4 ms·

Getting laid off after 15 years at a large tech company is a very scary notion. For aspiring developers, here are some encouraging thoughts: Pay is currently s

by nilkn 12y ago

Getting laid off after 15 years at a large tech company is a very scary notion. For aspiring developers, here are some encouraging thoughts: Pay is currently sufficiently high that you could, with a sufficiently frugal lifestyle and prudent investment habits, go from zero to millionaire in that time period. Being a millionaire isn't what it used to be, but that would provide one hell of a buffer should you find yourself laid off after 15 years. Think of it like this. If your total compensation over that period averages $150k, that's about $7.7k/month net in CA, $8.8k in WA. If you can invest $4k of that per month at a conservative 4% annual return, you'll have $1M in 15 years; about $1.2M if your return is 6%; and about $1.4M if your return is 8%. This is all assuming that you have don't marry a spouse during that period who is also earning an income and helping boost those savings. This is just a back of the envelope calculation, but my main point is that if you're dedicated to the task and you work hard, you can create for yourself a very strong safety buffer over the course of a 15 year career in the technology industry. $1M is almost enough to retire off of if you were to move to a rural area of the country and continued to live frugally--health insurance would be your most costly concern.

tdicola 12y ago
Housing costs don't really make it practical in WA to put away $4k/month when you're pulling in $6-7k/month after taxes. A mortgage on any decent-ish place is going to be around $2500-$3500+ a month. If you just bought a place recently your savings were probably tapped out out to come up with the $100k+ down payment. It's definitely possible to save a lot of money, but $1 million in the bank is pretty tough IMHO.
- nilkn 12y ago
  I said "sufficiently frugal" for a reason. You can't do this if you want to buy the big house in the big city and a fancy car right off the bat. The way you do this is fairly simple: don't buy the house. Rent an apartment (not a luxury one), possibly even share it with a roommate. I recognize that not everybody will be willing to do this. But owning a home in a major city is a luxury these days IMHO. Besides, this is assuming you're doing this all on your own -- no income from a spouse. Why do you need a house by yourself? (By the way, the income figure I cited was $8.8k/month in WA after taxes, not $6-7k.)
YZF 12y ago
There's the slight problem of there not being a conservative 4% annual return and inflation. How about marrying a spouse during that period who is raising your children and not working? Also that 1M is basically your house (or a portion thereof). I think the reality of our generation is that the middle class (and yes, these guys are all middle class) has faced erosion of its standard of living. Salaries for engineers have barely kept up with inflation (in some case simply not) coupled with higher risks. Just as you say, being a millionaire ain't what it used to be and a lot of these middle class families are far from being millionaires. MS like many other companies is hoarding it's cash and helping increase the class gap. That said it's still better to be an engineer in MS with a good salary than a homeless drug addict. Clever/frugal/single/some people can save money but it's not as easy as you make it sound.
- nilkn 12y ago
  I was talking about one specific scenario (no kids, living very frugally). If you want kids and you want to do it on a single income, you're going to have to make compromises, very serious ones. Unfortunately, that's all there is to it. Keep in mind that one possible compromise is that you move--take a 20% paycut (or more) and move to an area where you can afford the lifestyle that you want while still saving a reduced but proportional amount to my example. It's frankly a really bad idea for someone making very low six figures to try to raise a family on that income alone in an area where homes cost $1M (as you suggest they do).

by nilkn 12y ago

tdicola 12y ago

Housing costs don't really make it practical in WA to put away $4k/month when you're pulling in $6-7k/month after taxes. A mortgage on any decent-ish place is going to be around $2500-$3500+ a month. If you just bought a place recently your savings were probably tapped out out to come up with the $100k+ down payment. It's definitely possible to save a lot of money, but $1 million in the bank is pretty tough IMHO.

nilkn 12y ago
I said "sufficiently frugal" for a reason. You can't do this if you want to buy the big house in the big city and a fancy car right off the bat. The way you do this is fairly simple: don't buy the house. Rent an apartment (not a luxury one), possibly even share it with a roommate. I recognize that not everybody will be willing to do this. But owning a home in a major city is a luxury these days IMHO. Besides, this is assuming you're doing this all on your own -- no income from a spouse. Why do you need a house by yourself? (By the way, the income figure I cited was $8.8k/month in WA after taxes, not $6-7k.)

YZF 12y ago

There's the slight problem of there not being a conservative 4% annual return and inflation. How about marrying a spouse during that period who is raising your children and not working? Also that 1M is basically your house (or a portion thereof). I think the reality of our generation is that the middle class (and yes, these guys are all middle class) has faced erosion of its standard of living. Salaries for engineers have barely kept up with inflation (in some case simply not) coupled with higher risks. Just as you say, being a millionaire ain't what it used to be and a lot of these middle class families are far from being millionaires. MS like many other companies is hoarding it's cash and helping increase the class gap. That said it's still better to be an engineer in MS with a good salary than a homeless drug addict. Clever/frugal/single/some people can save money but it's not as easy as you make it sound.

nilkn 12y ago
I was talking about one specific scenario (no kids, living very frugally). If you want kids and you want to do it on a single income, you're going to have to make compromises, very serious ones. Unfortunately, that's all there is to it. Keep in mind that one possible compromise is that you move--take a 20% paycut (or more) and move to an area where you can afford the lifestyle that you want while still saving a reduced but proportional amount to my example. It's frankly a really bad idea for someone making very low six figures to try to raise a family on that income alone in an area where homes cost $1M (as you suggest they do).