I do think this is stupid on the surface, but better overall for the economy.
If people have the ability to make things themselves and build a business, then should pursue this under the banner of providing greater choice to consumers.
Particularly if the entire industry is bifurcating between a few enormous, ossifying tech conglomerates.
I’m going all in on independence, and I’m going to try to make a living with my own bare hands starting from nothing.
500k/year in your last year is "nothing", huh? It really undercuts the entire thrust of the post, because you're starting with a nice big war chest and a hell of a safety net, not "nothing".
Yes, I saved a lot. About $1M in liquid assets. But I meant that I'll start with no income, no product, no business. I'll write another post about how I set up my safety net.
Someone used to spending ~500k a year is not going to want the quality of life change of moving to 40k a year income. Their family would also not appreciate it.
The best thing I ever did for the family budget is work out a plan ahead of time for windfall money. Odds are OP will never make this much money again. Spending like this is the new normal is how rock stars and athletes end up broke at 40. You have to get out ahead of it.
Since OP has a million saved I’m going to assume they had a similar plan in place. But. $150k a year with young kids (they haven’t begun to get expensive yet) in Seattle is pretty high. Getting that down is a good deal of effort that will distract from running the business.
>>Odds are OP will never make this much money again.
I hope these kind of things are taught to people early. Somewhere in school, or may be at a level of a social value system. The default every day mode for most people is to work very hard and fail. In fact you are lucky to achieve mediocre success even after working insanely hard.
>>The best thing I ever did for the family budget is work out a plan ahead of time for windfall money.
Yes the best thing to do in case of a windfall period is to take all the money and put it into some kind of an investment. So that when the gravy train stops, you have something to fall back on.
>>Spending like this is the new normal is how rock stars and athletes end up broke at 40. You have to get out ahead of it.
It isn't just rock stars and athletes, its your every day cousins and uncles, who have some career run, spend like no tomorrow, when the gravy train stops, they realize they have their best years behind them, all their money is gone, and nothing that they can do will help them even get by, let alone take them back to their past glory.
>>$150k a year with young kids (they haven’t begun to get expensive yet) in Seattle is pretty high. Getting that down is a good deal of effort that will distract from running the business.
A lot of people will be willing to show sympathy to you if you met with an accident and bad things happened to you beyond you control. But if you threw away a perfectly fine opportunity and asked them to settle for less, they would be asking why should they even be doing it at all.
True. It's hard to regress on the standard of living, especially with a family. I wasn't spending $500K/year though :) I still made sure I abundantly lived within my means.
Perhaps, he was earning 500k but not spending that much. 500k would give you around 300k after tax. Half of 300k can easily be spent in order to have normal life.
Author here. My expenses are more like $150K a year, so my runway is only a few years. I have a family, two small kids (4 and 2), and live a comfortable life in Seattle. I could obviously adjust my standard of living, move somewhere cheaper, etc, but I didn't want my family to have to change anything from this experiment I'm doing with my life.
I understand you here. I just quit a financial startup. My runway is more than 10 years because I only have to take care my mother (Yeah, Single forever!). The real issue is mental health, that would lead to physical health if not aware!
I do. Got a $5M life insurance, and disability insurance that pays $10K/month if I can't do my work anymore. Got a high deductible health insurance through the ACA exchange. Life and disability insurance were quite cheap actually: about $3K/year in total (age 35 and good health). Health insurance is obviously expensive. The cheapest is about $14K/year here in WA for a family of four (which is what I got). Deductible is about $7/$14K IIRC.
> The cheapest is about $14K/year here in WA for a family of four (which is what I got). Deductible is about $7/$14K IIRC.
Just think, you need to have $21k in medical receipts before you can even break even. ACA is such a joke and yet many people in our society believe MORE "free" healthcare will drive prices (ie. taxes) lower.
What kind of skill sets do you have to warrant Amazon paying you that much? What kind of skill sets do developers have at this level that differentiates them from everyone else?
Amazon’s stock has gone up a lot. Likely that has a lot to do with it but if this is all base salary that’s awesome.
Usually big stock grants go out to those who have shown themselves to be force multipliers. If you can make everyone around you more productive than you’re contributing in ways that make companies like to put golden handcuffs on you.
Good for you! Honestly I don’t understand the criticism on one sentence of your post and it made sense to me.
“Now that I have some runway I’m going to build something from scratch”? Probably wouldn’t satisfy those that could only dream to make $500k and are frustrated you don’t appreciate it I guess.
I’m not making that much but your post makes sense and resonated with me.
The problem is the wording. Author makes it sound like they'll be pulling themselves up by their bootstraps when they're really just standing on a giant pile of money (which they earned rather than inherited, to be fair). People have a very negative reaction to this because they see it way too often in the rhetoric of certain political groups.
I know you're looking for attention or validation, but I have a feeling you'll probably get more negative attention than positive when you seem to be equating having $1M in liquid assets to "starting with no income, no product, no business".
You are correct! But the way you phrased it makes it sound like you are experiencing a hardship, which I think most would disagree with. Don't get me wrong, I think you should be proud, you clearly did a lot to earn your savings, but you're trying to make it sound like retiring young with $1M in liquid assets part is the difficult part when its probably the easy part. You don't have to work for a very long time, or at all!
Not at all. I live a very comfortable life and I don't expect it to change. Wasn't my intention to make it sound like hardship. But I don't have infinite runway, so I do have to make something.
Unless that $1M is stuffed under your mattress, you likely have some income from is. Even sitting in a CD at 2% you'll be pulling in $20k/year - that's not "no income".
What I think you mean is you don't have steady W2 income from an employer.
