9 ms·

Agree. In your 20s, your main competitive advantage is your ability to take risks. Plus your skill set is incomplete, so you’re likely to see much better return

Agree. In your 20s, your main competitive advantage is your ability to take risks. Plus your skill set is incomplete, so you’re likely to see much better returns from investing in yourself than the market.

maxro 9y ago
It's the good old debate on building human capital vs. financial capital.
austenallred 9y ago
Honestly if you’re a Stanford engineer those things aren’t mutually exclusive. You can take big risks and stash some cash. Even in the Bay Area when I was getting paid $120k with a lot of stock and supporting a family I could still put away $2k/month. (Granted, that was after student loans and all other debt were gone).
- SmellTheGlove 9y ago
  > Even in the Bay Area when I was getting paid $120k with a lot of stock and supporting a family I could still put away $2k/month. (Granted, that was after student loans and all other debt were gone). Tangential question if you don't mind. I'm currently staring at an offer in the bay area, and the cost of living is mind boggling. Where did you live on that 120k, while still saving 2k a month and having a family? I'm not asking this sarcastically, I'm asking because I'm looking for a place with good schools, 3 bedrooms, and not $5K a month in rent in order to decide whether this is the right move. If that's possible without commuting 1.5-2 hrs each way, I'd really love to know!
  - tlarkworthy 9y ago
    I am a family of four living in a 1 bed. Sleep with ur wife in the living room, kids in a bedroom. I manage to live in the city in a nice (albiet too small) apartment with 15 min commute for 3.8k rent a month. You have to compromise somewhere. I am on more than 120k though.
    - joshuamorton 9y ago
      Where on earth are you paying that much for a 1br? There are 2br apartments that can be had (still in SF proper) for less than that!
      - tlarkworthy 9y ago
        In mission Bay, next to a fancy playpark for my kids. With swimming pool etc. We get the life we want, just not in the sized house we want.
  - Mahn 9y ago
    As an European, reading things like these never ceases to amuse me, both the salaries that engineers earn and the crazy high cost of living to go with it. In Germany $120k is the salary of your average successful internet startup CEO and generally speaking an outrageous amount of money, in the Bay Area is about enough to get by, pay rent and save. The disconnect is astounding. And it's not like the quality of life in the Bay Area is ten times greater than in the top cities of Europe either, not to my knowledge anyway.
    - Kelbit 9y ago
      As a Canadian... :(. We get European tech salaries with rapidly-approaching American cost of living. On a median-income vs cost-of-living basis, Vancouver is actually now more expensive than SF and NYC. We lose all of our good talent south of the border on NAFTA visas.
      - deleted 9y ago
        [deleted]
    - heedlessly2 9y ago
      i feel the same way except i'm an American living in the midwest. I make $70k in the midwest and save $3k/month. That's $3k after taxes, insurance benefits, rent, food, etc.. So I'm surprised the 120k guy isn't putting away more.
      - softawre 9y ago
        You're saving more than 50% of your pre-tax money? That is impressive and unusual. I guess from that savings rate and the fact you only make 70k that you are fairly young with no kids? How much do you pay for rent/mortgage?
        clw8 9y ago
        Not OP but in the Midwest big companies like John Deere start their engineers in the $60k range (at least when I interned there). The cost of living is just that much cheaper. My studio apartment while in college in Iowa City was $500 a month for a location just a five minute walk from the campus.
  - SheepSlapper 9y ago
    I lived in San Leandro and earned less/saved the same or more as the other guy. Two bedroom apartment for $1600, 45 minutes to an hour commute into the city for work. Definitely not a place I'd send my kids to school though. You might have luck on the other side of the bay (Alameda is where I'd live if I ever went back) or far enough south out of the city. But no matter what cost of living will be higher than it should be.
  - deleted 9y ago
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  - sjg007 9y ago
    It's not possible. You can try to get your kids into a better school via the Allen Bill which means they can attend the school district where you are employed. For example, say you work in Palo Alto but live elsewhere. Otherwise you might have luck finding something in Union City / Fremont. But everyone is in this boat.. Hopefully, with increased parental involvement, the schools will improve.
    - heedlessly2 9y ago
      can the kids still attend that school district after you get fired/quit?
      - sjg007 9y ago
        Technically, no, but I would imagine something could be worked out on a case base case basis. They might, for example, let your kids finish out the current academic year and in some cases they might let you finish the school you are at (e.g. a junior in high school). You may also be able to find another job in the same district as well.
  - 1024core 9y ago
