I've more or less followed this advice, and it's worked out for me. For the most part, I used my salary to pay for expenses and stock compensation to build up wealth.
The tricky part is that a lot of this advice is situation-dependent. Should you switch to a riskier company that offers a higher compensation? Sometimes yes, sometimes no. Should you work late to accomplish goals hoping to get a promotion? It depends.
So how are we supposed to know what to do?
The answer, in my opinion, is people. You have to trust people who are trustworthy and avoid people who are not. As an employee, your success depends on the people who hired you--they are the ones who can promote you or cheat you. The best leaders are the ones who realize that helping you advance is going to help them advance. Help your boss accomplish their corporate goals and they will promote you--not as a reward, but as a bet that you will help them on the next goal.
Bad leaders are either too selfish (fail to promote you) or too incompetent (unable to rise, even with your help). You need to learn to avoid them.
Therefore, my advice is this: Look at the leaders in your company--people who could plausibly hire you. Which ones are the best bets? Which ones have both the talent and the integrity to succeed? If you're lucky there's more than one and you can work to get on their team. If you're unlucky, there are none and you need to find a different company.
I put half in a basket of tech stock (QQQ, etc.) the other half in buying a house. I am not an expert, so don't take my investment advice--do your own research.
Disclaimer: I am not qualified to give investment advice, I’m just an average tech worker who spent some amount of time on bogleheads forums.
I personally don’t invest more in tech than I need to via broad index funds (and I certainly never keep my RSUs in the company stock, I always sell immediately). Otherwise, if there is a sector-wide downturn, I’d be triple exposed - my paycheck, my tech investments, and my company stock. That seems like a lot of risk to take on.
A. Guaranteed $1,000 each month
B. Every month, flip a coin. Heads gains $5,000, tails you lose $1,000.
Obviously B has greater expected return, but losing $1,000 hurts. What if you can't pay the rent that month?
To me, that's SPY vs. QQQ. Tech in general has higher expected return, but more volatility. If you can handle the volatility, then QQQ is better. If not, then not.
Ultimately, I'm taking a bet on tech because I believe tech has the greatest chance of improving the economy/world.
Problem with this is that this can get you to 1-5 million in net worth (declining fast, someone joining a FANG now certainly won't make it as a single contributor to 5 million, unless they're truly exceptional) (of course 5 million effectively pays you a relatively high level FANG salary just from 4% safe investments ...)
Maybe you can get to 50 million with a reasonable management career.
But let's say you're on this path and you have 3 million or so, at 35/40 years ... then what? Management at all costs? No reasonable job at a FANG will get you to even just double what you have at that point.
If you have $5 million USD wealth you're in the top 5% of the US (and top 0.5% of the world).
If you cannot have a happy life on that, well...
But I get it--if your goal is to accumulate more wealth (no judgement--that's a legit goal) then it gets harder. When I was at Microsoft, partner-level engineers were making $1 million per year; now it's probably $2 million. Staff-engineer at FAANG is probably similar, I bet, to say nothing of the AI labs. I bet you could reach $25 million after 10 years with the right investment strategy. And $25 million throws off at least $1.25 million per year if you invest right.
Beyond that, you probably do need a startup or some other significant ownership stake.
I know these are just spit-balled numbers but getting to $25M in 10 years even with $2M annual comp would require pretty risky investment I think. Assuming you spent $300K per year and paid US taxes you’d have about $900K left over. 7% average returns would mean you’d have about $13M saved after 10 years. Getting more than 7% on the whole portfolio is going to require significant risk.
I'm not sure that's quite feasible. 2-2.5M in 10 years is about the best I've seen excluding getting reasonably lucky with major stock jumps. You could juice that a bit further with really aggressive savings, but for most people, you're looking at 4-5M in income pre tax over that 10-12 year period (maybe a bit higher), weighted mostly toward the end, so without a ton of time for market gains to help.
What's weird about this article is none of it is technically wrong: "Become a cheetah(super at ___)", "Aspire and engage to be better", "Build 6 types of capital". They are not bad things to do, if you can: and that is what it misses, if you can.
But don't feel bad if you have not been able to do any of them, e.g. Most People with kids can often do very little than job and take care of kids and that's it. What is more important is to not beat yourself up about it, give yourself grace and do one or two things that make you and your near and dear people/pets happy.
I skipped most of the stuff described in the article and just invested most of my salary into index ETFs. Mostly because I hate work much more than I like buying stuff.
I'm a "career person" and expect to retire soon in my late forties. The blog's advice is generally on point, but IMHO places too much emphasis on busting ass to play the career game. There are easier ways to win, and here's my secret sauce:
* Get a job at a successful listed tech company (not a startup) that issues RSUs.
* Get promoted to senior level but no higher (too much responsibility, poor work life balance, exposure to office politics)
* Move to a low tax jurisdiction like Dubai, Hong Kong or Singapore, at least long enough to build a serious nest egg (several million).