I would much prefer reading a post about quitting to do something off your own, or just about setting up your own thing, without the money angle.
A different post would inspire me to try too. A post like this one makes me sad to be less privileged.
And I'm not saying that to make you feel bad or anything. People have different circumstances and make different choices for themselves, some biased by the circumstances and some not. I'm just saying it as a consumer of a text. Just throwing my opinion with no expectations of anyone catching it.
I mean, savings accts are paying 2.2 percent right now, and while it's a drop in the bucket compared to senior developer wages at AMZN, you're looking at 20k in interest accrued annually, which is basically what each of my parents live on in middle America.
Depending on where you live, who you support (or are supported by), and how capital intensive your independent business is, that could be plenty. Plus, you've already got a book deal worked into the business plan it seems.
You can easily make in interest what many people make in salary. Please just drop the "starting with nothing" part of your story. No one ever has viewed $1M as "starting with nothing".
> "starting with no income, no product, no business".
Getting a sustainable business is not easy. Lots of groups don’t get there with $10’s of millions in venture capital. So from a business prospective he is starting with nothing but does have a personal safety cushion.
$20k a year in interest after taxes if he’s not a complete moron. I could survive on around $45k a year (including health insurance) so I could putter for a long time before I had to deliver something.
But domain knowledge and contacts will probably be the biggest assets OP turns out to possess. Don’t undersell those.
I have 80%+ in short term US treasuries and CDs (the rest in some stocks that I've held for a long time). I have no interest in the upside of the stock market right now. I'm already doing something speculative myself.
If you're working out a budget to allow you to quit your day job you'd better have all of the numbers in post-tax dollars or you're gonna have a bad time.
Good luck. Cautionary tale: I have a buddy that was in a similar situation (more than $1M actually). He started a business, was careful, and after a few years went bankrupt because the business never gained traction. He sure wishes he hadn’t gone down that path. He’ll probably never get back to where he was. Just a regular developer now. If you ask him if the experience was worth it, he’d tell you no. So be careful.
I did something similar 4 years ago. It was the best decision I have ever made. I did consultancy, sold myself cheap compared to the big consulting companies and helped several startups becoming real businesses. I loved it, every day was awesome!
Even though I sold myself cheap, I still made more money that the salary I would get if I had worked for the big consulting companies. The biggest challenge is selling yourself, and I am not very good at it. Still it worked out great for 2 years until I joined a startup as the first employee which has gone from 3 to 100 employees in just 2 years.
If I was employed at a regular company, I would never have gotten the chance to join that startup.
$1M is nothing when you could double it in a few years.
Anyways good luck with your startup, and you can always go back, and take your quitting just as a vacation (many of my friends and I were doing the same thing, it's totally normal).
I've seen the same attitude a lot of times. "I was an investment banker for 10 years but then I moved to Colorado and became a ski bum and I couldn't be happier!" Like alright man live your life but stop acting like you discovered some dark secret that anyone can reproduce. You know you ain't out here paying student loans.
They are fortunate, then. I have known some pretty fair painters over the years--good enough to be shown in a local gallery--and they have not had trust funds. Some taught, some worked in printing production.
You see a lot of that in some odd lifestyle bloggers and media folks.
They have a bunch of money, move upstate, talk about all these crafty / cosey things they do and how great a life choice they made and contrast it with a lot of bad things .... that are the only reason they can make the choices they can now.
I’m about to downshift myself. I have no illusions how much lower my cost of living will be due to selling my big city house and needing a comparatively tiny loan for the next one.
I’m reminded regularly about a line from the Dalai Lama. When we are young we sell our health for money and when we are old we will pay anything to get it back.
My original life plan was to do this maybe 8-10 years earlier. But the startups I picked didn’t go big (I chose for impact not cash out potential), two recessions and a divorce. And I can only do this now because I have simpler tastes (except for tools).
One thing I left out that your other comment brought to mind is that I don't think the lifestyle bloggers are accomplishing anything. I do feel we're shorting ourselves by hyperfocusing on a narrow field, since innovation is quite frequently the art of applying knowledge from other domains. But I don't say it often because I've seen that proselytizing about taking a breath and engaging with your surroundings just makes people double down. It's a thing I think you have to feel to understand and lecturing people about it works against your aims.
I come at it sideways by trying to encourage people to have more hobbies or at least see the sights/local events.
It's really hard to have exactly nothing. You can have much less than nothing, through student debt, and slightly more through and savings. Even then, a college education has worth (excluding philosophy) so no money might not mean no things. In the the end, nothing is as complicated as nothing.
The point is not that he is starving, or that he is desperate. The point of that number is what he gave up!
The point is he gave up a job of 0.5 million, potentially 1 million in a few years. To top it off the job had reasonable hours, great people and he was getting positive feedback.
You would not expect people to give that up. The question is why?
Instead, you're pointing out how lucky he was. Well, that is his point! He was so lucky and is giving it up! Aren't you curious why?
> You would not expect people to give that up. The question is why?
I would absolutely expect people to give that up, as well as any senior economist student would tell you, the labor preference curve is backward-bending after you start making a certain amount of money.
> He was so lucky and is giving it up! Aren't you curious why?
Not in the slightest. There are multiple studies saying that happiness plateaus after a certain amount of income. It's his life and he probably found his own plateau.
> I would absolutely expect people to give that up, as well as any senior economist student would tell you, the labor preference curve is backward-bending after you start making a certain amount of money.
Are you sure this is a good student? The bend in the curve demonstrates the preference for incremental wealth. So you might forego $500k to $600k. Going down to $0 takes you through the steepest part of the curve.
(I guess with interest on savings, the person is going down to something like $25k-$40k.)