    From the past tense in that post, I'd guess this may have been a few years ago. Today, the white-hot realestate market means living expenses are much higher. At $120K, you're looking at a tax rate of close to 30%, which puts the usable figure at $80K or so. You want to maximize your 401(K), so your salary goes down to $65K, which is about $5K/mo. A decent 3BR with good schools (Cupertino) will run about $3500/mo (1), which leaves $1500/mo for everything else. Not doable, unfortunately. (1) https://sfbay.craigslist.org/sby/apa/d/1500-off-move-in-book-your/6402874114.html https://sfbay.craigslist.org/sby/apa/d/1500-off-move-in-book...
    - moeamaya 9y ago
      Appreciate the concrete math, it helps ground the abstraction of living expenses. The missing piece here is the salary inflation over a very short period of time. As a Stanford engineer, one should use the leapfrog technique (stay at a job no more than 18mo) to increase your salary by 2x in 5 years. That would mean by 27-years-old, this person should be in the $250k range, 35% tax = $160k usable, $15k 401k = $12k/mo. YMMV, but this is should be entirely doable by the median Stanford grad.
    - austenallred 9y ago
      Was last year. 2 BR was/is $2500. Also if you’re maxing out your 401(K) I’d call that “saving”
    - collinmanderson 9y ago
      Keep in mind though, you're putting away $5K/mo towards retirement. You're _saving_ 60K every year, which is no small number.
      - hikarudo 9y ago
        Actually that would be only $15k/year or $1.25k/mo towards retirement.
  - ironjunkie 9y ago
    Still very possible: - Rent a room for less than 1000$ - No car (use the shuttle or other yuppies way of transport) - Don't overspend on drinking/eating you should be able to save upto 3k a month with a 120k salary
  - austenallred 9y ago
    Do you work in downtown SF? I live in the Tri-Valley area: Dublin, Pleasanton, San Ramon. You can get 3BR for under $3k/month, quick BART into the city (a little less than an hour each way). Though that doesn’t commute very well to San Jose/Palo Alto
- heedlessly2 9y ago
  You should be putting away way more than $2k per month. I know it's the Bay Area and all, but that's still $120k I make $70k in the midwest and save $3k/month. That's $3k after taxes, insurance benefits, rent, food, etc..
  - logiclion 9y ago
    If you are getting a $70k salary AFTER taxes, which would then be roughly 90-100k BEFORE taxes, then that'd be equal in the bay area to what? 150k-170k? I don't think this is an equal comparison.
    - heedlessly2 9y ago
      i make $70k before taxes and save $3k after taxes and other expenses.
      - josephdviviano 9y ago
        all back of napkin but im guessing you're playing with 55k after taxes, so 4.6 k a month. so your total costs (rent/mortgage, food, kids, all in) is only 1.6 k? and you're saving ~65% of what you take home? you must live extremely frugally, this is not normal. so kudos, but don't try to make it sound like everyone should do what you're doing. most people do just fine saving 20-30%, even less.
        heedlessly2 9y ago
        the big difference is that i don't have a family. But i'm not super frugal. I pay $700/month with utils + internet for my own 1Bedroom apartment. I could've gone much cheaper if I didn't live Downtown (120,000 city population) and could've gotten a roommate in a 2Bedroom aprt. Plus I also eat out at Chipotle/Jimmy Johns almost every other day, then I go drinking maybe once or twice a month. So I could easily save another $500 if I wanted to.
        9y ago
leifaffles 9y ago
This is true. It's also true that most people tell themselves that very thing to justify buying dumb shit.
- thanksgiving 9y ago
  Absolutely. I'm poor. It takes all my will to stop myself from buying a huge desktop computer.
- pault 9y ago
  There's a fine line between tool and toy and I often find myself on the wrong side.
- polotics 9y ago
  your submissions so far: 1. Ask HN: What are the strongest arguments against Net Neutrality? 6 points by leifaffles 4 days ago | flag | past | web | 3 comments 2. Tim Ferris: “Silicon Valley also has an insidious infection... McCarthyism” (reddit.com) 10 points by leifaffles 8 days ago | flag | past | web | 1 comment 3. CloudFlare CEO Plots to Slow Service for Political Opponents (twitter.com) 5 points by leifaffles 9 days ago | flag | past | web | 1 comment
  - dang 9y ago
    We've banned that other account for trolling, but what you did here and https://news.ycombinator.com/item?id=15831807 https://news.ycombinator.com/item?id=15831807 also breaks the site rules in several ways. Please don't do that. If another comment is bad for HN you can flag it or, in egregious cases, email us at hn@ycombinator.com.
hiram112 9y ago
> Agree. In your 20s, your main competitive advantage is your ability to take risks. Disagree. In your 20's, your main competitive advantage is time and exponential growth.
- logiclion 9y ago
  As a early/mid 20's college grad, thanks for this.
kudokatz 9y ago
> In your 20s, your main competitive advantage is your ability to take risks. Why is this some "special ability" of 20-somethings? I definitely prefer the approach of becoming financially independent and then having 50+ years to do what I want ... seems like having 50+ years to take risk after saving aggressively for 10-12 allows for even more risk/reward tradeoff by eliminating the worst consequences of failure without a safety net.

maxro 9y ago

It's the good old debate on building human capital vs. financial capital.

austenallred 9y ago

Honestly if you’re a Stanford engineer those things aren’t mutually exclusive. You can take big risks and stash some cash. Even in the Bay Area when I was getting paid $120k with a lot of stock and supporting a family I could still put away $2k/month. (Granted, that was after student loans and all other debt were gone).