* Live significantly below your means: I aimed to save & invest half my income. You'll still live a good life because these countries have vast income inequality and services are cheap.
* Find a partner who shares your values.
Not saying this is easy or even possible for many, but it worked for me.
One thing - your expenses will ALWAYS somewhow expand to your income. We see our current income as somehow the steady state long term norm. I would do your absolute best to hide extra income from your day to day self and invisibly invest it in a way you don’t even think about
And when you get a windfall (stock grants, acquisitions, etc) unless it’s truly life changing money where you never have to work again, find a good investor (CFP) to manage so you’re not even thinking about it. Or invest it in some future liability like college expenses, home down payment, retirement, etc.
I used to think this and then it stopped expanding. I have very low needs. Just enough for healthy food and some tennis equipment and I'm happy.
It got to the point where I was earning much more than I could justify spending so I decided to change careers for something that optimised for lifestyle over money and now I'm much happier.
People think that more money = more happiness, but I'd say that you need more money when you're unhappy. Money buys comfort but not happiness. Ironically when you're happier you need less money.
Personality and habit. For me, being a graduate student for 7 years (masters then PhD) forced me to live simply. Those habits stuck with me through the next decade of good salaries. My spending went up from graduate student poverty, but I still saved and invested 50% to 70% of gross income. Now I probably have more than a lot of peers who started working well before me, but didn't save as much.
To your point, pay yourself first. Set up automatic investments. Find a fiduciary advisor if you must, but it's really not rocket science.
I'd add or emphasize being strategic about which roles within an organization are rewarded. These are usually roles with very clearly attributable impact to top-line or bottom-line metrics.
Much enablement, unblocking, capability-based, or risk reduction work is very difficult to interpret for the business decision-makers.
This is one of the best, boiled down, to-the-point, common sense articles I've read on this topic that everyone should understand but so many don't. I'm going to have my kids read this.
I know two engineers who worked their way to becoming centi-millionaires. One worked for the same company his entire life. Another looked at every job as feeding a 'system' of a) co-workers; b) clients; c) the economy.
Probably the single best take-away from the article is to never stop learning. I also like the tip about keep networking and building relationships.
Damn, brutally true. If you've seen it, you've seen it, it plays out exactly as written here. Taking it as advice doesn't put you on their level though, their gift is incredible instinct hence why they do everything here without it.
I've got to admit, the most difficult part of saving money is that first you need to be able to comfortably afford your basic expenses, in particular, housing.
No, the most difficult part is it's so easy to want to live beyond your means. Take a look around your city. If it's anything like mine, you will find people who are working fast food jobs and you'll find other people who are both are doctors making over half a million dollars a year and yet, at the end of the month, both are having troubles finding enough money to pay all the bills. Unless you are at the very bottom of that, you are already living beyond what need. I don't blame you for wanting more, but be honest, you are spending more money than you need to.
It requires relatively no effort just discipline for anyone to save money and live within their means. yet, most don’t most always have an excuse. Within the design and engineering department that I worked in more than half of the people did not save always had an excuse even before they were married and had kids.
Just setting aside 25% over time adds up to a sizable amount.
25% is a huge amount. Yes, it adds up. Over time, you don't get me wrong. But you need to ask, should you do that much?
Everyone will die, despite great medical advances over the past century. Someone who lives past 5 and doesn't die in childbirth, or an accident - only got a couple years of life expectancy. You should be thinking of saving money as this is something we're going to spend in the future. The goal is not to get the most money on paper. The goal is to... Well, you figure out your own goals. I don't know the right answer for you, but to try and enjoy life with the money you make.
Most people don't have that discipline. If you asked the average person to "just" save 25% of their earnings, they'd look at you like you had two heads.
The downside of following this kind of advice is that you have to spend a lot of time thinking and strategizing about stuff that is generally pretty
boring.
but I think there is a crowd that rejects too many of the basics at their own detriment. yes, getting work, highly valued work, still helps and helps waaay more reliably for a broader population than other methods, but its just a step. So you still need to do that, You also need to parlay earnings into wealth producing assets, assets that also have their own independent value that is intended to grow.
The marxists are correct there is the wage earning class and also the ownership class
They are incorrect in that there is no strict separation of the two.
Anyone in tech can easily enter the ownership class. American assets are exceptionally cheap for what they are. It's very easy to purchase asset producing goods, whether that be businesses or real estate.
The ownership class matter because a worker exchanges time for money. Time is finite. Ownership is not.
A career is a quick and low volatility way towards ownership. You owe no loyalty to any company or any manager. Only owe loyalty to your friends, family, and the financial assets you own. These things reflect on you. Your job is just a distraction.
> American assets are exceptionally cheap for what they are. It's very easy to purchase asset producing goods, whether that be businesses or real estate.
