk about how they have a bias towards top 10 schools, one even admitted that the candidates don't seem that different but he still has this bias.
The biggest boost in your career earnings came from working at (1) financial companies and (2) working at FAANG. I don't think you have enough data to say that your area of focus is what to lead to this, and I personally think it is wrong.
You're welcome to look at the data on levels.fyi
It's pretty clear that at this point SWE's on average far-out earn HWE's. Not to mention the fact that there are a lot more open headcount for SWE's than for HWE's at the top-paying companies.
This is what I found frustrating about embedded and computer architecture jobs. Your knowledge base is difficult to attain and many jobs require you to disrupt your life by jumping on a plane and fly to $country_of_manufacture to diagnose issues while fighting jet lag. For that you’re rewarded less pay than your software engineering peers. It’s not worth it unless you greatly prefer to work closer to the metal.
This is on the disclaimer and several other comments already, but I can't help commenting.
Unavoidably: US based, 6 figures right from the start. You're pretty much half way there already.
Just happen to live in the US, work and don't be stupid financially. I guess it also helps not having a big "student debt" (that's also not US exclusive but US typical, since in many other countries education is cheaper - subsidized and you don't gradutate with a debt. ATL not a personal debt). But since there's so much tech demand in the US irrespective of education, you can often skip college and follow a different path. But not if you have to immigrate with a student visa to go the H1B way, haha!
The casualness with which you can earn those amounts of money and then lecture (not this particular post, more like the trend) on "retire at 40" or "financial independence in 10 yrs" is a bit tiring (from an outside perspective, and in a harmless-envious way) but all the best to those that are in a position to make it. Yes, casualness in a relative sense, not implying you don't have to work or anything like that.
I was expecting financial advice in the post but there wasn't any. There wasn't much of any substance either, but it sounds like the OP is still young and has some interesting plans to follow-through with.
> I was expecting financial advice in the post but there wasn't any.
Sorry, but that's just false. This article contained specific points of advice, a lot of which is parroted by most financially competent people, but not all. Here's a few takeaways I noticed:
> avoid accelerating your hedonic treadmill, and save that money instead
> Invest your money. Do not let it sit idle in a bank.
> My own investment portfolio has consisted entirely of US equity (VTI), Developed Countries (VEA) and Emerging Markets (VWO). In recent years, I’ve also added real-estate (REET) to the mix. My exact allocations have varied, but I’ve generally invested an equal amount in each of the above. If you’re more risk averse, add a bond fund (BND) to your portfolio
> Do not try to time the market or pick winners and losers. On average, these are both losing strategies.
> You should strongly consider interviewing elsewhere every ~3 years... Practicing your interview skills is the best financial investment you can make.
> I’ve heard many people say you should ignore equity and only look at base salary in a job offer. This is poor advice – always look at the total compensation, not any one piece of it.
> Tell recruiters what compensation you’re expecting, not what you’re currently making. As a rule of thumb, whenever I switch jobs, I expect a 30% compensation increase. Anything less than 20%, I would recommend waiting for something better to come along.
I think the real luck is getting on the ladder in the first place, where you have a prestigious job that is a natural step to even more prestigious jobs, ie you are always a likely candidate for the job above. Most hedge funds and FAANG employers get a lot of resumes that will never even be read.
Also you really don't know what you're actually applying for when you're a graduate. You think you know but only those who are fortunate are able to get it right. Plenty of people get a job thinking it leads somewhere. For instance, I've interviewed a lot of financial ops people who think they're on the ladder to becoming a trader. It does happen, but not that often.
But good on him, it still takes work and dedication to do something like this.
True in my experience. The path is set long before you think it is. Yes, you can jump on the prestige track later on (in my field, this means joining Apple after 5-10 years of working), but a Stanford grad naturally walks into these jobs. My spouse and I have the same degree and background, aside from alma mater, but they joined a FAANG, in a design role, out of school because that’s where everyone in their Stanford circle was going. I joined a tier 2 company in QA because that’s where my school was feeding people. 6 years later, my spouse is a multi-millionare* and I’m around 1 with 4 more years of experience.
I’ve been trying for years to jump to a FAANG and correct my initial career mistake, but it’s extremely difficult and I’ve only seen the top 10% of my company, in the right positions (not QA), do it. I need to do two jumps: QA to design, then tier 2 to tier 1. As a result, I’ve actually decided to throw in the towel and “reroll” as a software dev.
* For the purposes of retirement we track our net worths separately
[Edit] I also would like to mention that the article says as much
Absolutely. What's incredibly frustrating is that as I've moved up the employer prestige ladder, the level of talent definitely goes up, but so much of it is just a rise in credentials (e.g., better schools, better past jobs). Levels of motivation/effort don't seem too different: there are still the same groups of lazy people that put in the bare minimum and others that do a great job.
Each hop up takes a good mix of hard work and luck but it always results in a massive jump in pay
Changing career tracks like that is so hard. You almost need to hide your experience in interviews. I’ve had so many interviews get derailed because the interviewer finds out that I’m looking to switch away from a field I don’t enjoy and realizes that they have another opening there they’d rather fill.
> For instance, I've interviewed a lot of financial ops people who think they're on the ladder to becoming a trader
I think it is definitely possible to know. My college friends with parents in tech certainly knew.