SmellTheGlove 9y ago
> Even in the Bay Area when I was getting paid $120k with a lot of stock and supporting a family I could still put away $2k/month. (Granted, that was after student loans and all other debt were gone). Tangential question if you don't mind. I'm currently staring at an offer in the bay area, and the cost of living is mind boggling. Where did you live on that 120k, while still saving 2k a month and having a family? I'm not asking this sarcastically, I'm asking because I'm looking for a place with good schools, 3 bedrooms, and not $5K a month in rent in order to decide whether this is the right move. If that's possible without commuting 1.5-2 hrs each way, I'd really love to know!
- tlarkworthy 9y ago
  I am a family of four living in a 1 bed. Sleep with ur wife in the living room, kids in a bedroom. I manage to live in the city in a nice (albiet too small) apartment with 15 min commute for 3.8k rent a month. You have to compromise somewhere. I am on more than 120k though.
  - joshuamorton 9y ago
    Where on earth are you paying that much for a 1br? There are 2br apartments that can be had (still in SF proper) for less than that!
    - tlarkworthy 9y ago
      In mission Bay, next to a fancy playpark for my kids. With swimming pool etc. We get the life we want, just not in the sized house we want.
- Mahn 9y ago
  As an European, reading things like these never ceases to amuse me, both the salaries that engineers earn and the crazy high cost of living to go with it. In Germany $120k is the salary of your average successful internet startup CEO and generally speaking an outrageous amount of money, in the Bay Area is about enough to get by, pay rent and save. The disconnect is astounding. And it's not like the quality of life in the Bay Area is ten times greater than in the top cities of Europe either, not to my knowledge anyway.
  - Kelbit 9y ago
    As a Canadian... :(. We get European tech salaries with rapidly-approaching American cost of living. On a median-income vs cost-of-living basis, Vancouver is actually now more expensive than SF and NYC. We lose all of our good talent south of the border on NAFTA visas.
    - deleted 9y ago
      [deleted]
  - heedlessly2 9y ago
    i feel the same way except i'm an American living in the midwest. I make $70k in the midwest and save $3k/month. That's $3k after taxes, insurance benefits, rent, food, etc.. So I'm surprised the 120k guy isn't putting away more.
    - softawre 9y ago
      You're saving more than 50% of your pre-tax money? That is impressive and unusual. I guess from that savings rate and the fact you only make 70k that you are fairly young with no kids? How much do you pay for rent/mortgage?
      - clw8 9y ago
        Not OP but in the Midwest big companies like John Deere start their engineers in the $60k range (at least when I interned there). The cost of living is just that much cheaper. My studio apartment while in college in Iowa City was $500 a month for a location just a five minute walk from the campus.
- SheepSlapper 9y ago
  I lived in San Leandro and earned less/saved the same or more as the other guy. Two bedroom apartment for $1600, 45 minutes to an hour commute into the city for work. Definitely not a place I'd send my kids to school though. You might have luck on the other side of the bay (Alameda is where I'd live if I ever went back) or far enough south out of the city. But no matter what cost of living will be higher than it should be.
- deleted 9y ago
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- deleted 9y ago
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- sjg007 9y ago
  It's not possible. You can try to get your kids into a better school via the Allen Bill which means they can attend the school district where you are employed. For example, say you work in Palo Alto but live elsewhere. Otherwise you might have luck finding something in Union City / Fremont. But everyone is in this boat.. Hopefully, with increased parental involvement, the schools will improve.
  - heedlessly2 9y ago
    can the kids still attend that school district after you get fired/quit?
    - sjg007 9y ago
      Technically, no, but I would imagine something could be worked out on a case base case basis. They might, for example, let your kids finish out the current academic year and in some cases they might let you finish the school you are at (e.g. a junior in high school). You may also be able to find another job in the same district as well.
- 1024core 9y ago
  From the past tense in that post, I'd guess this may have been a few years ago. Today, the white-hot realestate market means living expenses are much higher. At $120K, you're looking at a tax rate of close to 30%, which puts the usable figure at $80K or so. You want to maximize your 401(K), so your salary goes down to $65K, which is about $5K/mo. A decent 3BR with good schools (Cupertino) will run about $3500/mo (1), which leaves $1500/mo for everything else. Not doable, unfortunately. (1) https://sfbay.craigslist.org/sby/apa/d/1500-off-move-in-book-your/6402874114.html https://sfbay.craigslist.org/sby/apa/d/1500-off-move-in-book...
  - moeamaya 9y ago
    Appreciate the concrete math, it helps ground the abstraction of living expenses. The missing piece here is the salary inflation over a very short period of time. As a Stanford engineer, one should use the leapfrog technique (stay at a job no more than 18mo) to increase your salary by 2x in 5 years. That would mean by 27-years-old, this person should be in the $250k range, 35% tax = $160k usable, $15k 401k = $12k/mo. YMMV, but this is should be entirely doable by the median Stanford grad.
  - austenallred 9y ago
    Was last year. 2 BR was/is $2500. Also if you’re maxing out your 401(K) I’d call that “saving”
  - collinmanderson 9y ago
    Keep in mind though, you're putting away $5K/mo towards retirement. You're _saving_ 60K every year, which is no small number.
    - hikarudo 9y ago
      Actually that would be only $15k/year or $1.25k/mo towards retirement.
- ironjunkie 9y ago
  Still very possible: - Rent a room for less than 1000$ - No car (use the shuttle or other yuppies way of transport) - Don't overspend on drinking/eating you should be able to save upto 3k a month with a 120k salary
- austenallred 9y ago
  Do you work in downtown SF? I live in the Tri-Valley area: Dublin, Pleasanton, San Ramon. You can get 3BR for under $3k/month, quick BART into the city (a little less than an hour each way). Though that doesn’t commute very well to San Jose/Palo Alto
heedlessly2 9y ago
You should be putting away way more than $2k per month. I know it's the Bay Area and all, but that's still $120k I make $70k in the midwest and save $3k/month. That's $3k after taxes, insurance benefits, rent, food, etc..
- logiclion 9y ago
  If you are getting a $70k salary AFTER taxes, which would then be roughly 90-100k BEFORE taxes, then that'd be equal in the bay area to what? 150k-170k? I don't think this is an equal comparison.
  - heedlessly2 9y ago
    i make $70k before taxes and save $3k after taxes and other expenses.
    - josephdviviano 9y ago
      all back of napkin but im guessing you're playing with 55k after taxes, so 4.6 k a month. so your total costs (rent/mortgage, food, kids, all in) is only 1.6 k? and you're saving ~65% of what you take home? you must live extremely frugally, this is not normal. so kudos, but don't try to make it sound like everyone should do what you're doing. most people do just fine saving 20-30%, even less.
      - heedlessly2 9y ago
        the big difference is that i don't have a family. But i'm not super frugal. I pay $700/month with utils + internet for my own 1Bedroom apartment. I could've gone much cheaper if I didn't live Downtown (120,000 city population) and could've gotten a roommate in a 2Bedroom aprt. Plus I also eat out at Chipotle/Jimmy Johns almost every other day, then I go drinking maybe once or twice a month. So I could easily save another $500 if I wanted to.
        9y ago

