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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

#241

Post by deanmoriarty »

endisneigh wrote: post #238
deanmoriarty wrote: post #193

I do not understand why articles like these consistently score poorly on HN? Of course it’s all based on luck, but that doesn’t make it an uninteresting read. I admire the diligence of the author, and how well they played the lucky cards they were given. I am frequently in awe when reading technical articles on HN, with people advancing the state of the art in some technology. Those people also are incredibly lucky,…

> rather than simply admitting that they willingly chose a different path in life, but they could have chased my same opportunities with largely the same financial outcome. Let’s suppose everyone did this, how do you see it turning out? Who will do all of the other things?

I don’t want to dismiss your question, but to be honest I don’t know how to answer it. Maybe if everyone did it new arbitrage opportunities would arise so that it would become more lucrative to move somewhere else where there is a demand for services that nobody is doing anymore? But I am not an economist so I am not interested in reading 50 pedantic comments about how my previous sentence is inaccurate.

I do not concern myself with non-practical (in my opinion) matters because I know that the vast majority of people will not take that path, so it’s likely not an issue.

Re: My Path to Financial Independence as a Software Engineer

#242

Post by blastonico »

deanmoriarty wrote: post #193

I do not understand why articles like these consistently score poorly on HN? Of course it’s all based on luck, but that doesn’t make it an uninteresting read. I admire the diligence of the author, and how well they played the lucky cards they were given. I am frequently in awe when reading technical articles on HN, with people advancing the state of the art in some technology. Those people also are incredibly lucky,…

+1

I'm a typical average joe, but I love reading these because I'm learning from them what to do when I have such resource.

Yeah, there're people luckier than me, but I'm increasing my odds in a variety of endeavors and improving my skills. I'm far from my goal yet, but results are very encouraging so far.

Re: My Path to Financial Independence as a Software Engineer

#243

Post by dogma1138 »

PUSH_AX wrote: post #233
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…

IR35 hasn't really affected that path, you can find contracts that are outside of the legislation and as long as your working practices are also outside you're fine, there are also insurances now for these things.

A lot of companies don’t hire contractors under their own LTD anymore they only take those that come through an umbrella company that pays them under PAYE.

Re: My Path to Financial Independence as a Software Engineer

#244

Post by dogma1138 »

refurb wrote: post #239
mmarq wrote: post #101

Earlier quoted context omitted.

In the UK, the stronger drag on wealth accumulation for the poor is the absurd taxation on the middle incomes (50K+), especially given the very low level of service of public schools, healthcare system, childcare, etc…

Not making a judgement call on which is better (its all trade offs), but this is what Americans don’t get - all those social benefits have a cost and a good portion falls on the middle to upper middle class. I think a lot of Americans envision finding a European style social safety net by only taxing billionaires.

I don’t think the UK has a European style safety net, they don’t tax enough people for that the first £12.5K of your income (below £100K) are income tax exempt the UK has the narrowest tax base in Europe.

Re: My Path to Financial Independence as a Software Engineer

#245

Post by thiht »

> even an average engineer with a five-figure salary can become a millionaire by her late 30s

With my five figure salary in France the max I can invest is 1k/month, so with a 10% RoI I can expect around 200k by the time I’m 30. That’s nowhere near a million and doesn’t take the flat tax in consideration. Maybe 10% is considered low or not risky enough?

> first salary in the low six-figure

Yeah, that’s not gonna happen in Europe.

Re: My Path to Financial Independence as a Software Engineer

#247

Post by refurb »

deanmoriarty wrote: post #193

I do not understand why articles like these consistently score poorly on HN? Of course it’s all based on luck, but that doesn’t make it an uninteresting read. I admire the diligence of the author, and how well they played the lucky cards they were given. I am frequently in awe when reading technical articles on HN, with people advancing the state of the art in some technology. Those people also are incredibly lucky,…

As a fellow immigrant who never hit these kinds of incomes I agree. It’s an interesting read, the author is humble enough to realize his result involved a good portion of luck.

I judge my own progress by where I was 10 years ago, not where some random internet author is today.

Re: My Path to Financial Independence as a Software Engineer

#248

Post by bjornsing »

charlesdm wrote: post #221
bjornsing wrote: post #209

Earlier quoted context omitted.

> That said, I know self employed developers making 150-200k (EUR) gross per year as contractors. There’s nothing unusual about that. I was making that kind of money 15 years ago. But one problem is, that’s about what I can make today as well. There is no upward mobility in pay. And it has nothing to do with ability. It’s a cultural thing. (Also, the deal is typically that you sell your social career progression. So…

Consumption yes. But how do you get to 70-80% for reinvesting? Corporate taxes are 20%, dividend taxes 30% on remaining 80? That gets you to 44% net tax. From gross to net. Income taxes are higher but still not 70-80%? I agree income taxes are high throughout most of Western Europe, but the way to grow wealth is by acquiring assets that can grow without having to sell them and pay taxes. An investment fund (or a prop…

> Corporate taxes are 20%, dividend taxes 30% on remaining 80? That gets you to 44% net tax. From gross to net.

No, there are special tax rules for small companies (the so-called 3:12 rules). You can pay yourself a small dividend ($15k or so), but above that you’re taxed as if it was regular income.

> Income taxes are higher but still not 70-80%?

Payroll tax is 31% and then you pay around 55% marginal tax on what’s left.

It’s debatable how you should count VAT in this context. Your consultant invoices will have 25% VAT on them that you have to pay the government. Your customers can get that back from the government, but will have to pay VAT on any value your services create. Since the name of the tax is value added tax I think it’s fair to say you are adding the value with your labor and are in fact the one paying the tax, but others may disagree.

Re: My Path to Financial Independence as a Software Engineer

#249

Post by endisneigh »

deanmoriarty wrote: post #241
endisneigh wrote: post #238

Earlier quoted context omitted.

> rather than simply admitting that they willingly chose a different path in life, but they could have chased my same opportunities with largely the same financial outcome. Let’s suppose everyone did this, how do you see it turning out? Who will do all of the other things?

I don’t want to dismiss your question, but to be honest I don’t know how to answer it. Maybe if everyone did it new arbitrage opportunities would arise so that it would become more lucrative to move somewhere else where there is a demand for services that nobody is doing anymore? But I am not an economist so I am not interested in reading 50 pedantic comments about how my previous sentence is inaccurate. I do not con…

What...?

You said:

> rather than simply admitting that they willingly chose a different path in life, but they could have chased my same opportunities with largely the same financial outcome.

But then you also say

> I do not concern myself with non-practical (in my opinion) matters

The "concern" is your own advice.

Re: My Path to Financial Independence as a Software Engineer

#250

Post by sillycube »

The thing I learn is that when you live in US especially in SF, speak US English, you can make the highest earning in the world as a software developer. This is because the tech industry lives in this city.

Even you are a mediocre developer, you can make above average salary because you are so lucky to born in US.

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