I agree with a lot of your post, but I don't think this is true anymore. Real-estate is pretty much at the maximum price the population can pay for it. We'll never see a rise like we did from the boomer generation until now in real-estate again. I also think most businesses don't make much money, at least small businesses.
> There is a popular idea that substantial wealth belongs mainly to entrepreneurs.
This is probably because 24yo college dropouts are achieving billion dollar valuations after 12 months of work. Their secondary sales are worth more than following all the advice in this article will be for your entire life.
(To say nothing of NVDA, SpaceX, or other big tech acquiring them and making their billions liquid, despite no moat or profitability, just because they have so much money and need to spend it on something.)
No matter how much “grit” you have, you’re still at the mercy of such people, as e.g. the engineers at Windsurf were, who worked super hard but their founders sold to Google, walked away with hundreds of millions, and gave the employees nothing.
Of course, it depends on your meaning of “substantial”. Successful engineers have great wealth too, enough that they can be very happy and buy anything they want. But pretending the two levels are comparable is silly.
This is all good advice... but just browsing X, the salaries folks are pulling down give me incredible FOMO.. early 20s already achieving generational wealth just spending 1-2 years in the right startup or frontier lab.
..and this doesn't include hustlers in Dubai or some other tax haven earning six figures a month doing various schemes.
There’s always been lottery tickets. If this causes you to lose sleep you need to take a step back and reconsider some things. Either learn to cope or become more risk tolerant. I mean this in the most genuine and whole hearted way possible as an engineer on the second half of a career.
These are glorified exceptions and not the norm. Hell, there's no telling what the reality is vs some randos post. But I hear ya, it's hard not to feel the fomo. I do too as a 40y/o that's been in tech obsessively my entire life and hardly have the monetary worth to show for the effort by comparison.
If you have generational wealth you can spend all your time traveling, hanging out with people no matter where they are in the world, having new experiences and just generally encounter way more there is to the world than you ever could working 60 hours a week for minimum wage in your hometown. You never have to worry about expenses for anything, you can hire maids and other professionals to take care of other things that would otherwise take up your time. Almost every single woman you ever meet likely will try to get in on it so if you want to casually have a lot of sex with beautiful women you can do that too. You are given a strong preference socially in any setting you meet others. If you have a health problem you can see your genius concierge physician who will personally try to help you the best you can be helped. You don't have to wait 6 weeks for an x-ray or CT scan on a cancerous tumor that can switch from stage 3 to 4 right in that time period.
It's really not even comparable to the life that normal people have. It's really sad.
The tricky part is that a lot of this advice is situation-dependent. Should you switch to a riskier company that offers a higher compensation? Sometimes yes, sometimes no. Should you work late to accomplish goals hoping to get a promotion? It depends.
So how are we supposed to know what to do?
The answer, in my opinion, is people. You have to trust people who are trustworthy and avoid people who are not. As an employee, your success depends on the people who hired you--they are the ones who can promote you or cheat you. The best leaders are the ones who realize that helping you advance is going to help them advance. Help your boss accomplish their corporate goals and they will promote you--not as a reward, but as a bet that you will help them on the next goal.
Bad leaders are either too selfish (fail to promote you) or too incompetent (unable to rise, even with your help). You need to learn to avoid them.
Therefore, my advice is this: Look at the leaders in your company--people who could plausibly hire you. Which ones are the best bets? Which ones have both the talent and the integrity to succeed? If you're lucky there's more than one and you can work to get on their team. If you're unlucky, there are none and you need to find a different company.
I personally don’t invest more in tech than I need to via broad index funds (and I certainly never keep my RSUs in the company stock, I always sell immediately). Otherwise, if there is a sector-wide downturn, I’d be triple exposed - my paycheck, my tech investments, and my company stock. That seems like a lot of risk to take on.
I’m open to other opinions here.
To me, that's SPY vs. QQQ. Tech in general has higher expected return, but more volatility. If you can handle the volatility, then QQQ is better. If not, then not.
Ultimately, I'm taking a bet on tech because I believe tech has the greatest chance of improving the economy/world.
[I'm also not qualified, so do your own research]
Maybe you can get to 50 million with a reasonable management career.
But let's say you're on this path and you have 3 million or so, at 35/40 years ... then what? Management at all costs? No reasonable job at a FANG will get you to even just double what you have at that point.
If you cannot have a happy life on that, well...
But I get it--if your goal is to accumulate more wealth (no judgement--that's a legit goal) then it gets harder. When I was at Microsoft, partner-level engineers were making $1 million per year; now it's probably $2 million. Staff-engineer at FAANG is probably similar, I bet, to say nothing of the AI labs. I bet you could reach $25 million after 10 years with the right investment strategy. And $25 million throws off at least $1.25 million per year if you invest right.
