4 ms·

For those of you in industries like software: it’s very easy to stop working. At $1m saved, you can comfortably withdraw 3%/year forever. $30,000/year stipend o

For those of you in industries like software: it’s very easy to stop working. At $1m saved, you can comfortably withdraw 3%/year forever. $30,000/year stipend on top of whatever passion thing makes you money is more than enough to live a modest life almost anywhere in the world. You won’t be eating at Michelin star places and you won’t have a palace, but you can comfortably live a decent quiet life in an out of the way place with a tiny rental, home cooked food, and maybe a cat. Want to be a tour guide in Iceland? All the other tour guides are surviving without that $30k stipend. Want to plant trees and sell homemade pots on Etsy? Same deal. If you save to $2m, then that’s $60,000/year, already you are beating the median American family. This is the point where, for me, I had to make peace with the fact that I wasn’t working like a dog to survive. I was doing it to have more stuff. If you graduate college at 22 making $200k/year and never get a raise; $1m by 30 should be no sweat. So now that we’ve disposed of engineers, finance folks, and a few other white collar disciplines, what about everybody else? It seems clear that the big problem facing us on an economic perspective is that most people are economically extremely low value. Somehow, before all people are economically extremely low value, we have to figure out how to get to the Star Trek future. That, I have no idea how to do.

deleted 6y ago
[deleted]
tomca32 6y ago
I wish this was true but it isn’t. The main reason I cannot do this is because health insurance is prohibitively expensive. The main reason I have to continue working is because I’m a T1 diabetic and I need to have health coverage. Although, even without diabetes I still would want to have health coverage.
- adewinter 6y ago
  The claim that one is unable to afford health insurance with a salary between $30k and $60k is... Factually incorrect. Do you mean that the medication for T1 diabetes is unaffordable at that salary range even with health insurance?
  - epicureanideal 6y ago
    I agree with you, and to give some numbers as examples for other readers to respond to, I've seen good individual health insurance in the $500-1200 range, and there may be tax advantages associated with paying it. That's not a huge amount per year if you are getting the $30-60k hypothesized interest income.
    - tomca32 6y ago
      You're right. After doing some research I could actually pull it off, but it would be pretty tight. There's some decent insurance options for ~$700/mo. That's still $8400/yr. With $60k/yr income, that might still be doable but I don't think it's realistic on a $30k budget.
    - redis_mlc 6y ago
      > I've seen good individual health insurance in the $500-1200 range Where should I start: 1) That's per month per individual. So $6,000 - $14,400 per year, plus any family members. That's a huge chunk of a "$30-60k hypothesized interest income." 2) That's if the ACA pre-existing condition exemption is in place. If not, you have a pre-existing condition, and #1 doesn't apply. You'll be lucky to be offered any insurance. 3) I suggest you look at the price of insulin in the US - any recent formulation is sky-high, as in if you're not the 1% then it's not sustainable if you're required to pay for it yourself. Since the era of Martin Shkreli, nothing is affordable. https://en.wikipedia.org/wiki/Martin_Shkreli https://en.wikipedia.org/wiki/Martin_Shkreli
- epicureanideal 6y ago
  I suppose the parent poster's response could be, with $2M you could consider that $30,000 per year plus health insurance. Or, at $1M you could have $30,000 per year to subsidize working in some job that provides health insurance but otherwise is something you enjoy. Being willing to work for $30k less than anyone else, for example, would probably give you ways to convince the hiring managers to let you do things your way most of the time.
- deleted 6y ago
  [deleted]
Arainach 6y ago
> If you graduate college at 22 making $200k/year and never get a raise; $1m by 30 should be no sweat. Citation needed. Just back of the envelope, you're looking at $52K in federal taxes. To get that kind of starting salary you're almost certainly in CA, NY, or another high COL area with state income tax, so let's take another $15K. If you live in a car in the parking lot and eat work-provided meals every day and save every penny, you're at $133K * 8 or just barely over a million. But rent's not free, nor is it even cheap. Even if you split with roommates the whole time, you're probably looking at $12K a year in rent or more. If you live a life of abject poverty you could perhaps meet those thresholds, but what's the point? Throwing away the best years of your life where you are almost certainly at the peak of your health, attractiveness, and ability to meet other people for the hope of.....subsisting in the future?
- adewinter 6y ago
  For one, you don't just toss that $133k into a savings account at the end of every year to just let it rot. You invest it and have it grow with compounding interest. You'll be amazed at the difference that makes to your calculations.
- bigcorp-slave 6y ago
  I claim you can save $100k/year on a $200k/year compensation. SmartAsset pegs you as right on the money as $133k take home. Let’s say you live in a $1400/mo place like I did for years (no roommates, but how often are you in your place in your 20s anyway?), that’s $17k a year. Now you’ve got $1300 a month for food and luxuries, and $100k/year going into investments. That is not roughing it. If you hit a financial rough patch you sell a little stock. If the market does 7% inflation adjusted per year (its average for the last 50 years), you end up over a million in the first eight years without a problem. And again, this is assuming you never get a raise or a bonus.... anything extra is gravy.
- epicureanideal 6y ago
  To add to this, what if the person wants to date, or have children, or even have a reliable car? What if they have student loans to pay off? Etc.
djsumdog 6y ago
This is a very insane statement. You need experience first. Fresh out of college, I was making $25k/yr in 2005. Within 4 years I was in the $40k~$50k range, but I also valued ... life, and living. I applied and got a holiday work visa (if you're under 30, they're ~$300 and you can live an work in another country for a year. Different countries have different agreements and age limits) and lived in Australia for a year and NZ for three. I also took a year off once and lived off of savings (and out of two bags and hostels). It wasn't until I lived in Seattle I was making six figures. It took a lot of experience and research and work to build up that level of expertise. It also took being in the right market (the west coast). If I had stayed in my home town, it wouldn't have been possible. (I wrote a post about tech markets for those who are interested: https://battlepenguin.com/tech/tech-culture-shock-from-america-to-the-south-pacific-and-seattle-to-chicago/ https://battlepenguin.com/tech/tech-culture-shock-from-ameri...) What you're describing is a tale that may be true for you, but it's the tale of someone who is determined to work at all odds to be at the top. If you want to live and do other things and have real adventures, you're not going to be in the same spot.
- bigcorp-slave 6y ago
  How much could a banana possibly cost? $10? Let’s just throw out one company as an example: let’s say you graduate from undergrad today and join Google as a fairly unremarkable new hire. Your average first year total compensation is $187k/year. If you negotiate well that can easily exceed $200k. If you do well in your career, three years later you’ll be an L4 earning an average of $263k/year. There are a number of companies that pay this well. All of FAANG is >$150k/year fresh out of undergrad. What I am saying is: if you decide early enough that you don’t want to be a wage slave your entire life, and you are talented and a bit lucky, you can wage slave for ten years and call it good, then spend 30-death doing whatever you want. The biggest danger, and one I’m wrestling with now, is that you get addicted to it. Thanks for providing the interesting article - sounds like you’ve lived a fun and variety-filled life so far. That’s fantastic and I’m a little jealous of you, but you compromised real economic utility by doing so. I think it’s a popular model, lots of people spend their 20s having adventures and making little money. Nothing wrong with that - but if instead you spend your twenties soullessly grinding away, thanks to the time-value of money you can have the rest of your life to have adventures. There are plenty of entry level jobs for people with bachelors degrees that pay $150k-$200k. You might have to make a lot of sacrifices to get them. For me, I didn’t graduate making this kind of money but ended up in the can-FIRE bucket anyway due to saving and market performance. But it wasn’t like it wasn’t possible, I was unaware that such jobs existed.

