14 ms·

How to get rich in tech

309 points by sirteno 11y ago

wsc981 11y ago
If you want to get rich, your best bet on a risk-adjusted basis is to join a profitable and growing public company. Google for short. Make $200-500k all-in a year, work hard and move up a level every 3-5 years, sell options as they vest (in case you joined Enron), and retire at 60, rich. This plan works every time. I don't think this is great advise. Not everyone is able to join a company like Google due to either luck or their capabilities. I also find being rich around 60 years pointless, since you've wasted too much of your life working for "the man" at that point. I think a better approach would be the following: 1. Become freelancer. 2. Do what you love and do it well. If you're passionate enough about your job you should be able to increase your rate over time. 3. In western european countries: aim for at least 100.000 EUR a year. 4. Live cheap and save up. Invest the cash you don't need at any moment in real estate (house) and index funds. 5. Travel around the world and find a nice cheap country you could enjoy your life in. 6. Emigrate once you have enough money to live comfortably in your country of choice. --- That's my plan at least. Currently I'm on a 'holiday' (2 months) in Thailand. I figured the following: - In Thailand one can live (bare minimum) for around 500 EUR a month (some Russians in my co-working space live from that amount). - Property can be bought for around 50.000 EUR in Pattaya. Not really huge, but decent with shared gym and swimming pool in apartment complex. - 100.000 EUR invested in indexfunds should net me on average around 6% a year after taxes, i.e. 6000 EUR a year or 500 EUR a month (7% historic average minus ~1% tax). - With no monthly rent to pay, I'm should be able to live a bit more comfortably compared to my Russian co-workers here :) - I could fully focus on personal software project and hopefully that will add to my income over time. --- I won't be financially rich, but I would have financial independence and could do what a love in a country with nice weather, good food and nice people - it's another form of wealth.
- minimaxir 11y ago
  > I don't think this is great advise. Not everyone is able to join a company like Google due to either luck or their capabilities. The original posts which prompted this one was centering around the super-engineer who can control their own destiny and work for any company they want. Nothing in this post applies to the average engineer.
  - andy_ppp 11y ago
    The old fixed vs growth mindset at work. There is nothing to stop you becoming an exceptional engineer, except your beliefs of course.
    - ambicapter 11y ago
      'Nothing'? Well, except a fuckload of experience, probably. Either spend 4 hard years at a top university or 10 years of consistent, hard work doing it all by your lonesome, maybe with and maybe without the benefit of being able to 'practice' at work. I don't think all it take is 'belief'. There is some actual hard work to be done.
      - mixmastamyk 11y ago
        Except that startups won't hire you once you get that experience. Look at their team pages, and struggle to find the one person over thirty-five.
    - wishful 11y ago
      Of course there is. First, there is your biology. You might simply not be intelligent enough to become a great engineer. If you set the cut-off for greatness at "published a widely influential paper" or "designed a large distributed system from ground up" this becomes even more the case. You might not have the health and the endurance to work on demanding high-end projects long enough to get really good at those kinds of projects. Then, there are the social factors. Your other obligations, like raising children, can get in the way, though you might say they are more manageable than intelligence and health. Growth mindset, beyond the "bloody obvious" [1] interpretation of it, is not something you can state as self-evident, and evidence to support the stronger interpretations is quite scarce. [1] http://slatestarcodex.com/2015/04/10/i-will-never-have-the-ability-to-clearly-explain-my-beliefs-about-growth-mindset/ http://slatestarcodex.com/2015/04/10/i-will-never-have-the-a...
      - andy_ppp 11y ago
        If you actually read the grand parent I was talking about an average engineer becoming amazing. It's 100% possible. You have added a whole load of random obstacles to our average engineer, like making him in poverty, setting him the goal of greatness and suggesting he's sick. I'd agree that he probably need to find a job that pays better, get well and have smaller goals before he succeeds.
- deleted 11y ago
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- mahyarm 11y ago
  You could do the same thing working at google, but instead of making $108k USD/yr, you would make +$250k/yr USD. Your time to target savings number would be greatly reduced. Then you can leverage that into a remote work position as you work from home in some cheap country. You can also buy a condo in las vegas for $50k USD too. You still have a developed country where you can speak the language and the bay area is a cheap one hour flight when you need to get more work.
  - lucaspiller 11y ago
    As OP said it's one thing to be financially rich, but there are other forms of wealth. The idea of working 10+ hours a day, 5 days a week (if I'm lucky), 50 weeks a year for the next 40 years just doesn't appeal to me. You are right you could earn more at Megatechcorp, but by freelancing I can work on stuff I find interesting and still live life on my terms. Also getting into a company like Google isn't something that everyone can do, where as it's pretty easy to start freelancing (especially if you are European, hence don't need to worry about healthcare).
    - mahyarm 11y ago
      But I said nothing about working 40 years. I just said you could do the same thing faster working at google than being a 100k freelancer. Most freelancers I know live a pretty variable life where you get feast & famine cycles. And when it's feast time, it's long hours time. It can be more stressful than being an employee too. You can also work pretty interesting projects at a place like google. If you want to do platform library type work, the only kinds of places your likely to get that kind of work is from a place like google or other larger companies. I think most software engineers could get into to google if they put the effort into it. If you can make it as a $100k/yr software freelancer, you could probably study 'cracking the coding interview' and make it into google. Also realize that google hires in europe too. The hours isn't what you think it is. There are many 9-5ers that do good work at places like apple and google. And there are other teams that work a lot. It all depends on the team. People also get more than 2 weeks vacation too. For example, the entire engineering org at apple at least gets 3 weeks of 'mandatory' vacation. One week for thanksgiving, 2 weeks for christmas. Then you have your normal vacation on top of that.
- gargarplex 11y ago
  - 100.000 EUR invested in indexfunds should net me on average around 6% a year after taxes, i.e. 6000 EUR a year or 500 EUR a month (7% historic average minus ~1% tax). - With no monthly rent to pay, I'm should be able to live a bit more comfortably compared to my Russian co-workers here :) How are you going to pay the rent when the market inevitably doesn't return?
  - onion2k 11y ago
    And what are you going to live on in 20 years time when inflation has halved the value of the 100.000 EURs?
    - wsc981 11y ago
      The historic numbers I mentioned with regards to profit from investments take into account historic inflation numbers. The numbers are based on the Dutch book 'De Schitterende Eenvoud van Indexbeleggen'[0]. Inflation should not be an issue. Still the bigger plan is to make extra money by working full-time on my own projects. So the goal is to increase investments every year and also the profit from investments. @onion2k: The book isn't saying you can live forever for that amount. It's a calculation I made for myself based on the historic average profits of the stock market in the long term (based on ~100 years of data). I'm living for 2 months in Thailand and I can have a basic living here for 500 EUR a month, especially if I have a fully paid for apartment. That's a basic living without much luxury, but a good starting point to full-time commit myself to my own projects. And hopefully build more income that way. I also don't have wife, kids, etc… --- [0]: http://www.bol.com/nl/p/de-schitterende-eenvoud-van-indexbeleggen/1001004006191081/ http://www.bol.com/nl/p/de-schitterende-eenvoud-van-indexbel...
      - onion2k 11y ago
        I don't read Dutch, but I can assure you that if it's saying you can invest 100.000 EUR and live off the interest forever without reinvesting it then it is wrong.
        11y ago
- tlarkworthy 11y ago
  interest on 100K won't cover visiting your family, having children, or any safety net if you get sick, unfortunately. Also a conservative fund return is more like (a volatile) 4%, and subject to the whims of 'previous performance doesn't predict future performance' (e.g. even that 4% can't really be relied upon).
  - deleted 11y ago
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  - wsc981 11y ago
    I understand, but those numbers were from my perspective. I don't have a girlfriend or kids. And one should be able to overcome minor sickness, though I do realise there's a risk. I believe when you're still young and healthy you should occasionally take a little risk to (hopefully) achieve your dreams. My dream is to be financially independent and work on my own software projects full time.
    - porker 11y ago
      Do you consider yourself a machine or a human? Became from outside it sure looks one way. I'm guessing you're relatively young. What I wished I'd learned earlier is the future comes faster than you think, and the earlier you start planning and saving for it (partner, children, ill health) the easier it is.
      - wsc981 11y ago
        I dunno why, but I've trouble connecting with women and even if I do connect, at some point I'm afraid I'll get bored. And I've never seen much reason to get kids myself. So perhaps in that aspect, I'm more of a machine. I'm 34 now. I've dealt with some heavy stuff. Lost my parents and a sister in a car accident when I was ~20 years old. I agree that the future comes faster than one might think, which is why I'm in such a hurry to achieve my dream future before I'm 40 years old, so I got still plenty of time to enjoy it. My little sister certainly didn't get the chance to live her dream future.
- JDDunn9 11y ago
