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I think there’s a different reason, companies just aren’t paying enough. Wages, even at 150-200k just really aren’t that much. 200k now is a lot less than 200k

I think there’s a different reason, companies just aren’t paying enough. Wages, even at 150-200k just really aren’t that much. 200k now is a lot less than 200k in 2010. The younger generation intuitively knows this. I don’t know anyone jockeying to climb the corporate ladder, and my social circle spans Stanford grads to no college degree at all. People are starting businesses because working for a corporation day in and out is slavery, you never make enough money to escape the debt of your mortgage. Sure, some FAANG employees do, but the number is small, and with a family, 300k compensation still doesn’t cut it, you will be working forever. People are getting “rich” from startups because they’re actually capturing the value of their labor, which I argue, used to happen at corporations.

dudeman13 5y ago
Just how bad at finances are you and people around you if 150k just really isn't that much? That literally places you amongst the richest 1%. Not metaphorically, literally. A couple of years worth of saving is enough to give you passive income to never need to work again for food or shelter.
- DC1350 5y ago
  $150k is not even enough to buy a small home near your workplace in a lot of cities. Janitors had better living conditions 50 years ago than $150k earners do today
  - Moodles 5y ago
    You sound more out of touch than an alien from outer space. No way is 150k worse quality of life than a janitor 50 years ago.
    - Der_Einzige 5y ago
      Many janitors are unionized and paid quite well. I think you're the out of touch one here.
      - Moodles 5y ago
        Data or gtfo
  - TheTrotters 5y ago
    > Janitors had better living conditions 50 years ago than $150k earners do today This is just batshit crazy.
  - dudeman13 5y ago
    >Janitors had better living conditions 50 years ago than $150k earners do today Utter bullshit. >$150k is not even enough to buy a small home near your workplace in a lot of cities Live within your means for 5 years, invest the 70k/y excess money into index funds. You can live of dividends anywhere in the world that isn't a capital in a first world country. Without even losing money. Literally the 1% pretending to be poor and living in worse conditions that janitors 50 years ago. Yeah, right.
    - whimsicalism 5y ago
      It's utterly amazing to me how far up the wealth pyramid you can go and find people saying "Me? No, no, no, I'm not wealthy - it's the people above me who are the wealthy ones." Perhaps it stops at like $500k/yr?
      - DC1350 5y ago
        > Perhaps it stops at like $500k/yr? It stops once somebody’s net worth is already so high that their annual income is irrelevant. Those are the real wealthy people.
  - paconbork 5y ago
    There's plenty of cities that aren't NYC/SF/LA
- frongpik 5y ago
  Emma, no, the top 1% has at least 10M in liquid assets (primary residence doesn't count). 150k will never take you to that level.
  - whimsicalism 5y ago
    If you are a two-professional household it can.
    - frongpik 5y ago
      Even with a 1M income you can't catch up. Their 10M grow at 10% per year, which gives 1M in the first year alone, while you can put only 0.5M after taxes. In 20 years it will take 50M to be in the top 1%.
- monktastic1 5y ago
  Richest 1% of what? Globally, the richest 1% is something like $35k IIRC. In the US, I think it's closer to $450k.
- jacobsenscott 5y ago
  Well, the thing is you generally can't make $150k in a place where a few years of that salary will sustain you for years. If you are making $150k per year you are living in a place where you can live comfortably, but you'll still need to work every year for a long time.
quantumofalpha 5y ago
Get out of your bubble. There's a whole world outside of Bay Area/NYC, where $150-200k/y is still a batshit crazy amount of money and $1M can last you happily ever after, even with kids. Accumulating $1-2M NW is totally within reach for most employees at US FAANGs after a decade or so of work.
- offtop5 5y ago
  A good friend of mine lives in Asia off 400$ or so a month. If I was to retire near him I'd be able to make a million last for a very very long time. Whoever says 200k isn't a lot of money is full of crap. You can live very well off 70k in most of America.
- monktastic1 5y ago
  I'll partly agree. I live in a HCOL city, and $200k is way more than enough, even with a kid. But $1M with a safe withdrawal rate of 3.5% gets you $35k/yr, which won't leave you "happily ever after" anywhere in the US with kids, particularly with healthcare concerns. Of course, one could move abroad, but that's not always feasible.
- darkwizard42 5y ago
  Agreed and I'd go so far to say just 5 years at FAANG (assuming you join at a mid-level eng, not L3/L4 fresh university hire) would get you into the $1-2M NW.
