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Or on the flipside, I've got some contractor/consulting buddies who regularly pull down $200/hr bouncing between Tech companies in the Bay Area and Seattle and

Or on the flipside, I've got some contractor/consulting buddies who regularly pull down $200/hr bouncing between Tech companies in the Bay Area and Seattle and big banks in NYC. Not owning anything allows you to go where the work is and keep your net worth in assets that produce actual income (like index funds and bonds), instead of sitting around collecting unemployment during a dry spell because you're encumbered by your depreciating assets. I'm sure some people will use this as a way to temporarily live beyond their means...but it's not like Credit Cards don't enable this behavior already. The US is the land of the free of course, where we allow the weak to be preyed upon.

walrus01 7y ago
This is a lot different if you're making $140,000/year gross vs the typical "rent to own" market of Aaron's and Rent-a-center for household furnishings, where the consumers make significantly less than that.
jackcosgrove 7y ago
I agree that many people already lived on a financial knife edge before all these rental services. However the example of a contractor who lives an unencumbered life and saves a lot of money is not at all typical. It's similar to using the example of an investment banking associate or corporate attorney who pay high rent in Manhattan for some years and invest the rest, as an argument against buying a home and having a mortgage. In reality, many/most people are better off with a mortgage because it forces them to save money, which they behaviorally wouldn't be able to do otherwise. Likewise, buying something and keeping it around probably prevents a lot of needless repurchases and upgrades of the same item. If you are rational the rental lifestyle can make sense in some cases. But for most it just facilitates impulsive behavior. Hence the rush to capitalize on it.
- Godel_unicode 7y ago
  > better off with a mortgage because it forces them to save money I'm going to go ahead and guess you don't have a large peer group who were buying houses in the late-2000s. A mortgage in no way forces you to save money, added to which it has a tendency to decrease savings due to the moral licensing of exactly your train of thought. "I'm already saving with my sweet ARM, I can afford to lease that car!" People who are financially illiterate are going to be bad with money, regardless of the system.
bitcoinmoney 7y ago
400k/year doing what?
- outside1234 7y ago
  A lot of things. Remember, this doesn't include their health insurance or a 401k and they will also have to pay self employment tax.
- yibg 7y ago
  There are lots of stories (and also some info) on engineers working at FAANG making ~$400k a year or up. Granted these are not your typical engineering jobs, but they do exist and in not so insignificant numbers; say it's 1% of engineers (made up number). I am curious though as to the distribution of freelance / contract rates. Is $200 / hour also 1% of engineers? More? Less? Financially for the same person what's actually a better route? For someone that can get $400k a year at google, is that better or worse than the contract route on average?
  - literallycancer 7y ago
    $200/hour definitely isn't the top 1%. On the other hand you could work at FAANG and run a company as a side project, you could use some of your connections there to get interesting contracts.
- joncrane 7y ago
  I think if you're making $200/hr and "bouncing around," you're not necessarily billin 2050 hours per year.

walrus01 7y ago

This is a lot different if you're making $140,000/year gross vs the typical "rent to own" market of Aaron's and Rent-a-center for household furnishings, where the consumers make significantly less than that.

jackcosgrove 7y ago

I agree that many people already lived on a financial knife edge before all these rental services. However the example of a contractor who lives an unencumbered life and saves a lot of money is not at all typical. It's similar to using the example of an investment banking associate or corporate attorney who pay high rent in Manhattan for some years and invest the rest, as an argument against buying a home and having a mortgage. In reality, many/most people are better off with a mortgage because it forces them to save money, which they behaviorally wouldn't be able to do otherwise. Likewise, buying something and keeping it around probably prevents a lot of needless repurchases and upgrades of the same item. If you are rational the rental lifestyle can make sense in some cases. But for most it just facilitates impulsive behavior. Hence the rush to capitalize on it.

Godel_unicode 7y ago
> better off with a mortgage because it forces them to save money I'm going to go ahead and guess you don't have a large peer group who were buying houses in the late-2000s. A mortgage in no way forces you to save money, added to which it has a tendency to decrease savings due to the moral licensing of exactly your train of thought. "I'm already saving with my sweet ARM, I can afford to lease that car!" People who are financially illiterate are going to be bad with money, regardless of the system.

bitcoinmoney 7y ago

400k/year doing what?

outside1234 7y ago
A lot of things. Remember, this doesn't include their health insurance or a 401k and they will also have to pay self employment tax.
yibg 7y ago
There are lots of stories (and also some info) on engineers working at FAANG making ~$400k a year or up. Granted these are not your typical engineering jobs, but they do exist and in not so insignificant numbers; say it's 1% of engineers (made up number). I am curious though as to the distribution of freelance / contract rates. Is $200 / hour also 1% of engineers? More? Less? Financially for the same person what's actually a better route? For someone that can get $400k a year at google, is that better or worse than the contract route on average?
- literallycancer 7y ago
  $200/hour definitely isn't the top 1%. On the other hand you could work at FAANG and run a company as a side project, you could use some of your connections there to get interesting contracts.
joncrane 7y ago
I think if you're making $200/hr and "bouncing around," you're not necessarily billin 2050 hours per year.