5 ms·

For the past nine years I've worked at a place that pays well, and saved a very large percentage of my income. I did this specifically so I have the flexibility

by agf 5y ago

For the past nine years I've worked at a place that pays well, and saved a very large percentage of my income. I did this specifically so I have the flexibility to take time off, and potentially choose jobs that don't pay nearly as well in the future, without it affecting my ability to retire. I don't want to imply I deprived myself to do this; we work in an industry where many of us can do all of that and still live beyond comfortably. While I realize this isn't an option for many people due to lack of opportunities, kids, lifestyle creep, etc., I have both planned for it and been very fortunate. So no, I'm not worried about it.

rubicon33 5y ago
I guess I'm still confused. "Pays well" as in, pays well above average? I'm taking average to mean ~$130,000 in California / Bay Area. So you made well above that for 9 years AND lived somewhere with a lower cost of living? Then I could understand saving so much that you don't worry about retirement. But if you're making "good" but average salary in the bay area, and even saving a lot, you're still eating into savings to take months and years off. Maybe an easier way to ask this is... What would you consider to be enough saved in the bank, at say, 35 years old, to take a whole year off?
- askafriend 5y ago
  I bet it'd be less than 100k to take a year off in the Bay Area with little reduction in lifestyle. A senior dev in the Bay Area working at a respectable company will get 300k per year minimum. 300k+ for 9 years will put you solidly into the 7 figures of net worth - especially if you invest well in the last decade.
  - agf 5y ago
    One of the reasons I don't usually answer financial questions like this online is because, in a sense, it really all comes down to this answer. If you make a lot of money, and you're careful, and don't get unlucky, the rest just falls into place. But hopefully my other response is helpful for people still learning how to think about saving.
    - rubicon33 5y ago
      I think my confusion centered around the mismatch between what I thought you were making, and what you likely are making. I figured that the average senior engineer in California makes somewhere between $130,000 and $170,000, depending on region. I had simply no idea that an average senior engineer could be making north of $300,000. That is jaw dropping and of course I understand now how you're able to take time off. I save over 50% of my income but I don't make anything close to $300,000 so yea, taking a whole year off would be a big chunk of my savings. I guess I need to try and find a job where I'm making $300,000 lol. Do you have some niche specialty or is that literally just a standard rate?
      - agf 5y ago
        > I save over 50% of my income but I don't make anything close to $300,000 so yea, taking a whole year off would be a big chunk of my savings. There is something wrong with this piece of information. If you really save 50%, then taking a whole year off will only wipe out one year of savings, no matter what you make. So if it's a large part of your savings and you're really saving 50%, then the problem is you've only been saving for a couple of years. Having a higher income just makes it easier to have a higher savings rate, it doesn't change the math on how many years you have to save to afford the time off, given equal savings rates. You might want to re-read my other comment: https://news.ycombinator.com/item?id=27126783 https://news.ycombinator.com/item?id=27126783 > I guess I need to try and find a job where I'm making $300,000 lol. Do you have some niche specialty or is that literally just a standard rate? It's a standard rate for someone who was a senior engineer then got promoted two more times, I guess. I don't have a niche specialty. And I expect to (and have planned for) making less at my next job, and potentially for the rest of my career.
        rubicon33 5y ago
        Well, my guess is that isn't only "standard" at the big FANG type companies (PayPal and other goliaths in the bay area included). I could be wrong but, I don't think that's standard pay for the vast majority of software jobs in the bay area, whether it be at smaller startups or more old school traditional software companies.
- agf 5y ago
  > I guess I'm still confused. "Pays well" as in, pays well above average? I'm taking average to mean ~$130,000 in California / Bay Area. > So you made well above that for 9 years AND lived somewhere with a lower cost of living? As I said in my original post, I've been very fortunate, and my situation doesn't apply to everyone even in tech. But yes, though I started out lower than that at the beginning, it just grew rapidly over time. This is the pay grade I've been at for the last several years: https://www.levels.fyi/company/PayPal/salaries/Software-Engineer/T27/ https://www.levels.fyi/company/PayPal/salaries/Software-Engi... (3rd party source, not implying anything about its accuracy) > Then I could understand saving so much that you don't worry about retirement. But if you're making "good" but average salary in the bay area, and even saving a lot, you're still eating into savings to take months and years off. I'm going to ignore compound interest and taxes for simplicity here. If I save 50% of my salary, and take one year off, I lose two years of savings -- one year of spending and one year of making up for what I spent. If I save 10% of my salary, and take one year off, I lose ten years of savings -- one year of spending and nine years making up for what I spent. > Maybe an easier way to ask this is... What would you consider to be enough saved in the bank, at say, 35 years old, to take a whole year off? This part of the answer is actually terrible advice because it's so over-simplified, this is just meant to make a point. The shorthand rule is at a 50% savings rate you can retire after a 20 year career. So you don't really need to have anything saved at 35 beyond what you'll spend to take time off, because when you come back you'll still have more than 20 years left to work. Keeping my savings rate high is fundamentally what allows me to do this, more because I'll make up for the "lost time" quickly than because of what I've already saved.