When I was in college, I looked over H1B data to get a sense of what was really going on. The conclusion: finance, consulting, law, all vastly overrated in compensation unless you are doing quantitative finance or have a very rare job.
There is little point in discussing money and using yourself as an example when you are extremely well off.
Congrats to OP for having a lot of money in the bank, but there is nothing special or unique about their advice. It's the usual invest your money, don't spend too much, try to get into a top company, etc.
Even for someone in a similar situation, there is very little here that I haven't seen repeated elsewhere countless times.
> The author was lucky to earn a huge amount of money.
He's not earning "huge" amounts of money for jobs in that field. (Additionally, it's a field that most intelligent people can enter with 1-3 years of study.)
Compound interest wasn’t the key here. The key was salary increasing rapidly and the 600K+ salary at the end. He could’ve not invested at all and still gotten there.
This. Compound interest is the key when the household income remains stable for decades. With monthly investments and dividends reinvesting a medium class family can achieve something... 20 years from now.
Not saying the author doesn't have merit, of course he has plenty. It's just a different kind.
The fresh graduate salary for 100k is higher than the majority of US workers will peak during their entire career of 50 years (adjusted for inflation).
Yes. My friend and I are both self taught engineers (as are several others in our social circle — all coming from similar roots and places)
We are continuously flabbergasted how much we are paid, and it’s not even FAANG levels; still, it’s more than many other skilled and important roles in the workforce.
Part of me understands that there’s still a lot of money to be made and thus, salaries should continue to be high but other parts of me wonder (especially with increased ability to work anywhere) when/if we’ll see salaries normalize.
Salaries won't decrease until the demand of people to work in tech eclipses the demand of society for new tech. This works both ways. If a ton of people suddenly become interested in coding, this could pop the bubble. And if society suddenly stops demanding new technology (perhaps due to some catastrophic hack), then the bubble pops as well. The scary thing is that the latter is probably more likely to happen than the former.
The high demand is for experienced developers and not juniors. In recent years there has been an uptick in coding interest and the pool of newcomers is bigger than ever before. However, the _quality_ of this torrent of new developers is seen to be lower than previous years.
I think people who are graduating now will have a hard time replicating this. My cohort (now in our early 30s, cs majors from a top school) were incredibly lucky because we were in a permanent bull run so as long as we were invested in almost any tech stock, we did well. Almost all of us hit one million mark before early 2020 and that became 2 million at the end of 2021.
I would love for this to continue forever but can it really? For example the author (and my friends) are in similar situation where their compensation are now in the ~500k range but that number is based on the stock value at the time of offer. It is now essentially double that. So we're in a situation where your everyday senior FAANG engineers are locked in a golden handcuff unless they are offered million dollar packages to jump ship.
Golden handcuffs are a good thing. It's such a first world problem to complain about golden handcuffs. "Oh no, I'm making $300k/yr over my nominal market value!"
The golden handcuffs are only handcuffs if you’re in a terrible environment. I’ve walked away from a 7-figure TC. Handcuffs be damned. I wasn’t going to take the abuse anymore.
Some people don’t have the strength to walk away and instead will obsess over money for anything. It’s funny how I’m sure people would require much bigger numbers if they were given an offering where they’d have to go to a terrible prison for 2-3 years in their prime years.
There's no question that equity valuations are due for a massive collapse, the federal reserve has even admitted this. But there are a few things that make me thing that software engineer compensation has nowhere to go but up:
- The world is becoming increasingly computerized. The demand for software is skyrocketing.
- Software engineering is extremely economically efficient. You can produce infinite quantities of a piece of software with no marginal cost.
- Outside of the HN / CS bubble, most regular people still think coding is either boring, stupid, or too hard.
I really think it would be tough to do this job without some major interest in computers that most people simply don't have. And you can't really fake this. This puts a cap on the supply of engineers.
1) To stop working when you hit a certain number seems to me to be falling into the faulty logic illustrated in Freakonomics -- when a taxi driver works every day towards a certain $ figure, he suffers on crappy days (keeps on driving to little benefit) when fares are just not coming, and cuts off his earnings on great days where business is pouring in like crazy. Instead, you should call it day early when the business sucks, and ride it when times are good.
If you're good at what you do, aren't physically being exhausted by your work, and pulling in good money, why wouldn't you keep on working and make the most of your time + skills? Did you go through all your education and training just to hit a certain number and call it quits?
2) In some ways I don't get the "financially independent" life. Sure, you're no longer absolutely needing to have a job. But what do you do with the rest of your life? You're just retired at 50? With what to challenge / strive for?
Maybe I'm just fortunate in that I don't mind working / find some fulfillment from it, and don't have a burning desire to sit around with no activities for 5 days a week. Maybe if I were smarter about it, I could be some kind of board member or something? Is that what people do? What takes the place of work?
2) In some ways I don't get the "financially independent" life. Sure, you're no longer absolutely needing to have a job. But what do you do with the rest of your life? You're just retired at 50? With what to challenge / strive for?
FI has never meant "go live on the beach and sip beer", I mean it can for some but the majority of folks I talk to have interests or career aspirations that are not economically viable.
For example, volunteering full time at a non-profit, writing a book, community organizing, etc. all this takes time and can be difficult to do when you have a full-time FANG job.
So, I'll speak as a recently retired principal engineer from big tech.
