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The author thinks new grad getting $250k/yr compensation in fifth year in job is an average outcome. I don't trust anyone who gets that wrong to tell me anythi

by udev 6y ago

The author thinks new grad getting $250k/yr compensation in fifth year in job is an average outcome. I don't trust anyone who gets that wrong to tell me anything about the power of compounding or whatnot.

ghaff 6y ago
In fairness, per his link, he's claiming it it's an average comp at a handful of big tech companies. But that's something of a bubble and mostly (normally) doesn't come with remote anywhere (even US anywhere) options. It's a small percentage of developers and certainly people in tech more broadly. Yes, if someone lands a job at one of the big SV companies, lives frugally, and are fine with living frugally the rest of your life, you can probably retire/semi-retire pretty early if that's your preference.
- ticmasta 6y ago
  This totally ignores the fact that a big reason salaries are so high in these markets is because cost of living is very high as well. Living on 25K a year wouldn't even cover your shared accommodation costs.
  - emit_time 6y ago
    Which is why you move when you retire.
    - legulere 6y ago
      Which is easy because you have no friends or family because you spent all time working.
  - easde 6y ago
    $25k/year is enough to live on even in the Bay Area if you have roommates and work at a big tech company with good benefits. It's not too hard to find a 3 bedroom house for $4,000/month in somewhere like Santa Clara. Split that 3 ways and that's only $1,300/month. Food and transportation is free during the week, leaving $700 / month for all other expenses (old car, food on weekends, some entertainment). Definitely would not be the most exciting life ever, but it's doable. Very effective if you want to quickly save $500k-1M for a home down payment or retire somewhere to a low COL area by the time you're 30.
    - alextheparrot 6y ago
      While I agree with your math on premise, trying to live this lifestyle is definitely part of what burns people out. This assumes you’re eating all your meals at the office, limiting the hobbies you can pursue, not going on vacations, etc. Why not take an extra year to do all those things and also be able to engage with your twenties a bit more actively? I became much happier when I started to abandon frugality to this degree and bought a used car, picked up a few hobbies that cost a few grand a year, planned vacations that actually pushed my boundaries. (Bay Area, mid twenties for reference)
      - hindsightbias 6y ago
        Those of us older would just see that as an exstension of college life and look at it nostalgically. Sure, I wish I’d taken a gap year, but any millennial trying to survive/move up is going to have to work hard. We didn’t have that time without frugaility, so maybe not realistic for most millennials. So I guess a stoic with a used Triumph motorcycle, a backpack and a copy of ZAMM would be optimal. A pretty decent set of vacations are only a gastank away in the Bay.
        alextheparrot 6y ago
        When I moved out to the bay and was making ~85k a year at a startup I definitely lived like the person I responded to, except I paid for my own meals. Drive to local vacations, excess money went right into student loans and, after those were paid off, stocks. The difference in opinion is derived, I think, from how I reacted when I got a big tech job. My earnings went way up relative to that first job, but initially my lifestyle didn't change at all. Eventually I started adding things little by little, thoughtfully I think. I took my first international trips, didn't dismiss hobbies outright because of cost - it made me a lot happier because I was experiencing things for the first time. That doesn't mean I stopped backpacking, drinking beer in the park, or going to cheap concerts - it was additive. At the end of the day, though, my lifestyle increased only by a small portion of how my earnings were. All things considered, my savings rate didn't really change by all that much. There are some people who do really, really well trying to minimize their yearly spend, but there are a lot of people who could give themselves a little bit more slack and be better off mentally and physically for it. It isn't that they're not working hard. For me, it was just growing with working class parents - I never learned to ski, we drove instead of flew to visit family, video games were birthday presents. Relaxing some of the frugality was part of being thoughtful about who I actually was and wanted to be, and I think that's ok.
- bsanr2 6y ago
  In a surprise move, the guy - who has a platform large enough to have his year-old blog post hit the front page of HN - preaching about the utility of not living paycheck-to-paycheck is speaking mostly to a wealthy minority. /s
fred_is_fred 6y ago
And in any city where that wage is true (SF/NY), living on his example of US median income is basically impossible unless you are sleeping in your car and eating every meal at the office.
- dehrmann 6y ago
  It's median US income, so you'd obviously be moving to Cleveland.
dehrmann 6y ago
From the post, > a fresh grad at a big tech company can safely earn ~$500k post-tax in 5 years. > The US median income post-tax is ~$25k It's funny how they pick a "conservative" best-case scenario, then a "median" scenario that, relative to the first, is impossibly low. I guess the numbers barely work, but good luck making that lifestyle trade.

