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> You need to save a few million dollars to retire with $40-$80k in investment income. It should be very possible to do this with a backend developer's salary o

> You need to save a few million dollars to retire with $40-$80k in investment income. It should be very possible to do this with a backend developer's salary over a period of 10-15 years, How would a few million be possible? What is your contextual salary for this position, and their expected expenses?

Aeolun 8y ago
3.000.000 / 15 * 2 (50% savings rate) = $400k That’s a bit on the high end, but I guess not SV/FAANG impossible.
- underwater 8y ago
  I don't think the IRS would be impressed with that logic.
goldenchrome 8y ago
Earn 250k on average across 15 years. This is quite conservative for FAANG. In California, you'll take home about 150k. Each year, live frugally off 50k and put away 100k in index funds. Over 15 years, you'll gain 7% real annual returns from the stock market. In 15 years you'll go from $0 to $2.5m. At a very conservative safe withdrawal rate of 3.5%, you can withdraw about 85k per year for the rest of your life. If you're dual income for part of that 15 years, you'll have far more money, or you can retire a few years earlier.
- underwater 8y ago
  You are describing an outlier of an outlier. To follow your advice our developer has to have well above average skills (250k salary would be relatively senior even at FAANG), be single and live in a share house for 15 years (50k would cover rent for a family in areas with high tech salaries, nothing else) and the tech sector has to remain strong for 15 years (looking back 2004 was 4 years before the financial crisis and generally not a great time to be staring a career in a big tech company).
  - goldenchrome 8y ago
    I agree that it's difficult to pull this off, but it's not as difficult as you say. 250k is the total comp for someone with one promotion at FAANG, i.e. a couple years out of school. My wife and I spend about 50k a year and we live in a 1-bed in the Bay Area. Who knows what the future holds, but if you started at FAANG in 2004 you would have far more than a couple million by now. The financial crisis is a fantastic time to invest in index funds.
    - gnachman 8y ago
      FAANG in 2004 paid much less in nominal terms than it does today. I was a level 5 swe at Google in 2006 and total comp was around $170k.
  - throwaway713 8y ago
    > 250k salary would be relatively senior even at FAANG Not at all. I joined a FAANG company less than a year ago, am not a software engineer, and I'm at about $250k. Senior software engineers are closer to $400k-$500k. See levels.fyi. EDIT: You mentioned salary, but I think you're referring to total comp. Base salary at these companies is indeed lower than $200k except for non-senior positions.
    - underwater 8y ago
      No, referring to salary. Total comp is great and all, but unless you're liquidating immediately after you receive a grant then you're adding another variable into the mix of things that need to go right. And the stock portion of your comp being valuable is dependent on the company doing well. True for FAANG, but that's only because by definition that group is the companies that are doing well! A $200K equivalent RSU grant spread over four years could end up being worth 20K a year or 200K a year, depending on whether you get lucky or not. Remember that the biggest tech companies 15 years ago included Dell, Delphi, Cisco and Yahoo.
      - akavi 8y ago

Aeolun 8y ago

3.000.000 / 15 * 2 (50% savings rate) = $400k That’s a bit on the high end, but I guess not SV/FAANG impossible.

underwater 8y ago
I don't think the IRS would be impressed with that logic.

goldenchrome 8y ago

Earn 250k on average across 15 years. This is quite conservative for FAANG. In California, you'll take home about 150k. Each year, live frugally off 50k and put away 100k in index funds. Over 15 years, you'll gain 7% real annual returns from the stock market. In 15 years you'll go from $0 to $2.5m. At a very conservative safe withdrawal rate of 3.5%, you can withdraw about 85k per year for the rest of your life. If you're dual income for part of that 15 years, you'll have far more money, or you can retire a few years earlier.

underwater 8y ago
You are describing an outlier of an outlier. To follow your advice our developer has to have well above average skills (250k salary would be relatively senior even at FAANG), be single and live in a share house for 15 years (50k would cover rent for a family in areas with high tech salaries, nothing else) and the tech sector has to remain strong for 15 years (looking back 2004 was 4 years before the financial crisis and generally not a great time to be staring a career in a big tech company).
- goldenchrome 8y ago
  I agree that it's difficult to pull this off, but it's not as difficult as you say. 250k is the total comp for someone with one promotion at FAANG, i.e. a couple years out of school. My wife and I spend about 50k a year and we live in a 1-bed in the Bay Area. Who knows what the future holds, but if you started at FAANG in 2004 you would have far more than a couple million by now. The financial crisis is a fantastic time to invest in index funds.
  - gnachman 8y ago
    FAANG in 2004 paid much less in nominal terms than it does today. I was a level 5 swe at Google in 2006 and total comp was around $170k.
- throwaway713 8y ago
  > 250k salary would be relatively senior even at FAANG Not at all. I joined a FAANG company less than a year ago, am not a software engineer, and I'm at about $250k. Senior software engineers are closer to $400k-$500k. See levels.fyi. EDIT: You mentioned salary, but I think you're referring to total comp. Base salary at these companies is indeed lower than $200k except for non-senior positions.
  - underwater 8y ago
    No, referring to salary. Total comp is great and all, but unless you're liquidating immediately after you receive a grant then you're adding another variable into the mix of things that need to go right. And the stock portion of your comp being valuable is dependent on the company doing well. True for FAANG, but that's only because by definition that group is the companies that are doing well! A $200K equivalent RSU grant spread over four years could end up being worth 20K a year or 200K a year, depending on whether you get lucky or not. Remember that the biggest tech companies 15 years ago included Dell, Delphi, Cisco and Yahoo.
    - akavi 8y ago