(1) The number to reach is an inflection point where you can pivot and focus on things you don't like about work. For example, as much as I like architecting systems, I definitely don't like architecting through people which is what the job demands. A good question then is why do the climb at all, and there is a bit of disease of more in our culture.
"financially independent" doesn't necessarily mean you stop working, it's just that you have the flexibility to chose what to work on and who to work for.
Yeah for me it's just peace of mind not worrying if I don't have a job or how long it takes me to get another one. I too strive for the idea of investing a lot/getting percentage back. I will always tinker on something.
I spend virtually all of my free time and energy on side projects, and my list of side projects grows faster than I can take them on. When I retire, I’ll have no shortage of things to spend my time on.
It only makes sense if youve got something else you want to do. Id venture almost none of the FIRE crowd end up sitting in front of a tv eating microwave dinners for 60 years because they retired. I mean maybe thats what some people want and more power to them but thats not what FIRE is about
> end up sitting in front of a tv eating microwave dinners for 60 years because they retired.
For a 21st century kick, we have superfood protein smoothies now. They're better for you, have less taste, can be consumed on the go, and are better for the environment.
Also, the type of person diligent enough to save a large fraction of their income for decade(s) isn’t likely to just sit around doing nothing. They’ll just do what they want.
Those questions reflect your life more than OP's. Is your life so meaningless and boring outside work that you'd have nothing to do when you retire? If the answer is yes you should seriously re-evaluate your approach to life. At least get some hobbies!
At least those hobbies that I would like seriously do - like D&D, in contrast to playing video games - generally require other people. I'm not the type of person that gets any satisfaction from alone tinkering with shit in the garage as that seems to be the hobby of most people talking about hating work.
So, what do I gain when I stop working? My friends still will work, and I'm just going to have 8 hours in a day when there's no one to do fun stuff.
On thought #2, I'm with you. While I'm planning to retire early (thanks to software, I will have the money, and not much brain power left), I have yet to figure out what the heck I want to do, and I won't retire until I figure that out.
I also think the "financially independent" life has a pretty wide definition. I don't need a job for an alarmingly long time, but couldn't retire on what I have. It still gives me enough freedom to work where I want, when I want - which is what proponents of this life talk about.
> Did you go through all your education and training just to hit a certain number and call it quits?
Yes, I don't see what's so surprising about that. Most people do the same but instead of being an amount of money, it's an amount of years, or an amount of money that you will get more slowly.
> In some ways I don't get the "financially independent" life. Sure, you're no longer absolutely needing to have a job. But what do you do with the rest of your life? You're just retired at 50? With what to challenge / strive for?
Whatever you want, that's the point. If you want to spend all day in your bed, you can. If you want to go very deeply on one topic, you can. If you want to surf HN all day you can. If you want to give time to charities you can. You can even go back to work if you want to!
> Maybe I'm just fortunate in that I don't mind working / find some fulfillment from it, and don't have a burning desire to sit around with no activities for 5 days a week.
> What takes the place of work?
Your comment seems to asume that working is a natural state and that you need an opposite "burning desire" to not want to work. I personally don't get much fulfillment from work. It's nice and all but I'd rather not do it. In a way it's like washing the dishes: sometimes it feels a bit good to do it, and most people need to do it, but if I can get a dishwasher, I'd rather get one and use one.
You’re floating on a boat in the ocean. Do you want to be in a boat that is sinking, and requires you to bail water every day, or one that is naturally buoyant?
“Oh, if you don’t have to bail water to keep from drowning you’ll just sit there in the ocean not doing anything.”
No. You can go where you want, without worry.
“But I like bailing water, it gives me purpose, I want to do this forever!”
Sure, it’s like growing a garden, where if you don’t grow enough you go hungry ;-).
For most, work is first about survival/decent quality of life, and then life satisfaction. FI is about taking the survival element off the table, so you can pursue satisfaction at work (or elsewhere).
(Put another way, people seem to argue that they prefer to stay financially _dependent_ — stay that way if you want, and hope your preferences never change.)
As someone who is considering the FIRE path, I appreciated your point about the taxi driver. I have a list of big projects I want to pursue after getting out of the corporate world, but I wouldn't recommend FIRE to someone who just wants to be lazy: I don't think laziness is good for mental health.
The article gives some general advice on how to manage your personal wealth. Probably the exact figures could have been expressed as percentage increases to give the article more appeal.
However, for budding engineers in the early stage of their career it gives some idea of what is potentially achievable (in US).
Like what? That you can save ton when you earn 500-600k to have few millions in your net worth? Okay, but where is anything new in the article.
If anything, some of the advice doesn't make any sense. Like, saving extremely on the low income. Whatever he has saved in the first six years of his career would be offset by just working one year more.
I see a lot of people complaining that the author of this article is unrealistic or delusional. I disagree. I think he recognizes that the advice does not apply to everyone.
But it does apply to many people reading HN, and it's important - especially for young people - to realize that this kind of life path is possible. I expect and hope that in the future, a lot of cultural and intellectual progress will be made by people who spent a few years in FAANG and then retired with a comfortable nest egg, to pursue less-well-compensated goals.
1) get a prenup before marriage because there's a 50/50 chance you'll lose half in divorce (at least in California.) This is not very romantic so it's not something I ever considered, but it's recommended to wealthy persons by lawyers.
