Sorry for off-topic but why specifically Silicon Valley? While it has many historical technological centers and is often hyped, it's not the only possible place to open a technological startup.
The Real Silicon Valley
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Re: The Real Silicon Valley
#42Why be depressed? If you are young and a programmer making 100K at 25, party with your hipster friends and sock away 40K in savings every year. You'll end up with 200K by 30, not a cool billion dollar but with 6% muni-bonds, you suddenly have tax-free interest income of equivalent of $1.2 million at regular 1% CD rate. Work on interesting projects that you want to work on. Do some traveling. Go back to grad school fo…
If you think success will cure depression, your youthful inexperience is showing.
Maybe off topic here, but there is a song that is popular out here in Texas that makes a useful observation (fame don't take away the pain, it just pays the bills): http://www.youtube.com/watch?v=tBjxmJIRnS8
Re: The Real Silicon Valley
#43Earlier quoted context omitted.
Everyone knows startups are not the optimal economically rational way to make money. But to an entrepreneur, living off 6% muni bond interest is profoundly uninteresting, and dare I say soul crushing. Repeat after me: If you think it's only about the money, you're missing the point. And even if it is all about the money, most 25 year olds would jump at a 1% chance to make $10 million over a $100% chance to make $200K…
Better way to make money is to take out a personal loan for 100K, same opportunity cost of two years of programmer-salary on startups. Buy out of the money options on small-cap pharmacuetical facing FDA decisions, you have the ability to also make $10 million overnight with 30% success. Go for insider-tips to max out on your success.
Wouldn't the insider tips be illegal insider trading?
Re: The Real Silicon Valley
#44Why be depressed? If you are young and a programmer making 100K at 25, party with your hipster friends and sock away 40K in savings every year. You'll end up with 200K by 30, not a cool billion dollar but with 6% muni-bonds, you suddenly have tax-free interest income of equivalent of $1.2 million at regular 1% CD rate. Work on interesting projects that you want to work on. Do some traveling. Go back to grad school fo…
Nobody has mentioned taxes yet.
I assume your "making 100K" is the salary. The pre-tax salary. Taxes will chop that pretty much in half. So if you save $40K/year, you get to live off of $10k in the second most expensive MSA in the US. Good luck.
Re: The Real Silicon Valley
#45You need to update the photo before you speak about SV..SV !== San Francisco
Re: The Real Silicon Valley
#46Earlier quoted context omitted.
It's not that 99% fail, it's that well over 99% of participants fail to hit a $1m payout. Top founders and early VC, as well as key executive hires, may win. For staff, including early engineering hires, "a good year" is a more likely outcome, after 2-6 years, or more, of sweat equity. Payout of 5-6 figures.
Assuming this is referring to founders. If you're an employee, you're the engineer making $100K in OP's comment.
> "If you're an employee, you're the engineer making $100K in OP's comment."
Except when you're not. I can't count how many times people I've met have been suckered into taking substantial pay cuts for not a lot of equity.
It's a real facepalm moment - what do you mean you're giving up $40K+ a year in salary. Did you know that even if your startup hits all of its wildest dreams you'll cash out for $80-100K after about 5 years? How in the world did that math ever make sense?!
I flat out refuse to talk to any founders that try to swindle people like this. Either put more equity on the table or pay me market. Quit relying on a tired lie.
Re: The Real Silicon Valley
#47Earlier quoted context omitted.
Where can you buy muni bonds that earn 6%? Most of the muni bonds yields I've found online are in the 3.5-4% range. That is unless you're talking about the city of Detroit (which is flirting with bankruptcy) that pays 7% plus and is riskier imho than doing a startup. http://blogs.marketwatch.com/fundmastery/2010/03/12/goldman-...
Found some Mass. bonds (because it's my home state, so tax-free for both federal and state) yielding 6.43% just now, with expiration date of 2029-05-01 and with credit rating of AA+ http://massachusetts.municipalbonds.com/bonds/issue/914440KJ... . Also can also buy some REITs with annual high-dividend yield of 17% such as AGNC or NLY. These are a bit riskier due to fluctuating principal out on the open equity market.…
I can't see the details on this because I'm not going to set up an account, but in general don't believe the yield; you want to see the yield-to-worst.
http://www.forbes.com/sites/rickferri/2012/07/19/the-yield-t...
Re: The Real Silicon Valley
#48Jesse, I completely feel your pain. I moved up to San Francisco the previous June with the grand vision of building out my team, raising a round of investment and building my PaaS for hosting node.js apps (NodeSocket) to something really special. I left a cushy director level job in San Diego and left a core group of good friends as well. I simply packed up everything in my car and made the drive up. The first couple…
Why move to San Francisco? One of the benefits of living in this day and age is that you can start a business from pretty much anywhere in the world. Sure, it is presumably easier to acquire VC, talent and deal with general logistics if you're located in the valley but still... It's pretty obvious that leaving your job, friends, moving to a different city and living off your savings is a high risk move vs staying where you are and working from there. Not knocking you or anything (I don't know your entire story), I'm just saying.
If I were to start a company now, I'd probably stay right where I am and keep my job until I saw a level of success with my new project.
Re: The Real Silicon Valley
#49Why be depressed? If you are young and a programmer making 100K at 25, party with your hipster friends and sock away 40K in savings every year. You'll end up with 200K by 30, not a cool billion dollar but with 6% muni-bonds, you suddenly have tax-free interest income of equivalent of $1.2 million at regular 1% CD rate. Work on interesting projects that you want to work on. Do some traveling. Go back to grad school fo…
Nobody has mentioned taxes yet. I assume your "making 100K" is the salary. The pre-tax salary. Taxes will chop that pretty much in half. So if you save $40K/year, you get to live off of $10k in the second most expensive MSA in the US. Good luck.
You and I are looking at different marginal tax rate tables if you're talking about US income tax.
Re: The Real Silicon Valley
#50Why be depressed? If you are young and a programmer making 100K at 25, party with your hipster friends and sock away 40K in savings every year. You'll end up with 200K by 30, not a cool billion dollar but with 6% muni-bonds, you suddenly have tax-free interest income of equivalent of $1.2 million at regular 1% CD rate. Work on interesting projects that you want to work on. Do some traveling. Go back to grad school fo…
Nobody has mentioned taxes yet. I assume your "making 100K" is the salary. The pre-tax salary. Taxes will chop that pretty much in half. So if you save $40K/year, you get to live off of $10k in the second most expensive MSA in the US. Good luck.
This is way overly pessimistic. At 100k total taxes (Federal+CA+SS+Medicare) are in the 30% range. That leaves 30k to spend (not too hard for a single 25 year old assuming you don't have lots of student loans, even in SF) and 40k to save.
And this ignores tax-advantaged savings