4 ms·
> Opportunity cost and time value of money. In general, if person A puts $5K a year into a 401k between ages 25-35 and then stops, while person B puts in $5K a
by Axsuul 6y ago
> Opportunity cost and time value of money. In general, if person A puts $5K a year into a 401k between ages 25-35 and then stops, while person B puts in $5K a year between ages 35-65, at age 65 person A will have a larger retirement balance despite having put in only 1/3 as much principal. This generalizes to the rest of your net worth (salary+stock) as well.
I'm with you on the opportunity cost of money but I don't see how it has anything to do with what we are discussing.
> The economics of software are simply different. Someone good enough to start a business that brings in $10-20K MRR and barely survive is almost certainly good enough to get hired and paid $200K+ by any number of companies. If you're not going big or going home, it doesn't make sense to do a software startup these days.
This is not true at all. There are tons of FAANG engineers plotting their exit to start their own business for the reasons of freedom and impact. It's not just about the money. Also, if you can reach $10-20k MRR—that's a lot more scalable than your salary at a company ever would be.
Don't confound entrepreneurship solely as a vehicle for getting rich.
- Arainach 6y agoIf you come from a family that is anything less than "well off", there is a strong instinct for security. When you know how bad the alternative is, you play it conservative and plan for the future. If your choices are a job at Microsoft where you'll start at a level of compensation that's quite possibly higher than any ever earned by any of your family at any point in their careers and likely climb to senior or principal where you'll make more money in a year than most members of your family will ever have as a net worth or to throw away that essentially guaranteed income for the chance that you could do something else? You take the sure thing.