  I'm more-or-less doing this now too, here's a few problems I've run into: - Visa renewals. Leaving the country every 90 days to renew your tourist visa gets old fast. - Finding a country that is both stable and has a low cost of living. I was in Bangkok during the last revolution when the current military junta took over. The airport shut down and I had to take a bus past a lot of guys with machine guns to get out of there. - Starting a family changes things. Poor countries have poor education systems. I enjoyed my visit to Pattaya, but wouldn't want my kids passing by "walking street" on their way to school. - You lose some small niceties like Amazon Prime and Hulu :)
  - ido 11y ago
    I've been through this thought process myself & my conclusion was that a lot of the eastern side of the EU (including eastern Germany) is not a bad compromise between fairly low cost of living & decent infrastructure/public services.
    - codecamper 11y ago
      Yes but a beer and a sausage for lunch will really cut into the afternoon productivity. :)
    - turar 11y ago
      What countries do you have in mind?
      - ido 11y ago
        I currently live in Berlin which is getting borderline expensive (still much cheaper than almost any major western city - more so now with the weak euro). I've heard good things about the Czech republic and Bulgaria. Seems like Croatia isn't bad either.
        prodmerc 11y ago
        Don't forget Romania :-)
- kaybe 11y ago
  I can live in Germany for that much, and it includes health insurance. Are you sure that's the lowest you can go?
  - kuschku 11y ago
    In fact, 670€ is the average that students live on in Germany.
- porker 11y ago
  >100.000 EUR invested in indexfunds should net me on average around 6% a year after taxes, i.e. 6000 EUR a year or 500 EUR a month (7% historic average minus ~1% tax). Really? That's a better return than I'm seeing averaged over 10 years.
  - ewaldort 11y ago
    He also doesn't take inflation into consideration.
    - nommm-nommm 11y ago
      Or market volatility. .... or much of anything, really.
      - pc86 11y ago
        Expecting above-average returns on a small amount of money for several decades as sole income while ignoring inflation and market volatility. What could possibly go wrong?
        wsc981 11y ago
        I hoped to make clear this wasn't the sole income for decades. It's meant as a starting point to dedicate myself full-time on my own projects and hopefully make extra money from this work. Since I'm a developer with focus on mobile, I'd try to make several apps a year in this way which would hopefully generate substantial extra income over time.
    - crdoconnor 11y ago
      Or those pesky 0% interest rates we've had for 7 years.
      - muzz 11y ago
        0% interest rates are not a concept that applies to index funds
- JabavuAdams 11y ago
  > I also find being rich around 60 years pointless, since you've wasted too much of your life working for "the man" at that point. Lolwut? Sure it's better to be young and rich but don't discount the comfort of being old(er) and rich. That said, your plan sounds pretty good. How does your plan change if you want to raise kids?
  - wsc981 11y ago
    > That said, your plan sounds pretty good. How does your plan change if you want to raise kids? If I'd have kids (and wife) I'd need way more money of course. But I don't want kids of my own. This opinion of me hasn't changed in the last 10 years and I don't think it'll change in the future. I believe there are already plenty enough people on earth and more people wouldn't make the world necessarily a better place.
    - JabavuAdams 11y ago
      > I believe there are already plenty enough people on earth and more people wouldn't make the world necessarily a better place. Not contradicting your decision, but I have to argue this point. There are not enough creative, educated, tolerant, empathetic people in the world. Every educated tolerant person with empathy is a little win for civilization. So, if you think you can make or train one, then there's an argument for having or mentoring kids.
- pc86 11y ago
  > I also find being rich around 60 years pointless, since you've wasted too much of your life working for "the man" at that point. Most people in the US will die having never been rich by any measure and having never done any better than living paycheck to paycheck, at best. 25+ years of wealth at the end of your life puts you solidly near the top of the pile. And financial independence anywhere in the world is a whole different ballgame than living "rich" in a developed country (particularly the US).
  - codecamper 11y ago
    Once you are rich at 60 there is some small chance that there will be life extension products available. (for some serious dough of course)
    - itchyouch 11y ago
      At the moment, lifestyle (nutrition/fitness) & social connections seems to be the key to living to 100.
- guiomie 11y ago
  Great plan if you have no extended or close family (our you simply don't care about them), nor do you care about living in the country you were born in.
danieltillett 11y ago
My first piece of advice for startup job seekers is that equity, all things equal, you can’t pick ‘em. On a risk-adjusted basis, startups are likely to be about the same. If there is information that a company has significantly de-risked, it will be priced in. Despite the market often being very wrong, you are unlikely to outsmart it. I don’t understand the argument for this. Isn’t the whole basis of venture investment being able to identify business that will return above the risk-adjusted return? Given many investors lack the technical understanding to know a good risk from a bad one how could this be priced in?
- lwhalen 11y ago
  It can't, hence why it's gambling when you get down to brass tacks.
  - danieltillett 11y ago
    This would imply the market for startups is perfectly efficient which I find hard to believe based on my experience.
    - potatolicious 11y ago
      No, but it does mean that at an individual level the difference is not consequential. a16z and Sequoia might be able to pick the winners at a higher rate than other investors, but that advantage only bears itself out with a large N of companies. At the individual case, with a single individual looking for a single job in a single company, the difference between being to pick winners 5% better than the baseline is not consequential, since the expected outcome is still "not a winner". Some people may be able to pick winners better than others - but the effect is not strong enough to be useful in the micro scale because the odds of success are still very, very low.
      - danieltillett 11y ago
        There is something not right about this argument. Do you really say to yourself: “Here are two companies A & B with the same valuation. I think A has the best chance of success based on its technology, but I don’t care which one I join since they have the same chance of success.”
pla3rhat3r 11y ago
While I don't agree with all the points, the best advice in here is: "But for all that is good and holy, don’t join a startup for the fucking money." If you're joining or starting a company because you think you're going to buy a yacht and a small island, stop it! Recently I've seen some Founders tweeting things that make me shake my head every day. You're not going to be rich unless you have that once in a lifetime solution no one else is building. That's why it's called, "winning the startup lottery." It's still a fucking lottery. :)
- danieltillett 11y ago
  The thinking that you are going to get rich via a startup is a very concrete sign that you are in a bubble. Create a startup because you want to do something that can’t be done in a big company, or because you think it will be fun, but don’t do it for the money.
- adventured 11y ago
  There are thousands of small, private technology businesses worth millions or tens of millions of dollars across the US, that have taken little to no venture capital, and in which the founders have very large equity stakes in their own business. It does not require the equivalent to winning the lottery to get rich with a technology business. The odds are several magnitudes greater that you'll get rich creating a technology business than playing the powerball. Being worth $4 million, and having a small business that generates $650,000 per year in profit, is rich. Getting rich with a start-up in Silicon Valley, given the approach used there, is like playing the lottery. The start-up lottery you're referring to only exists in SV / SF. Nearly everywhere else, the fundamentals of having an operating business still rule - in that world, a lot of people get rich running smaller technology businesses. $50 million or $500 million rich? Nope, $5 million rich. Silicon Valley is mostly all or nothing, and that's what makes good outcomes so relatively rare.
  - puranjay 11y ago
    Exactly what I tell my startup friends. I know people who run design consulting firms and pull in $300-500k/year in profits. Some run SEO/SEM marketing agencies and do similar figures. They give themselves generous salaries and own nearly 80-90% of their businesses which, on paper, are worth $4-5M. That's definitely very, very well-off, if not F-U rich. And it's very "safe", unless your $1M in revenue hinges entirely on one or two clients
msoad 11y ago
If you worked five years in a startup that failed it's hard to believe that you can get a VPN job at Google. With acquisition maybe. But Google don't hire VPs like that.
retube 11y ago
Reading the linked article about how employees of Good paid huge tax bills on stock that ultimately proved worthless - how insane is US tax law?? Surely you should only be taxed on realised gains, i.e when you cash out.
- mahyarm 11y ago
  You get taxed at the amount of 'profit' you have gained when you exercise the option. There is an 'ISO' stock option type for employees that makes the tax event when you actually cash out, but an alternative tax system called 'AMT' (alternative minimum tax) kicks in pretty quickly and taxes you anyway. The entire system assumes you are getting public company stock or something similarly liquid and taxes you as so. Capital losses cannot be applied to normal income in practice in the US either, only to other capital gains.
  - adventured 11y ago
    > Capital losses cannot be applied to normal income in practice in the US either, only to other capital gains. That's wrong. You can deduct $3,000 per year in capital losses against normal income. "Generally, realized capital losses are first offset against realized capital gains. Any excess losses can be deducted against ordinary income up to $3,000 ($1,500 if married filing separately) on line 13 of Form 1040. Losses in excess of this limit can be carried forward to later years to reduce capital gains or ordinary income until the balance of these losses is used up." https://www.irs.gov/uac/IRS-Reminds-Taxpayers-They-Can-Use-Stock-Losses-to-Reduce-Taxes https://www.irs.gov/uac/IRS-Reminds-Taxpayers-They-Can-Use-S...
    - mahyarm 11y ago
      That is why I said in practice. You just had a $50k loss from your startup option tax bill? It's going to take 17 years before you can deduct all of that loss from your normal income! $150k loss? 50 years!! In other countries, capital loss can be deducted from your normal income immediately.
