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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

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.
  - giantg2 5y ago
    I guess other people agree with him because I'm getting downvoted.
  - bradlys 5y ago
    Everyone argues about this but for most people in tech - $400k/yr does not give you a "very comfortable" lifestyle. You cannot afford a $2m home. A $2m home isn't even that comfortable in the peninsula. (Varies on location but it'll probably be under 2000sqft, still 3-4 bedroom, 4000-8000sqft lot, 2-car garage if you're fortunate, will likely require $200k+ in renovation/repairs on move in, nothing lavish) Good luck trying to get one anyway - you're going to be beat by cash offers anyway. If you extend your reach to very far out areas - you can get a better home and your dollar goes further but you're sacrificing on commute and then you don't have a very comfortable lifestyle because you're commuting really far. A very comfortable lifestyle for most people in tech would be: two luxury cars (bmw/mercedes/porsche/modelsx), good public schools, safe and pleasant to look at neighborhood to purchase a home in, short commute distance (<30 min), and the usual lake tahoe trips, one-two vacations abroad a year, plus the usual smaller vacations, etc. You're not doing that on $400k/yr in SV. If both partners make $400k/yr then sure. I'm skipping out on the nanny, private school, prepared meals, and so forth because I think that's going above and beyond. People I know who are at $400k/yr (household) are not buying homes in the peninsula or - just generally - close to work.
    - joshuamorton 5y ago
      > 2000sqft, still 3-4 bedroom, 4000-8000sqft lot, 2-car garage if you're fortunate In what way is this not "comfortable"? What is your definition of "comfortable"? Like, I grew up in a 3BR, 2 car garage house that was <2000 SqFt. It was absolutely "comfortable". I had friends who were lower income who had smaller houses who were comfortable. You're describing an inflated, luxury lifestyle. You even sort of admit it when you say "very comfortable lifestyle for most people in tech". That's not "very comfortable", that's "very comfortable for people who are already very comfortable". I feel like this is a sort of keeping up with the joneses thing: comfortable implies "more comfortable than the median person in your social circle, where your social circle is all tech people with 400K a year or more household incomes". Like another way of putting this is that a 400K income should allow you to afford a nice 3-BR rental and kids and save money. If you don't have kids, 400K allows you to keep a luxury apartment in SF and another one in the south bay, you know, if you want to do that.
      - jkubicek 5y ago
        > You're describing an inflated, luxury lifestyle. Exactly. I consider a "comfortable" lifestyle to be a 3BR house in a safe neighborhood, 2 reliable cars, 2 week+ domestic vacations/year, plus saving enough to give a nice cushion in case of emergencies / retirement. I'm terrible with budgeting / saving and I was doing this working for a startup on a $120k/year salary. Granted, this was 10 years ago and housing has appreciated significantly since then, but still. $200k would be more than enough to enjoy this sort of comfortable lifestyle.
        bradlys 5y ago
        Sorry, $200k isn't enough. You won't get the house. I know because I've applied. No landlord is renting out homes to single income in the peninsula at $200k/yr. $400k at FAANG - yes (they're all afraid of people losing their jobs at startups and lots of FAANG out there to rent them homes up). But, again, we're talking about "very comfortable" - not comfortable. Not okay. Not "I managed". Very comfortable - something people actually want, not just live with. And I don't put renting in the "very comfortable" category. Nor do I put "reliable" cars or domestic vacations. Safe neighborhood? It's expensive - $2m expensive. Do you have any real insight to the CURRENT housing market in the SF Bay Area? Housing is the big cost. It's more expensive to have a garage for a Porsche than the Porsche itself. I can literally go out tomorrow and buy a 911 but CANNOT afford to put it in a garage. That's how fucking ridiculous it is.
- ed312 5y ago
  Cost of living has gone absolutely through the roof, and shows no signs of stopping. That's, least in the northeast, the main reason $400k sounds rich but for a family of 4, with a $5k/mo mortgage, child care, etc. it really isn't.
  - giantg2 5y ago
    I'm in the northeast, make under $100k, and support my family. $400k is in the top 10% of earners. $5k per month is about a $1M mortgage, which is on the high side, right?
    - nostrademons 5y ago
      $1M is on the high side for SFHs in the Boston area, $1M will get you a 2BR condo in the Bay Area.
- irishcule 5y ago
  "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." I believe the OP is talking about the owners of the startups.
  - giantg2 5y ago
    But in that case, the question still stands. Sure they started the company, but they didn't build it alone. There are usually people involved with little to no equity. It's similar to how there are CEOs making millions per year, when that money is really made through the sales of the products of the workers. So they aren't just being compensated for what they produced, but for what everyone in the company produced.
teachingassist 5y ago
> 10x the median income just isn’t that much. If you have three kids You are taking home (in California; approximately) net 7.4 times what people with three kids on the median income are taking home. If you choose to live a median lifestyle, you can save 86% of your net income and therefore retire on it within 4 years.
- nostrademons 5y ago
  Just as a counterpoint - if you believe that the median person is about to get screwed (either by civil disorder, famine, inflation, corporate restructuring, housing shortages, rentier landlords, conscription, etc.), then it's worth paying a premium not to be the median person. Judging from social & news media these days, the median person believes that the median person is about to get screwed. The "live like the median person, bank 86% of your income, and retire in 4 years" strategy works well in times of abundance, where the median person has a decent life. Once people start expecting shortages - where the median person ends up dead, or unable to complete life milestones they desire like having kids - it becomes less feasible. I've seen a large shift in expectations over the last 1-10 years (depending on how far down the income distribution you were), where more and more people are realizing that bad things might be on the verge of happening.
  - curiousllama 5y ago
    > if you believe that the median person is about to get screwed, then it's worth paying a premium not to be the median person You have a remarkably apt username
joshuamorton 5y ago
> 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. The tradeoff here is that if you have 3 kids, you can't afford to work at or start a startup, because your income today will be less than at a BigCo. The number of startups that will pay you 10x the median income, today, is pretty low (they're all already unicorns, which means your upside is somewhat limited) and you need to be fairly senior anyway.
Wohlf 5y ago
The lowest state median income in the US is Mississippi at $45,000. I can't possibly imagine how someone mismanages their finances so much that $450,000 is not enough to raise a family on.
- MisterBastahrd 5y ago
  All you have to do is live beyond your means. Buy that $4M house in the cozy neighborhood, add in some private schooling for your kids, throw in a half dozen vacations, and add a few expensive cars that you buy new every year. Sorry, describing an old boss.
- blamarvt 5y ago
  I think the problem here might be the different meanings of "money is tight". https://www.financialsamurai.com/scraping-by-on-500000-a-year-high-income-earners-struggling/ https://www.financialsamurai.com/scraping-by-on-500000-a-yea...

