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I mean, FAANG compensation lets you trivially retire (or achieve financial independence) by ~40 (if you're single), and that's assuming you're budgeting for 200

I mean, FAANG compensation lets you trivially retire (or achieve financial independence) by ~40 (if you're single), and that's assuming you're budgeting for 200k/year with an extremely conservative withdrawal rate (3%). If you're willing to resettle somewhere cheaper and live a somewhat less extravagant lifestyle, you could do it by your early 30s no problem. And, again, this is if you're single, i.e. no second income, paying a single-filer's tax rate, and no benefit of cheaper housing by having someone to split the expense with, etc. A partner earning any real amount of money speeds this up dramatically. (Kids do cost money, if you have them, but they don't cost enough money to offset having a second SWE income, even if you pay for extremely expensive daycare, unless you have like five.) I don't know about you, but having "fuck you" money after a decade in the workforce, or "no, really, fuck you" money after 2 decades is a pretty good deal. It is, in fact, much easier to make this happen working at a FAANG (or comparable) than elsewhere. People like to complain about the cost of living, and yes, those complaints are valid, but working at a FAANG it's entirely possible to save more after taxes and expenses than software engineers in other parts of the country make _before_ taxes; trying to equivocate between those situations is really quite silly. The first is in a dramatically better financial position than the second.

onion2k 5y ago
I imagine this is true in theory. The math checks out. But every FAANG company has been around for at least 15 years now and we don't hear many stories of their early hires retiring. Where does it break down in practise? Is it just too hard to give up the high paying role? Is it that retirees don't talk about it? Or is it that the theory is actually wrong for some reason, and working for $200k for 20 years doesn't actually leave you with fuck you money after all?
- sanxiyn 5y ago
  My impression is that there is no breakdown, people who want to retire do retire, but people who want to retire is minority.
- ulber 5y ago
  I'd wager hedonistic adaptation is the big culprit. You don't end up saving that much unless you actually plan for achieving financial independence.
- bawolff 5y ago
  Maybe the retirees feel less pressure to talk about themselves on blogs/twitter, since they are retired they don't have to try and stay relavent and instead can just enjoy life.
- underdeserver 5y ago
  I do hear many stories. On Twitter, on FIRE forums, some from friends. It's just that the kind of person to do this doesn't tend to be very outspoken.
- marcus_holmes 5y ago
  Divorces are ridiculously expensive. That was the major culprit for my generation. Only one peer of mine has actually retired before 50 (that I know of), and he stayed married. Everyone else ended up splitting up, which wiped all their savings. Or they went another path. I followed the other path - total mental breakdown, severe depression followed by "non-retirement" - working freelance, as a co-founder and in interesting jobs while travelling. Turns out that being a well-paid employee for years and years isn't something I can actually do without getting depressed about it.
  - blagie 5y ago
    Both the divorce rates and the divorce cost are thanks to the divorce industry and the divorce lobby. We have a massive industry set up to encourage and profit from divorce. Most countries don't have this problem, but it's a bigger problem than even the US' ballooning medical costs.
    - marcus_holmes 5y ago
      I'm not American :) The UK and Australia both have this problem. I think it's less to do with the actual costs of the divorce, and more about converting one household into two. All the equity in the house gets split up, which usually gives a decent deposit for another house for each partner, but nowhere near enough to pay off the whole mortgage. Each partner needs enough rooms to host the kids during their shared custody, so a family of 4 goes from needing a single 3-bed house to needing two 3-bed houses. They need two cars, instead of being able to survive on one. If one of the partners gave up their career for the kids then there's alimony to pay. And so on. The legal bills are like icing on the cake.
      - Viliam1234 5y ago
        Luckily I observe this from the perspective of having a happy marriage, which happens to be incredibly frugal compared to two single people living alone. A house for two people who enjoy being together does not need to be larger than a house for one person; although you need a larger house when you have kids. Of many objects you only need one piece, because you are not using them all the time. Cooking is cheap; it requires time, but if you spend that time talking, you don't really mind. Minus those expenses you had in the past simply because you felt alone or bored. The expenses of two people living together are almost the same as of one person living alone. The extra expenses are mostly for the kids (including the mortgage for the larger house). Which means that if one person has a good salary, the other can "early retire" immediately. Or if both have good salaries, they can save half of the income, and perhaps retire as soon as the kids become independent. A divorce throws all of this out of the window.
- marvin 5y ago
  Those who retire don’t get too public amout it. And most who could will in fact keep working in some capacity, either because they’re excessively paranoid about the capital markets or they enjoy work too much to quit.
- deleted 5y ago
  [deleted]
- comp_throw7 5y ago
  Sorry, when I said 200k, I meant withdrawing & spending 200k/year, not earning 200k/year. In today's environment you're more likely to be earning (at least) 400k/year by the time you retire if you're following that playbook. If you take a pretty standard estimate of career and comp growth for an engineer that joined a FAANG company as a new grad and stuck around, generally speaking they'd get promoted to senior-equivalent within 7-8 years (faster for Facebook - 5 years there). Over that time, assuming annual expenses of ~50k/year (single, renting a 1-bedroom in the Bay, leaving you with 20-25k to cover everything else), and sticking everything that's left over into the market, you'd have well over a million by year 8. Let's then pessimistically assume your compensation never grows after it reaches 400k - at that point you'll be taking home ~225k after taxes, or 175k after expenses. Stick that into the market for another decade, you end up with ~5m. You might say that 50k/year in expenses is unrealistically low for someone living in the SFBA - it's not, really, you aren't even living with roommates and you have five figures to play with after housing and transportation (remember, food is close to free, since most of these places will feed you 3 meals a day M-F if you want). But even if you bump that up to 60k/year that pushes out your retirement date... by a year. Maybe. This is all inflation-adjusted, mind you. 5m in today's dollars is enough to retire on extremely comfortably, and unless you decide to drastically increase your spending in retirement it'll be growing faster than your draw-down. I imagine most people who do this either keep working or start working on their own projects. I'm not aiming for this just so I can watch TV all day, let me tell you :)