curiousllama 5y ago
How many consultants & I-bankers do you know? You sound like you come from a remarkably entrepreneurial subset of the world. Where I come from, everyone wants to make MD/Partner, ether in law, finance, or consulting. More generally, MBA applications to top schools have been rising for years. Besides, if 10x the median individual income isn't enough outside of SF/NYC, you got bigger problems.
- yao420 5y ago
  I was in consulting and yes everyone WANTS to become a partner but 90% quit before the first promotion due to the abusive lifestyle and workload.
- internetslave 5y ago
  I used to work in investment research in NYC. So I know those types, but the vibe was the same. Maybe I’ve been lucky, but a lot of people I know actually have had startup success. I know a few people that ended up making over 25 million by 30. None of them made it in law or finance, and none of them ever wanted to continue their finance career. 10x the median income just isn’t that much. If you have three kids, money is still tight. I’m arguing that we are all making less and that startups are making people rich because they’re actually getting paid what they produced.
  - giantg2 5y ago
    "...because they’re actually getting paid what they produced." Do they really though? That's really the owners getting paid that, not all the workers. And a lot of that is really valued on the potential rather than what was actually produced to that point. "10x the median income just isn’t that much. If you have three kids, money is still tight." That's about $400k, right? That seems like an insane amount of money (I'm not in the Bay area).
    - jkubicek 5y ago
      It is an insane amount of money even in the Bay Area. It's more than enough to support a large family living a very comfortable lifestyle while also saving significantly for retirement. I'm not sure what the grandparent poster is on about.
harshaw 5y ago
Inflation data: https://www.in2013dollars.com/us/inflation/2010?amount=1 https://www.in2013dollars.com/us/inflation/2010?amount=1. I don't think that a 20% difference means 200K is a lot less. It's a bit less.
- john_moscow 5y ago
  Sure, rice, jeans and dollar store trinkets have only become 20% more expensive. The real estate, healthcare and education tell a completely different story though.
- deleted 5y ago
  [deleted]
- internetslave 5y ago
  I don’t trust any inflation numbers. Financial asset inflation is out of control
- mgolawala 5y ago
  Unfortunately, for the last few years I have noticed more and more people no longer take government inflation data very seriously. Here are two (I am sure there are more) reasons why: Housing, Health and Education.. these very basic needs have consistently outstripped official inflation numbers. Specifically on the US coasts. Correct me if I am wrong, but I believe the cost of housing is completely left out of that inflation number. Which in my opinion is kind of silly. The formula for the index used considers substitutions. So for example, let's say Wool gets expensive, they expect you to substitute it for acrylic. If beef gets expensive, they expect you to substitute it for chicken or turkey, and so on. This isn't the reality people _feel_. For example, I for one, would realize I am no longer able to afford wool socks, and have to make do with acrylic socks. In essence, feeling poorer than I did before.
  - mdorazio 5y ago
    CPI and inflation metrics generally do account for housing costs [1], but the problem is inflation in housing is not evenly distributed. If you live in a coastal city or tech hub, your housing costs have likely risen much faster than the national average. I've found it difficult to get realistic measures of city-level inflation data without trying to construct my own index from various data sources. [1] https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-and-rent.pdf https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-an...
john_moscow 5y ago
Because the corporations have discovered a way to give people a fake feeling of growth, meaning and belonging, while de-facto keeping them as lowest-bidder replaceable cogs. There are many stories of people feeling betrayed by the corporate machine when their interests stopped being aligned with the corporate ones. There are numerous people boasting about a new sexy title or a recognition certificate they got from their employer, who at the same time shrug if you ask them about their property ownership or retirement plans. A lot of "pro-employee" and "pro-feeling" agendas boil down to making people more comfortable owning less and getting paid less.
HarryHirsch 5y ago