bcoinbanker 11y ago
Powerful VC who profited from the kind of situation described in the nytimes piece: "Don't join a startup because you are trying to maximize wealth". Fk yes, just like you, the only reason I joined and you invested in that dating app is to save the singles from this damn evil world.
lazyjones 11y ago
If you have the skills to go work for Google and climb up the career ladder there, you probably have the skills to start your own company, work harder and retire at 40 (not 60) with a decent amount of wealth. Just find an interesting niche, develop it for a large market and don't waste your time on worthless features. I retired at 41 this way and don't think I was even Google material when I started (too old and relatively inexperienced). Also, listen to this advice: https://news.ycombinator.com/item?id=10787615 https://news.ycombinator.com/item?id=10787615
- pjc50 11y ago
  Just find an interesting niche, develop it for a large market and don't waste your time on worthless features. "Just" It requires a good mixture of luck and keeping your ear to the ground to find an undeveloped but large market niche, and a good crystal ball to know which features are worthwhile. I'm not saying it's impossible, but it's far from a certain path to victory.
  - enraged_camel 11y ago
    The more domain expertise you have, the less luck you need to identify a worthwhile niche in that domain. People tend to think that startups are for young people, but most successful startups are actually founded by 40-something year-olds for this very reason. https://www.quora.com/What-is-the-average-age-of-founders-for-the-most-successful-startups https://www.quora.com/What-is-the-average-age-of-founders-fo...
  - lazyjones 11y ago
    > It requires a good mixture of luck and keeping your ear to the ground to find an undeveloped but large market niche, and a good crystal ball to know which features are worthwhile. That's a bit exaggerated IMO. Granted, it's harder now than 15 years ago to find something under(not un-)developed on the Web e.g. that seems doable and interesting, but if you keep an open eye, you see opportunities every day and wonder why something that seems useful hasn't been done (or done properly). Some of these potential products will be very hard to develop fully and never be perfect, which doesn't make them less interesting (the opposite is true perhaps - does Google Search work perfectly?), only a bit scarier. As for which features are worthwhile: a lot of wisdom has been written down about this - it's important to look at the product from the perspective of a user. If you lose that perspective, talk to real users. The rest is hard work and that's easier and more rewarding if you work for yourself, I believe. My advice is that if you find yourself thinking "XYZ would be nice to have, why hasn't someone done this?" or "all solutions for XYZ I can find are terrible, why hasn't anyone done it right?", just sit down and attempt to do it, if it fits your skill set somehow (doesn't have to be a perfect fit and you don't need an MBA!). People are getting rich like this all the time. Don't look for "unicorn" ideas, you don't need to chase billions to retire comfortably.
TeeWEE 11y ago
Ok how does this work in Europe. In Amsterdam, high salaeries are around 72000 per year. Of which 50% goes to the tax. So you only have around 3k per month...
- pc86 11y ago
  Part of the benefit of living in the US is the relatively low tax climate (California notwithstanding, its state income taxes are 4x what I pay) which generally leads to increased socioeconomic mobility (a disputed statement, I know). I imagine the advice for a European with a salary cap of approximately 70-80k is the same for an American with a salary cap of 85-90k: wealth is most likely only going to come from entrepreneurship or blind luck.
  - athenot 11y ago
    Salaries in the US are much closer to those of in the EU once you factor in the cost of financing your own safety net. That's the counterpart of lower taxes. Now if you're in the US and pretend to have an EU salary by stashing away a big chunk of it, then yes that is most desirable.
    - crucifiction 11y ago
      Not in tech. Per other HN recent articles its relatively straightforward to make in the $150-250k range as a software engineer at BigTech. Even if you decide to stash $30k/year after tax for your own 'safety net' (equivalent to whatever net you receive in an EU country), you are still coming out way ahead of a EU software engineer that is probably making $70-90k USD equivalent before taxes take half.
      - nommm-nommm 11y ago
        Does anyone make that much money outside of expensive cities like San Francisco and New York though? I know that I am underpaid but I don't think I am that underpaid.
J_Darnley 11y ago
Don't bother. Don't even try. It will never happen to you.
- iso8859-1 11y ago
  What will happen then? Your post is useless without arguments.
tabeth 11y ago
The real question I think is what are the preconditions to "get rich in tech" and how do you get to those preconditions? Assuming you're not in a position to get the typical pedigree associated with the preconditions, e.g. Stanford/MIT/ C.S, how does a "typical" engineer become amazing. I would love a comprehensive guide on how to do this. Being great at your job is one thing, meeting the preconditions associated with getting rich in tech, is another.
- sethammons 11y ago
  "Amazing engineer" doesn't have to correlate with getting rich in tech. I see a couple of paths for getting rich. One, be lucky and work for a start up that becomes a unicorn. Maybe not the best of plans. Two, solve problems for which others will pay for solutions, work hard, and still be lucky (just not as lucky as finding a unicorn - or maybe you accidentally make a unicorn). Three, be an amazing engineer, get a decent salary, save and invest, and wait. For becoming an amazing engineer, focus on providing solutions to the stage of company you enjoy working at. While it might be splitting hairs between being good at your job, I feel an amazing engineer does something more than just their job. They bring something that helos push the company forward. At the beginning, maybe companies need fast implementations that can just get by. Maybe later they need proper automation and tooling. Perhaps they need a solid team lead who works with people as well as tools. Maybe later they need more experience collecting telemety on their systems. Or need more elegant designs to scale. Or whatever. Experience, practice, and/or studying can help you strive to be an amazing engineer. If you find yourself not growing year after year, do something about it. Hope that was cohesive. Posting from a phone throws me off more than I normally am, haha.
code4tee 11y ago
Most people get 'rich' slow and steady rather than overnight ...and by 'rich' those that are financially the best off typically don't look like it. They drive a modest car, live in a modest home, have nice but not flashy things. 3 main rules to live by: 1. The easiest way to increase your ability to save (other than a windfall inheritance) is to earn more money. Live a balanced life, but make sure that focus includes a strong career track with 1, 5 and 10 year goals. As has been discussed elsewhere at length, popular culture likes to play up the person that worked at a startup and sold their options for millions. This is very rare (most options are worthless or end up being worth less than the cash one gave up in the form of a lower salary to get them). Most 'rich' people are those that work hard and earn above average salaries over long periods of time. 2. As soon as practical, at every stage of your life live below your means. This isn't practical early on when some people are just scraping by, but once you start earning some real $$ learn from times when you had less $$ and live happily well under your means. If you earn $150k, live like you earn $100k. As one earns more it's fine to spend a bit (maybe you have a somewhat expensive hobby). Saving every penny eating beans and rice your whole life is no way to live. However, so long as you live well under your means you'll do very well. One of the biggest mistakes I see high earners make over and over is that they increase their spending as fast or faster than they increase their earnings. I can't tell you the number of "millionaires" I know that have trouble paying the electric bill some months. Don't fall into this trap. 3. Invest, but do so in a diversified and conservative fashion. Slow and steady is the key. Trying to "get rich quick" is also an easy way to "get poor quick." Build a reasonable pool of assets and invest when the market is up or down, just keep investing throughout your life. The math shows time and time again that people are horrible at timing the market. When everyone was in a full blown panic in 2008-09 the smart person just kept investing. Every $ the they invested is now worth 2-3x. Those that panicked and pulled out or stopped investing missed out big time.
- alexfisher 11y ago
  Some of the best advice I've read in this thread so far. I'd recommend reading: 1. The Richest Man in Babylon The $7.89 I spent on this book, which I read in a single night, is the best investment I ever made. 2. Think and Grow Rich An older book, but there are some golden nuggets within.
astazangasta 11y ago
This is the same horsehit they sell graduate students. "Ah, we're paying you a pittance,but the experience is worth it!" But you can't eat experience, and all of this - grad school, the startup ecosystem, etc. - is just a way for greedy assholes to exploit naive young people when they are at their most energetic. Don't accept sub-market pay and long hours in exchange for 'experience'. Other people (i.e. investors) are making money off your work. Get paid.
- volaski 11y ago
  Did you even read the article? People who don't want risk can go to Google and make tons of money. There's nothing wrong with it. This guy is saying if you're working for a startup you shouldn't do it for the money since a much better choice in that case would be to go to Google. I guess no matter how good a piece of advice is, you aren't able to take advantage of it if you're not ready for the advice.
  - astazangasta 11y ago
    Did you read the article? This isn't about assuming risk for the hope of greater reward, this is about working hard and getting nothing in exchange but 'experience'. That advice is bullshit.
    - hoorayimhelping 11y ago
      >getting nothing in exchange but 'experience'. Are you assuming there's no pay involved? I didn't get that from the article; it's not saying take a job for no pay. It's saying it's unreasonable to expect to get paid Google money at a startup. In exchange for not getting paid what you're worth to Google, you get to touch a lot of different areas and get a lot of experience with a lot of things.
    - volaski 11y ago
