4 ms·

Why is that laughable? 150k spare a year, diligently invested 20 years with an overall real return rate of 5% (which should be relatively achievable with index

Why is that laughable? 150k spare a year, diligently invested 20 years with an overall real return rate of 5% (which should be relatively achievable with index funds, otherwise our capitalist machine is in serious trouble and it won't matter too much what my portfolio does) compound to $5.2M. And that's a real return rate so it should be protected against inflation (add a ~3% if you want to do pre-inflation calculation and see the number skyrocket to ~$7M). In fact, that's what I've been doing myself, and I am just on track at ~Y8 like I said in my other comment, all while being an average productive software engineer in the bay. The key is to live frugally and invest in a very diversified way. I live frugally in the bay area with ~$40k/y, I don't succumb to peer pressure of having fancy houses and cars, so for me saving ~150k/y (a bit less actually) is rather easy, and I'm lucky enough to be in a relationship with a woman who feels the exact same, and my life couldn't be any fuller: I'm not slave to material possessions, I live in a decent apartment close to work, my weekends are full of nice outdoor experiences, I work on world-class technology in the bay, and I'm building some serious wealth in the process so I can gain absolute freedom in early/mid 40s (hopefully). I should also say, for full disclosure, that I don't plan on having kids (I have a huge extended family with tons of nephews, so that's enough for me), and I might just adopt much later in life if I'll feel the need, so that might heavily affect my savings numbers. Math: - Y1: $157,500.00 - Y2: $322,875.00 - Y3: $496,518.75 - Y4: $678,844.69 - Y5: $870,286.92 - Y6: $1,071,301.27 - Y7: $1,282,366.33 - Y8: $1,503,984.65 - Y9: $1,736,683.88 - Y10: $1,981,018.07 - Y11: $2,237,568.98 - Y12: $2,506,947.43 - Y13: $2,789,794.80 - Y14: $3,086,784.54 - Y15: $3,398,623.77 - Y16: $3,726,054.95 - Y17: $4,069,857.70 - Y18: $4,430,850.59 - Y19: $4,809,893.12 - Y20: $5,207,887.77

