4 ms·

it really depends on what you mean by rich: the surest path to end up with $2-5M over ~10 years is job at ~FAANG, do it well to get promoted, and manage your sa

it really depends on what you mean by rich: the surest path to end up with $2-5M over ~10 years is job at ~FAANG, do it well to get promoted, and manage your savings/investments well. that path is very unlikely to get you to $10-100M in the same 10 years, and starting a startup seems to be one of the best ways to do that.

ilrwbwrkhv 3y ago
You forget the higher up you go in these companies, the politics get nasty. Not many people have the appetite for that.
- lupire 3y ago
  You don't need to be a higher up; you just need to be a good cog.
Hydraulix989 3y ago
Senior engineer (E5) is enough to get you $2-5M over 10 years. That's terminal cog level.
- ojbyrne 3y ago
  According to levels.fyi, E5 at Google gets you $385k TC annually. If you save a third of that (which is not easy) for 10 years you get to approximately $1.3 million. Maybe your investments get you above $2 million, but it would really depend on what decade that was. If you had the Great Recession in the middle of that, not so great. If you think it is easy to save more than a third of your income, remember you’ll have a federal marginal tax rate of 35% or higher, will probably have to work onsite in a HCOL state, and unless you’re lucky enough to live in WA, a high state income tax. Yes you can shield some of your income via 401ks and Roths, but for the former you’re going to get taxed on withdrawal, and for the latter you get penalized if you touch it before you’re 59.5. Now if you’re dual cogs with no kids, maybe. If you do have kids, you’re not retiring until long after ten years.
  - kudokatz 3y ago
    > If you save a third of that (which is not easy) This is very easy, actually. You just happen to like fancy things and houses, probably. > Now if you’re dual cogs with no kids, maybe. If you do have kids, you’re not retiring until long after ten years. I find it depressing that so many people use kids as an excuse to avoid facing their own problems with money and spending. Look deeper and you can find happiness with a lot less.
    - ojbyrne 3y ago
      This is just a thinly veiled ad hominem.
    - ojbyrne 3y ago
      Actually I just looked at my last year at a FAANG in California. I earned about $370 K (including 401K match). $135 K went to taxes (Federal, Social Security, Medicare, State). If I save absolutely everything left ($235 K) for 10 years that gets me to 2.35 million. The parent post mentioned saving $2-5 million. To get to $ 2 M I have to live off $35 K a year (I realize I'm ignoring investment activities). EDIT: additionally to minimize taxation you’re probably doing some of that savings in a 401k. Let’s say $25k * 10 year (I was). But that actually creates a deferred tax obligation. Let’s say the tax rate you pay that at is 20% (very optimistic but by the time you pay it you’ll likely be used to living below the poverty line). That takes you down to $30k a year. Actually even worse the employer match is taxable when you withdraw it, so another deferred tax obligation means that to get to $2M (accounting for future tax obligations) in 10 years you need to live on $25K a year. That seems challenging in Northern California. Also why would I want to do that? - living at that spending level is likely to affect my long-term health and happiness, so the motivation is not clear to me.
      - kudokatz 3y ago
        > But that actually creates a deferred tax obligation. Let’s say the tax rate you pay that at is 20% (very optimistic There are also ways to get at this money with almost no taxes paid later IF you are not working--look for "Roth IRA conversion ladder". Also look into "Mega Backdoor Roth" for more tax sheltering. > That seems challenging in Northern California You don't have to retire to California. Just pay minimal costs while you're there. Many places in US are beautiful, have great infrastructure and health care, and don't cost as much. And investment growth is a LOT; don't ignore it. And after just a few years of not working, unless you have a bad start you can probably live off of much more than the initial safe withdrawal rate.

ilrwbwrkhv 3y ago

You forget the higher up you go in these companies, the politics get nasty. Not many people have the appetite for that.

lupire 3y ago
You don't need to be a higher up; you just need to be a good cog.

Hydraulix989 3y ago

Senior engineer (E5) is enough to get you $2-5M over 10 years. That's terminal cog level.

ojbyrne 3y ago
According to levels.fyi, E5 at Google gets you $385k TC annually. If you save a third of that (which is not easy) for 10 years you get to approximately $1.3 million. Maybe your investments get you above $2 million, but it would really depend on what decade that was. If you had the Great Recession in the middle of that, not so great. If you think it is easy to save more than a third of your income, remember you’ll have a federal marginal tax rate of 35% or higher, will probably have to work onsite in a HCOL state, and unless you’re lucky enough to live in WA, a high state income tax. Yes you can shield some of your income via 401ks and Roths, but for the former you’re going to get taxed on withdrawal, and for the latter you get penalized if you touch it before you’re 59.5. Now if you’re dual cogs with no kids, maybe. If you do have kids, you’re not retiring until long after ten years.
- kudokatz 3y ago
  > If you save a third of that (which is not easy) This is very easy, actually. You just happen to like fancy things and houses, probably. > Now if you’re dual cogs with no kids, maybe. If you do have kids, you’re not retiring until long after ten years. I find it depressing that so many people use kids as an excuse to avoid facing their own problems with money and spending. Look deeper and you can find happiness with a lot less.
  - ojbyrne 3y ago
    This is just a thinly veiled ad hominem.
  - ojbyrne 3y ago
    Actually I just looked at my last year at a FAANG in California. I earned about $370 K (including 401K match). $135 K went to taxes (Federal, Social Security, Medicare, State). If I save absolutely everything left ($235 K) for 10 years that gets me to 2.35 million. The parent post mentioned saving $2-5 million. To get to $ 2 M I have to live off $35 K a year (I realize I'm ignoring investment activities). EDIT: additionally to minimize taxation you’re probably doing some of that savings in a 401k. Let’s say $25k * 10 year (I was). But that actually creates a deferred tax obligation. Let’s say the tax rate you pay that at is 20% (very optimistic but by the time you pay it you’ll likely be used to living below the poverty line). That takes you down to $30k a year. Actually even worse the employer match is taxable when you withdraw it, so another deferred tax obligation means that to get to $2M (accounting for future tax obligations) in 10 years you need to live on $25K a year. That seems challenging in Northern California. Also why would I want to do that? - living at that spending level is likely to affect my long-term health and happiness, so the motivation is not clear to me.
    - kudokatz 3y ago
      > But that actually creates a deferred tax obligation. Let’s say the tax rate you pay that at is 20% (very optimistic There are also ways to get at this money with almost no taxes paid later IF you are not working--look for "Roth IRA conversion ladder". Also look into "Mega Backdoor Roth" for more tax sheltering. > That seems challenging in Northern California You don't have to retire to California. Just pay minimal costs while you're there. Many places in US are beautiful, have great infrastructure and health care, and don't cost as much. And investment growth is a LOT; don't ignore it. And after just a few years of not working, unless you have a bad start you can probably live off of much more than the initial safe withdrawal rate.