> There are multiple studies saying that happiness plateaus after a certain amount of income. It's his life and he probably found his own plateau.
I am not sure what you mean by "probably found his own plateau".
Do you mean he found he didn't need as much money to live?
> I am not sure what you mean by "probably found his own plateau". Do you mean he found he didn't need as much money to live?
He figured out that living on $150k (stated elsewhere) and doing his own thing 24/7 gives him more utility and satisfaction than earning $500k and working at Amazon full time.
Neither one is particularly interesting, because it's already in dream territory for most people and if you gave them a choice of living on $150k and working on their own business (an enormous safety net), most people would be happy with those options.
I would absolutely expect people to give that up, as well as any senior economist student would tell you, the labor preference curve is backward-bending after you start making a certain amount of money.
But a plateau would just mean he quit advancing. This guy didn't stop on a plateau, he stepped off a cliff. That's a pretty big difference.
Also, the people (me included) that don't question "why" are the people that would do the same if they had the opportunity.
Of course anyone can create the opportunity for themselves, and of course the income and spendings are relative, but no matter how you slice it, a half a million safety net, or even 1/10th that, is still a pretty big help to take the decision.
He didn't give anything up. He can have his job back anytime he wants it back realistically. Title should be "Quitting your 9-5 is easy, just make sure you are loaded with $$$ and have the most in demand skill set on the planet."
Please. It was perfectly obvious from context that the "nothing" he was referring to was his "new thing". No product, no customers, no brand, no marketing, no customer discovery, etc... that's pretty much "nothing" in terms of starting a business.
It's not like he claimed to be broke, or a destitute, homeless, bum. If anything, I kinda feel like we should give the OP credit for being transparent in a way that most people aren't.
The tl;dr is that when someone is paying you $500k a year then the work itself might not be all that motivating. However, within time, the money isn't enough to motivate you either.
You gotta wonder, though, what the rest of the world would think if they stumbled across this kind of blog post.
Author here. Agree. But I bet most of the audience here is already earning enough. Once you cover the basics, the returns of additional income diminish quickly. I chose to say how much I was earning just to emphasize that everything was really going well at my job, including compensation.
Have you ever thought that the amount of motivation for money is the issue? In other words, what if the main factor that motivated you to work hard was not money? What if you kept the job but you shifted your motivation on producing impact for other people instead of yourself? To add to your point, even if you do build a successful business, you'll get to a place where you will have this same problem correct of diminishing motivation correct? In summary, I think it is necessary for us to sit down and ask ourselves what are living for?
What I found is that there are some motivators that don't diminish. I'm pursing earning a living fueled by those intrinsic motivators instead of by money, fame, promotions, etc.
No offense, but there are people all over the world reading HN. We’re not all living in a country that can pay SW engineers such large salaries. Good for you and all the best, but please try to think of us living with 15k€ per year. The reason you’re getting a lot of negativity and envy is because we’re living in different environments and we can’t relate to what you’re describing. Anyhow, I hope your decision plays out and you finally find what you’re looking for, even if I don’t agree with you.
None taken. I grew up and worked in Europe in a country with a median household income of $20K. I understand and been through different circumstances. However this happened to be my situation and I’m describing it as it happened. I think my general point still stands though, that motivation through rewards wears off quickly after clearing a certain level of necessities.
Yea, probably a lot of people would ... for that kind of money. I guess it really depends on the person. Some crave money even if they are super rich. Some just want to have a happy life (no matter what money) - whatever that means for a person - focusing on a hobby, helping others, reading, etc.
In addition, the problems he now chooses to work on may not prove to be so important, as the very same motivation he lost at Amazon will remain missing until near the end of his runway.
Thus I can foresee an abstract quality to problem-selection, rather than a "damn this needs to be fixed as it's bringing me down on a daily basis" drive to build great things.
I hate seeing negative numbers accumulate in my bank account. I hope that will be enough extrinsic motivation to get me to do something profitable ASAP :)
> When I first hit $100K income, I would take a peek at my W2 for a few days admiring the six digits, but then it wore off. When I hit $200K, $300K, $400K, and $500K, it was the same thing. I would be delusional to think that earning $1M, or $10M would suddenly make it different.
>What is out there that I could do that would make me excited waking up every day for the next 45 years that could also earn me enough money to cover my expenses?
At $500k, with UK tax rates (probably higher than US), you'd have $275k net. If you remove generous expenses, you have $200k a year in savings. Five years working would get you $1M.
With $1M, you would probably never have to work again (~$40k in safe withdrawal per year).
Then you'd have the ability to pick any job, irrespective of pay. Go help charities, help with research, spend all your time on open source projects, whatever you want.
Lots of people used to taking home 275k aren't going to transition well to 40k which depending on where you live could feel like you are only slightly above poverty level.
yeah, going up is obviously fine, but it quickly becomes your new normal. Going back down is...painful.
Even for simple things. I grew up without A/C in an apartment with leaky windows that would get way too cold at night. Never bothered me. I was used to sweating a lot in summer and using a lot of blankets or standing by the oven while we were making dinner in winter.
Today? The moment the temperature is a little off I WANT TO DIE. I can't get any work (or anything really) done, and I'm likely to get sick. Im a wuss now. Central air/heat (or heated floors if we're gonna get fancy) or I'm sad. My young self from 30 years ago would laugh his ass off at how useless my current self is. Wealth can spoil you really quickly.
I get that everyone's priorities are different, but I'm always amazed that ultra high income earners don't do this (this being live well below means, invest the rest in index funds then go work on passion projects, hobbies, focus on family). Lifestyle inflation and projecting status is a pricey hedonistic treadmill that is ultimately unrewarding.