People are getting rich from startups because they’re actually capturing the value of their labor That's not a positive, isn't it? Back in the mid-1990s there were entry-level jobs with a career trajectory, you could drop out of college, join a school district as computer herder, move to a hosting company and get into systems programming and then go to work for Google and Facebook. (Hi Rachel!) That doesn't exist any longer, nowadays everyone goes and grinds leetcode for months to prepare for interviews.
- OldHand2018 5y ago
  Back in the mid-1990s I paid more for rent than I did for tuition. And the rent was affordable working part time as a code monkey. If you can manage to max out your 401k contributions from college graduation all the way until retirement, it would be hard not to have at least $4-5 million. Is that even reasonable right now, for someone that graduates today? I have no idea. But it doesn’t seem like something that would be restricted to tech workers in the Bay Area. It might even be harder to do in the Bay Area than in Des Moines.
giantg2 5y ago
I think some of this depends on the area. Even in an average area, a $200k salary with a family could give the option for early retirement. I make less than $100k and support my family in an average area. It does feel like I'll work until I die. If I were making double that, it would be a huge difference.
- NortySpock 5y ago
  Yeah, also making under 100k if I made 200k even for a year it would absolutely let me pay for my wife's college out of pocket rather than co-signing on debt, and then let me either buff my retirement IRA or pay down a chunk the mortgage... Located in the Midwest USA
  - giantg2 5y ago
    I know, right? Even $100-120k would make a huge difference. I see people talk about maxing out their 401k, but who has $20k per year to save? I mean, I've done everything right - good grades, stay out of trouble, got an ok job, worked hard (not so much now after being screwed multiple times, went to night school for a masters, 9 years in, and still a not very successful intermediate developer. Kind of depressing.
tqi 5y ago
"working for a corporation day in and out is slavery" Corporations are the boogeyman de jour but from personal experience, landlords / restrictive zoning / "anti gentrification" activists are the primary cause of my angst. I make more money now than I ever thought I would, but a truly staggering amount of it goes directly into my landlord's pocket.
- boringg 5y ago
  And how much of your paycheck to landlords goes to the bank to pay off the mortgage
  - alexgmcm 5y ago
    But except for the interest that is still money going to the landlord as they have the property itself.
    - boringg 5y ago
      Interest, capital expenditures, maintenance, insurance, potential lawsuits (hopefully not), time spent managing the properties. Don't disagree with you - it pays off the principal also goes towards other things. For some people not owning, having to take care of a property or put significant amounts of capital into a property is an asset. Not everyone for sure, but some people. For example myself until my late 30s was a happy renter - would I prefer the money going elsewhere? Yes. Would I have been able to afford the same lifestyle in the city? Absolutely not.
  - tqi 5y ago
    Well they bought the place in 2005 for about 1/3 of what the current Redfin estimate is, so probably very little? And even if that were not the case, with real estate climbing 8% or more per year, they are still in line for a huge payday if / when they choose to sell.
    - boringg 5y ago
      Well that depends - if the real estate market holds and they pay for all the appropriate upkeeps. What about the situation where real estate properties go down and it's difficult to find renters or pay for upkeep on the property. Also - rental real estate doesn't rise in the same way the single family homes do. The landlord is the scourge narrative bugs me. There are for sure a bunch of terrible land lords especially the huge soulless companies but there are a lot of little family operations that don't try and gouge their tenants.
Moodles 5y ago
What are your expenses? 200K is very comfortable early retirement, even working in SF or NY.
mattlondon 5y ago
I disagree. Sure I am not able to just give up work entirely but those sort of figures you mention lead to a very comfortable standard of living, even supporting my entire family on one salary. I guess it is about expectations about what you think you should have. I don't have a Tesla for instance.
zuhayeer 5y ago
To be fair though mid-career engineers and PMs are now making incredible amounts of money even outside of FAANG. Equity has been a huge part of upside for high growth companies, and has motivated a lot of smart people to work at larger companies. No FAANG company even made the list for Entry Level on the Levels.fyi 2020 list: https://levels.fyi/2020/ https://levels.fyi/2020/
Sohcahtoa82 5y ago
> Wages, even at 150-200k just really aren’t that much Imagine thinking 150-200K isn't that much while there are millions of minimum-wage workers trying to survive on under $30K. (EDIT: And in some states, only $15K!)