2) don't become an alcoholic or drug addict. If you think you might be developing a problem, own up to it, seek help and go to rehab if necessary. This includes gambling addictions. A cocaine and gambling habit is probably the quickest way to become broke again.
I don't agree with this because you want to have kids if you are to have any chance of anyone caring about you when you are old. I guess some might be satisfied with people caring about the money you have when your old, potentially leaving some of it to them, but that's not my cup of tea.
Right, I didn't say caretakers. You can hire those to come in daily. Another nice option money buys is a great luxury senior living home. A good one starts at $3500 a month but typically costs more (while the average cost for a senior living community in Santa Cruz, CA is $5,595)
Better: Just don’t get legally married and don’t live in a common law state. Prenups aren’t enforceable. Judges can throw them out and ignore them whenever they feel. I don’t plan to ever get married due to these factors.
Another option for the drugs thing is to never do drugs or drink alcohol. I haven’t ever done any and I’ve managed to avoid addiction my entire life. I still have fun - I am actually considered the fun and lively person of many friend groups.
I don't disagree with you because I've gone through a divorce that halved my net worth but I don't think "don’t live in a common law state" is decent advice.
If you ignore all of California, you miss out on higher compensation and interesting work opportunities. Should you live your life such that you limit your opportunities? I don't think so.
I don't think ignoring serious relationships altogether or avoiding children because of the potential financial headache they could cause is a healthy way of thinking about your future, purpose and what you want, just my 2 cents.
Also to add, when your income starts getting into tech amounts, it's actually MORE tax efficient to not be married than to be married unless your spouse does not work. Also there is nothing preventing you getting rings, having a wedding and having a marriage relationship.
Right, as your link details, I experienced a marriage bonus due to my partner earning a lot less than I did. So I suppose I was in the happy/lucky camp but I didn't realize it's a penalty for 2 high earners.
My apologies, you're absolutely correct. I have no idea why I thought CA was common law. Probably after the divorce I got bombarded with information and it was all soup in my brain.
> I’m proposing avoiding the legal contracts that will not do you any good.
It's only an issue if you have kids and/or plan to immigrate to a different country. Being married helps there.
Marriage for kids isn't necessary. You can prove you're a parent and that you have a legal right to your child even if you are unmarried. I've known plenty of couples who had kids without being married and it wasn't an issue.
The immigration part is more difficult but you can get married temporarily for the purposes of immigration unless you're specifically moving to that place to live there forever. I've known people who have done this and it is clearly very feasible. They got legally divorced after. However - I am assuming that both people in a relationship are going to be working and therefore this is a not a problem. If one is not going to be working then that adds a layer of complexity. Marriage law at that point is weird.
Personally - I'm tailoring my advice for the overwhelming majority of people - not the one-off weird scenarios that most Americans are not going to be dealing with. 60%+ of people in the USA don't even have a passport. And they definitely aren't thinking of leaving permanently - lol.
Right, I actually was in the exact situation you describe in the middle, moving to a new country with a non-working spouse, so marriage was a requirement and there was no way she would have come with me if I asked her to divorce after. That's ludicrous.
For me an my partner, we don't like the idea of the government regulating our relationship, and many years later, we still don't like the idea of it too. There is a difference between the relationship and the government paperwork.
Similarly you would couch it to your spouse the same way. If you both treat it like the corporation paperwork it is (and if you think about how the government treats it, it's actually similar to a business partnership structure in many ways), then getting paperwork married and then paperwork divorced as planned doesn't have to be an issue.
My guess is that it isa conflation of “community property” with “common law”, as both relate to marriage and are similar enough in name that it is easy to swap them in memory.
Also, community property is the one more relevant to what happens in divorce, while common law is about formation of marriage.
You're right, that's where I got confused. Since I was married, everything was considered community property, so it's good to know California doesn't enforce community property on non-married couples, since it doesn't recognize common law marriages.
> Since I was married, everything was considered community property
Whether this is true (in the absence of a prenup, etc.) depends on record keeping and where (and particularly when) your assets come from; the somewhat oversimplified version is that a
ssets (and debts) acquired between the beginning of marriage and separation that are not gifts or inheritances specifically intended for one or the other of the spouses are community property by default, those acquired before marriage or after separation (even before divorce) are separate property.
The legal court reactions to prenups is usually a lot more hand wavy and malleable than a typical contract between two people, and people get surprised what is actually enforceable in a prenup vs the reality when the rubber hits the road. This is what is usually referenced.
This is very similar to my story. I moved to America from Ireland in 2007 after graduating with a degree in cs. I did a year in grad school before working in tech in the Bay Area for more than a decade, including at two companies from FAANG. I also ran a consulting business and for the last 3 years worked at Coinbase.
I don’t consider myself in anyway special. I know many people from Europe who went down this path.
The sad reality is that in Europe software engineers don’t get paid very well relative to the value they create. It’s a lot better today in my home country Ireland than it was a decade or so ago but salaries and opportunities are still nowhere near as good as in the USA.
Unless you are very lucky, if you want to make a lot of money and work with the top people in your profession, you will have to move. This will likely involve risk and personal sacrifice. If I was to distill this guys journey into a high level formula it would be as follows:
1) Pick a fast growing industry you are interested in.
2) Move to the area which pays you the most and where the most opportunities are.
3) work with top people and adapt your career based on what you see them do.