People get addicted to the power that resources bring. Buying things because you like them, eating whatever you want whenever you want (and not having to travel for it), the ability to follow whims and flu around the world.
The problem there is you’re just responding to whims, and everything will start to feel the same.
Most people that make a lot of money probably like their jobs. It is probably quite difficult to get really good at something you don't actually like doing.
> you'd have $275k net. If you remove generous expenses, you have $200k a year in savings.
In Seattle Washington? You'd have an extremely hard time making ends meet on $75K, it certainly isn't "generous." For example median home value in Seattle is $725K.
I have a family, two small kids (4 and 2), and live a comfortable life in Seattle. I could obviously adjust my standard of living, move somewhere cheaper, etc, but I didn't want my family to have to change anything from this experiment I'm doing with my life.
I live a comfortable life in Seattle and my mortgage is $3k a month including taxes, in a house that’s too big for us to keep clean. I think “comfortable” might be understating things.
If I moved into my neighborhood now it might be closer to $5k (without a bigger down payment) but I wouldn’t recommend it.
$5K includes property taxes, HOA, and home insurance. The total was $4K originally when I bought a $850K townhouse in 2015. But I refinanced recently to get some cash out and that got it to $5K.
As someone trying to do something similar in 5 years (not nearly in the same situation), I'm having a hard time imagining why you would refinance and take money out (and not the opposite, refinance and pay things down or pay off your mortgage completely).
A lot of the things in your post resonated with me, but seeing this in the comments really got me curious about your math.
I didn't need the cash out, but it adds a bit of a safety margin. Liquid cash gives you optionality. For example, if things don't work out as I hope, I could use that cash to try to buy another small business, or something like that. It would have been harder (or impossible) to refinance without a steady paycheck, so I planned for that while I still had the job.
My mortgage interest rate is 4% and I've put the cash I've withdrawn in short term US treasures at 2.5%, so that cash is only costing me 1.5%.
Another reason I did a refinance was that when I bought my house I had only been in the US for 2.5 years and my credit score wasn't great (in the 600s IIRC). I could only get an 5/1 ARM loan that was about to start becoming variable at a higher interest rate.
I agree with you but grocery and other essentials bills itself comes out to be $2000 per month for family of 4. If you don’t care about organic food shopping, specific brands for quality and relying heavily on Wallart then it is possible to lower this at $1000. The eating out lunch at work itself is usually $300. Phone + cable + internet bills in family would add another $300 even when you haven’t upgraded in 4 years and so minimum TV subscription. The cost of gas and 2 car maintenance + insurance easily adds up to $500/mo. Replacing car, even mid end, adds another $500/mo for next 5 years. Computers, house maintenance (essential servicing) etc will add another $300/mo spread out. We haven’t yet got to various other utilities, schooling, dentist, optometrist etc.
I suppose bare minimum essential is probably $1000/mo but if you set needle to little above middle class but way below “rich” (which is not same as median) then $3000’for “everything else” is not sufficient.
I live in Seattle, none of my friends work in tech, none of them make anywhere near 75k, try cutting that number in half. They aren't living in condos in cap hill with the other high earning tech folks but believe it or not they aren't struggling to eat at night either and live comfortable fulfilling lives.
What bubble/ivory tower part of the country are you in? $1m is enough. Especially with a paid-off mortgage. Most people get by for way, way less than that.
If at any point in ones life you’ve made over $300k, I doubt $40k a year would feel like anything other than relative poverty - not that that’s a terrible thing. It’s plenty of money except if you’re used to vacations to Europe in 4 star hotels, nice gym and golf memberships, cars, etc.
In the bay area and almost everywhere on the west coast you are looking at over $1k/month in property taxes for that house with a "paid-off mortgage." In most states you never really "own" your home. You only own it while you pay tax every six months until you are dead.
I think the commenter's point is yes you could cash out and move to nowheresville with a cheap house, but there's no point in playing that hypothetical game because it doesn't end (live in the ghetto! Your house is valued at $10k, aren't those low low property taxes sweet??)
They making the probably-fair assumption that these hypothetical people want to live at least close to where they're rooted their lives.
>$1m is not enough for most people in the US to never work again, unless they are quite frugal.
i.e. "$1m is not enough for most people in the US to never work again assuming they want to live to the standard that I have become accustomed to."
Which very likely does not apply to "most people". We do pretty well for ourselves and it's easy to forget that "most people" live paycheck to paycheck on far less.
Florida is popular retirement destination in US and comfort living cost there for 2 people is about $50K annual without taxes. Part of the high cost is that most people in our generation won’t have paid off their mortgage and monthly $1500 expense is expected just for that. Add on the top property taxes, high cost of medical, high cost of smart devices, phone plans, eating out even once a week - etc. If you have kids who are still dependent then you can easily add another significant chunk.
+1 for Florida. You can buy a 3 bedroom home on a barrier island within walking/biking distance to a pristine beach for $500k. Even less for a nice condo.
The 40th percentile income in the US is $43.3k [0], with 126 million households [1], that comes out to about 50 million households that make less than $44k.
To put my feelings bluntly, get out of your bubble.
Just my insurance is $20K/year (health, life, disability, home, auto, umbrella). Then $10K/year in property taxes. Then $30K/year in mortgage interest. That's already $60K/year and doesn't include food, utilities, schools, etc.
A good balance between risk and returns is often considered to be 10% annualized. Annual comfort living expense for family of 4 is at least $120K net in most urban areas. Adding taxes, your gross would be around $150K. So $1.5M in investment is often considered good in theory for achieving financial independence.
