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My Path to Financial Independence as a Software Engineer

software.rajivprab.com

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Re: My Path to Financial Independence as a Software Engineer

#181

Post by JCM9 »

tiagobraw wrote: post #138

> but as someone without children this is a huge factor that influences almost every other decision he listed there: - living with roommates or renting a cheap apartment - not wanting to buy an apartment - having the time to do side hustles - even changing career paths is challenging when you have a family to take care of - saving the majority of his annual compensation I don’t want to say his advices are bad, just k…

This is the fallacy with this approach IMHO. Yes you can save a ton my living on minimal spend with no kids. That’s also not a life many/most people desire to live.

I’ll all for saving and do broadly follow a similar approach. With kids I won’t be retiring in my 30s or 40s but I’m investing in life now so that when I do retire it’s a much more well rounded and wholesome experience.

To each their own, but most of the “I’m not gonna have kids and just save all my money” types I know say later they made a poor life choice that’s hard to fix once that realization is made.

The main advice I do agree with is just because you start earning more doesn’t mean you should start spending more. Living comfortably below one’s means is a good way to build wealth over time. I just don’t recommend the “extreme” version of this.

Re: My Path to Financial Independence as a Software Engineer

#182

Post by charlesdm »

yunohn wrote: post #157
dsomers wrote: post #121

Earlier quoted context omitted.

What an absolute joke. The United States has terrible class mobility compared to the Netherlands or Germany for example. You don’t have anything to support what you said other than a skewed perspective created by American centric media. Edit: I guess the down voters here hate facts. The US scores lower on social mobility than the majority of European countries https://en.m.wikipedia.org/wiki/Global_Social_Mobility_In…

Given my experience in NL, I would disagree. I see a very clear class divide here, which is just mostly ignored by the middle/upper classes and government. Most of the population spend the majority of their income on rent, commuting, and essentials. Students also have lots of debt over the past decade (15k on average). Owning a car is expensive, but so is public transport (esp. for a family). Renting is expensive, bu…

You forgot to mention you do have a wealth tax. For wealthy people, those tend to be one of the "worst" taxes, because it is payable regardless of whether your investments do well or bad.

Re: My Path to Financial Independence as a Software Engineer

#183

Post by oblio »

yholio wrote: post #98
apples_oranges wrote: post #28

Earlier quoted context omitted.

Tech is not a bubble, software is transforming everything (/eating the world).

The eating part might be more literal than most expect. For example, it's hard to argue that software made journalism better. Sure, there is some efficiency in using a phone to record interviews and sending the results of your work on seconds on the other side of the world - as opposed to things like notepads and telexes. On the other hand, Google and Facebook almost completely eviscerated the revenue streams that fe…

Worse than that, they're taking away money from local businesses. Local markets, local stores, local shops, local newspapers, local magazines, small businesses, etc.

They're vampires centralizing local revenues worldwide and for what?!? That money gets reinvested or offshored so that about 100 billionaires live like kings with about 2 million millionaire flunkies working for them.

Re: My Path to Financial Independence as a Software Engineer

#184

Post by refurb »

tiagobraw wrote: post #138

> but as someone without children this is a huge factor that influences almost every other decision he listed there: - living with roommates or renting a cheap apartment - not wanting to buy an apartment - having the time to do side hustles - even changing career paths is challenging when you have a family to take care of - saving the majority of his annual compensation I don’t want to say his advices are bad, just k…

With that income? Sure, if kids came into the picture during the last day 3-4 years it would increase his expenses, but he’d presumably also have another income, at least for a few years?

I don’t disagree that for middle income earners kids are a huge expense, but when you’re making $350,000+ each year, $30,000 for childcare isn’t a dramatic expense. Same with all the incidentals.

Re: My Path to Financial Independence as a Software Engineer

#185

Post by ahelwer »

zomglings wrote: post #71

> Ultimately for me, that’s what financial independence is all about, and why it is all worth it. It’s not about sitting on a beach and drinking your life away. It’s about having the freedom to pursue your life purpose, whatever it may be, and however impractical it may be. This is just my personal opinion, but this is an ass backwards way of doing things and it gets me frothing at the mouth. If it's your life purpos…

I think it’s difficult to discover your “life purpose” while still working full time. Unless you’re anomalously lucky to be exposed to various subfields at your job, it requires a fair amount of leisure and self-directed tinkering (months to years). Quitting your job and living like a cockroach to find yourself or whatever is a pretty big sell. I also suspect this process requires a baseline level of comfort and freedom from stress but can’t say authoritatively.