dudeman13 5y ago

Just how bad at finances are you and people around you if 150k just really isn't that much? That literally places you amongst the richest 1%. Not metaphorically, literally. A couple of years worth of saving is enough to give you passive income to never need to work again for food or shelter.

DC1350 5y ago
$150k is not even enough to buy a small home near your workplace in a lot of cities. Janitors had better living conditions 50 years ago than $150k earners do today
- Moodles 5y ago
  You sound more out of touch than an alien from outer space. No way is 150k worse quality of life than a janitor 50 years ago.
  - Der_Einzige 5y ago
    Many janitors are unionized and paid quite well. I think you're the out of touch one here.
    - Moodles 5y ago
      Data or gtfo
- TheTrotters 5y ago
  > Janitors had better living conditions 50 years ago than $150k earners do today This is just batshit crazy.
- dudeman13 5y ago
  >Janitors had better living conditions 50 years ago than $150k earners do today Utter bullshit. >$150k is not even enough to buy a small home near your workplace in a lot of cities Live within your means for 5 years, invest the 70k/y excess money into index funds. You can live of dividends anywhere in the world that isn't a capital in a first world country. Without even losing money. Literally the 1% pretending to be poor and living in worse conditions that janitors 50 years ago. Yeah, right.
  - whimsicalism 5y ago
    It's utterly amazing to me how far up the wealth pyramid you can go and find people saying "Me? No, no, no, I'm not wealthy - it's the people above me who are the wealthy ones." Perhaps it stops at like $500k/yr?
    - DC1350 5y ago
      > Perhaps it stops at like $500k/yr? It stops once somebody’s net worth is already so high that their annual income is irrelevant. Those are the real wealthy people.
- paconbork 5y ago
  There's plenty of cities that aren't NYC/SF/LA
frongpik 5y ago
Emma, no, the top 1% has at least 10M in liquid assets (primary residence doesn't count). 150k will never take you to that level.
- whimsicalism 5y ago
  If you are a two-professional household it can.
  - frongpik 5y ago
    Even with a 1M income you can't catch up. Their 10M grow at 10% per year, which gives 1M in the first year alone, while you can put only 0.5M after taxes. In 20 years it will take 50M to be in the top 1%.
monktastic1 5y ago
Richest 1% of what? Globally, the richest 1% is something like $35k IIRC. In the US, I think it's closer to $450k.
jacobsenscott 5y ago
Well, the thing is you generally can't make $150k in a place where a few years of that salary will sustain you for years. If you are making $150k per year you are living in a place where you can live comfortably, but you'll still need to work every year for a long time.

quantumofalpha 5y ago

Get out of your bubble. There's a whole world outside of Bay Area/NYC, where $150-200k/y is still a batshit crazy amount of money and $1M can last you happily ever after, even with kids. Accumulating $1-2M NW is totally within reach for most employees at US FAANGs after a decade or so of work.

offtop5 5y ago
A good friend of mine lives in Asia off 400$ or so a month. If I was to retire near him I'd be able to make a million last for a very very long time. Whoever says 200k isn't a lot of money is full of crap. You can live very well off 70k in most of America.
monktastic1 5y ago
I'll partly agree. I live in a HCOL city, and $200k is way more than enough, even with a kid. But $1M with a safe withdrawal rate of 3.5% gets you $35k/yr, which won't leave you "happily ever after" anywhere in the US with kids, particularly with healthcare concerns. Of course, one could move abroad, but that's not always feasible.
darkwizard42 5y ago
Agreed and I'd go so far to say just 5 years at FAANG (assuming you join at a mid-level eng, not L3/L4 fresh university hire) would get you into the $1-2M NW.