The big issue however is that returns are averaged over long duration and so on some years you can end with as little as 2-3% or even negative. So you need to have 25-50% cushion to ride out bad turns in economy where you will be eating up principal itself. This is also important for any unforeseen circumstances such a medical issues that might rack up huge out of pocket (especially in US). Or children leaving for college needing to pay as much as $50K in tuitions. You also need at least 6 months of buffer ($50K) in case some bad event triggers losing your investment, for example, someone trying to to sue you. Given all these more practical investment asset size is $3M for financial independence.
TL;DR OP liked his job, but his motivation was decreasing. Could be possible earning much more in the next few years. Gonna build his own things from now on.
Long story short money is not everything. I understand it. I'm currently unemployed working on my own things and I pretty like it. Although I don't have that much money saved and probably I'm gonna find work soon, I've found out that I'm that kind of person, who wants to explore the world by myself and on my own terms.
This might just be envy speaking, but I don't feel like this was a very tough decision (not that it needs to be!). Either way, congrats on the early retirement!
I've heard of Amazon paying between $200 and $300K for software engineers, but this is the first time I've heard of them paying $500K!
Goodness, I don't have any work/life balance now, so it really makes me wonder if I shouldn't start applying at Amazon.
the 500k is due to Amazon's stock value going up. The amount of stock you'll be receiving is set several years out and is frequently a major portion of your salary. Amazon's stock tripling has put many people at high salaries.
OP is an SDE3, which levels.fyi puts at $154,259 base, $150,648 stock, $19,227 bonus. The stock goes up 3x in the years between the grant and when you vest, you are making tons of money. Most people don't expect Amazon's stock to triple again in the next few years.
From the description in the blog post, the author was a high performing L6 SDE[0] getting paid the rates of an L7 SDE[0] because he was about to get promoted.
Amazon has very few L7+ SDEs (~1% of SDEs). So when you read that salary, you have to remember the author is relatively rare even within Amazon.
What kind of companies pay software engineers 300k+? Is it realistic to make 500k-1 million+ at these companies as a developer? What sort of title/level are these developers at? How much is it in stocks/rsus vs salary at that point? Can someone lay out a traditional example at this level? What skillsets do these people have?
I don't work in Seattle but I was about to, it's 10% cheaper off the bat because of WA's lack of income tax (of course, Amazon also increases base salary in SFBA by about the same amount so it's a wash).
Luxury apartments are much cheaper than SF and South Bay in my experience, and I wouldn't have needed a car. Weather isn't as nice as SFBA probably, but I enjoy the weather around there. Commuting is also pretty straightforward into the suburbs.
Senior at a lot of the larger companies I've interacted with is often a kind of a "terminal level", meaning that you're not expected to rise above it, and can comfortably spend most of your career at that level.
Staff, sr staff, principle and other monikers are usually about affecting change at the scale larger than your team, operating at larger scope, and growing people around you.
Senior would be someone who takes the lead on projects in their domain across their team/other teams. Principal would be responsible for leading overall architecture for multiple teams/departments or a super expert in some domain. At Google, probably less than 1% will reach principle, I've heard around 25% of engineers are senior+.
> What kind of companies pay software engineers 300k+?
The big ones. Google Facebook Microsoft Amazon.
> Is it realistic to make 500k-1 million+ at these companies as a developer?
It's realistic but not a given. You've gotta be into staff software engineer+ range to be making that much. Plenty of people never make staff.
> How much is it in stocks/rsus vs salary at that point?
Probably around 50/50. 50 salary 50 bonus + rsus. Or maybe even 40 salary 60 bonus + rsu.
> What skillsets do these people have?
Be one of the better software engineers at a company that can curate top engineers.
Strong communication, high interpersonal skills, ability to lead complex software projects, high intelligence, fast learner, breadth and depth of understanding of software. Plays well with others. Generalist -- able to work in a variety of languages with different tools, with no hesitation to learn and quickly understand new environments. These engineers may be domain experts at specific things, but they are by no means pigeonholed.
Usually, but not always, these engineers are also very productive and motivated.
It's not realistic, but it happens. Especially with RSU appreciation. AMZN's up 88 percent in the last 2 years, so if you were issued compensation plus refreshers amounting to 300k, but 200k of that was RSU, you're looking at 500k in comp when the stock doubles your grant price.
> I made $75K in my first year and that gradually grew to $511K by my last year.
Wow, I'm envious of this rate of internal raises. Is this consistent within Amazon's culture, or other SV companies?
I've found (in the small-town Midwestern shops I frequent, not in the FAANG bubble) that I have to change employers to do better than a token 3-5% annual raise, even if my value to the company is increasing much more quickly.
I've even been heartily congratulated and thanked at my annual review for completing successful, profitable projects in my first year at one job, and offered a reward of a $1/hour raise. I was a bit shocked, as that represented a pay cut when you factored in inflation. They 'capitulated' to an increase of $1.50/hour, which was just about keeping up...had to go look elsewhere to do better.
Author here. I got a big bump from $230K to $396K in 2016 when I got a competing offer and Amazon matched it so that I wouldn't leave. From then on, the growth from $400K to $500K happened because the AMZN stock nearly tripled in that time frame.
Well, this just illustrated why a company shouldn't play the matching game. What did Amazon get for matching the offer? They got to keep you for a couple more years at a premium. I'm sure you did some good things in those two years, but the accounting side would probably have a difficult time assessing the real value of those two years.
might have been just to avoid letting that particular skill set and experience go to a competitor. the value of that competitor getting that person was more valuable than amazon keeping him/her.
Huh? This seems like a non-sequitur. What does leaving in 2 years have to do with your worth this year? How many years would he have to stay to pay off this year?
By that logic hires are bad deals if they ever eventually leave because you "lost" the money of their last n years.