      Yeah, like another guy said below, who said they get "nothing" but experience? Also you seem to think "experience" is not worth much (maybe because you lack experience of getting experience?), but if you ask me, I would always take a valuable experience over petty money. My time is worth more than a couple thousand dollars per month
Futurebot 11y ago
"And if you go in with this mentality, even when startups fail, you succeed. If you put five years into building a company and team, you will end up with a great network of talented and motivated people, lots of first-hand experience, and often some management experience as well. Worst case, your next step could be going into Google at the VP level it would’ve taken you 15 years to get to joining out of college to “inject some startup DNA,” and catch up on salary within a few years. Unless this internet thing is a fad, that job will always be there for you." This advice is quite precise about where it applies. If you're at a startup that is undercapitalized, working you 12-16 hours a day, 7 days a week, with poor management and no opportunities for anything but building and maintenance, you can actually wind up worse off than when you went in: no built-up network and nothing that would make you "VP at Google" material, and in the case of startups doing pay cuts (in an environment of ever-rising rents), even less money than when you started(!) He is referring to working at "decent or better" startups; problem is, you may not know you're not working at one of those until you actually work at another one. The rest of his advice is probably worth listening to, but the above part should be considered very carefully.
- dopamean 11y ago
  I thought that advice was entirely tongue in cheek...
- fweespeech 11y ago
  > If you want to get rich, your best bet on a risk-adjusted basis is to join a profitable and growing public company. Google for short. Make $200-500k all-in a year, work hard and move up a level every 3-5 years, sell options as they vest (in case you joined Enron), and retire at 60, rich. This plan works every time. I'm pretty sure that is the only part of the advice that wasn't a joke.
- trjordan 11y ago
  So this happened to me. I believe it 100%, but it's nowhere near as straightforward as you may believe after reading this. The reason is that if you want to work hard for a startup, you need to ditch the role mentality. You have to be all in on the company, all day. You have to think like a CEO without being a CEO, and without access to all the information that comes with it. You also don't get comped for it immediately. My path: - Joined a company just as they got seed funding. Wrote code for 1.5 years. Constantly fought to understand why we were building what we were and where I could cut corners while still being proud of my work. - Company got acquired. Took as job as sales engineer. Gave 6 demos a day for 9 months. - Asked to scale my role. Turns out that's product marketing, so hired my replacement and moved to marketing. 2 months in, we fired my VP and I started reporting directly to CEO. Did this for another 7 months. - More marketing churn, I ended up running marketing (team of 2). 1 left, hired 4 total more over 8 months. - Decided I was leaving, told my CEO with 6 months notice. Ran the search for a new CMO (obviously the CEO had final say, but we didn't have many significant disagreements). At every one of these steps, I freaked out about my ability to perform. I'd be up in the middle of the night, or stressing about not understanding anything. I wasn't leveraging my skills -- I was stepping into gaps the company needed filled and backfilling the roles I was leaving. If you can find a company that will let you do this, you come out with an AMAZING skillset. I'm 30, and I haven't tested my ability to get a VP-at-Google job, but I'm not finding anything in starting my own company that's a total surprise. The breadth and exposure I got from trying different roles at a startup every 6-12 months has been frighteningly valuable. You can't stay heads-down and think writing code is all the your startup needs. You need to think like a founder for 5 years, without any of the upside, and you'll get a huge amount of intangible value from the experience.
foobarqux 11y ago
Does anyone have an actual example of someone getting to VP level at Google through a startup faster than you could otherwise?
foobarqux 11y ago
Does anyone have an actual example of someone getting to VP level at Google through a startup faster than you could otherwise?
astazangasta 11y ago
Not to be rude, but you're exactly who I am talking about. "I also have entrepreneurial ambitions so joining a startup as employee #1 has allowed me to learn how to build a business at every level." This is the same bullshit American dream Silicon Valley has been scamming people with for decades. Your aspiration is to graduate to tier 2 of the Ponzi scheme. I have news for you: your business will not blow up big, you are not a special unicorn. You are just like everyone else, stomping on the treadmill so the investor class can make more dough.
- 67726e 11y ago
  Or rather, I would like to create a sustainable, long-term profitable business. I don't want to build some Silicon Valley VC bullshit. The knowledge around building a business is generally applicable, and I have always had an entrepreneurial bent, long before I had any idea of VC and long before the way things are now. Now show me on the organizational chart who hurt you...
- cushychicken 11y ago
  I think you're acting just the slightest bit rude here, frankly. "Entrepreneurial ambition" != "Silicon Valley/Ponzi scheme/unicorn". Starting a business doesn't mean you have to join the VC/SV/startup treadmill. You can get away with doing the same thing that the vast majority of entrepreneurs have done throughout history: take a skill you know, strike out on your own, and start offering to make things or perform a service in exchange for money. It wasn't until the internet came along that you could become a billionaire in under a decade doing it. That's a distortion that recent history has introduced. The vast majority of entrepreneurs are not SV titans - they're small businesses. I don't have much respect for folks who denigrate those sorts of ambitions, especially on HN. On top of helping to continue to distort the overall shape of entrepreneurship, it's awfully close to a personal attack, as it's basically saying "Your dreams are stupid".
  - astazangasta 11y ago
    I feel bad about being rude, but I stand by my position. You are right, entrepreneurial ambition is not the same as the Valley Ponzi scheme, but SV is exactly about funneling that ambition into a wealth-generating machine for the investor class, and most of the ambition in the Valley is captured and squandered this way. I would rather err by calling this out.
tptacek 11y ago
Developers at failed startups do not as a rule get offered VP-level jobs at Google.
- w1ntermute 11y ago
  VP level jobs at Google have nothing to do with being a developer and everything to do with playing office politics extremely effectively (and getting lucky, as with much else in life).
  - tptacek 11y ago
    I am very wary about claims like those from the article about how working for a lower salary at startups will allow you to somehow compress N years of career experience into (N-k) years of actual work. I think the instances where that actually happens are balanced out by the instances where your work will be valued at less than what it'd be worth had you worked at Google.
    - w1ntermute 11y ago
      > I am very wary about claims like those from the article about how working for a lower salary at startups will allow you to somehow compress N years of career experience into (N-k) years of actual work. That claim has never made any sense to me (I think I first saw pg make it). In my experience, there's little to no practical difference between working as a developer at most startups and doing the same at a bigcorp in terms of experience. There's certainly a lot of rah-rah-rah about the "startup culture", but places like Google try very hard to make their employees happy as well. There might be a little more cowboy coding at the startup and a little more bureaucracy at the bigcorp (though it's a good manager's job to shield engineers from that bureaucracy), but your future job prospects are almost always better when you've got a bigcorp stint on your resume.
blue11 11y ago
Google and startups are two extreme ends of the spectrum, and neither is that great in terms of risk-reward balance. Personally, I'd recommend joining an established, but still growing, medium-sized company. That means shortly before, or a year or two after IPO, somewhere between 100-500 employees. That kind of a place still has momentum and is still relatively generous with equity. You won't get as rich as your pre-IPO coworkers, but you'll do OK and with less sacrifice. If the company is still growing, there will be opportunities for promotion and for learning and doing a lot of cool things. Think of joining Google or Facebook when they had 500 employees. In hindsight, it seems obvious that that was a good time to join, but I'm sure that lot's of people passed on the opportunity, thinking that it was too late. So recognizing that a company still has momentum can be a bit tricky. If you are coming out of college, one easy way to test if an established company is still a good place or if it has stagnated is to do an internship there.
blantonl 11y ago
One important approach this article is missing is the fact that there are thousands of quiet, successful, single owner companies that have found a niche and don't aspire to change the world, and they still bring in hundreds of thousands of dollars in profit every year. Getting on with the Google's or the VC backed "change the world" startups aren't the only ways to get rich in tech.
- halayli 11y ago
  pretty much.
orionblastar 11y ago
Yeah I followed advice like this. It does not always work. I studied hard in college, I worked hard, and I was a programmer earning good money. I never learned how to deal with stress and the stress from the job caused a mental illness that forced me to go on disability. If I had to do it all over again I'd develop stress management skills along with people and social skills. Getting along with people who don't understand how technology works is a big deal. I don't know how to get back into working again and I'm 47 and barely getting by. Blew through my life savings and filed chapter 13 bankruptcy due to high medical bills. If I never developed that mental illness, I'd most likely still be working.
- copperx 11y ago
  Did you find the job more stressful than college? can you explain what triggered the stress?
GoodJokes 11y ago
If your goal in life is to get rich than you have already failed as a human. It is a very easy to get rich. Commit to an amoral lifestyle.
GoodJokes 11y ago
Ironically, some of the richest people I know are actually the poorest.