Re: My Path to Financial Independence as a Software Engineer

#187

Post by ethbr0 »

bjornsing wrote: post #153
dsomers wrote: post #121

Earlier quoted context omitted.

What an absolute joke. The United States has terrible class mobility compared to the Netherlands or Germany for example. You don’t have anything to support what you said other than a skewed perspective created by American centric media. Edit: I guess the down voters here hate facts. The US scores lower on social mobility than the majority of European countries https://en.m.wikipedia.org/wiki/Global_Social_Mobility_In…

I don’t think that measurement of social mobility makes much sense in this context. Sure, moving from lower working class to upper middle class is probably easier in Sweden than in many other countries. But the thing is: it doesn’t make much of a difference. I have a sneaking suspicion that the Nordic welfare state kind of games the social mobility score in this way, by having such a compressed income distribution. I…

The report itself [0] notes many of the contradictions in the US:

> "Despite scoring high on the Work Opportunities (83.0) pillar—because of its low unemployment rate—as well as on the Technology Access pillar (90.2), it has the lowest score in the region on the Fair Wages pillar (43.8 against an average of 64.6 for the region). With an incidence of low pay (less than two-thirds of median wages) at 24.9, it has one of the shares of low-paid workers among OECD countries. The lack of effective social protection in the United States also translates into a low score on the Social Protection pillar (61.7). The minimum guaranteed income benefits for a family with two children (where one partner is out of work) is only 20% of median income. The United States could also improve on the Health pillar, where it performs quite poorly compared to peers in its region (75.8) due to a low healthy life expectancy at birth (66.6 years)."

When you average things down to a single number, you lose a lot of nuance.

For the US, the data the report collected generally supports something like 'You have the opportunity to succeed greatly, and be rewarded extremely well, but this requires financial resources at birth.' While also being true that 'If you are less successful, there are few and poor support nets for you, and serious pitfalls to avoid (f.ex. health care costs).'

[0] https://www3.weforum.org/docs/Global_Social_Mobility_Report....

Re: My Path to Financial Independence as a Software Engineer

#188

Post by lotsofpulp »

vjeux wrote: post #155
pyrale wrote: post #131

Earlier quoted context omitted.

> Your flip comment seems to belie the fact that he's only earned at least a half a million dollars for one year. I would say $475k is close enough, in all honesty. > The majority of his NW comes from investment and savings, not income. Sum of (earnings - spent) over the career is $2,611,000. Net worth by the end is $2,400,000. In order for investment returns to be above savings on income, taxes would have to be 42.3…

Tech stock is taxed at around 50% when you get it and then 20% of the upswing. So $475k total comp is more like $250k in your bank account in practice.

If you are going to include the tax rate on the capital gains, then you should include the capital gains in the amount in your bank account.

You should also hire a CPA or at least spend some time reading about strategies to minimize taxes if you are paying close to an effective 50% income tax on $500k of income.

Re: My Path to Financial Independence as a Software Engineer

#189

Post by nickflood »

xwdv wrote: post #152
jpatters wrote: post #84

Earlier quoted context omitted.

And with no kids.

How much should one expect kids to cost? Is an extra $1k in expenses a reasonable estimate?

If you have kids and live in Europe already with a spouse who also has their hopes and dreams and works in a different field, kids cost you 500k out of the total 600k compensation because you can't (really - don't want to) move to bay area :)

Re: My Path to Financial Independence as a Software Engineer

#190

Post by 300bps »

nickkell wrote: post #43
dogma1138 wrote: post #40

So rough calculation here.. $100K first job which is around £74K in the UK… you aren’t likely to get anywhere near that as a grad masters or not here but after taxes and student loan payments (which are deducted from your income in the UK) and all other deductions you’ll end up with £42,908.26 per year, that’s $56K. And this is where this breaks down for people in tech outside of the US at least. In the UK the path w…

I started out at £21k and in 10 years haven’t reached the author’s starting salary! The real advice should be for everyone to relocate to the US

At my last company we hired new computer science graduates at more than $100k per year.

A friend of mine has a son that just got a job offer right out of a medium tier computer science school with total compensations more than $200k per year.

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