4) live reasonably, save and invest.
I see a lot of people from Europe in the comments saying this is unrealistic or that it would be hard to replicate this success doing the same thing today. I disagree.
While the specifics of the plan might be different for todays 20 year olds. I.e specialize in cryptocurrency or machine learning or fintech. The overall approach is still valid, it just involves a lot of sacrifices and risks you may not be willing to take.
I hate tech interviews. If it’s any consolation, I remember when I interviewed at Apple, I failed 10 interviews for multiple teams over 2 years before I got my first job.
FAANG interviews are best approached as iterative steps. That is: expect that you'll fail the majority of them (this is true for most capable people) and keep doing them as regularly as you can until you get an offer.
I bet most engineers at these companies did not get an offer on their first 3 tries. This is not a big deal at all because they'll let you interview over and over after cool-off periods.
>I did a year in grad school before working in tech in the Bay Area for more than a decade, including at two companies from FAANG.
I guess moved there with a F-1 visa, then F1 OPT and then H1-B?
The "best" flow at the moment from what I have seen seems to be working for FAANG in Europe and then moving with a L1 visa, though that depends of course on the company.
So the "path" to financial independance mainly involves getting a 100k/year from day one.
I hope it will inspire and convince all these people who earn below the US median salary range of 47k/year. (and they range in all age categories, not 20 years old engineers).
It would have been more interesting that he writes on how it was complicated for him to reach financial independence even when he earned 100k/year from day one and more than 600k/year 12 years later.
Just imagine how it's impossible for someone with 47k/year!
And that's the MEDIAN salary range in the US!
But apparently that thought escaped him, whatever.
“How I bought a house: first I cut out my $5 Starbucks habit. That gave me the money, and more importantly the courage I needed to ask my parents to pay for my house. Which they did. Never underestimate what you can achieve!”
The point is that it's not much of a path when you start at $100k. If you're earning $100k with zero experience, your salary cap is likely to be pretty high.
With a starting salary that high I think you're very likely to easily achieve financial independence, barring a catastrophic fuck up.
Child care in the bay area is $2-3k / month per child. Plus you need a bigger home with one more bedroom so an additional $1-2k/month. Then a bigger car. This is without all the expenses related to having a child such as healthcare, food, activities…
So it sounds like $8k per month for a child is pretty reasonable, but then you hit economies of scale so the next kid will be a bit cheaper than the first to have.
If you have kids and live in Europe already with a spouse who also has their hopes and dreams and works in a different field, kids cost you 500k out of the total 600k compensation because you can't (really - don't want to) move to bay area :)
> Ultimately for me, that’s what financial independence is all about, and why it is all worth it. It’s not about sitting on a beach and drinking your life away. It’s about having the freedom to pursue your life purpose, whatever it may be, and however impractical it may be.
This is just my personal opinion, but this is an ass backwards way of doing things and it gets me frothing at the mouth.
If it's your life purpose, DO it already. Live lean if you have to, become a cockroach if you must, but let that purpose ROAR out of you. Don't sit around accruing meaningless tokens, becoming an old fuck with all of the juice of life wrung out of you like some decrepit mop.
The beauty of high tech is that you can achieve financially independent within your mid-to-late 30s depending on how well you do.
Conversely, I've seen those that "pursue their passion" end up being bitter and cynical when they don't make it. They end up working one dead-end job after another, hoping to one day become a famous writer/actor/singer/etc.
Eventually they realize they don't have what it takes and are now stuck working into their 50s/60s.
Sure some small pct end up being successful but the majority end up being in the same corporate trap that they originally eschewed, albeit with more debt and a more precarious financial situation.
I think it’s difficult to discover your “life purpose” while still working full time. Unless you’re anomalously lucky to be exposed to various subfields at your job, it requires a fair amount of leisure and self-directed tinkering (months to years). Quitting your job and living like a cockroach to find yourself or whatever is a pretty big sell. I also suspect this process requires a baseline level of comfort and freedom from stress but can’t say authoritatively.
"I learnt that even an average engineer with a five-figure salary can become a millionaire by her late 30s, through financial discipline and investment planning."
Yet this is not what the article is about! $300k+ is not something an average engineer makes. No shit you can become a multimillionaire if you're pulling in half a million every year.
One common thread these kinds of stories seem to always share: a single, childless person earned an extremely high (and rare) level of income, hoarded it for several years, then ‘retired’.
The author earned the majority of their net worth in only a few years (five or six) via a high salary and stock options. There’s nothing wrong with that, but for most anyone—American or not—it’s an unrealistic, semi-mythical story that says more about a lopsided economic system than life.
And so, the main lesson of such stories (for me) is always “extraordinarily high incomes without significant life encumbrances make it easy to quickly hoard money and compound it”.
It is probably easier to be a millionaire if you do not feel the need to socialize with other millionaires, live where they live, do what they do, send your kids to the same exclusive schools etc.
Of course, without networking with other millionaires, becoming a millionaire is a bit harder...
On yet another hand, a millionaire living in the well-to-do coastal communities of California might actually still be financially insecure, while a not-yet-quite millionaire living in rural Montana may be secure for life.
I am instinctively drawn towards the rural Montana thing, but mainly because I am introverted anyway.
It’s more like 3 or 4 years due to taxes, even if you don’t spend your money. Feels like government is hellbent on making sure you don’t become a millionaire.