309 points by sirteno 11y ago

If you want to get rich, your best bet on a risk-adjusted basis is to join a profitable and growing public company. Google for short. Make $200-500k all-in a year, work hard and move up a level every 3-5 years, sell options as they vest (in case you joined Enron), and retire at 60, rich. This plan works every time. I don't think this is great advise. Not everyone is able to join a company like Google due to either luck or their capabilities. I also find being rich around 60 years pointless, since you've wasted too much of your life working for "the man" at that point. I think a better approach would be the following: 1. Become freelancer. 2. Do what you love and do it well. If you're passionate enough about your job you should be able to increase your rate over time. 3. In western european countries: aim for at least 100.000 EUR a year. 4. Live cheap and save up. Invest the cash you don't need at any moment in real estate (house) and index funds. 5. Travel around the world and find a nice cheap country you could enjoy your life in. 6. Emigrate once you have enough money to live comfortably in your country of choice. --- That's my plan at least. Currently I'm on a 'holiday' (2 months) in Thailand. I figured the following: - In Thailand one can live (bare minimum) for around 500 EUR a month (some Russians in my co-working space live from that amount). - Property can be bought for around 50.000 EUR in Pattaya. Not really huge, but decent with shared gym and swimming pool in apartment complex. - 100.000 EUR invested in indexfunds should net me on average around 6% a year after taxes, i.e. 6000 EUR a year or 500 EUR a month (7% historic average minus ~1% tax). - With no monthly rent to pay, I'm should be able to live a bit more comfortably compared to my Russian co-workers here :) - I could fully focus on personal software project and hopefully that will add to my income over time. --- I won't be financially rich, but I would have financial independence and could do what a love in a country with nice weather, good food and nice people - it's another form of wealth.

minimaxir 11y ago
> I don't think this is great advise. Not everyone is able to join a company like Google due to either luck or their capabilities. The original posts which prompted this one was centering around the super-engineer who can control their own destiny and work for any company they want. Nothing in this post applies to the average engineer.
- andy_ppp 11y ago
  The old fixed vs growth mindset at work. There is nothing to stop you becoming an exceptional engineer, except your beliefs of course.
  - ambicapter 11y ago
    'Nothing'? Well, except a fuckload of experience, probably. Either spend 4 hard years at a top university or 10 years of consistent, hard work doing it all by your lonesome, maybe with and maybe without the benefit of being able to 'practice' at work. I don't think all it take is 'belief'. There is some actual hard work to be done.
    - mixmastamyk 11y ago
      Except that startups won't hire you once you get that experience. Look at their team pages, and struggle to find the one person over thirty-five.
  - wishful 11y ago
    Of course there is. First, there is your biology. You might simply not be intelligent enough to become a great engineer. If you set the cut-off for greatness at "published a widely influential paper" or "designed a large distributed system from ground up" this becomes even more the case. You might not have the health and the endurance to work on demanding high-end projects long enough to get really good at those kinds of projects. Then, there are the social factors. Your other obligations, like raising children, can get in the way, though you might say they are more manageable than intelligence and health. Growth mindset, beyond the "bloody obvious" [1] interpretation of it, is not something you can state as self-evident, and evidence to support the stronger interpretations is quite scarce. [1] http://slatestarcodex.com/2015/04/10/i-will-never-have-the-ability-to-clearly-explain-my-beliefs-about-growth-mindset/ http://slatestarcodex.com/2015/04/10/i-will-never-have-the-a...
    - andy_ppp 11y ago
      If you actually read the grand parent I was talking about an average engineer becoming amazing. It's 100% possible. You have added a whole load of random obstacles to our average engineer, like making him in poverty, setting him the goal of greatness and suggesting he's sick. I'd agree that he probably need to find a job that pays better, get well and have smaller goals before he succeeds.
deleted 11y ago
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mahyarm 11y ago
You could do the same thing working at google, but instead of making $108k USD/yr, you would make +$250k/yr USD. Your time to target savings number would be greatly reduced. Then you can leverage that into a remote work position as you work from home in some cheap country. You can also buy a condo in las vegas for $50k USD too. You still have a developed country where you can speak the language and the bay area is a cheap one hour flight when you need to get more work.
- lucaspiller 11y ago
  As OP said it's one thing to be financially rich, but there are other forms of wealth. The idea of working 10+ hours a day, 5 days a week (if I'm lucky), 50 weeks a year for the next 40 years just doesn't appeal to me. You are right you could earn more at Megatechcorp, but by freelancing I can work on stuff I find interesting and still live life on my terms. Also getting into a company like Google isn't something that everyone can do, where as it's pretty easy to start freelancing (especially if you are European, hence don't need to worry about healthcare).
  - mahyarm 11y ago
    But I said nothing about working 40 years. I just said you could do the same thing faster working at google than being a 100k freelancer. Most freelancers I know live a pretty variable life where you get feast & famine cycles. And when it's feast time, it's long hours time. It can be more stressful than being an employee too. You can also work pretty interesting projects at a place like google. If you want to do platform library type work, the only kinds of places your likely to get that kind of work is from a place like google or other larger companies. I think most software engineers could get into to google if they put the effort into it. If you can make it as a $100k/yr software freelancer, you could probably study 'cracking the coding interview' and make it into google. Also realize that google hires in europe too. The hours isn't what you think it is. There are many 9-5ers that do good work at places like apple and google. And there are other teams that work a lot. It all depends on the team. People also get more than 2 weeks vacation too. For example, the entire engineering org at apple at least gets 3 weeks of 'mandatory' vacation. One week for thanksgiving, 2 weeks for christmas. Then you have your normal vacation on top of that.
gargarplex 11y ago
- 100.000 EUR invested in indexfunds should net me on average around 6% a year after taxes, i.e. 6000 EUR a year or 500 EUR a month (7% historic average minus ~1% tax). - With no monthly rent to pay, I'm should be able to live a bit more comfortably compared to my Russian co-workers here :) How are you going to pay the rent when the market inevitably doesn't return?
- onion2k 11y ago
  And what are you going to live on in 20 years time when inflation has halved the value of the 100.000 EURs?
  - wsc981 11y ago
    The historic numbers I mentioned with regards to profit from investments take into account historic inflation numbers. The numbers are based on the Dutch book 'De Schitterende Eenvoud van Indexbeleggen'[0]. Inflation should not be an issue. Still the bigger plan is to make extra money by working full-time on my own projects. So the goal is to increase investments every year and also the profit from investments. @onion2k: The book isn't saying you can live forever for that amount. It's a calculation I made for myself based on the historic average profits of the stock market in the long term (based on ~100 years of data). I'm living for 2 months in Thailand and I can have a basic living here for 500 EUR a month, especially if I have a fully paid for apartment. That's a basic living without much luxury, but a good starting point to full-time commit myself to my own projects. And hopefully build more income that way. I also don't have wife, kids, etc… --- [0]: http://www.bol.com/nl/p/de-schitterende-eenvoud-van-indexbeleggen/1001004006191081/ http://www.bol.com/nl/p/de-schitterende-eenvoud-van-indexbel...
    - onion2k 11y ago
      I don't read Dutch, but I can assure you that if it's saying you can invest 100.000 EUR and live off the interest forever without reinvesting it then it is wrong.
      - 11y ago
tlarkworthy 11y ago
interest on 100K won't cover visiting your family, having children, or any safety net if you get sick, unfortunately. Also a conservative fund return is more like (a volatile) 4%, and subject to the whims of 'previous performance doesn't predict future performance' (e.g. even that 4% can't really be relied upon).
- deleted 11y ago
  [deleted]
- wsc981 11y ago
  I understand, but those numbers were from my perspective. I don't have a girlfriend or kids. And one should be able to overcome minor sickness, though I do realise there's a risk. I believe when you're still young and healthy you should occasionally take a little risk to (hopefully) achieve your dreams. My dream is to be financially independent and work on my own software projects full time.
  - porker 11y ago
    Do you consider yourself a machine or a human? Became from outside it sure looks one way. I'm guessing you're relatively young. What I wished I'd learned earlier is the future comes faster than you think, and the earlier you start planning and saving for it (partner, children, ill health) the easier it is.
    - wsc981 11y ago
      I dunno why, but I've trouble connecting with women and even if I do connect, at some point I'm afraid I'll get bored. And I've never seen much reason to get kids myself. So perhaps in that aspect, I'm more of a machine. I'm 34 now. I've dealt with some heavy stuff. Lost my parents and a sister in a car accident when I was ~20 years old. I agree that the future comes faster than one might think, which is why I'm in such a hurry to achieve my dream future before I'm 40 years old, so I got still plenty of time to enjoy it. My little sister certainly didn't get the chance to live her dream future.
JDDunn9 11y ago
I'm more-or-less doing this now too, here's a few problems I've run into: - Visa renewals. Leaving the country every 90 days to renew your tourist visa gets old fast. - Finding a country that is both stable and has a low cost of living. I was in Bangkok during the last revolution when the current military junta took over. The airport shut down and I had to take a bus past a lot of guys with machine guns to get out of there. - Starting a family changes things. Poor countries have poor education systems. I enjoyed my visit to Pattaya, but wouldn't want my kids passing by "walking street" on their way to school. - You lose some small niceties like Amazon Prime and Hulu :)
- ido 11y ago
  I've been through this thought process myself & my conclusion was that a lot of the eastern side of the EU (including eastern Germany) is not a bad compromise between fairly low cost of living & decent infrastructure/public services.
  - codecamper 11y ago
    Yes but a beer and a sausage for lunch will really cut into the afternoon productivity. :)
  - turar 11y ago
    What countries do you have in mind?
    - ido 11y ago
      I currently live in Berlin which is getting borderline expensive (still much cheaper than almost any major western city - more so now with the weak euro). I've heard good things about the Czech republic and Bulgaria. Seems like Croatia isn't bad either.
      - prodmerc 11y ago
        Don't forget Romania :-)
kaybe 11y ago
I can live in Germany for that much, and it includes health insurance. Are you sure that's the lowest you can go?
- kuschku 11y ago
  In fact, 670€ is the average that students live on in Germany.
porker 11y ago
>100.000 EUR invested in indexfunds should net me on average around 6% a year after taxes, i.e. 6000 EUR a year or 500 EUR a month (7% historic average minus ~1% tax). Really? That's a better return than I'm seeing averaged over 10 years.
- ewaldort 11y ago
  He also doesn't take inflation into consideration.
  - nommm-nommm 11y ago
    Or market volatility. .... or much of anything, really.
    - pc86 11y ago
      Expecting above-average returns on a small amount of money for several decades as sole income while ignoring inflation and market volatility. What could possibly go wrong?
      - wsc981 11y ago
        I hoped to make clear this wasn't the sole income for decades. It's meant as a starting point to dedicate myself full-time on my own projects and hopefully make extra money from this work. Since I'm a developer with focus on mobile, I'd try to make several apps a year in this way which would hopefully generate substantial extra income over time.
  - crdoconnor 11y ago
    Or those pesky 0% interest rates we've had for 7 years.
    - muzz 11y ago
      0% interest rates are not a concept that applies to index funds
JabavuAdams 11y ago
> I also find being rich around 60 years pointless, since you've wasted too much of your life working for "the man" at that point. Lolwut? Sure it's better to be young and rich but don't discount the comfort of being old(er) and rich. That said, your plan sounds pretty good. How does your plan change if you want to raise kids?
- wsc981 11y ago
  > That said, your plan sounds pretty good. How does your plan change if you want to raise kids? If I'd have kids (and wife) I'd need way more money of course. But I don't want kids of my own. This opinion of me hasn't changed in the last 10 years and I don't think it'll change in the future. I believe there are already plenty enough people on earth and more people wouldn't make the world necessarily a better place.
  - JabavuAdams 11y ago
    > I believe there are already plenty enough people on earth and more people wouldn't make the world necessarily a better place. Not contradicting your decision, but I have to argue this point. There are not enough creative, educated, tolerant, empathetic people in the world. Every educated tolerant person with empathy is a little win for civilization. So, if you think you can make or train one, then there's an argument for having or mentoring kids.
pc86 11y ago
> I also find being rich around 60 years pointless, since you've wasted too much of your life working for "the man" at that point. Most people in the US will die having never been rich by any measure and having never done any better than living paycheck to paycheck, at best. 25+ years of wealth at the end of your life puts you solidly near the top of the pile. And financial independence anywhere in the world is a whole different ballgame than living "rich" in a developed country (particularly the US).
- codecamper 11y ago
  Once you are rich at 60 there is some small chance that there will be life extension products available. (for some serious dough of course)
  - itchyouch 11y ago
    At the moment, lifestyle (nutrition/fitness) & social connections seems to be the key to living to 100.
guiomie 11y ago
Great plan if you have no extended or close family (our you simply don't care about them), nor do you care about living in the country you were born in.