by udev 6y ago

ghaff 6y ago

In fairness, per his link, he's claiming it it's an average comp at a handful of big tech companies. But that's something of a bubble and mostly (normally) doesn't come with remote anywhere (even US anywhere) options. It's a small percentage of developers and certainly people in tech more broadly. Yes, if someone lands a job at one of the big SV companies, lives frugally, and are fine with living frugally the rest of your life, you can probably retire/semi-retire pretty early if that's your preference.

ticmasta 6y ago
This totally ignores the fact that a big reason salaries are so high in these markets is because cost of living is very high as well. Living on 25K a year wouldn't even cover your shared accommodation costs.
- emit_time 6y ago
  Which is why you move when you retire.
  - legulere 6y ago
    Which is easy because you have no friends or family because you spent all time working.
- easde 6y ago
  $25k/year is enough to live on even in the Bay Area if you have roommates and work at a big tech company with good benefits. It's not too hard to find a 3 bedroom house for $4,000/month in somewhere like Santa Clara. Split that 3 ways and that's only $1,300/month. Food and transportation is free during the week, leaving $700 / month for all other expenses (old car, food on weekends, some entertainment). Definitely would not be the most exciting life ever, but it's doable. Very effective if you want to quickly save $500k-1M for a home down payment or retire somewhere to a low COL area by the time you're 30.
  - alextheparrot 6y ago
    While I agree with your math on premise, trying to live this lifestyle is definitely part of what burns people out. This assumes you’re eating all your meals at the office, limiting the hobbies you can pursue, not going on vacations, etc. Why not take an extra year to do all those things and also be able to engage with your twenties a bit more actively? I became much happier when I started to abandon frugality to this degree and bought a used car, picked up a few hobbies that cost a few grand a year, planned vacations that actually pushed my boundaries. (Bay Area, mid twenties for reference)
    - hindsightbias 6y ago
      Those of us older would just see that as an exstension of college life and look at it nostalgically. Sure, I wish I’d taken a gap year, but any millennial trying to survive/move up is going to have to work hard. We didn’t have that time without frugaility, so maybe not realistic for most millennials. So I guess a stoic with a used Triumph motorcycle, a backpack and a copy of ZAMM would be optimal. A pretty decent set of vacations are only a gastank away in the Bay.
      - alextheparrot 6y ago
        When I moved out to the bay and was making ~85k a year at a startup I definitely lived like the person I responded to, except I paid for my own meals. Drive to local vacations, excess money went right into student loans and, after those were paid off, stocks. The difference in opinion is derived, I think, from how I reacted when I got a big tech job. My earnings went way up relative to that first job, but initially my lifestyle didn't change at all. Eventually I started adding things little by little, thoughtfully I think. I took my first international trips, didn't dismiss hobbies outright because of cost - it made me a lot happier because I was experiencing things for the first time. That doesn't mean I stopped backpacking, drinking beer in the park, or going to cheap concerts - it was additive. At the end of the day, though, my lifestyle increased only by a small portion of how my earnings were. All things considered, my savings rate didn't really change by all that much. There are some people who do really, really well trying to minimize their yearly spend, but there are a lot of people who could give themselves a little bit more slack and be better off mentally and physically for it. It isn't that they're not working hard. For me, it was just growing with working class parents - I never learned to ski, we drove instead of flew to visit family, video games were birthday presents. Relaxing some of the frugality was part of being thoughtful about who I actually was and wanted to be, and I think that's ok.
bsanr2 6y ago
In a surprise move, the guy - who has a platform large enough to have his year-old blog post hit the front page of HN - preaching about the utility of not living paycheck-to-paycheck is speaking mostly to a wealthy minority. /s

fred_is_fred 6y ago

And in any city where that wage is true (SF/NY), living on his example of US median income is basically impossible unless you are sleeping in your car and eating every meal at the office.

dehrmann 6y ago
It's median US income, so you'd obviously be moving to Cleveland.

dehrmann 6y ago

From the post, > a fresh grad at a big tech company can safely earn ~$500k post-tax in 5 years. > The US median income post-tax is ~$25k It's funny how they pick a "conservative" best-case scenario, then a "median" scenario that, relative to the first, is impossibly low. I guess the numbers barely work, but good luck making that lifestyle trade.