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No, the risk for regular employee is higher due to downside vs upside. Once you cross some wealth threshold, it's not possible to lose everything (e.g. become h

No, the risk for regular employee is higher due to downside vs upside. Once you cross some wealth threshold, it's not possible to lose everything (e.g. become homeless) unless you do something deliberately stupid like gambling or drugs. There's always plan B if you're rich. Like, rent out property or something.

dheera 2y ago
The risk for a software engineer at any of the big tech companies is extremely low if you have some common sense level of financial literacy. If you're an engineer at Nvidia you'd have to do some braindead stupid things with your money to end up homeless. Also, if you have technical skills at a level that Nvidia would hire you, you can easily get a job at probably a thousand other companies. Layoffs are a non-issue. Recruiters will be scrambling to hire ex-Nvidia folks in the event of a mass layoff, barring a major global financial collapse (in which case you're still better off than 95% of the population).
lnsru 2y ago
Thanks for writing this. Owning a place to live and couple rental properties makes one economically independent. Leaving a toxic workplace means loosing fancy car and canceling expensive vacation. Loosing job before that wealth threshold means homelessness and poverty.
- dheera 2y ago
  > Leaving a toxic workplace means loosing fancy car and canceling expensive vacation. > Loosing job before that wealth threshold means homelessness and poverty. No, it doesn't. Maybe don't borrow money and buy a fancy car and vacations you can't afford? Buy a normal car with cash and go on normal middle-class vacations? If you work in an mid-level engineer capacity at a FAANG or Nvidia in the Bay Area you can easily live on 1/3 of your take-home compensation (that's including a normal car, a couple economy-class vacations a year, and a modest apartment) and invest the rest in index funds. Within a few years of working, you would have banked enough to have a decade worth of expenses saved before you'll be homeless, and I'm sure you can find another job in that decade. I work at a big tech company, my (very normal) car cost me 1/10 of my annual take-home salary, I've never flown anything but economy class, and I save 60-75% of my take home pay and invest it. I can't afford rental properties or any of that, but I do have enough funds to last me several years at my current lifestyle. Back when I was at startups (including co-founding one), I was never able to save more than a few months' worth of emergency fund, and that was not good for my mental health. That's one of the reason I joined a big tech company for now -- to de-risk myself financially. Startups are financially FAR higher risk. You'll get 1/4 the pay that Nvidia gives you, the equity may end up being worth $0, and if it does end up being worth $0, you'll have missed out on the opportunity cost of being hired at any of the FAANG companies for whatever time you spent there. I'm not discouraging anyone from doing a startup, but it IS higher financial risk in every way.
  - throwaway2037 2y ago
    Wow, 60-75% savings rate is incredible. > I can't afford rental properties or any of that Why not? Combine a 10% down payment and a bank loan. You can definitely afford it.
    - dheera 2y ago
      In my book, borrowing money to buy something I don't have the cash for does NOT mean I can afford it. Back in the days when I didn't have money to buy a car with cash, I just didn't buy a car and used a bike and public transit to get everywhere. I mean, maybe that's why I have a high savings rate.
      - throwaway2037 2y ago
        Do you also plan to buy your home with cash only? You will need to save for a long time. To me, loans can be used to judiciously add leverage to your financial profile. If 90% LTV (loan-to-value) is too high for your personal risk profile, then you can increase the down payment from 10% to 20 or 30%.
        dheera 2y ago
        That's OK, I don't want to owe anyone money. I can quit my job with full peace of mind, that's what this whole thread is about. If and when I have money to buy a house, I'll just buy one. It's not that different from buying a fancy meal or a plane ticket. If I have the money I might buy it. If I don't, I don't think about it. I'm simple like that, and as a result, I have very few financial worries.
robertlagrant 2y ago
> No, the risk for regular employee is higher due to downside vs upside People start businesses and actually risk everything they have on them. If you only look at someone who owns and runs the biggest company in the world, you're just using the apex fallacy[0] to justify your perspective, and hoping nobody notices. [0] https://rationalwiki.org/wiki/Apex_fallacy https://rationalwiki.org/wiki/Apex_fallacy