danieltillett 11y ago

My first piece of advice for startup job seekers is that equity, all things equal, you can’t pick ‘em. On a risk-adjusted basis, startups are likely to be about the same. If there is information that a company has significantly de-risked, it will be priced in. Despite the market often being very wrong, you are unlikely to outsmart it. I don’t understand the argument for this. Isn’t the whole basis of venture investment being able to identify business that will return above the risk-adjusted return? Given many investors lack the technical understanding to know a good risk from a bad one how could this be priced in?

lwhalen 11y ago
It can't, hence why it's gambling when you get down to brass tacks.
- danieltillett 11y ago
  This would imply the market for startups is perfectly efficient which I find hard to believe based on my experience.
  - potatolicious 11y ago
    No, but it does mean that at an individual level the difference is not consequential. a16z and Sequoia might be able to pick the winners at a higher rate than other investors, but that advantage only bears itself out with a large N of companies. At the individual case, with a single individual looking for a single job in a single company, the difference between being to pick winners 5% better than the baseline is not consequential, since the expected outcome is still "not a winner". Some people may be able to pick winners better than others - but the effect is not strong enough to be useful in the micro scale because the odds of success are still very, very low.
    - danieltillett 11y ago
      There is something not right about this argument. Do you really say to yourself: “Here are two companies A & B with the same valuation. I think A has the best chance of success based on its technology, but I don’t care which one I join since they have the same chance of success.”

pla3rhat3r 11y ago

While I don't agree with all the points, the best advice in here is: "But for all that is good and holy, don’t join a startup for the fucking money." If you're joining or starting a company because you think you're going to buy a yacht and a small island, stop it! Recently I've seen some Founders tweeting things that make me shake my head every day. You're not going to be rich unless you have that once in a lifetime solution no one else is building. That's why it's called, "winning the startup lottery." It's still a fucking lottery. :)

danieltillett 11y ago
The thinking that you are going to get rich via a startup is a very concrete sign that you are in a bubble. Create a startup because you want to do something that can’t be done in a big company, or because you think it will be fun, but don’t do it for the money.
adventured 11y ago
There are thousands of small, private technology businesses worth millions or tens of millions of dollars across the US, that have taken little to no venture capital, and in which the founders have very large equity stakes in their own business. It does not require the equivalent to winning the lottery to get rich with a technology business. The odds are several magnitudes greater that you'll get rich creating a technology business than playing the powerball. Being worth $4 million, and having a small business that generates $650,000 per year in profit, is rich. Getting rich with a start-up in Silicon Valley, given the approach used there, is like playing the lottery. The start-up lottery you're referring to only exists in SV / SF. Nearly everywhere else, the fundamentals of having an operating business still rule - in that world, a lot of people get rich running smaller technology businesses. $50 million or $500 million rich? Nope, $5 million rich. Silicon Valley is mostly all or nothing, and that's what makes good outcomes so relatively rare.
- puranjay 11y ago
  Exactly what I tell my startup friends. I know people who run design consulting firms and pull in $300-500k/year in profits. Some run SEO/SEM marketing agencies and do similar figures. They give themselves generous salaries and own nearly 80-90% of their businesses which, on paper, are worth $4-5M. That's definitely very, very well-off, if not F-U rich. And it's very "safe", unless your $1M in revenue hinges entirely on one or two clients

msoad 11y ago

If you worked five years in a startup that failed it's hard to believe that you can get a VPN job at Google. With acquisition maybe. But Google don't hire VPs like that.

retube 11y ago

Reading the linked article about how employees of Good paid huge tax bills on stock that ultimately proved worthless - how insane is US tax law?? Surely you should only be taxed on realised gains, i.e when you cash out.

mahyarm 11y ago
You get taxed at the amount of 'profit' you have gained when you exercise the option. There is an 'ISO' stock option type for employees that makes the tax event when you actually cash out, but an alternative tax system called 'AMT' (alternative minimum tax) kicks in pretty quickly and taxes you anyway. The entire system assumes you are getting public company stock or something similarly liquid and taxes you as so. Capital losses cannot be applied to normal income in practice in the US either, only to other capital gains.
- adventured 11y ago
  > Capital losses cannot be applied to normal income in practice in the US either, only to other capital gains. That's wrong. You can deduct $3,000 per year in capital losses against normal income. "Generally, realized capital losses are first offset against realized capital gains. Any excess losses can be deducted against ordinary income up to $3,000 ($1,500 if married filing separately) on line 13 of Form 1040. Losses in excess of this limit can be carried forward to later years to reduce capital gains or ordinary income until the balance of these losses is used up." https://www.irs.gov/uac/IRS-Reminds-Taxpayers-They-Can-Use-Stock-Losses-to-Reduce-Taxes https://www.irs.gov/uac/IRS-Reminds-Taxpayers-They-Can-Use-S...
  - mahyarm 11y ago
    That is why I said in practice. You just had a $50k loss from your startup option tax bill? It's going to take 17 years before you can deduct all of that loss from your normal income! $150k loss? 50 years!! In other countries, capital loss can be deducted from your normal income immediately.

