9 ms·

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

by 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
[deleted]
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.

by wsc981 11y ago

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

[deleted]

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.