> even an average engineer with a five-figure salary can become a millionaire by her late 30s
With my five figure salary in France the max I can invest is 1k/month, so with a 10% RoI I can expect around 200k by the time I’m 30.
That’s nowhere near a million and doesn’t take the flat tax in consideration. Maybe 10% is considered low or not risky enough?
625k a year? Doing what exactly? Good for you, but I have never seen a spec with even a third of that salary. Or is it that it's only FAANG who's paying that big?
Never set foot in SV nor in the States, but from half a world away it does seem that that figure (i.e. ~600k) for total yearly comp at a FAANG company, given OP's experience, is in the general ballpark, so to speak.
What can we European devs do to boost tech salaries in Europe?
I love my five weeks of paid holiday, 14 weeks of paid paternity leave, and free healthcare. but I would still prefer early retirement instead of working till 65.
> What can we European devs do to boost tech salaries in Europe?
Basically, build a network of tech monopolies which engage in unethical, if not criminal practices, then build a VC ecosystem that is ready to spend king's ransoms to get startups to join that club. Wait as these companies compete to buy your soul.
Independent contractor or entering management. Employment salaries go high currently only in Switzerland, though they have definitely been rising in recent years also in Central Europe.
Not only the amount of investment poured in European startups not the same, but also the culture isn't. It seems like in Europe people prioritize paid holidays and other things given by the state, high taxes etc over big ambitious audacious achievements like you'd see in the US (that later Europe has to combat with regulations instead of innovation). Why pay a SWE in Europe 300k to work on a delivery app? 300k would make sense if they are working on something of the caliber of FAANG (yes, Facebook is just a social network/messaging app, but they possess data that not a single state in Europe or elsewhere can dream of, unfortunately).
Kill particular countries languages, cultures and laws to create real single market. At least US Congress has sole authority to regulate interstate commerce, compared to EU.
I know I shouldn’t, but reading about people who successfully surfed the tech bubble makes me groan. Because, even though I’ve also done well in Europe, I almost moved to the U.S. twice (couldn’t get offers), and passed up interviewing at Shopify before they exploded
So it’s painful thinking that you were very much in the right place at the right time, but were just a step or two away from the stratosphere… however, it’s all relative I guess, those with 2 mil envy those with 5 mil
Very well done. The best part is that a modest 4% return on net worth/investments will yield about 100k a year which is a very good amount for most people.
Living off 4% works in retirement because you can in part live off principle. In early retirement it’s not going to work out nearly as well because you get the reverse of dollar cost averaging, removing money in down markets is more expensive than in good ones. You need either dramatically reduce spending when your portfolio is down or to live well below the expected returns.
The straightforward 4% analysis is a simplification. It’s pretty easy (and pleasant, even) to do independent contracting for a couple months of the year and cover almost all your living expenses - so no or very little withdrawal. Since you have lots of leisure time to explore your interests, you can also get lucrative niche-of-niche contracts in your specialty.
You can also live comfortably in most of the US on 30k per year assuming you have no dependents or disabilities. It’s simply a comment about spending not the ability to retire.
I’m not sure I understand. Is it really true that you can’t extract 4% cash money per year off of a million dollars, even in a down market, without shrinking the principal?
$100k should be enough to live comfortably off of in the Midwest.
I'm confused by your question. If you take 4% of the principal and the market does not return at least 4%, your principle has shrunk. This does not account for inflation either.
The Trinity study that the 4% rule comes from is based on having some assets left after 30 years, not the original principle being intact.
But in the Us, you are currently free of 7.5% payroll tax and your income tax caps to 15%. Plus, you no longer need to save 15% of your income for retirement.
The most expensive early retirement tax in the us is health insurance.
Saving on payroll tax is a benefit, but it’s also a significant risk for early retirement. Up to 50k/ year for a single person is a real cushion if you start to run out of money. Retire at say 35 and you can probably still get something from SS, but you need to be significantly more cautious.
Similarly saving 15% for retirement is critical, but saving enough to cover inflation is just as important with an early retirement.
Agreed completely. I meant in the sense of having this 100k once you retire and to continue to work on this high paying job for a few more years assuming you do a proper asset allocation.
Everything he says is right and I agree that when done correctly can lead to financial independence in ~10 years, but his models are very linear and this should be accounted for.
For example, finding roommates is a good way to save money, but you have to be careful about who you room with. Roommates can both increase social opportunities for a busy software developer, but can also damage career opportunities. I had a roommate that got a homeless boyfriend. I was apprehensive about it but supportive at first. My employment depends on me having minimal interactions with police and when I found out he was bringing drugs into the apartment, I had to end the lease and got my own living space. I now live alone and I lost a friend. This is more expensive but less risky. It will slow my financial independence, but less so than job loss.
Renting a cheap apartment sounds good on face value, but the problem with it is that the quality of people you’re around is lower. When you get dragged down, you enter a world where there is no respect or affirmation for your time or goals, everything is an emergency demanding your immediate and full attention, this is cancer for your attention. If you want to develop your skills as an engineer or learn a new technology on your own time, guess what you’re not going to do in that situation? One example, when my car was broken into at my cheap apartment, police assume that since you’re a victim of crime, you’ve got nothing better to do and you have plenty of time. Guess what I didn’t do that day? I didn’t go to work. I would say living in a more expensive area ultimately saves you time and lets you grow because it takes away a lot of the barriers living around poverty introduces.
