4 ms·

Yeah, but no one ever got rich off salary.

by pbreit 11y ago

MCRed 11y ago
I've made more money investing in stocks and options than I have from options. Over 20 years as an employee (so excluding time as a founder) my returns from investments is 2-3X the return from startup stock options. And that's as only a part time investor. I like sure things (like I knew in 2001 from an understanding of economics that there would be a housing bubble and that it would eventually burst. I was never able to buy CDOs against the market, but I did profit from it until 2007 when things got crazy and I got out of the market-- a year early but I'll take it.) I suspect most people can't do this... but they can buy a house or two in up and coming areas, and put extra salary into that. Rent one out, get your mortgage paid by your tenants and you're building a real estate empire... slowly, but it can make you rich.
- ryandrake 11y ago
  But that's not "getting rich off of salary". That's gambling on the stock market. Sure, there are plenty of people who hit that jackpot too, but let's not lump that together with the idea that 9-5 salary is a way to get rich.
  - MCRed 11y ago
    Investing in the stock market is not a game of chance. You may lack the skill or discipline to engage in that activity, and that's fine, don't do it, put your time elsewhere, such as the real estate method I described. Calling it gambling, however, is dishonest, and is popular among those who want to use that characterization to serve the purpose of denying people the opportunity to invest. For instance, despite working in startups for 20 years, regulations prevent me from being an angel investor (though it seems its common in california to simply ignore those regulations) ... because people like you think that I shouldn't be allowed to decide where to invest my money. Yet I could go to Las Vegas and blow $100k in a weekend. So, no, it's not gambling. It's investing. And shame on you for saying otherwise.
    - ryandrake 11y ago
      "People like me"? I think you're reading way into my comment. I don't care what you do with your money, it's yours. Gambling is defined as "an enterprise undertaken or attempted with a risk of loss and a chance of profit or success." That's exactly what people do when they buy a stock or invest in a start-up. They just go to sites like E-trade and Schwab to do it rather than PokerStars. Unless you know of some risk-free stock where chance is not a factor (I'm all ears).
  - pekk 11y ago
    How is that any worse than gambling with options?
  - smileysteve 11y ago
    > That's gambling on the stock market. A gambling game where the house historically doesn't win (if you don't try to day trade). And historically, your money doubles in ~7 years. > Sure, there are plenty of people who hit that jackpot too Yes, many people hit that jackpot. > let's not lump that together with the idea that 9-5 salary is a way to get rich. There are many well off upper middle class that own multiple homes this way and retire at a reasonable if not early age, with a net worth that will leave substantial amounts to their kids.
- daviross 11y ago
  In other words "It's easy to make money if you have a lot of it already"? Useful advice for a micro-fraction of the population, but this sounds like advice on "How best to wax your yachts" compared to even the average developer.
- smileysteve 11y ago
  I'm very surprised when I discover how uncommon it is for [even] our industry to invest in equities. Somehow stock in a company makes more sense to most than compound returns. It's even more surprising when I find 30 year olds who haven't figured out to use the company match on their 401k yet.
michaelochurch 11y ago
Yeah, but no one ever got rich off salary. These people called "executives" can. Programmers generally don't, unless they're very good and very mercenary, and even then "rich" means "7-figure net worth and the ability to consult at a decent rate as much as one wants". Which isn't bad at all but isn't VC MegaBux.
danielweber 11y ago
If you live on less than you make, you can indeed become quite rich. It might not be your definition of "rich" depending on how you grew up.
deleted 11y ago
[deleted]
icedchai 11y ago
Not exactly true. You can get pretty rich in ~15 years if you save and invest a good percentage. The average American consumer is incapable of doing this, of course. Why save when you can spend, spend, spend?
- aetherson 11y ago
  Let's say that you get paid $100k for 5 years, then $150k for 5 years, and then $200k for 5 years. Nominal. So you take home $80k, $120k, $150k. You invest half of your take-home salary, so $40k, $60k, $75k. You invest everything at 4% real return. That about $1 million after those fifteen years. It's....... pretty rich, sure. It's also a LOT of savings. I'd say it's possible to get rich on salary if your salary gets high early and fast, or by the time you retire, maybe less so in fifteen years.
  - zrail 11y ago
    But, if you're able to stick to the plan you outlined you're probably living on $40k the entire time, which means you can live the rest of your life on that $1 million, due to the assumed 4% real return and 4% withdraw.
s73v3r 11y ago
And a miniscule amount have gotten rich off of equity. Your point?

