3 ms·

If I were a young software developer solely focused on saving as much money as possible, I would: move to SF in a heartbeat, work for Facebook, Google, or Amazo

by nugget 10y ago

If I were a young software developer solely focused on saving as much money as possible, I would: move to SF in a heartbeat, work for Facebook, Google, or Amazon, pick a mission-critical team that exposed me to systems at massive scale, and live in a van a pleasant 5-10 minute bike ride from the office. After I felt comfortable I'd start to consult on the side on weekends for up to $53k of annual tax-free solo 401k sheltered income. Life doesn't present a ton of these "sell picks and shovels to gold miners" opportunities but this is definitely one of them.

zump 10y ago
Stupid advice. Not everything that happens is a choice, you can't just pick a team at Google, and you can't just magically become a profitable consultant on the side.
EpicEng 10y ago
If I lived in your fantasy world I'd just make myself the king of Saudi Arabia. Seems simpler.
et-al 10y ago
> After I felt comfortable I'd start to consult on the side on weekends for up to $53k of annual tax-free solo 401k sheltered income. May someone please explain this? I wasn't aware of a different 401k contribution limit for freelancing. > Life doesn't present a ton of these "sell picks and shovels to gold miners" opportunities but this is definitely one of them. Feel like this is more akin to a goldminer working 24/7. Selling "picks and shovels" is what landlords / AWS / food delivery / ride-shares are doing.
- baddox 10y ago
  I was under the impression that you can just set up a corporation for your freelancing, with you as the only employee, and have your corporation offer a very generous 401k plan that matches individual contributions up to the maximum legal amount.
- pk3 10y ago
  If the side business is profitable (and makes enough to enact this plan), it works like this for a solo 401(k): the employee's contribution (you) up to $18,000 and a profit sharing contribution up to 25% of the business earnings. For 2017, it maxes out at $54,000 if you're under 50 years old. Keep in mind though that maximums are per person not per company; if you keep the day job 401(k) (and potential match) you'd have to reduce the contributions from your side business to not exceed the maximum. https://www.irs.gov/retirement-plans/one-participant-401k-plans https://www.irs.gov/retirement-plans/one-participant-401k-pl... https://scs.fidelity.com/products/mobile/sepMobile.shtml https://scs.fidelity.com/products/mobile/sepMobile.shtml
  - et-al 10y ago
    Thanks pk3 and baddox!
  - nugget 10y ago
    The employee contribution maximum is limited per person, but the employer contribution maximum is per company (if the companies are unrelated, by ownership structure). Some illustrative answers here: https://www.quora.com/401-k-Is-it-possible-to-fund-both-a-Solo-401k-and-a-regular-401k-at-the-same-time https://www.quora.com/401-k-Is-it-possible-to-fund-both-a-So...

by nugget 10y ago

zump 10y ago

Stupid advice. Not everything that happens is a choice, you can't just pick a team at Google, and you can't just magically become a profitable consultant on the side.

EpicEng 10y ago

If I lived in your fantasy world I'd just make myself the king of Saudi Arabia. Seems simpler.

et-al 10y ago

> After I felt comfortable I'd start to consult on the side on weekends for up to $53k of annual tax-free solo 401k sheltered income. May someone please explain this? I wasn't aware of a different 401k contribution limit for freelancing. > Life doesn't present a ton of these "sell picks and shovels to gold miners" opportunities but this is definitely one of them. Feel like this is more akin to a goldminer working 24/7. Selling "picks and shovels" is what landlords / AWS / food delivery / ride-shares are doing.

baddox 10y ago
I was under the impression that you can just set up a corporation for your freelancing, with you as the only employee, and have your corporation offer a very generous 401k plan that matches individual contributions up to the maximum legal amount.
pk3 10y ago
If the side business is profitable (and makes enough to enact this plan), it works like this for a solo 401(k): the employee's contribution (you) up to $18,000 and a profit sharing contribution up to 25% of the business earnings. For 2017, it maxes out at $54,000 if you're under 50 years old. Keep in mind though that maximums are per person not per company; if you keep the day job 401(k) (and potential match) you'd have to reduce the contributions from your side business to not exceed the maximum. https://www.irs.gov/retirement-plans/one-participant-401k-plans https://www.irs.gov/retirement-plans/one-participant-401k-pl... https://scs.fidelity.com/products/mobile/sepMobile.shtml https://scs.fidelity.com/products/mobile/sepMobile.shtml
- et-al 10y ago
  Thanks pk3 and baddox!
- nugget 10y ago
  The employee contribution maximum is limited per person, but the employer contribution maximum is per company (if the companies are unrelated, by ownership structure). Some illustrative answers here: https://www.quora.com/401-k-Is-it-possible-to-fund-both-a-Solo-401k-and-a-regular-401k-at-the-same-time https://www.quora.com/401-k-Is-it-possible-to-fund-both-a-So...