leifaffles 9y ago

This is true. It's also true that most people tell themselves that very thing to justify buying dumb shit.

thanksgiving 9y ago
Absolutely. I'm poor. It takes all my will to stop myself from buying a huge desktop computer.
pault 9y ago
There's a fine line between tool and toy and I often find myself on the wrong side.
polotics 9y ago
your submissions so far: 1. Ask HN: What are the strongest arguments against Net Neutrality? 6 points by leifaffles 4 days ago | flag | past | web | 3 comments 2. Tim Ferris: “Silicon Valley also has an insidious infection... McCarthyism” (reddit.com) 10 points by leifaffles 8 days ago | flag | past | web | 1 comment 3. CloudFlare CEO Plots to Slow Service for Political Opponents (twitter.com) 5 points by leifaffles 9 days ago | flag | past | web | 1 comment
- dang 9y ago
  We've banned that other account for trolling, but what you did here and https://news.ycombinator.com/item?id=15831807 https://news.ycombinator.com/item?id=15831807 also breaks the site rules in several ways. Please don't do that. If another comment is bad for HN you can flag it or, in egregious cases, email us at hn@ycombinator.com.

hiram112 9y ago

> Agree. In your 20s, your main competitive advantage is your ability to take risks. Disagree. In your 20's, your main competitive advantage is time and exponential growth.

logiclion 9y ago
As a early/mid 20's college grad, thanks for this.

kudokatz 9y ago

> In your 20s, your main competitive advantage is your ability to take risks. Why is this some "special ability" of 20-somethings? I definitely prefer the approach of becoming financially independent and then having 50+ years to do what I want ... seems like having 50+ years to take risk after saving aggressively for 10-12 allows for even more risk/reward tradeoff by eliminating the worst consequences of failure without a safety net.