This is largely due to Amazon stock appreciation. Amazon does not pay senior engineers $400K, let alone $500K. In FAANG, a typical non-promotion raise is 5-8%.
The author could probably have been a bit more specific and noted that his income was actually quite likely to go down for the next several years, but it wouldn't have made for such a compelling post.
Amazon adjusted my comp to ~$380K in 2016 after I got a similar competing offer. It's true that I would have made a bit less if I stayed, but it was still going to be around $500K assuming the stock price remained the same.
This is a very common theme. Once you reach a certain threshold of income (not everybody though) you start valuing freedom, flexibility, traveling and start looking beyond work. This is primarily because money has lost its forcing function. Even if you have the best setup in terms of work, compensation, co-workers, you lose motivation and drift away. This isn't true of everybody though, most successful entrepreneurs despite earning massive amounts of money, are still as hungry, motivated, and dedicated to their work as the first day.
My base was $160K for a long time. I think it's the max at Amazon. The rest was stock. I got lucky that AMZN stock grew a lot in the last few years. Without the growth it would have been about $380K/year (i.e. that's what I was granted originally before the stock grew).
I'm not following how $380k is the baseline. Were the grants based in dollars or in AMZN shares? I assume it was based in shares and if the stock had fallen you'd have made less?
The grants were based in AMZN shares. Yes, if the stock had fallen I would have make less. If it falls significantly (happened only once in 2014-2015 when I was there) the company typically tops you up with the difference (or part of it).
> The last couple of years, however, were quite different. I was leading the most important project in the history of my department, with many stakeholders and complex goals.
Well yeah dude - you started at 75K and now you make 500K - bigger salary = bigger obligations.
Now the hard part will be finding a way to be disruptive/innovative after so many years of monotonous work and so much time being brainwashed by the solopreneur propaganda/filter bubble.
You’re right. I don’t need to be disruptive though. I just need to earn enough to cover my expenses. It can even take a couple of years until I break even.
Most of the comments seem to not understand that he wasn't developing per se anymore. He was managing, which explains the larger payout.
In addition, I greatly dislike how the top post is negative on the story: it disregards the idea behind the post and instead replicates the typical "you have things good so fuck you" response.
I agree. Just started with Wordpress and I'm still figuring out how to get rid of all the unnecessary stuff. I made sure I didn't have any creepy analytics though. The third-party JS is just fonts from Adobe.
The declining motivation with increasing scope really resonates with me. I often feel the same.
And I feel that his career trajectory is pretty typical - you start building cool stuff in a small team and you end up trying to coordinate large groups of people (who a typically the managers of the people who will build the cool stuff).
Well I sure hope going off on your own helps you gain some humility. This whole post just reeks of first world problems™
Yes you can still be miserable with a ton of cash but I'd rather cry in a Corvette than on a bus. Hoping to see a follow up post from OP after they've gained some perspective.
My spidey sense tells me the op just needed a reality check, a long vacation and some introspection.
Everyone here is bent by the $500k, but nobody is mentioning working for yourself can lead to less autonomy as you have to take on lame projects just to pay the bills, or the product your customers actually will pay for is not he one you want to build.
Ideal autonomy is getting corporate patronage to mange your open source project.
Looks like lots of comments here are negative. I hope it doesn't deter you or get you down. It's tough to leave a high paying job to pursue something different and I wish you all the best.
It's interesting timing to quit now. If you have 45 years to work, why not work a few more years to have a much longer runway?
Safe withdrawal rate now is $40k...if you did 3 more years to and saved $2 mill, that's a double of your safe withdrawal rate to $80k. You're doing 40 hours a week on a good team...
Also I saw you put your health insurance is $1.2k per month...Amazon's health insurance../sucks?
> why not work a few more years to have a much longer runway?
Because I didn't want to keep postponing. There will always be something that I could be waiting for.
PS. Regarding health insurance. No $1.2K/month is from the ACA marketplace. I could have continued Amazon's through cobra for 1 year, but it was about $1.5K. When I was with Amazon, I think I only paid $300/month.
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[ 2.8 ms ] story [ 221 ms ] threadIf people have the ability to make things themselves and build a business, then should pursue this under the banner of providing greater choice to consumers.
Particularly if the entire industry is bifurcating between a few enormous, ossifying tech conglomerates.
500k/year in your last year is "nothing", huh? It really undercuts the entire thrust of the post, because you're starting with a nice big war chest and a hell of a safety net, not "nothing".
Since OP has a million saved I’m going to assume they had a similar plan in place. But. $150k a year with young kids (they haven’t begun to get expensive yet) in Seattle is pretty high. Getting that down is a good deal of effort that will distract from running the business.
I hope these kind of things are taught to people early. Somewhere in school, or may be at a level of a social value system. The default every day mode for most people is to work very hard and fail. In fact you are lucky to achieve mediocre success even after working insanely hard.
>>The best thing I ever did for the family budget is work out a plan ahead of time for windfall money.
Yes the best thing to do in case of a windfall period is to take all the money and put it into some kind of an investment. So that when the gravy train stops, you have something to fall back on.
>>Spending like this is the new normal is how rock stars and athletes end up broke at 40. You have to get out ahead of it.
It isn't just rock stars and athletes, its your every day cousins and uncles, who have some career run, spend like no tomorrow, when the gravy train stops, they realize they have their best years behind them, all their money is gone, and nothing that they can do will help them even get by, let alone take them back to their past glory.
>>$150k a year with young kids (they haven’t begun to get expensive yet) in Seattle is pretty high. Getting that down is a good deal of effort that will distract from running the business.