curiousllama 5y ago

How many consultants & I-bankers do you know? You sound like you come from a remarkably entrepreneurial subset of the world. Where I come from, everyone wants to make MD/Partner, ether in law, finance, or consulting. More generally, MBA applications to top schools have been rising for years. Besides, if 10x the median individual income isn't enough outside of SF/NYC, you got bigger problems.

yao420 5y ago
I was in consulting and yes everyone WANTS to become a partner but 90% quit before the first promotion due to the abusive lifestyle and workload.
internetslave 5y ago
I used to work in investment research in NYC. So I know those types, but the vibe was the same. Maybe I’ve been lucky, but a lot of people I know actually have had startup success. I know a few people that ended up making over 25 million by 30. None of them made it in law or finance, and none of them ever wanted to continue their finance career. 10x the median income just isn’t that much. If you have three kids, money is still tight. I’m arguing that we are all making less and that startups are making people rich because they’re actually getting paid what they produced.
- giantg2 5y ago
  "...because they’re actually getting paid what they produced." Do they really though? That's really the owners getting paid that, not all the workers. And a lot of that is really valued on the potential rather than what was actually produced to that point. "10x the median income just isn’t that much. If you have three kids, money is still tight." That's about $400k, right? That seems like an insane amount of money (I'm not in the Bay area).
  - jkubicek 5y ago
    It is an insane amount of money even in the Bay Area. It's more than enough to support a large family living a very comfortable lifestyle while also saving significantly for retirement. I'm not sure what the grandparent poster is on about.

harshaw 5y ago

Inflation data: https://www.in2013dollars.com/us/inflation/2010?amount=1 https://www.in2013dollars.com/us/inflation/2010?amount=1. I don't think that a 20% difference means 200K is a lot less. It's a bit less.

john_moscow 5y ago
Sure, rice, jeans and dollar store trinkets have only become 20% more expensive. The real estate, healthcare and education tell a completely different story though.
deleted 5y ago
[deleted]
internetslave 5y ago
I don’t trust any inflation numbers. Financial asset inflation is out of control
mgolawala 5y ago
Unfortunately, for the last few years I have noticed more and more people no longer take government inflation data very seriously. Here are two (I am sure there are more) reasons why: Housing, Health and Education.. these very basic needs have consistently outstripped official inflation numbers. Specifically on the US coasts. Correct me if I am wrong, but I believe the cost of housing is completely left out of that inflation number. Which in my opinion is kind of silly. The formula for the index used considers substitutions. So for example, let's say Wool gets expensive, they expect you to substitute it for acrylic. If beef gets expensive, they expect you to substitute it for chicken or turkey, and so on. This isn't the reality people _feel_. For example, I for one, would realize I am no longer able to afford wool socks, and have to make do with acrylic socks. In essence, feeling poorer than I did before.
- mdorazio 5y ago
  CPI and inflation metrics generally do account for housing costs [1], but the problem is inflation in housing is not evenly distributed. If you live in a coastal city or tech hub, your housing costs have likely risen much faster than the national average. I've found it difficult to get realistic measures of city-level inflation data without trying to construct my own index from various data sources. [1] https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-and-rent.pdf https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-an...

john_moscow 5y ago

Because the corporations have discovered a way to give people a fake feeling of growth, meaning and belonging, while de-facto keeping them as lowest-bidder replaceable cogs. There are many stories of people feeling betrayed by the corporate machine when their interests stopped being aligned with the corporate ones. There are numerous people boasting about a new sexy title or a recognition certificate they got from their employer, who at the same time shrug if you ask them about their property ownership or retirement plans. A lot of "pro-employee" and "pro-feeling" agendas boil down to making people more comfortable owning less and getting paid less.

HarryHirsch 5y ago

People are getting rich from startups because they’re actually capturing the value of their labor That's not a positive, isn't it? Back in the mid-1990s there were entry-level jobs with a career trajectory, you could drop out of college, join a school district as computer herder, move to a hosting company and get into systems programming and then go to work for Google and Facebook. (Hi Rachel!) That doesn't exist any longer, nowadays everyone goes and grinds leetcode for months to prepare for interviews.