conqrr 8y ago
You are indeed lucky to find a partner who fees the exact same way as you about saving and having kids. Is the 150k joint savings or your individual savings per year?
- deanmoriarty 8y ago
  Just mine, we have completely separate finances (as far as lucky: yes, I am very lucky, but I had to do a lot of dating before finding her, most people, especially in the bay, are very materialistic and like to blow their RSUs on “luxury” rent, Mercedes and Teslas, which I absolutely respect but don't agree with). It’s a high number but if you take advantage of all the tax deferred accounts available and are an average performer at a good company, it’s incredibly easy in the bay to get a $250-300k job, at which point the $150k becomes very achievable if you live frugally (in my case it’s a bit less than $150k, but I also don’t think I’ll need 5M to retire, that’s way too much considering my life style and the fact that I’ll probably just go back to my home country in rural Europe to retire close to my family).
ju-st 8y ago
So in the bay area you can make 350k/y (saving, living, taxes) average for 20 years starting as a 25 year old?
- deanmoriarty 8y ago
  You don't exactly need 350k/y to get those numbers (at least I don't). I don't know what the history will be over the next 20 years if you start now, but for the entire 8 years of my career so far (started at 24), my pre-tax compensation has been roughly 260k/y averaged (I'm at 350k now and started at ~120k), which has allowed me to comfortably save 120k+ a year. My career has been a mix of a couple startups (one with decent exit, but nothing life changing, say 1.5 years worth of salary as financial outcome of the vested equity) and a big solid growing company (no FAANG though).
  - richrichardsson 8y ago
    Well, that's given me some insight into bay area dev pay! I've never even heard of anything near those levels in the UK except for contractors.
    - brianwawok 8y ago
      UK programmer pay is a whole other league. (Maybe the rest of the world? Not sure who else pays like SV, no one that I know)
    - paulgrant999 8y ago
      Most of the jobs I saw were in the 120-190 range. you don't start hitting 220+ unless you're already on the tech pump-n-dump wagon i.e. have "internet-scale" experience. And with the rent and cost of living so high, 165 is basically the poverty line. If you want to actually enjoy some of your money before you die from the politics. tops out at 300-400k unless your management. and thats usually phd-grade stuff (cutting edge). minus "acquisitions" (employees that came over from acquisitions for talent). blockbusting using h1b's and hiring fresh grads keeps the real rates low. thats why theres so much of an emphasis on constant meetings and mentoring. you train your lower paid replacement. its even worse when you consider the level of automation being dev'd and deployed even as we speak. Call it what you will, but coding yourself out of a job, does not strike me as a very rewarding job. Same thing with "frameworks". Count how many horror stories you hear about a company bringing on x-tech, to implement, only to realize there's serious design flaws in the stack they've chosen. I think the best company I saw, did all their development, in-house (for the money-making stuff). C/C++ coders. And they only bring in "mature" technologies (10+ years) -- where the tradeoffs and fixes, are pretty much well known. SANE. I was not much impressed by the quality of engineers out there. Theirs way too much "compartmentalization". Even worse now with the microservices (circa 2015-2017) implementations that failed to grasp basic architectural decisions that still need to be made. If anyone's hiring for those 300+ k jobs, drop me a line. I only have one requirement. Get the fuck out of my way. M.O.V.E. :) One other note: When you're applying, don't do the end of the year (normal cycle for a normal co; they know how much they made, what their next quarter's budget is going to be, prospects are closer etc). H1'bs are all busy getting imported. Wait until they run out of their H1B's and give a month or two to clock their new wage-slaves through their "onboarding". The experienced engineers will get a good sense of what material they're working with and call out for more labor ;) Retarded, but hey, "silicon valley".
deanmoriarty 8y ago
I would really love to know why this was downvoted? This is what I don’t like about HN, one spends time to come up with a reasonable, realistic and thorough comment, and just gets downvoted. Makes me lose motivation for writing my future next comment.
- icedchai 8y ago
  Probably because coming up with 150K/spare year to invest, right out of the gate, is unrealistic. 50K, maybe, if you live in low-COL area on a good salary...
  - deleted 8y ago
    [deleted]
- bpicolo 8y ago
  Because 150k spare a year is drastically higher than the savings of a typical software engineer? That implies like a 400k+ salary.
- lastofus 8y ago
  > I would really love to know why this was downvoted? Some bar napkin math: $150k (savings) + $40k (living expenses) = $190k post tax. Assuming 30% goes to taxes (making liberal use of a 401k), that would be $272k salary. @ 35% it would be $292k. I think the reason everyone is annoyed/down voting is the assumption that every developer in the bay area is pulling top end salaries like that. The reality is the median dev salary is a lot closer to $140k/yr. It's also quite difficult to live on $40k/yr for most people in the bay area ($3.3k/mo). It's definitely possible but compromises will be made (e.g. no children, live with partner/roommates, have no expensive hobbies, no travel, etc). Assuming everyone is as fortunate as you, and is willing to make the same compromises as you can come off as condescending, as if everyone is is screwing up and they just need to do this simple easy thing you are doing. It's akin to "why don't you poor people just earn more money??" With that said, congrats on kicking ass at the savings game, and I hope you enjoy your early retirement :)
  - 8y ago

conqrr 8y ago

You are indeed lucky to find a partner who fees the exact same way as you about saving and having kids. Is the 150k joint savings or your individual savings per year?

deanmoriarty 8y ago
Just mine, we have completely separate finances (as far as lucky: yes, I am very lucky, but I had to do a lot of dating before finding her, most people, especially in the bay, are very materialistic and like to blow their RSUs on “luxury” rent, Mercedes and Teslas, which I absolutely respect but don't agree with). It’s a high number but if you take advantage of all the tax deferred accounts available and are an average performer at a good company, it’s incredibly easy in the bay to get a $250-300k job, at which point the $150k becomes very achievable if you live frugally (in my case it’s a bit less than $150k, but I also don’t think I’ll need 5M to retire, that’s way too much considering my life style and the fact that I’ll probably just go back to my home country in rural Europe to retire close to my family).

ju-st 8y ago

So in the bay area you can make 350k/y (saving, living, taxes) average for 20 years starting as a 25 year old?