onion2k 5y ago

I imagine this is true in theory. The math checks out. But every FAANG company has been around for at least 15 years now and we don't hear many stories of their early hires retiring. Where does it break down in practise? Is it just too hard to give up the high paying role? Is it that retirees don't talk about it? Or is it that the theory is actually wrong for some reason, and working for $200k for 20 years doesn't actually leave you with fuck you money after all?

sanxiyn 5y ago
My impression is that there is no breakdown, people who want to retire do retire, but people who want to retire is minority.
ulber 5y ago
I'd wager hedonistic adaptation is the big culprit. You don't end up saving that much unless you actually plan for achieving financial independence.
bawolff 5y ago
Maybe the retirees feel less pressure to talk about themselves on blogs/twitter, since they are retired they don't have to try and stay relavent and instead can just enjoy life.
underdeserver 5y ago
I do hear many stories. On Twitter, on FIRE forums, some from friends. It's just that the kind of person to do this doesn't tend to be very outspoken.
marcus_holmes 5y ago
Divorces are ridiculously expensive. That was the major culprit for my generation. Only one peer of mine has actually retired before 50 (that I know of), and he stayed married. Everyone else ended up splitting up, which wiped all their savings. Or they went another path. I followed the other path - total mental breakdown, severe depression followed by "non-retirement" - working freelance, as a co-founder and in interesting jobs while travelling. Turns out that being a well-paid employee for years and years isn't something I can actually do without getting depressed about it.
- blagie 5y ago
  Both the divorce rates and the divorce cost are thanks to the divorce industry and the divorce lobby. We have a massive industry set up to encourage and profit from divorce. Most countries don't have this problem, but it's a bigger problem than even the US' ballooning medical costs.
  - marcus_holmes 5y ago
    I'm not American :) The UK and Australia both have this problem. I think it's less to do with the actual costs of the divorce, and more about converting one household into two. All the equity in the house gets split up, which usually gives a decent deposit for another house for each partner, but nowhere near enough to pay off the whole mortgage. Each partner needs enough rooms to host the kids during their shared custody, so a family of 4 goes from needing a single 3-bed house to needing two 3-bed houses. They need two cars, instead of being able to survive on one. If one of the partners gave up their career for the kids then there's alimony to pay. And so on. The legal bills are like icing on the cake.
    - Viliam1234 5y ago
      Luckily I observe this from the perspective of having a happy marriage, which happens to be incredibly frugal compared to two single people living alone. A house for two people who enjoy being together does not need to be larger than a house for one person; although you need a larger house when you have kids. Of many objects you only need one piece, because you are not using them all the time. Cooking is cheap; it requires time, but if you spend that time talking, you don't really mind. Minus those expenses you had in the past simply because you felt alone or bored. The expenses of two people living together are almost the same as of one person living alone. The extra expenses are mostly for the kids (including the mortgage for the larger house). Which means that if one person has a good salary, the other can "early retire" immediately. Or if both have good salaries, they can save half of the income, and perhaps retire as soon as the kids become independent. A divorce throws all of this out of the window.
marvin 5y ago
Those who retire don’t get too public amout it. And most who could will in fact keep working in some capacity, either because they’re excessively paranoid about the capital markets or they enjoy work too much to quit.
deleted 5y ago
[deleted]
comp_throw7 5y ago
Sorry, when I said 200k, I meant withdrawing & spending 200k/year, not earning 200k/year. In today's environment you're more likely to be earning (at least) 400k/year by the time you retire if you're following that playbook. If you take a pretty standard estimate of career and comp growth for an engineer that joined a FAANG company as a new grad and stuck around, generally speaking they'd get promoted to senior-equivalent within 7-8 years (faster for Facebook - 5 years there). Over that time, assuming annual expenses of ~50k/year (single, renting a 1-bedroom in the Bay, leaving you with 20-25k to cover everything else), and sticking everything that's left over into the market, you'd have well over a million by year 8. Let's then pessimistically assume your compensation never grows after it reaches 400k - at that point you'll be taking home ~225k after taxes, or 175k after expenses. Stick that into the market for another decade, you end up with ~5m. You might say that 50k/year in expenses is unrealistically low for someone living in the SFBA - it's not, really, you aren't even living with roommates and you have five figures to play with after housing and transportation (remember, food is close to free, since most of these places will feed you 3 meals a day M-F if you want). But even if you bump that up to 60k/year that pushes out your retirement date... by a year. Maybe. This is all inflation-adjusted, mind you. 5m in today's dollars is enough to retire on extremely comfortably, and unless you decide to drastically increase your spending in retirement it'll be growing faster than your draw-down. I imagine most people who do this either keep working or start working on their own projects. I'm not aiming for this just so I can watch TV all day, let me tell you :)