Beyond that, you probably do need a startup or some other significant ownership stake.
That would be what I'm trying to avoid.
But don't feel bad if you have not been able to do any of them, e.g. Most People with kids can often do very little than job and take care of kids and that's it. What is more important is to not beat yourself up about it, give yourself grace and do one or two things that make you and your near and dear people/pets happy.
Kissing ass at work might help you but not nearly as much as this two ideas.
* Get a job at a successful listed tech company (not a startup) that issues RSUs.
* Get promoted to senior level but no higher (too much responsibility, poor work life balance, exposure to office politics)
* Move to a low tax jurisdiction like Dubai, Hong Kong or Singapore, at least long enough to build a serious nest egg (several million).
* Live significantly below your means: I aimed to save & invest half my income. You'll still live a good life because these countries have vast income inequality and services are cheap.
* Find a partner who shares your values.
Not saying this is easy or even possible for many, but it worked for me.
And when you get a windfall (stock grants, acquisitions, etc) unless it’s truly life changing money where you never have to work again, find a good investor (CFP) to manage so you’re not even thinking about it. Or invest it in some future liability like college expenses, home down payment, retirement, etc.
To your point, pay yourself first. Set up automatic investments. Find a fiduciary advisor if you must, but it's really not rocket science.
1. Alimony
2. Child support
Much enablement, unblocking, capability-based, or risk reduction work is very difficult to interpret for the business decision-makers.
Specifically pieces about how to be valuable in a pragmatic and honest way.
Probably the single best take-away from the article is to never stop learning. I also like the tip about keep networking and building relationships.
Don’t you mean hecto-millionaires? Otherwise it’s not so impressive. ;)
> A centi-millionaire (or hundred millionaire) is an individual with a net worth or liquid investable assets of USD $100 million or greater.
I thought they might be a centillionaire, but that's a 1 followed by 303 or 600 zeroes (?!), depending on the numeric system used.
The employer doesn't do it.
Doing the day job is priority #2. Many do not fully understand this late into their career.
By then it is too late and late stage health problems start due to stress.
If you live anywhere in the developed world, and you are reasonably able bodied, you can certainly save sufficient money for your long term needs.
there is maybe 1% of the population who can't do it, for everyone else it's a choice.
Just setting aside 25% over time adds up to a sizable amount.
Everyone will die, despite great medical advances over the past century. Someone who lives past 5 and doesn't die in childbirth, or an accident - only got a couple years of life expectancy. You should be thinking of saving money as this is something we're going to spend in the future. The goal is not to get the most money on paper. The goal is to... Well, you figure out your own goals. I don't know the right answer for you, but to try and enjoy life with the money you make.
Otherwise you end up with what's called lifestyle creep, if you leave it into your bank account you will always find something to spend it on.
It does depend a bit on how much money you were making, but I'd guess it applies to most here.
but I think there is a crowd that rejects too many of the basics at their own detriment. yes, getting work, highly valued work, still helps and helps waaay more reliably for a broader population than other methods, but its just a step. So you still need to do that, You also need to parlay earnings into wealth producing assets, assets that also have their own independent value that is intended to grow.
They are incorrect in that there is no strict separation of the two.
Anyone in tech can easily enter the ownership class. American assets are exceptionally cheap for what they are. It's very easy to purchase asset producing goods, whether that be businesses or real estate.
The ownership class matter because a worker exchanges time for money. Time is finite. Ownership is not.
A career is a quick and low volatility way towards ownership. You owe no loyalty to any company or any manager. Only owe loyalty to your friends, family, and the financial assets you own. These things reflect on you. Your job is just a distraction.
I agree with a lot of your post, but I don't think this is true anymore. Real-estate is pretty much at the maximum price the population can pay for it. We'll never see a rise like we did from the boomer generation until now in real-estate again. I also think most businesses don't make much money, at least small businesses.
> There is a popular idea that substantial wealth belongs mainly to entrepreneurs.
This is probably because 24yo college dropouts are achieving billion dollar valuations after 12 months of work. Their secondary sales are worth more than following all the advice in this article will be for your entire life.
(To say nothing of NVDA, SpaceX, or other big tech acquiring them and making their billions liquid, despite no moat or profitability, just because they have so much money and need to spend it on something.)
No matter how much “grit” you have, you’re still at the mercy of such people, as e.g. the engineers at Windsurf were, who worked super hard but their founders sold to Google, walked away with hundreds of millions, and gave the employees nothing.
Of course, it depends on your meaning of “substantial”. Successful engineers have great wealth too, enough that they can be very happy and buy anything they want. But pretending the two levels are comparable is silly.
..and this doesn't include hustlers in Dubai or some other tax haven earning six figures a month doing various schemes.
Why am I wasting my life?
Go after the achievable P75-P90 that's within your power.
It's really not even comparable to the life that normal people have. It's really sad.