deanmoriarty 8y ago
You don't exactly need 350k/y to get those numbers (at least I don't). I don't know what the history will be over the next 20 years if you start now, but for the entire 8 years of my career so far (started at 24), my pre-tax compensation has been roughly 260k/y averaged (I'm at 350k now and started at ~120k), which has allowed me to comfortably save 120k+ a year. My career has been a mix of a couple startups (one with decent exit, but nothing life changing, say 1.5 years worth of salary as financial outcome of the vested equity) and a big solid growing company (no FAANG though).
- richrichardsson 8y ago
  Well, that's given me some insight into bay area dev pay! I've never even heard of anything near those levels in the UK except for contractors.
  - brianwawok 8y ago
    UK programmer pay is a whole other league. (Maybe the rest of the world? Not sure who else pays like SV, no one that I know)
  - paulgrant999 8y ago
    Most of the jobs I saw were in the 120-190 range. you don't start hitting 220+ unless you're already on the tech pump-n-dump wagon i.e. have "internet-scale" experience. And with the rent and cost of living so high, 165 is basically the poverty line. If you want to actually enjoy some of your money before you die from the politics. tops out at 300-400k unless your management. and thats usually phd-grade stuff (cutting edge). minus "acquisitions" (employees that came over from acquisitions for talent). blockbusting using h1b's and hiring fresh grads keeps the real rates low. thats why theres so much of an emphasis on constant meetings and mentoring. you train your lower paid replacement. its even worse when you consider the level of automation being dev'd and deployed even as we speak. Call it what you will, but coding yourself out of a job, does not strike me as a very rewarding job. Same thing with "frameworks". Count how many horror stories you hear about a company bringing on x-tech, to implement, only to realize there's serious design flaws in the stack they've chosen. I think the best company I saw, did all their development, in-house (for the money-making stuff). C/C++ coders. And they only bring in "mature" technologies (10+ years) -- where the tradeoffs and fixes, are pretty much well known. SANE. I was not much impressed by the quality of engineers out there. Theirs way too much "compartmentalization". Even worse now with the microservices (circa 2015-2017) implementations that failed to grasp basic architectural decisions that still need to be made. If anyone's hiring for those 300+ k jobs, drop me a line. I only have one requirement. Get the fuck out of my way. M.O.V.E. :) One other note: When you're applying, don't do the end of the year (normal cycle for a normal co; they know how much they made, what their next quarter's budget is going to be, prospects are closer etc). H1'bs are all busy getting imported. Wait until they run out of their H1B's and give a month or two to clock their new wage-slaves through their "onboarding". The experienced engineers will get a good sense of what material they're working with and call out for more labor ;) Retarded, but hey, "silicon valley".

deanmoriarty 8y ago

I would really love to know why this was downvoted? This is what I don’t like about HN, one spends time to come up with a reasonable, realistic and thorough comment, and just gets downvoted. Makes me lose motivation for writing my future next comment.

icedchai 8y ago
Probably because coming up with 150K/spare year to invest, right out of the gate, is unrealistic. 50K, maybe, if you live in low-COL area on a good salary...
- deleted 8y ago
  [deleted]
bpicolo 8y ago
Because 150k spare a year is drastically higher than the savings of a typical software engineer? That implies like a 400k+ salary.
lastofus 8y ago
> I would really love to know why this was downvoted? Some bar napkin math: $150k (savings) + $40k (living expenses) = $190k post tax. Assuming 30% goes to taxes (making liberal use of a 401k), that would be $272k salary. @ 35% it would be $292k. I think the reason everyone is annoyed/down voting is the assumption that every developer in the bay area is pulling top end salaries like that. The reality is the median dev salary is a lot closer to $140k/yr. It's also quite difficult to live on $40k/yr for most people in the bay area ($3.3k/mo). It's definitely possible but compromises will be made (e.g. no children, live with partner/roommates, have no expensive hobbies, no travel, etc). Assuming everyone is as fortunate as you, and is willing to make the same compromises as you can come off as condescending, as if everyone is is screwing up and they just need to do this simple easy thing you are doing. It's akin to "why don't you poor people just earn more money??" With that said, congrats on kicking ass at the savings game, and I hope you enjoy your early retirement :)
- 8y ago