A lot of people will be willing to show sympathy to you if you met with an accident and bad things happened to you beyond you control. But if you threw away a perfectly fine opportunity and asked them to settle for less, they would be asking why should they even be doing it at all.
Just think, you need to have $21k in medical receipts before you can even break even. ACA is such a joke and yet many people in our society believe MORE "free" healthcare will drive prices (ie. taxes) lower.
- almost broke startup founder
Usually big stock grants go out to those who have shown themselves to be force multipliers. If you can make everyone around you more productive than you’re contributing in ways that make companies like to put golden handcuffs on you.
“Now that I have some runway I’m going to build something from scratch”? Probably wouldn’t satisfy those that could only dream to make $500k and are frustrated you don’t appreciate it I guess.
I’m not making that much but your post makes sense and resonated with me.
What I think you mean is you don't have steady W2 income from an employer.
A different post would inspire me to try too. A post like this one makes me sad to be less privileged.
And I'm not saying that to make you feel bad or anything. People have different circumstances and make different choices for themselves, some biased by the circumstances and some not. I'm just saying it as a consumer of a text. Just throwing my opinion with no expectations of anyone catching it.
Depending on where you live, who you support (or are supported by), and how capital intensive your independent business is, that could be plenty. Plus, you've already got a book deal worked into the business plan it seems.
Getting a sustainable business is not easy. Lots of groups don’t get there with $10’s of millions in venture capital. So from a business prospective he is starting with nothing but does have a personal safety cushion.
But domain knowledge and contacts will probably be the biggest assets OP turns out to possess. Don’t undersell those.
And 80k is still well over the average household income
Even though I sold myself cheap, I still made more money that the salary I would get if I had worked for the big consulting companies. The biggest challenge is selling yourself, and I am not very good at it. Still it worked out great for 2 years until I joined a startup as the first employee which has gone from 3 to 100 employees in just 2 years.
If I was employed at a regular company, I would never have gotten the chance to join that startup.
Now, as warped as this all seems, this pales in comparison to what some tech people make in finance.
They have a bunch of money, move upstate, talk about all these crafty / cosey things they do and how great a life choice they made and contrast it with a lot of bad things .... that are the only reason they can make the choices they can now.
I’m reminded regularly about a line from the Dalai Lama. When we are young we sell our health for money and when we are old we will pay anything to get it back.
My original life plan was to do this maybe 8-10 years earlier. But the startups I picked didn’t go big (I chose for impact not cash out potential), two recessions and a divorce. And I can only do this now because I have simpler tastes (except for tools).
I'd like to do it, maybe try my hand at woodworking.
I come at it sideways by trying to encourage people to have more hobbies or at least see the sights/local events.
EDIT: oh he just said $1M saving there.
Capital helps. It won't make you profitable though.
The point is not that he is starving, or that he is desperate. The point of that number is what he gave up!
The point is he gave up a job of 0.5 million, potentially 1 million in a few years. To top it off the job had reasonable hours, great people and he was getting positive feedback.
You would not expect people to give that up. The question is why?
Instead, you're pointing out how lucky he was. Well, that is his point! He was so lucky and is giving it up! Aren't you curious why?
I would absolutely expect people to give that up, as well as any senior economist student would tell you, the labor preference curve is backward-bending after you start making a certain amount of money.
> He was so lucky and is giving it up! Aren't you curious why?
Not in the slightest. There are multiple studies saying that happiness plateaus after a certain amount of income. It's his life and he probably found his own plateau.
Are you sure this is a good student? The bend in the curve demonstrates the preference for incremental wealth. So you might forego $500k to $600k. Going down to $0 takes you through the steepest part of the curve.
(I guess with interest on savings, the person is going down to something like $25k-$40k.)
> There are multiple studies saying that happiness plateaus after a certain amount of income. It's his life and he probably found his own plateau.
I am not sure what you mean by "probably found his own plateau".
Do you mean he found he didn't need as much money to live?
He figured out that living on $150k (stated elsewhere) and doing his own thing 24/7 gives him more utility and satisfaction than earning $500k and working at Amazon full time.
Neither one is particularly interesting, because it's already in dream territory for most people and if you gave them a choice of living on $150k and working on their own business (an enormous safety net), most people would be happy with those options.
But a plateau would just mean he quit advancing. This guy didn't stop on a plateau, he stepped off a cliff. That's a pretty big difference.
Also, the people (me included) that don't question "why" are the people that would do the same if they had the opportunity. Of course anyone can create the opportunity for themselves, and of course the income and spendings are relative, but no matter how you slice it, a half a million safety net, or even 1/10th that, is still a pretty big help to take the decision.
Please. It was perfectly obvious from context that the "nothing" he was referring to was his "new thing". No product, no customers, no brand, no marketing, no customer discovery, etc... that's pretty much "nothing" in terms of starting a business.
It's not like he claimed to be broke, or a destitute, homeless, bum. If anything, I kinda feel like we should give the OP credit for being transparent in a way that most people aren't.
You gotta wonder, though, what the rest of the world would think if they stumbled across this kind of blog post.
Thus I can foresee an abstract quality to problem-selection, rather than a "damn this needs to be fixed as it's bringing me down on a daily basis" drive to build great things.
I hope to be wrong of course, good for him.
>What is out there that I could do that would make me excited waking up every day for the next 45 years that could also earn me enough money to cover my expenses?
At $500k, with UK tax rates (probably higher than US), you'd have $275k net. If you remove generous expenses, you have $200k a year in savings. Five years working would get you $1M.
With $1M, you would probably never have to work again (~$40k in safe withdrawal per year).
Then you'd have the ability to pick any job, irrespective of pay. Go help charities, help with research, spend all your time on open source projects, whatever you want.