dheera 2y ago

The risk for a software engineer at any of the big tech companies is extremely low if you have some common sense level of financial literacy. If you're an engineer at Nvidia you'd have to do some braindead stupid things with your money to end up homeless. Also, if you have technical skills at a level that Nvidia would hire you, you can easily get a job at probably a thousand other companies. Layoffs are a non-issue. Recruiters will be scrambling to hire ex-Nvidia folks in the event of a mass layoff, barring a major global financial collapse (in which case you're still better off than 95% of the population).

lnsru 2y ago

Thanks for writing this. Owning a place to live and couple rental properties makes one economically independent. Leaving a toxic workplace means loosing fancy car and canceling expensive vacation. Loosing job before that wealth threshold means homelessness and poverty.

dheera 2y ago
> Leaving a toxic workplace means loosing fancy car and canceling expensive vacation. > Loosing job before that wealth threshold means homelessness and poverty. No, it doesn't. Maybe don't borrow money and buy a fancy car and vacations you can't afford? Buy a normal car with cash and go on normal middle-class vacations? If you work in an mid-level engineer capacity at a FAANG or Nvidia in the Bay Area you can easily live on 1/3 of your take-home compensation (that's including a normal car, a couple economy-class vacations a year, and a modest apartment) and invest the rest in index funds. Within a few years of working, you would have banked enough to have a decade worth of expenses saved before you'll be homeless, and I'm sure you can find another job in that decade. I work at a big tech company, my (very normal) car cost me 1/10 of my annual take-home salary, I've never flown anything but economy class, and I save 60-75% of my take home pay and invest it. I can't afford rental properties or any of that, but I do have enough funds to last me several years at my current lifestyle. Back when I was at startups (including co-founding one), I was never able to save more than a few months' worth of emergency fund, and that was not good for my mental health. That's one of the reason I joined a big tech company for now -- to de-risk myself financially. Startups are financially FAR higher risk. You'll get 1/4 the pay that Nvidia gives you, the equity may end up being worth $0, and if it does end up being worth $0, you'll have missed out on the opportunity cost of being hired at any of the FAANG companies for whatever time you spent there. I'm not discouraging anyone from doing a startup, but it IS higher financial risk in every way.
- throwaway2037 2y ago
  Wow, 60-75% savings rate is incredible. > I can't afford rental properties or any of that Why not? Combine a 10% down payment and a bank loan. You can definitely afford it.
  - dheera 2y ago
    In my book, borrowing money to buy something I don't have the cash for does NOT mean I can afford it. Back in the days when I didn't have money to buy a car with cash, I just didn't buy a car and used a bike and public transit to get everywhere. I mean, maybe that's why I have a high savings rate.
    - throwaway2037 2y ago
      Do you also plan to buy your home with cash only? You will need to save for a long time. To me, loans can be used to judiciously add leverage to your financial profile. If 90% LTV (loan-to-value) is too high for your personal risk profile, then you can increase the down payment from 10% to 20 or 30%.
      - dheera 2y ago
        That's OK, I don't want to owe anyone money. I can quit my job with full peace of mind, that's what this whole thread is about. If and when I have money to buy a house, I'll just buy one. It's not that different from buying a fancy meal or a plane ticket. If I have the money I might buy it. If I don't, I don't think about it. I'm simple like that, and as a result, I have very few financial worries.

robertlagrant 2y ago

> No, the risk for regular employee is higher due to downside vs upside People start businesses and actually risk everything they have on them. If you only look at someone who owns and runs the biggest company in the world, you're just using the apex fallacy[0] to justify your perspective, and hoping nobody notices. [0] https://rationalwiki.org/wiki/Apex_fallacy https://rationalwiki.org/wiki/Apex_fallacy