As a fellow FIRE person, my key response is ATTA-boy. Huzzah! Congratulations!
What many critics will not fully get is how hard it is to not spend the wealth. I know too many people making mid six figures and they spend everything. The paradox is that this adds enough stress to their lives that they can't focus on the next level of income.
Find the gratitude for the opportunity, but please take pride in the discipline of keeping it.
The main takeaway from this is that you want to work FAANG lol. He was on track to hit 2m in 20-25 years until he shifted to Google/Amazon. A vast part of his compensation was probably in stock and those stocks are way up, so he hit his savings goal within a few years. He would have spent 15 years at Intel/Sun to hit the same #s
This is very interesting, but should be taken with a grain of salt even inside the US. This is likely not to be very sustainable for much longer, and it significantly skews the perspective of making your "own money" long term. The OP took advantage of a couple of cities in a country where tech is hyper-valuated at the moment. The solution is not to "move to the US", and change your lifestyle chasing abnormal salaries. The US has its own problems, and prices are very inflated here in general. Salaries are already catching up in the UK, and the tendency is that this becomes more common outside the US. Earning 100k pounds in the UK is not the same as earning 100k USD.
TLDR; Get a job in faang and keep interviewing and you will be financially independent.
I don't like this article at all, since it does not talk about the average software engineer. The author's current salary is 625k USD which would already make one financially independent regardless of any of the other decisions that they took in their life (eg. living with roommates to be frugal like they suggest)
Congrats to OP! Most of this resonated with me and is good advice. Perhaps some things like getting a Masters degree did not (I’m American with only an undergrad CS degree). Huge props for maintaining the same lifestyle and goals as earnings increased. I wish that was my case lol! Most people’s life circumstances will never allow this level of success. On the other hand I also see many years of hard work and dedication that many commenting about luck could follow but choose not to or don’t realize is available to them. So for anyone discounting this as luck I challenge you to reconsider.
This is good info. Bookmarking it in case I ever make those pay grades (unlikely). Also if the current bubble pops during my lifetime, that'll really reduce my ability to save...
Yeah, as a youngling in Europe I feel like I'm about to get the shitty end of the stick by the time I hit my 30s. 600k/year (inflation-adjusted) seems like a pipe dream...
It’s a pipe dream. 100k€ a year is exceptional for an engineer in Europe. Outside of finance and some American company, it is an exceptional salary period, very rare for someone under 30. I know senior managers in some consulting company who don’t gain that in my country.
I like how people always feel the need to shift a discussion on actual salary that normal people experience to a few job mostly in finance negotiated directly with key stack holders to pretend things are comparable.
Let’s forget that salaries in Europe are ridiculously low to focus on the handful of people who might get an extraordinary position - still paid less than an equivalent one in North America nevertheless - and pretends its doable and everything is fine.
While London is a finance hot spot, jobs from Google, Facebook or similarly competing company will also be in that range.
And that's not even the top salaries, there are also jobs that pay in millions.
You'll also find similar salaries in Amsterdam, Paris, Zurich...
I'm just stating that jobs that pay the same as in the article do exist in Europe, and I don't believe they're as exceptional as you suggest.
There just is a large spectrum of salaries for software engineering, and as we all know, 90% of everything is crud, so of course the median will be much lower.
Tbh it's a pipe dream for essentially everyone else as well, even 95-99% of Americans. For instance the American President makes 400k/year. That's a wild annual salary and only possible for an exceedingly small smidge of the population. And this guy is earning more.
The president's salary is sort of a joke though, everyone knows that every single president will have a lengthy tour and series of book deals after their term. They'll be paid advisors to companies and non-profits.
Back to tech though, there are probably 100 100k roles for every 400k role. So if you start out making 100k in tech, you have to be 1 in 100 to move up to a 400k role.
I'm a software developer in the US and this is all a pipe dream to me too - I started in the (software) workforce a few years before this person but at close to half the salary. After my first year of employment my net worth was nowhere near positive, especially not five figures positive - I had a student loan burden that was more than my yearly salary. I didn't get into the positive net worth territory until around year ~5 in the workforce.
2009 was also a recession year where it was difficult to find an entry level job at all, at any salary. I went without (software) work for half a year when I was laid off at the end of 2008 and ended up having to relocate for employment.
I'm in my late 30s now and I'm well off by almost every measure (I max out all retirement accounts, I have a six figure brokerage account) - but I'm nowhere near a millionaire or financially independent. I'll need to work another decade best case scenario.
The biggest boost to my savings rate/financial position came from getting married and sharing income/bills with my husband.
If I did it over again I'd pay off my loans slower and put more in my retirement accounts earlier.
Engineering salaries in the US are so high I think these “retire by 35” posts should be put into perspective. Saving 250k USD in a lifetime would set me up for life where I’m from. Never mind over 500k in a single year.
TLDR he rode the tech bubble, lived frugally and poured his savings into what happened to be a very favorable stock decade, which together with his tech stock options from employers made him a multimillionaire.
Not to disrespect the effort that went into this, but let's make this very clear: this type of trajectory is only possible for a very limited few, in a particular moment in history.
Everything seems to indicate that, save for a few samurai, the tech overlords are a powerful force driving inequality today.