OldHand2018 5y ago
Back in the mid-1990s I paid more for rent than I did for tuition. And the rent was affordable working part time as a code monkey. If you can manage to max out your 401k contributions from college graduation all the way until retirement, it would be hard not to have at least $4-5 million. Is that even reasonable right now, for someone that graduates today? I have no idea. But it doesn’t seem like something that would be restricted to tech workers in the Bay Area. It might even be harder to do in the Bay Area than in Des Moines.

giantg2 5y ago

I think some of this depends on the area. Even in an average area, a $200k salary with a family could give the option for early retirement. I make less than $100k and support my family in an average area. It does feel like I'll work until I die. If I were making double that, it would be a huge difference.

NortySpock 5y ago
Yeah, also making under 100k if I made 200k even for a year it would absolutely let me pay for my wife's college out of pocket rather than co-signing on debt, and then let me either buff my retirement IRA or pay down a chunk the mortgage... Located in the Midwest USA
- giantg2 5y ago
  I know, right? Even $100-120k would make a huge difference. I see people talk about maxing out their 401k, but who has $20k per year to save? I mean, I've done everything right - good grades, stay out of trouble, got an ok job, worked hard (not so much now after being screwed multiple times, went to night school for a masters, 9 years in, and still a not very successful intermediate developer. Kind of depressing.

tqi 5y ago

"working for a corporation day in and out is slavery" Corporations are the boogeyman de jour but from personal experience, landlords / restrictive zoning / "anti gentrification" activists are the primary cause of my angst. I make more money now than I ever thought I would, but a truly staggering amount of it goes directly into my landlord's pocket.

boringg 5y ago
And how much of your paycheck to landlords goes to the bank to pay off the mortgage
- alexgmcm 5y ago
  But except for the interest that is still money going to the landlord as they have the property itself.
  - boringg 5y ago
    Interest, capital expenditures, maintenance, insurance, potential lawsuits (hopefully not), time spent managing the properties. Don't disagree with you - it pays off the principal also goes towards other things. For some people not owning, having to take care of a property or put significant amounts of capital into a property is an asset. Not everyone for sure, but some people. For example myself until my late 30s was a happy renter - would I prefer the money going elsewhere? Yes. Would I have been able to afford the same lifestyle in the city? Absolutely not.
- tqi 5y ago
  Well they bought the place in 2005 for about 1/3 of what the current Redfin estimate is, so probably very little? And even if that were not the case, with real estate climbing 8% or more per year, they are still in line for a huge payday if / when they choose to sell.
  - boringg 5y ago
    Well that depends - if the real estate market holds and they pay for all the appropriate upkeeps. What about the situation where real estate properties go down and it's difficult to find renters or pay for upkeep on the property. Also - rental real estate doesn't rise in the same way the single family homes do. The landlord is the scourge narrative bugs me. There are for sure a bunch of terrible land lords especially the huge soulless companies but there are a lot of little family operations that don't try and gouge their tenants.

Moodles 5y ago

What are your expenses? 200K is very comfortable early retirement, even working in SF or NY.

mattlondon 5y ago

I disagree. Sure I am not able to just give up work entirely but those sort of figures you mention lead to a very comfortable standard of living, even supporting my entire family on one salary. I guess it is about expectations about what you think you should have. I don't have a Tesla for instance.

zuhayeer 5y ago

To be fair though mid-career engineers and PMs are now making incredible amounts of money even outside of FAANG. Equity has been a huge part of upside for high growth companies, and has motivated a lot of smart people to work at larger companies. No FAANG company even made the list for Entry Level on the Levels.fyi 2020 list: https://levels.fyi/2020/ https://levels.fyi/2020/

Sohcahtoa82 5y ago

> Wages, even at 150-200k just really aren’t that much Imagine thinking 150-200K isn't that much while there are millions of minimum-wage workers trying to survive on under $30K. (EDIT: And in some states, only $15K!)