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.
- giantg2 5y ago
  I guess other people agree with him because I'm getting downvoted.
- bradlys 5y ago
  Everyone argues about this but for most people in tech - $400k/yr does not give you a "very comfortable" lifestyle. You cannot afford a $2m home. A $2m home isn't even that comfortable in the peninsula. (Varies on location but it'll probably be under 2000sqft, still 3-4 bedroom, 4000-8000sqft lot, 2-car garage if you're fortunate, will likely require $200k+ in renovation/repairs on move in, nothing lavish) Good luck trying to get one anyway - you're going to be beat by cash offers anyway. If you extend your reach to very far out areas - you can get a better home and your dollar goes further but you're sacrificing on commute and then you don't have a very comfortable lifestyle because you're commuting really far. A very comfortable lifestyle for most people in tech would be: two luxury cars (bmw/mercedes/porsche/modelsx), good public schools, safe and pleasant to look at neighborhood to purchase a home in, short commute distance (<30 min), and the usual lake tahoe trips, one-two vacations abroad a year, plus the usual smaller vacations, etc. You're not doing that on $400k/yr in SV. If both partners make $400k/yr then sure. I'm skipping out on the nanny, private school, prepared meals, and so forth because I think that's going above and beyond. People I know who are at $400k/yr (household) are not buying homes in the peninsula or - just generally - close to work.
  - joshuamorton 5y ago
    > 2000sqft, still 3-4 bedroom, 4000-8000sqft lot, 2-car garage if you're fortunate In what way is this not "comfortable"? What is your definition of "comfortable"? Like, I grew up in a 3BR, 2 car garage house that was <2000 SqFt. It was absolutely "comfortable". I had friends who were lower income who had smaller houses who were comfortable. You're describing an inflated, luxury lifestyle. You even sort of admit it when you say "very comfortable lifestyle for most people in tech". That's not "very comfortable", that's "very comfortable for people who are already very comfortable". I feel like this is a sort of keeping up with the joneses thing: comfortable implies "more comfortable than the median person in your social circle, where your social circle is all tech people with 400K a year or more household incomes". Like another way of putting this is that a 400K income should allow you to afford a nice 3-BR rental and kids and save money. If you don't have kids, 400K allows you to keep a luxury apartment in SF and another one in the south bay, you know, if you want to do that.
    - jkubicek 5y ago
      > You're describing an inflated, luxury lifestyle. Exactly. I consider a "comfortable" lifestyle to be a 3BR house in a safe neighborhood, 2 reliable cars, 2 week+ domestic vacations/year, plus saving enough to give a nice cushion in case of emergencies / retirement. I'm terrible with budgeting / saving and I was doing this working for a startup on a $120k/year salary. Granted, this was 10 years ago and housing has appreciated significantly since then, but still. $200k would be more than enough to enjoy this sort of comfortable lifestyle.
      - bradlys 5y ago
        Sorry, $200k isn't enough. You won't get the house. I know because I've applied. No landlord is renting out homes to single income in the peninsula at $200k/yr. $400k at FAANG - yes (they're all afraid of people losing their jobs at startups and lots of FAANG out there to rent them homes up). But, again, we're talking about "very comfortable" - not comfortable. Not okay. Not "I managed". Very comfortable - something people actually want, not just live with. And I don't put renting in the "very comfortable" category. Nor do I put "reliable" cars or domestic vacations. Safe neighborhood? It's expensive - $2m expensive. Do you have any real insight to the CURRENT housing market in the SF Bay Area? Housing is the big cost. It's more expensive to have a garage for a Porsche than the Porsche itself. I can literally go out tomorrow and buy a 911 but CANNOT afford to put it in a garage. That's how fucking ridiculous it is.
ed312 5y ago
Cost of living has gone absolutely through the roof, and shows no signs of stopping. That's, least in the northeast, the main reason $400k sounds rich but for a family of 4, with a $5k/mo mortgage, child care, etc. it really isn't.
- giantg2 5y ago
  I'm in the northeast, make under $100k, and support my family. $400k is in the top 10% of earners. $5k per month is about a $1M mortgage, which is on the high side, right?
  - nostrademons 5y ago
    $1M is on the high side for SFHs in the Boston area, $1M will get you a 2BR condo in the Bay Area.
irishcule 5y ago
"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." I believe the OP is talking about the owners of the startups.
- giantg2 5y ago
  But in that case, the question still stands. Sure they started the company, but they didn't build it alone. There are usually people involved with little to no equity. It's similar to how there are CEOs making millions per year, when that money is really made through the sales of the products of the workers. So they aren't just being compensated for what they produced, but for what everyone in the company produced.