deleted 6y ago

[deleted]

tomca32 6y ago

I wish this was true but it isn’t. The main reason I cannot do this is because health insurance is prohibitively expensive. The main reason I have to continue working is because I’m a T1 diabetic and I need to have health coverage. Although, even without diabetes I still would want to have health coverage.

adewinter 6y ago
The claim that one is unable to afford health insurance with a salary between $30k and $60k is... Factually incorrect. Do you mean that the medication for T1 diabetes is unaffordable at that salary range even with health insurance?
- epicureanideal 6y ago
  I agree with you, and to give some numbers as examples for other readers to respond to, I've seen good individual health insurance in the $500-1200 range, and there may be tax advantages associated with paying it. That's not a huge amount per year if you are getting the $30-60k hypothesized interest income.
  - tomca32 6y ago
    You're right. After doing some research I could actually pull it off, but it would be pretty tight. There's some decent insurance options for ~$700/mo. That's still $8400/yr. With $60k/yr income, that might still be doable but I don't think it's realistic on a $30k budget.
  - redis_mlc 6y ago
    > I've seen good individual health insurance in the $500-1200 range Where should I start: 1) That's per month per individual. So $6,000 - $14,400 per year, plus any family members. That's a huge chunk of a "$30-60k hypothesized interest income." 2) That's if the ACA pre-existing condition exemption is in place. If not, you have a pre-existing condition, and #1 doesn't apply. You'll be lucky to be offered any insurance. 3) I suggest you look at the price of insulin in the US - any recent formulation is sky-high, as in if you're not the 1% then it's not sustainable if you're required to pay for it yourself. Since the era of Martin Shkreli, nothing is affordable. https://en.wikipedia.org/wiki/Martin_Shkreli https://en.wikipedia.org/wiki/Martin_Shkreli
epicureanideal 6y ago
I suppose the parent poster's response could be, with $2M you could consider that $30,000 per year plus health insurance. Or, at $1M you could have $30,000 per year to subsidize working in some job that provides health insurance but otherwise is something you enjoy. Being willing to work for $30k less than anyone else, for example, would probably give you ways to convince the hiring managers to let you do things your way most of the time.
deleted 6y ago
[deleted]