by agf 5y ago

rubicon33 5y ago

I guess I'm still confused. "Pays well" as in, pays well above average? I'm taking average to mean ~$130,000 in California / Bay Area. So you made well above that for 9 years AND lived somewhere with a lower cost of living? Then I could understand saving so much that you don't worry about retirement. But if you're making "good" but average salary in the bay area, and even saving a lot, you're still eating into savings to take months and years off. Maybe an easier way to ask this is... What would you consider to be enough saved in the bank, at say, 35 years old, to take a whole year off?

askafriend 5y ago
I bet it'd be less than 100k to take a year off in the Bay Area with little reduction in lifestyle. A senior dev in the Bay Area working at a respectable company will get 300k per year minimum. 300k+ for 9 years will put you solidly into the 7 figures of net worth - especially if you invest well in the last decade.
- agf 5y ago
  One of the reasons I don't usually answer financial questions like this online is because, in a sense, it really all comes down to this answer. If you make a lot of money, and you're careful, and don't get unlucky, the rest just falls into place. But hopefully my other response is helpful for people still learning how to think about saving.
  - rubicon33 5y ago
    I think my confusion centered around the mismatch between what I thought you were making, and what you likely are making. I figured that the average senior engineer in California makes somewhere between $130,000 and $170,000, depending on region. I had simply no idea that an average senior engineer could be making north of $300,000. That is jaw dropping and of course I understand now how you're able to take time off. I save over 50% of my income but I don't make anything close to $300,000 so yea, taking a whole year off would be a big chunk of my savings. I guess I need to try and find a job where I'm making $300,000 lol. Do you have some niche specialty or is that literally just a standard rate?
    - agf 5y ago
      > I save over 50% of my income but I don't make anything close to $300,000 so yea, taking a whole year off would be a big chunk of my savings. There is something wrong with this piece of information. If you really save 50%, then taking a whole year off will only wipe out one year of savings, no matter what you make. So if it's a large part of your savings and you're really saving 50%, then the problem is you've only been saving for a couple of years. Having a higher income just makes it easier to have a higher savings rate, it doesn't change the math on how many years you have to save to afford the time off, given equal savings rates. You might want to re-read my other comment: https://news.ycombinator.com/item?id=27126783 https://news.ycombinator.com/item?id=27126783 > I guess I need to try and find a job where I'm making $300,000 lol. Do you have some niche specialty or is that literally just a standard rate? It's a standard rate for someone who was a senior engineer then got promoted two more times, I guess. I don't have a niche specialty. And I expect to (and have planned for) making less at my next job, and potentially for the rest of my career.
      - rubicon33 5y ago
        Well, my guess is that isn't only "standard" at the big FANG type companies (PayPal and other goliaths in the bay area included). I could be wrong but, I don't think that's standard pay for the vast majority of software jobs in the bay area, whether it be at smaller startups or more old school traditional software companies.
agf 5y ago
> I guess I'm still confused. "Pays well" as in, pays well above average? I'm taking average to mean ~$130,000 in California / Bay Area. > So you made well above that for 9 years AND lived somewhere with a lower cost of living? As I said in my original post, I've been very fortunate, and my situation doesn't apply to everyone even in tech. But yes, though I started out lower than that at the beginning, it just grew rapidly over time. This is the pay grade I've been at for the last several years: https://www.levels.fyi/company/PayPal/salaries/Software-Engineer/T27/ https://www.levels.fyi/company/PayPal/salaries/Software-Engi... (3rd party source, not implying anything about its accuracy) > Then I could understand saving so much that you don't worry about retirement. But if you're making "good" but average salary in the bay area, and even saving a lot, you're still eating into savings to take months and years off. I'm going to ignore compound interest and taxes for simplicity here. If I save 50% of my salary, and take one year off, I lose two years of savings -- one year of spending and one year of making up for what I spent. If I save 10% of my salary, and take one year off, I lose ten years of savings -- one year of spending and nine years making up for what I spent. > Maybe an easier way to ask this is... What would you consider to be enough saved in the bank, at say, 35 years old, to take a whole year off? This part of the answer is actually terrible advice because it's so over-simplified, this is just meant to make a point. The shorthand rule is at a 50% savings rate you can retire after a 20 year career. So you don't really need to have anything saved at 35 beyond what you'll spend to take time off, because when you come back you'll still have more than 20 years left to work. Keeping my savings rate high is fundamentally what allows me to do this, more because I'll make up for the "lost time" quickly than because of what I've already saved.