teachingassist 5y ago

> 10x the median income just isn’t that much. If you have three kids You are taking home (in California; approximately) net 7.4 times what people with three kids on the median income are taking home. If you choose to live a median lifestyle, you can save 86% of your net income and therefore retire on it within 4 years.

nostrademons 5y ago
Just as a counterpoint - if you believe that the median person is about to get screwed (either by civil disorder, famine, inflation, corporate restructuring, housing shortages, rentier landlords, conscription, etc.), then it's worth paying a premium not to be the median person. Judging from social & news media these days, the median person believes that the median person is about to get screwed. The "live like the median person, bank 86% of your income, and retire in 4 years" strategy works well in times of abundance, where the median person has a decent life. Once people start expecting shortages - where the median person ends up dead, or unable to complete life milestones they desire like having kids - it becomes less feasible. I've seen a large shift in expectations over the last 1-10 years (depending on how far down the income distribution you were), where more and more people are realizing that bad things might be on the verge of happening.
- curiousllama 5y ago
  > if you believe that the median person is about to get screwed, then it's worth paying a premium not to be the median person You have a remarkably apt username

joshuamorton 5y ago

> 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. The tradeoff here is that if you have 3 kids, you can't afford to work at or start a startup, because your income today will be less than at a BigCo. The number of startups that will pay you 10x the median income, today, is pretty low (they're all already unicorns, which means your upside is somewhat limited) and you need to be fairly senior anyway.

Wohlf 5y ago

The lowest state median income in the US is Mississippi at $45,000. I can't possibly imagine how someone mismanages their finances so much that $450,000 is not enough to raise a family on.

MisterBastahrd 5y ago
All you have to do is live beyond your means. Buy that $4M house in the cozy neighborhood, add in some private schooling for your kids, throw in a half dozen vacations, and add a few expensive cars that you buy new every year. Sorry, describing an old boss.
blamarvt 5y ago
I think the problem here might be the different meanings of "money is tight". https://www.financialsamurai.com/scraping-by-on-500000-a-year-high-income-earners-struggling/ https://www.financialsamurai.com/scraping-by-on-500000-a-yea...