Arainach 6y ago

> If you graduate college at 22 making $200k/year and never get a raise; $1m by 30 should be no sweat. Citation needed. Just back of the envelope, you're looking at $52K in federal taxes. To get that kind of starting salary you're almost certainly in CA, NY, or another high COL area with state income tax, so let's take another $15K. If you live in a car in the parking lot and eat work-provided meals every day and save every penny, you're at $133K * 8 or just barely over a million. But rent's not free, nor is it even cheap. Even if you split with roommates the whole time, you're probably looking at $12K a year in rent or more. If you live a life of abject poverty you could perhaps meet those thresholds, but what's the point? Throwing away the best years of your life where you are almost certainly at the peak of your health, attractiveness, and ability to meet other people for the hope of.....subsisting in the future?

adewinter 6y ago
For one, you don't just toss that $133k into a savings account at the end of every year to just let it rot. You invest it and have it grow with compounding interest. You'll be amazed at the difference that makes to your calculations.
bigcorp-slave 6y ago
I claim you can save $100k/year on a $200k/year compensation. SmartAsset pegs you as right on the money as $133k take home. Let’s say you live in a $1400/mo place like I did for years (no roommates, but how often are you in your place in your 20s anyway?), that’s $17k a year. Now you’ve got $1300 a month for food and luxuries, and $100k/year going into investments. That is not roughing it. If you hit a financial rough patch you sell a little stock. If the market does 7% inflation adjusted per year (its average for the last 50 years), you end up over a million in the first eight years without a problem. And again, this is assuming you never get a raise or a bonus.... anything extra is gravy.
epicureanideal 6y ago
To add to this, what if the person wants to date, or have children, or even have a reliable car? What if they have student loans to pay off? Etc.

djsumdog 6y ago

This is a very insane statement. You need experience first. Fresh out of college, I was making $25k/yr in 2005. Within 4 years I was in the $40k~$50k range, but I also valued ... life, and living. I applied and got a holiday work visa (if you're under 30, they're ~$300 and you can live an work in another country for a year. Different countries have different agreements and age limits) and lived in Australia for a year and NZ for three. I also took a year off once and lived off of savings (and out of two bags and hostels). It wasn't until I lived in Seattle I was making six figures. It took a lot of experience and research and work to build up that level of expertise. It also took being in the right market (the west coast). If I had stayed in my home town, it wouldn't have been possible. (I wrote a post about tech markets for those who are interested: https://battlepenguin.com/tech/tech-culture-shock-from-america-to-the-south-pacific-and-seattle-to-chicago/ https://battlepenguin.com/tech/tech-culture-shock-from-ameri...) What you're describing is a tale that may be true for you, but it's the tale of someone who is determined to work at all odds to be at the top. If you want to live and do other things and have real adventures, you're not going to be in the same spot.

bigcorp-slave 6y ago
How much could a banana possibly cost? $10? Let’s just throw out one company as an example: let’s say you graduate from undergrad today and join Google as a fairly unremarkable new hire. Your average first year total compensation is $187k/year. If you negotiate well that can easily exceed $200k. If you do well in your career, three years later you’ll be an L4 earning an average of $263k/year. There are a number of companies that pay this well. All of FAANG is >$150k/year fresh out of undergrad. What I am saying is: if you decide early enough that you don’t want to be a wage slave your entire life, and you are talented and a bit lucky, you can wage slave for ten years and call it good, then spend 30-death doing whatever you want. The biggest danger, and one I’m wrestling with now, is that you get addicted to it. Thanks for providing the interesting article - sounds like you’ve lived a fun and variety-filled life so far. That’s fantastic and I’m a little jealous of you, but you compromised real economic utility by doing so. I think it’s a popular model, lots of people spend their 20s having adventures and making little money. Nothing wrong with that - but if instead you spend your twenties soullessly grinding away, thanks to the time-value of money you can have the rest of your life to have adventures. There are plenty of entry level jobs for people with bachelors degrees that pay $150k-$200k. You might have to make a lot of sacrifices to get them. For me, I didn’t graduate making this kind of money but ended up in the can-FIRE bucket anyway due to saving and market performance. But it wasn’t like it wasn’t possible, I was unaware that such jobs existed.