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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

#191

Post by bjornsing »

charlesdm wrote: post #179
bjornsing wrote: post #51

> Disclaimer: I acknowledge that I’ve been very privileged, especially in the educational opportunities I’ve had. This might sound reasonable from a US-centric perspective, but to me it reads like utter nonsense. The main privilege here is access to the US labor market and tax policy. There are no stories like this one where I live (in Sweden). Absolutely none.

Most self employed in Europe have access to similar tax policies. You could think about and approach things differently to attain a similar result. I live in Belgium with similar high income tax rates to Sweden, but I know quite a few people that I grew up with who have done very well. Better than his story. All mid 30s and all came from nothing. Even as an employee. No excuses, man. These stories might not be listed…

You know people in Belgium who make $600k a year as employed software engineers? Yea, sure...

In Sweden you can incorporate and work as a consultant. That lets you accumulate capital on the corporate side of the tax barrier so to speak. But the tax authorities can show up at any time, claim that your one man company is “overcapitalized” and force you to pay income taxes on your earnings.

Re: My Path to Financial Independence as a Software Engineer

#192

Post by ahelwer »

Retric wrote: post #7
gmanis wrote: post #3

Very well done. The best part is that a modest 4% return on net worth/investments will yield about 100k a year which is a very good amount for most people.

Living off 4% works in retirement because you can in part live off principle. In early retirement it’s not going to work out nearly as well because you get the reverse of dollar cost averaging, removing money in down markets is more expensive than in good ones. You need either dramatically reduce spending when your portfolio is down or to live well below the expected returns.

The straightforward 4% analysis is a simplification. It’s pretty easy (and pleasant, even) to do independent contracting for a couple months of the year and cover almost all your living expenses - so no or very little withdrawal. Since you have lots of leisure time to explore your interests, you can also get lucrative niche-of-niche contracts in your specialty.

Re: My Path to Financial Independence as a Software Engineer

#193

Post by deanmoriarty »

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, because they were born with massive talents that, through sacrifices and education, they transformed into life achievements.

As an average software engineer I was not lucky enough to be born with cognitive skills that will ever allow me to reach those technical highs, but that is not a reason to crap on it saying “Just luck! Just genetic/environmental luck!”.

Similarly, I don’t typically read from others: “It’s easy for you to rewrite the Linux kernel in JavaScript over a weekend, your work is just luck because you were born a genius in a developed country so all your achievements need to be discounted and you have no merits!”.

I suspect when it comes to compensation talk people tend on average to get more bitter than they should otherwise be.

Maybe I take this to heart because I made significant sacrifices to immigrate to the US and, while I was immensely lucky to succeed in the endeavor, most people I know would have never taken those uncomfortable steps (leaving family behind in a different country, sacrifice personal space by frugal living in a HCOL area as opposed to a LCOL area with a house and backyard for the kids, …), yet they will happily “complain” that my compensation is much higher than theirs, and that there is no merit to it, 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.

If I was reading this article and I was not a tech worker in the US but interested in getting those compensations, my first reaction would be “damn, let me research what are the options for legal immigration to the US and let me start down a path that has good odds of me landing a tech job over there within 5-10 years”. It would not be “let me complain on HN how the country I am a forever-prisoner in has a 90% effective tax rate so that I feel good about my situation”.

Re: My Path to Financial Independence as a Software Engineer

#194

Post by Invictus0 »

bjornsing wrote: post #51

> Disclaimer: I acknowledge that I’ve been very privileged, especially in the educational opportunities I’ve had. This might sound reasonable from a US-centric perspective, but to me it reads like utter nonsense. The main privilege here is access to the US labor market and tax policy. There are no stories like this one where I live (in Sweden). Absolutely none.

Just move then, your feet aren't bolted to the ground.

Re: My Path to Financial Independence as a Software Engineer

#195

Post by debbiedowner »

When I look at his constantly increasing income I just think I would rather spend the money on a super good easy life and other people knowing there'll always be more.

I feel like living within your means makes sense both ways. Don't obsess materially and go into debt. But also don't obsess about the future enough to sacrifice the best possible present for yourself.

Re: My Path to Financial Independence as a Software Engineer

#196

Post by martincmartin »

refurb wrote: post #184
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.

The biggest expense is college, at least in the U.S. If you retire before they apply, you may want to be conservative and set aside the cost of the most expensive college. MIT is $77k/year [1]. For two kids, that's $616k. And it increases faster than inflation, estimate 6%/yr. If you have enough money in the bank that you're financially independent, they won't qualify for need based aid, you'll have to pay the sticker price.

Columbia is more expensive.

And if one of them wants to become a doctor or lawyer, now you need to pay for grad school too.

[1] https://sfs.mit.edu/billing-repayment/undergraduate-tuition-...

Re: My Path to Financial Independence as a Software Engineer

#197

Post by garmaine »

bjornsing wrote: post #51

> Disclaimer: I acknowledge that I’ve been very privileged, especially in the educational opportunities I’ve had. This might sound reasonable from a US-centric perspective, but to me it reads like utter nonsense. The main privilege here is access to the US labor market and tax policy. There are no stories like this one where I live (in Sweden). Absolutely none.

Markus Persson?

Re: My Path to Financial Independence as a Software Engineer

#199

Post by garmaine »

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…

> Students also have lots of debt over the past decade (15k on average)

Those are amateur numbers. -USA

Re: My Path to Financial Independence as a Software Engineer

#200

Post by charlesdm »

bjornsing wrote: post #191
charlesdm wrote: post #179

Earlier quoted context omitted.

Most self employed in Europe have access to similar tax policies. You could think about and approach things differently to attain a similar result. I live in Belgium with similar high income tax rates to Sweden, but I know quite a few people that I grew up with who have done very well. Better than his story. All mid 30s and all came from nothing. Even as an employee. No excuses, man. These stories might not be listed…

You know people in Belgium who make $600k a year as employed software engineers? Yea, sure... In Sweden you can incorporate and work as a consultant. That lets you accumulate capital on the corporate side of the tax barrier so to speak. But the tax authorities can show up at any time, claim that your one man company is “overcapitalized” and force you to pay income taxes on your earnings.

You can't just work your way to wealth. You need to reinvest what you make into other assets and let them compound...

That said, I know self employed developers making 150-200k (EUR) gross per year as contractors. But I also know employees that get allocated a few 100k/year in stock options as part of their compensation.

Yes, you do need to be exceptional. And you need to be smart in the choices you make. I thought that was a given, since millions of dollars don't just come falling from the sky.

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