bcoinbanker 11y ago

Powerful VC who profited from the kind of situation described in the nytimes piece: "Don't join a startup because you are trying to maximize wealth". Fk yes, just like you, the only reason I joined and you invested in that dating app is to save the singles from this damn evil world.

lazyjones 11y ago

If you have the skills to go work for Google and climb up the career ladder there, you probably have the skills to start your own company, work harder and retire at 40 (not 60) with a decent amount of wealth. Just find an interesting niche, develop it for a large market and don't waste your time on worthless features. I retired at 41 this way and don't think I was even Google material when I started (too old and relatively inexperienced). Also, listen to this advice: https://news.ycombinator.com/item?id=10787615 https://news.ycombinator.com/item?id=10787615

pjc50 11y ago
Just find an interesting niche, develop it for a large market and don't waste your time on worthless features. "Just" It requires a good mixture of luck and keeping your ear to the ground to find an undeveloped but large market niche, and a good crystal ball to know which features are worthwhile. I'm not saying it's impossible, but it's far from a certain path to victory.
- enraged_camel 11y ago
  The more domain expertise you have, the less luck you need to identify a worthwhile niche in that domain. People tend to think that startups are for young people, but most successful startups are actually founded by 40-something year-olds for this very reason. https://www.quora.com/What-is-the-average-age-of-founders-for-the-most-successful-startups https://www.quora.com/What-is-the-average-age-of-founders-fo...
- lazyjones 11y ago
  > It requires a good mixture of luck and keeping your ear to the ground to find an undeveloped but large market niche, and a good crystal ball to know which features are worthwhile. That's a bit exaggerated IMO. Granted, it's harder now than 15 years ago to find something under(not un-)developed on the Web e.g. that seems doable and interesting, but if you keep an open eye, you see opportunities every day and wonder why something that seems useful hasn't been done (or done properly). Some of these potential products will be very hard to develop fully and never be perfect, which doesn't make them less interesting (the opposite is true perhaps - does Google Search work perfectly?), only a bit scarier. As for which features are worthwhile: a lot of wisdom has been written down about this - it's important to look at the product from the perspective of a user. If you lose that perspective, talk to real users. The rest is hard work and that's easier and more rewarding if you work for yourself, I believe. My advice is that if you find yourself thinking "XYZ would be nice to have, why hasn't someone done this?" or "all solutions for XYZ I can find are terrible, why hasn't anyone done it right?", just sit down and attempt to do it, if it fits your skill set somehow (doesn't have to be a perfect fit and you don't need an MBA!). People are getting rich like this all the time. Don't look for "unicorn" ideas, you don't need to chase billions to retire comfortably.

TeeWEE 11y ago

Ok how does this work in Europe. In Amsterdam, high salaeries are around 72000 per year. Of which 50% goes to the tax. So you only have around 3k per month...

pc86 11y ago
Part of the benefit of living in the US is the relatively low tax climate (California notwithstanding, its state income taxes are 4x what I pay) which generally leads to increased socioeconomic mobility (a disputed statement, I know). I imagine the advice for a European with a salary cap of approximately 70-80k is the same for an American with a salary cap of 85-90k: wealth is most likely only going to come from entrepreneurship or blind luck.
- athenot 11y ago
  Salaries in the US are much closer to those of in the EU once you factor in the cost of financing your own safety net. That's the counterpart of lower taxes. Now if you're in the US and pretend to have an EU salary by stashing away a big chunk of it, then yes that is most desirable.
  - crucifiction 11y ago
    Not in tech. Per other HN recent articles its relatively straightforward to make in the $150-250k range as a software engineer at BigTech. Even if you decide to stash $30k/year after tax for your own 'safety net' (equivalent to whatever net you receive in an EU country), you are still coming out way ahead of a EU software engineer that is probably making $70-90k USD equivalent before taxes take half.
    - nommm-nommm 11y ago
      Does anyone make that much money outside of expensive cities like San Francisco and New York though? I know that I am underpaid but I don't think I am that underpaid.

J_Darnley 11y ago

Don't bother. Don't even try. It will never happen to you.

iso8859-1 11y ago
What will happen then? Your post is useless without arguments.

tabeth 11y ago

The real question I think is what are the preconditions to "get rich in tech" and how do you get to those preconditions? Assuming you're not in a position to get the typical pedigree associated with the preconditions, e.g. Stanford/MIT/ C.S, how does a "typical" engineer become amazing. I would love a comprehensive guide on how to do this. Being great at your job is one thing, meeting the preconditions associated with getting rich in tech, is another.

sethammons 11y ago
"Amazing engineer" doesn't have to correlate with getting rich in tech. I see a couple of paths for getting rich. One, be lucky and work for a start up that becomes a unicorn. Maybe not the best of plans. Two, solve problems for which others will pay for solutions, work hard, and still be lucky (just not as lucky as finding a unicorn - or maybe you accidentally make a unicorn). Three, be an amazing engineer, get a decent salary, save and invest, and wait. For becoming an amazing engineer, focus on providing solutions to the stage of company you enjoy working at. While it might be splitting hairs between being good at your job, I feel an amazing engineer does something more than just their job. They bring something that helos push the company forward. At the beginning, maybe companies need fast implementations that can just get by. Maybe later they need proper automation and tooling. Perhaps they need a solid team lead who works with people as well as tools. Maybe later they need more experience collecting telemety on their systems. Or need more elegant designs to scale. Or whatever. Experience, practice, and/or studying can help you strive to be an amazing engineer. If you find yourself not growing year after year, do something about it. Hope that was cohesive. Posting from a phone throws me off more than I normally am, haha.

code4tee 11y ago

Most people get 'rich' slow and steady rather than overnight ...and by 'rich' those that are financially the best off typically don't look like it. They drive a modest car, live in a modest home, have nice but not flashy things. 3 main rules to live by: 1. The easiest way to increase your ability to save (other than a windfall inheritance) is to earn more money. Live a balanced life, but make sure that focus includes a strong career track with 1, 5 and 10 year goals. As has been discussed elsewhere at length, popular culture likes to play up the person that worked at a startup and sold their options for millions. This is very rare (most options are worthless or end up being worth less than the cash one gave up in the form of a lower salary to get them). Most 'rich' people are those that work hard and earn above average salaries over long periods of time. 2. As soon as practical, at every stage of your life live below your means. This isn't practical early on when some people are just scraping by, but once you start earning some real $$ learn from times when you had less $$ and live happily well under your means. If you earn $150k, live like you earn $100k. As one earns more it's fine to spend a bit (maybe you have a somewhat expensive hobby). Saving every penny eating beans and rice your whole life is no way to live. However, so long as you live well under your means you'll do very well. One of the biggest mistakes I see high earners make over and over is that they increase their spending as fast or faster than they increase their earnings. I can't tell you the number of "millionaires" I know that have trouble paying the electric bill some months. Don't fall into this trap. 3. Invest, but do so in a diversified and conservative fashion. Slow and steady is the key. Trying to "get rich quick" is also an easy way to "get poor quick." Build a reasonable pool of assets and invest when the market is up or down, just keep investing throughout your life. The math shows time and time again that people are horrible at timing the market. When everyone was in a full blown panic in 2008-09 the smart person just kept investing. Every $ the they invested is now worth 2-3x. Those that panicked and pulled out or stopped investing missed out big time.

alexfisher 11y ago
Some of the best advice I've read in this thread so far. I'd recommend reading: 1. The Richest Man in Babylon The $7.89 I spent on this book, which I read in a single night, is the best investment I ever made. 2. Think and Grow Rich An older book, but there are some golden nuggets within.

astazangasta 11y ago

This is the same horsehit they sell graduate students. "Ah, we're paying you a pittance,but the experience is worth it!" But you can't eat experience, and all of this - grad school, the startup ecosystem, etc. - is just a way for greedy assholes to exploit naive young people when they are at their most energetic. Don't accept sub-market pay and long hours in exchange for 'experience'. Other people (i.e. investors) are making money off your work. Get paid.

volaski 11y ago
Did you even read the article? People who don't want risk can go to Google and make tons of money. There's nothing wrong with it. This guy is saying if you're working for a startup you shouldn't do it for the money since a much better choice in that case would be to go to Google. I guess no matter how good a piece of advice is, you aren't able to take advantage of it if you're not ready for the advice.
- astazangasta 11y ago
  Did you read the article? This isn't about assuming risk for the hope of greater reward, this is about working hard and getting nothing in exchange but 'experience'. That advice is bullshit.
  - hoorayimhelping 11y ago
    >getting nothing in exchange but 'experience'. Are you assuming there's no pay involved? I didn't get that from the article; it's not saying take a job for no pay. It's saying it's unreasonable to expect to get paid Google money at a startup. In exchange for not getting paid what you're worth to Google, you get to touch a lot of different areas and get a lot of experience with a lot of things.
  - volaski 11y ago
    Yeah, like another guy said below, who said they get "nothing" but experience? Also you seem to think "experience" is not worth much (maybe because you lack experience of getting experience?), but if you ask me, I would always take a valuable experience over petty money. My time is worth more than a couple thousand dollars per month

