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Assuming your annual expenses came to $50K, you had to have made $225K-$325K a year before tax to save up that much in eight years. Shave or add a couple tens o
by zhdc1 6y ago
Assuming your annual expenses came to $50K, you had to have made $225K-$325K a year before tax to save up that much in eight years. Shave or add a couple tens of thousands in either direction.
$225K is a high salary almost anywhere in the states that's not on the coast. It's an absolutely ungodly amount outside of a small number of countries. You're likely to make a third of that in the EU or Asia. Maybe half that in cities with large tech scenes.
Advising someone to save up $2M before they're thirty is like telling someone to be born rich, except that the odds of being born rich are much higher (~40M millionaires in the world vs ~3M programmers in the States, of which the majority make less than $90K a year).
You start a company and go through hell to get $2M in a bank, not the other way around.
I'm not nuanced in the ins and outs of YC, but $150K on fair terms is a sizable amount in almost every reasonable context.
- gnicholas 6y agoI think your salary estimates aren't high enough. In California you're paying around 35% in state/fed income taxes, which means that with $225k gross you have $145k net of taxes and under $100k after living expenses. With $325k gross you're $160k after taxes and living expenses. Even starting at the top of your range, it gets you just over halfway there before investment gains.
- pembrook 6y agoSo OP was making 300k (roughly standard for a mid-level engineer in the Bay Area at about 20+ different companies here) and dumping 160k of it into index funds every year. With the market basically doubling over the past 8 years with no inflation, and those returns compounded, it's clear to see how he got to $2m. This doesn't account for any returns on company stock OP held on to (tech companies have basically doubled the return of the S&P over the past 10 years). Whether you could replicate OP's experience over the next 10 years, is debatable.
- gnicholas 6y agoThe scenario you describe makes sounds plausible, but it isn’t “I saved $2.2M over my 8 year career”. “Save” ≠ invest in the stock market. The commenter made this seem like the low-risk alternative to taking VC funding, so relying on stock market returns is antithetical to that.