> the tech overlords are a powerful force driving inequality today.
I would truly disagree; tech is transforming lives across the class spectrum, globally.
In fact, what you should be concerned about is how other industries think it’s acceptable to significantly underpay their average employee. And the ironic part is that tech companies still pay managers and executives way more than the average SWE - at FAANG, often directors make more than their entire reporting chain.
Also you need to be extremely lucky to be born in the right country and the right area, have a healthy childhood and access to learning, have no physical or psychological illness, have no moral qualms with working for those companies, and the list goes on.
> this type of trajectory is only possible for a very limited few
We are talking 0.1% of human population if not less.
The eating part might be more literal than most expect.
For example, it's hard to argue that software made journalism better. Sure, there is some efficiency in using a phone to record interviews and sending the results of your work on seconds on the other side of the world - as opposed to things like notepads and telexes.
On the other hand, Google and Facebook almost completely eviscerated the revenue streams that fed traditional journalists, without putting anything in it's place.
Instead of a large number of local papers and ad agencies earning local revenue and funding journalists, you have a massive revenue stream going into Google's offshore tax shells, of which a part is used to fund their software mercenary army, and the bulk is reimvested into further tech monopolies.
The corrupt and the despots surely welcome the tech overlords.
Worse than that, they're taking away money from local businesses. Local markets, local stores, local shops, local newspapers, local magazines, small businesses, etc.
They're vampires centralizing local revenues worldwide and for what?!? That money gets reinvested or offshored so that about 100 billionaires live like kings with about 2 million millionaire flunkies working for them.
In France making 100k a year (pre taxes) put you in the top 3% of income. In the US it's around 10%. It's a smaller gap than I expected, but on the other hand I don't know anyone that makes 100k after college. It seems like the answer for people not in the US is to go to the US, work 10 years and then come back in your country of origin.
Thanks for making this article and sharing all of that, it's precious information.
If everyone thought and lived like this. Save everything, don't spend too much, don't have kids etc. Would it not lead us into a world where there is not enough economic activity and growth.
And the money that you do have in that case would not be worth much anyway..
It's hard to say exactly what would happen. Generally it's hard in the short term, as businesses deal with decreased demand. Long term, it means the population is less susceptible to global downturns, and can more easily ride out personal income loss.
If the author lurks around: the investment part would be more convincing if you added the gains you got from it to the table, at least between the first and last year.
These articles always describe the arithmetic of compound interest; I would be very interested if instead they read “I made 2 million dollars over time. Here is what my childhood, personality, family and friends were like.”. I think the mere fact of how someone -identifies- and prioritizes things at a young age account for 95% of these outcomes, and the arithmetic of investing maybe 5.
When I look at his constantly increasing income I just think I would rather spend the money on a super good easy life and other people knowing there'll always be more.
I feel like living within your means makes sense both ways. Don't obsess materially and go into debt. But also don't obsess about the future enough to sacrifice the best possible present for yourself.
Reserve banks printed trillions of dollars over the past decade; this propped up high-exposure corporate stocks including Google and Amazon.
At the same time, regular people have had their salaries continuously diluted and are now losing jobs by the millions. I think it's not good to brag about ones' income when it is based on the theft of others'.
Just curious. How does live develop in such case? I mean working at a FAANG isn't that bad at all, even if you don't have to work any more. Love the idea of "doing" startup's, but guess even with 1-2m$ you have only few shots.
Just to add an additional avenue for any people earlier in their career, starting salaries for research associates (bench-based wet lab work) in the Boston area right now, fresh out of undergrad with a 4-year degree, is $100k.
If we are comparing this to the article you'd need a starting salary of ~$128,000 in 2021 dollars to have a comparable salary of $100,000 in 2009 dollars, fwiw.
Totally. With a masters, starting salary is $120k, so much more in line with OP. Also, OP is total comp, which a BS hits with equity and bonus targets.
My SO just started a PHD in chem eng, before she decided we looked for some open positions and found nothing/low paying (40-50K a year) jobs for grads.
I’m in a similar but worse boat - my net worth is only now reaching $375k after 3 years in the market. Most of my friends and coworkers are pushing 750k to 5-7 million.
The biggest takeaway is, of course, in-flow over spending.
Can you please not use a trollish username? We ban such accounts because it has the effect of subtly trolling every thread the account posts to. Maybe you didn't intend it that way, but these effects end up happening regardless of intent, and we've learned it's better to deal with this early than to let the problem compound over time.
If you'd like to pick a different username we'll be happy to rename it for you.
The article doesn't really elaborate that well on the inflection point, that is where the author nearly doubled an already six figure salary while also making a career change.
Not only that, but riding the appreciation of AMZN and GOOG stock (or just tech in general) in the last couple of years. It appears from the graph that this person had a lot of investments in tech and that the recent bull run helped them tremendously. As someone, who has similar investments, I've seen it firsthand, but I don't think it's a trend that will last forever.
The thing I learn is that when you live in US especially in SF, speak US English, you can make the highest earning in the world as a software developer. This is because the tech industry lives in this city.
Even you are a mediocre developer, you can make above average salary because you are so lucky to born in US.
This might sound reasonable from a US-centric perspective, but to me it reads like utter nonsense. The main privilege here is access to the US labor market and tax policy. There are no stories like this one where I live (in Sweden). Absolutely none.