Futurebot 11y ago

"And if you go in with this mentality, even when startups fail, you succeed. If you put five years into building a company and team, you will end up with a great network of talented and motivated people, lots of first-hand experience, and often some management experience as well. Worst case, your next step could be going into Google at the VP level it would’ve taken you 15 years to get to joining out of college to “inject some startup DNA,” and catch up on salary within a few years. Unless this internet thing is a fad, that job will always be there for you." This advice is quite precise about where it applies. If you're at a startup that is undercapitalized, working you 12-16 hours a day, 7 days a week, with poor management and no opportunities for anything but building and maintenance, you can actually wind up worse off than when you went in: no built-up network and nothing that would make you "VP at Google" material, and in the case of startups doing pay cuts (in an environment of ever-rising rents), even less money than when you started(!) He is referring to working at "decent or better" startups; problem is, you may not know you're not working at one of those until you actually work at another one. The rest of his advice is probably worth listening to, but the above part should be considered very carefully.

dopamean 11y ago
I thought that advice was entirely tongue in cheek...
fweespeech 11y ago
> If you want to get rich, your best bet on a risk-adjusted basis is to join a profitable and growing public company. Google for short. Make $200-500k all-in a year, work hard and move up a level every 3-5 years, sell options as they vest (in case you joined Enron), and retire at 60, rich. This plan works every time. I'm pretty sure that is the only part of the advice that wasn't a joke.
trjordan 11y ago
So this happened to me. I believe it 100%, but it's nowhere near as straightforward as you may believe after reading this. The reason is that if you want to work hard for a startup, you need to ditch the role mentality. You have to be all in on the company, all day. You have to think like a CEO without being a CEO, and without access to all the information that comes with it. You also don't get comped for it immediately. My path: - Joined a company just as they got seed funding. Wrote code for 1.5 years. Constantly fought to understand why we were building what we were and where I could cut corners while still being proud of my work. - Company got acquired. Took as job as sales engineer. Gave 6 demos a day for 9 months. - Asked to scale my role. Turns out that's product marketing, so hired my replacement and moved to marketing. 2 months in, we fired my VP and I started reporting directly to CEO. Did this for another 7 months. - More marketing churn, I ended up running marketing (team of 2). 1 left, hired 4 total more over 8 months. - Decided I was leaving, told my CEO with 6 months notice. Ran the search for a new CMO (obviously the CEO had final say, but we didn't have many significant disagreements). At every one of these steps, I freaked out about my ability to perform. I'd be up in the middle of the night, or stressing about not understanding anything. I wasn't leveraging my skills -- I was stepping into gaps the company needed filled and backfilling the roles I was leaving. If you can find a company that will let you do this, you come out with an AMAZING skillset. I'm 30, and I haven't tested my ability to get a VP-at-Google job, but I'm not finding anything in starting my own company that's a total surprise. The breadth and exposure I got from trying different roles at a startup every 6-12 months has been frighteningly valuable. You can't stay heads-down and think writing code is all the your startup needs. You need to think like a founder for 5 years, without any of the upside, and you'll get a huge amount of intangible value from the experience.

foobarqux 11y ago

Does anyone have an actual example of someone getting to VP level at Google through a startup faster than you could otherwise?

foobarqux 11y ago

Does anyone have an actual example of someone getting to VP level at Google through a startup faster than you could otherwise?

astazangasta 11y ago

Not to be rude, but you're exactly who I am talking about. "I also have entrepreneurial ambitions so joining a startup as employee #1 has allowed me to learn how to build a business at every level." This is the same bullshit American dream Silicon Valley has been scamming people with for decades. Your aspiration is to graduate to tier 2 of the Ponzi scheme. I have news for you: your business will not blow up big, you are not a special unicorn. You are just like everyone else, stomping on the treadmill so the investor class can make more dough.

67726e 11y ago
Or rather, I would like to create a sustainable, long-term profitable business. I don't want to build some Silicon Valley VC bullshit. The knowledge around building a business is generally applicable, and I have always had an entrepreneurial bent, long before I had any idea of VC and long before the way things are now. Now show me on the organizational chart who hurt you...
cushychicken 11y ago
I think you're acting just the slightest bit rude here, frankly. "Entrepreneurial ambition" != "Silicon Valley/Ponzi scheme/unicorn". Starting a business doesn't mean you have to join the VC/SV/startup treadmill. You can get away with doing the same thing that the vast majority of entrepreneurs have done throughout history: take a skill you know, strike out on your own, and start offering to make things or perform a service in exchange for money. It wasn't until the internet came along that you could become a billionaire in under a decade doing it. That's a distortion that recent history has introduced. The vast majority of entrepreneurs are not SV titans - they're small businesses. I don't have much respect for folks who denigrate those sorts of ambitions, especially on HN. On top of helping to continue to distort the overall shape of entrepreneurship, it's awfully close to a personal attack, as it's basically saying "Your dreams are stupid".
- astazangasta 11y ago
  I feel bad about being rude, but I stand by my position. You are right, entrepreneurial ambition is not the same as the Valley Ponzi scheme, but SV is exactly about funneling that ambition into a wealth-generating machine for the investor class, and most of the ambition in the Valley is captured and squandered this way. I would rather err by calling this out.

tptacek 11y ago

Developers at failed startups do not as a rule get offered VP-level jobs at Google.

w1ntermute 11y ago
VP level jobs at Google have nothing to do with being a developer and everything to do with playing office politics extremely effectively (and getting lucky, as with much else in life).
- tptacek 11y ago
  I am very wary about claims like those from the article about how working for a lower salary at startups will allow you to somehow compress N years of career experience into (N-k) years of actual work. I think the instances where that actually happens are balanced out by the instances where your work will be valued at less than what it'd be worth had you worked at Google.
  - w1ntermute 11y ago
    > I am very wary about claims like those from the article about how working for a lower salary at startups will allow you to somehow compress N years of career experience into (N-k) years of actual work. That claim has never made any sense to me (I think I first saw pg make it). In my experience, there's little to no practical difference between working as a developer at most startups and doing the same at a bigcorp in terms of experience. There's certainly a lot of rah-rah-rah about the "startup culture", but places like Google try very hard to make their employees happy as well. There might be a little more cowboy coding at the startup and a little more bureaucracy at the bigcorp (though it's a good manager's job to shield engineers from that bureaucracy), but your future job prospects are almost always better when you've got a bigcorp stint on your resume.

blue11 11y ago

Google and startups are two extreme ends of the spectrum, and neither is that great in terms of risk-reward balance. Personally, I'd recommend joining an established, but still growing, medium-sized company. That means shortly before, or a year or two after IPO, somewhere between 100-500 employees. That kind of a place still has momentum and is still relatively generous with equity. You won't get as rich as your pre-IPO coworkers, but you'll do OK and with less sacrifice. If the company is still growing, there will be opportunities for promotion and for learning and doing a lot of cool things. Think of joining Google or Facebook when they had 500 employees. In hindsight, it seems obvious that that was a good time to join, but I'm sure that lot's of people passed on the opportunity, thinking that it was too late. So recognizing that a company still has momentum can be a bit tricky. If you are coming out of college, one easy way to test if an established company is still a good place or if it has stagnated is to do an internship there.

blantonl 11y ago

One important approach this article is missing is the fact that there are thousands of quiet, successful, single owner companies that have found a niche and don't aspire to change the world, and they still bring in hundreds of thousands of dollars in profit every year. Getting on with the Google's or the VC backed "change the world" startups aren't the only ways to get rich in tech.

halayli 11y ago
pretty much.

orionblastar 11y ago

Yeah I followed advice like this. It does not always work. I studied hard in college, I worked hard, and I was a programmer earning good money. I never learned how to deal with stress and the stress from the job caused a mental illness that forced me to go on disability. If I had to do it all over again I'd develop stress management skills along with people and social skills. Getting along with people who don't understand how technology works is a big deal. I don't know how to get back into working again and I'm 47 and barely getting by. Blew through my life savings and filed chapter 13 bankruptcy due to high medical bills. If I never developed that mental illness, I'd most likely still be working.

copperx 11y ago
Did you find the job more stressful than college? can you explain what triggered the stress?

GoodJokes 11y ago

If your goal in life is to get rich than you have already failed as a human. It is a very easy to get rich. Commit to an amoral lifestyle.

GoodJokes 11y ago

Ironically, some of the richest people I know are actually the poorest.