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I was referring to lucrative consulting opportunities. Side note: the "equity/benefits/stability of being a salaried employee" are somewhat overestimated. 1.

I was referring to lucrative consulting opportunities. Side note: the "equity/benefits/stability of being a salaried employee" are somewhat overestimated. 1. Equity has risks associated with it that are discounted during good times but become painfully obvious when the business cycle turns. Think Google or Facebook are great companies with bright futures? You can buy their shares without having to work for them for 4 years. 2. If you're working as a high-end consultant, you will easily be earning enough to create a tailored benefits package for yourself. For instance, you can set up a self-directed 401(k) and defer up to $18,000 of your salary (2015 limit). Your business can also contribute up to 25% (or 20% if you're a sole proprietor) of its profit as a profit-sharing contribution. All told, you can stash away up to $53,000/year pre-tax in a 401(k). 3. Stability is an illusion. Most salaried employees are at-will and can be terminated at any time for any reason, or no reason at all.

eastbayjake 12y ago
I completely agree with you. And honestly, I'm surprised how many people on these salary/negotiation HN threads say startup equity is a serious part of their financial plan. I treat any equity offer like Monopoly money -- it's probably worthless, but if not then it's just a nice surprise. By the way, any advice for salaried engineers who'd like to start consulting? Anything you wish you'd known or things you'd do differently in hindsight?
- JoeAltmaier 12y ago
  Few people get rich on salary. There are many, many examples of folks rich off of equity. They are clearly different propositions, and the value people assign to them depends on the person.
  - 7Figures2Commas 12y ago
    > There are many, many examples of folks rich off of equity. This is true, but you need to look at who they actually are. The majority of folks who become fabulously wealthy off of equity (read: owning a piece of a business) are the folks who start those businesses and manage to hold on to most or all of the equity. Most of these businesses are obviously not in tech, but if you want to filter out non-tech companies, the power law distribution of equity-derived wealth in Silicon Valley still doesn't favor employees, even those who join companies early on.
    - JoeAltmaier 12y ago
      And yet I know several personally. Wealthy off of equity from being early employees. Maybe half a dozen. That's enough to make a person believe.
      - lostcolony 12y ago
        Yes, there are anecdotes of individuals who had a large payout from being an early employee. It's a major risk/reward proposition, and the likelihood of the reward is quite low. It's basically like being paid in lottery tickets. Fine so long as the rest of your salary is enough to pay the bills, not fine if you depend on it for your retirement, and either way, some of us would prefer the well defined payout of cash.
        JoeAltmaier 12y ago
        Except its not really like that at all. You get paid in cash plus equity. The value of the equity part is somewhat under your control. Hard to affect the value of the lottery ticket. It may seem hopeless, and indeed many other factors do make good product companies fail. But when other factors do NOT intervene, then the remaining value does depend on your execution.

eastbayjake 12y ago

I completely agree with you. And honestly, I'm surprised how many people on these salary/negotiation HN threads say startup equity is a serious part of their financial plan. I treat any equity offer like Monopoly money -- it's probably worthless, but if not then it's just a nice surprise. By the way, any advice for salaried engineers who'd like to start consulting? Anything you wish you'd known or things you'd do differently in hindsight?

JoeAltmaier 12y ago
Few people get rich on salary. There are many, many examples of folks rich off of equity. They are clearly different propositions, and the value people assign to them depends on the person.
- 7Figures2Commas 12y ago
  > There are many, many examples of folks rich off of equity. This is true, but you need to look at who they actually are. The majority of folks who become fabulously wealthy off of equity (read: owning a piece of a business) are the folks who start those businesses and manage to hold on to most or all of the equity. Most of these businesses are obviously not in tech, but if you want to filter out non-tech companies, the power law distribution of equity-derived wealth in Silicon Valley still doesn't favor employees, even those who join companies early on.
  - JoeAltmaier 12y ago
    And yet I know several personally. Wealthy off of equity from being early employees. Maybe half a dozen. That's enough to make a person believe.
    - lostcolony 12y ago
      Yes, there are anecdotes of individuals who had a large payout from being an early employee. It's a major risk/reward proposition, and the likelihood of the reward is quite low. It's basically like being paid in lottery tickets. Fine so long as the rest of your salary is enough to pay the bills, not fine if you depend on it for your retirement, and either way, some of us would prefer the well defined payout of cash.
      - JoeAltmaier 12y ago
        Except its not really like that at all. You get paid in cash plus equity. The value of the equity part is somewhat under your control. Hard to affect the value of the lottery ticket. It may seem hopeless, and indeed many other factors do make good product companies fail. But when other factors do NOT intervene, then the remaining value does depend on your execution.