Yeah, but no one ever got rich off salary.

by pbreit 11y ago

Yeah, but no one ever got rich off salary.

MCRed 11y ago

I've made more money investing in stocks and options than I have from options. Over 20 years as an employee (so excluding time as a founder) my returns from investments is 2-3X the return from startup stock options. And that's as only a part time investor. I like sure things (like I knew in 2001 from an understanding of economics that there would be a housing bubble and that it would eventually burst. I was never able to buy CDOs against the market, but I did profit from it until 2007 when things got crazy and I got out of the market-- a year early but I'll take it.) I suspect most people can't do this... but they can buy a house or two in up and coming areas, and put extra salary into that. Rent one out, get your mortgage paid by your tenants and you're building a real estate empire... slowly, but it can make you rich.

ryandrake 11y ago
But that's not "getting rich off of salary". That's gambling on the stock market. Sure, there are plenty of people who hit that jackpot too, but let's not lump that together with the idea that 9-5 salary is a way to get rich.
- MCRed 11y ago
  Investing in the stock market is not a game of chance. You may lack the skill or discipline to engage in that activity, and that's fine, don't do it, put your time elsewhere, such as the real estate method I described. Calling it gambling, however, is dishonest, and is popular among those who want to use that characterization to serve the purpose of denying people the opportunity to invest. For instance, despite working in startups for 20 years, regulations prevent me from being an angel investor (though it seems its common in california to simply ignore those regulations) ... because people like you think that I shouldn't be allowed to decide where to invest my money. Yet I could go to Las Vegas and blow $100k in a weekend. So, no, it's not gambling. It's investing. And shame on you for saying otherwise.
  - ryandrake 11y ago
    "People like me"? I think you're reading way into my comment. I don't care what you do with your money, it's yours. Gambling is defined as "an enterprise undertaken or attempted with a risk of loss and a chance of profit or success." That's exactly what people do when they buy a stock or invest in a start-up. They just go to sites like E-trade and Schwab to do it rather than PokerStars. Unless you know of some risk-free stock where chance is not a factor (I'm all ears).
- pekk 11y ago
  How is that any worse than gambling with options?
- smileysteve 11y ago
  > That's gambling on the stock market. A gambling game where the house historically doesn't win (if you don't try to day trade). And historically, your money doubles in ~7 years. > Sure, there are plenty of people who hit that jackpot too Yes, many people hit that jackpot. > let's not lump that together with the idea that 9-5 salary is a way to get rich. There are many well off upper middle class that own multiple homes this way and retire at a reasonable if not early age, with a net worth that will leave substantial amounts to their kids.
daviross 11y ago
In other words "It's easy to make money if you have a lot of it already"? Useful advice for a micro-fraction of the population, but this sounds like advice on "How best to wax your yachts" compared to even the average developer.
smileysteve 11y ago
I'm very surprised when I discover how uncommon it is for [even] our industry to invest in equities. Somehow stock in a company makes more sense to most than compound returns. It's even more surprising when I find 30 year olds who haven't figured out to use the company match on their 401k yet.

michaelochurch 11y ago

Yeah, but no one ever got rich off salary. These people called "executives" can. Programmers generally don't, unless they're very good and very mercenary, and even then "rich" means "7-figure net worth and the ability to consult at a decent rate as much as one wants". Which isn't bad at all but isn't VC MegaBux.

danielweber 11y ago

If you live on less than you make, you can indeed become quite rich. It might not be your definition of "rich" depending on how you grew up.

deleted 11y ago

[deleted]

icedchai 11y ago

Not exactly true. You can get pretty rich in ~15 years if you save and invest a good percentage. The average American consumer is incapable of doing this, of course. Why save when you can spend, spend, spend?

aetherson 11y ago
Let's say that you get paid $100k for 5 years, then $150k for 5 years, and then $200k for 5 years. Nominal. So you take home $80k, $120k, $150k. You invest half of your take-home salary, so $40k, $60k, $75k. You invest everything at 4% real return. That about $1 million after those fifteen years. It's....... pretty rich, sure. It's also a LOT of savings. I'd say it's possible to get rich on salary if your salary gets high early and fast, or by the time you retire, maybe less so in fifteen years.
- zrail 11y ago
  But, if you're able to stick to the plan you outlined you're probably living on $40k the entire time, which means you can live the rest of your life on that $1 million, due to the assumed 4% real return and 4% withdraw.

s73v3r 11y ago

And a miniscule amount have gotten rich off of equity. Your point?