Even for simple things. I grew up without A/C in an apartment with leaky windows that would get way too cold at night. Never bothered me. I was used to sweating a lot in summer and using a lot of blankets or standing by the oven while we were making dinner in winter.
Today? The moment the temperature is a little off I WANT TO DIE. I can't get any work (or anything really) done, and I'm likely to get sick. Im a wuss now. Central air/heat (or heated floors if we're gonna get fancy) or I'm sad. My young self from 30 years ago would laugh his ass off at how useless my current self is. Wealth can spoil you really quickly.
The problem there is you’re just responding to whims, and everything will start to feel the same.
In Seattle Washington? You'd have an extremely hard time making ends meet on $75K, it certainly isn't "generous." For example median home value in Seattle is $725K.
Fixed costs per month:
* $5K mortgage
* $1.2K health insurance
* $300 life and disability insurance
* $800 utilities
* $2K home services: nanny, sitter, cleaner
* $800 school / preschool and kids activities
* $2K groceries, essentials, etc
I have a family, two small kids (4 and 2), and live a comfortable life in Seattle. I could obviously adjust my standard of living, move somewhere cheaper, etc, but I didn't want my family to have to change anything from this experiment I'm doing with my life.
Spends more per month on luxuries than most people make in the US, cries.
Get a grip, dude.
If I moved into my neighborhood now it might be closer to $5k (without a bigger down payment) but I wouldn’t recommend it.
A lot of the things in your post resonated with me, but seeing this in the comments really got me curious about your math.
Good luck with your endeavor!
My mortgage interest rate is 4% and I've put the cash I've withdrawn in short term US treasures at 2.5%, so that cash is only costing me 1.5%.
Another reason I did a refinance was that when I bought my house I had only been in the US for 2.5 years and my credit score wasn't great (in the 600s IIRC). I could only get an 5/1 ARM loan that was about to start becoming variable at a higher interest rate.
Renting an 1800 sq ft 3 bedroom house is $40K/year. That leaves $35K. Per month that's almost $3000.
If you are having an "extremely hard time" paying for everything else with $3000, you may want to reevaluate your lifestyle.
I'm not saying it's a fantastic lifestyle, but it's not a poor lifestyle. You'll still be able to afford a lifestyle better than most of the country.
I suppose bare minimum essential is probably $1000/mo but if you set needle to little above middle class but way below “rich” (which is not same as median) then $3000’for “everything else” is not sufficient.
That isn’t much less than the median income in Seattle.
Why's that?
Neither here nor there. The GP was responding to "$1M is not enough for most people to retire on."
So, the ivory tower remark seems appropriate.
They making the probably-fair assumption that these hypothetical people want to live at least close to where they're rooted their lives.
i.e. "$1m is not enough for most people in the US to never work again assuming they want to live to the standard that I have become accustomed to."
Which very likely does not apply to "most people". We do pretty well for ourselves and it's easy to forget that "most people" live paycheck to paycheck on far less.
To put my feelings bluntly, get out of your bubble.
[0] https://statisticalatlas.com/United-States/Household-Income [1] https://www.google.com/search?q=us+number+of+households
The big issue however is that returns are averaged over long duration and so on some years you can end with as little as 2-3% or even negative. So you need to have 25-50% cushion to ride out bad turns in economy where you will be eating up principal itself. This is also important for any unforeseen circumstances such a medical issues that might rack up huge out of pocket (especially in US). Or children leaving for college needing to pay as much as $50K in tuitions. You also need at least 6 months of buffer ($50K) in case some bad event triggers losing your investment, for example, someone trying to to sue you. Given all these more practical investment asset size is $3M for financial independence.
Long story short money is not everything. I understand it. I'm currently unemployed working on my own things and I pretty like it. Although I don't have that much money saved and probably I'm gonna find work soon, I've found out that I'm that kind of person, who wants to explore the world by myself and on my own terms.
OP is an SDE3, which levels.fyi puts at $154,259 base, $150,648 stock, $19,227 bonus. The stock goes up 3x in the years between the grant and when you vest, you are making tons of money. Most people don't expect Amazon's stock to triple again in the next few years.
Amazon has very few L7+ SDEs (~1% of SDEs). So when you read that salary, you have to remember the author is relatively rare even within Amazon.
[0] https://www.levels.fyi/SE/Amazon/Facebook/Google
Luxury apartments are much cheaper than SF and South Bay in my experience, and I wouldn't have needed a car. Weather isn't as nice as SFBA probably, but I enjoy the weather around there. Commuting is also pretty straightforward into the suburbs.
Staff, sr staff, principle and other monikers are usually about affecting change at the scale larger than your team, operating at larger scope, and growing people around you.
The big ones. Google Facebook Microsoft Amazon.
> Is it realistic to make 500k-1 million+ at these companies as a developer?
It's realistic but not a given. You've gotta be into staff software engineer+ range to be making that much. Plenty of people never make staff.
> How much is it in stocks/rsus vs salary at that point?
Probably around 50/50. 50 salary 50 bonus + rsus. Or maybe even 40 salary 60 bonus + rsu.
> What skillsets do these people have?
Be one of the better software engineers at a company that can curate top engineers.
Strong communication, high interpersonal skills, ability to lead complex software projects, high intelligence, fast learner, breadth and depth of understanding of software. Plays well with others. Generalist -- able to work in a variety of languages with different tools, with no hesitation to learn and quickly understand new environments. These engineers may be domain experts at specific things, but they are by no means pigeonholed.
Usually, but not always, these engineers are also very productive and motivated.
Wow, I'm envious of this rate of internal raises. Is this consistent within Amazon's culture, or other SV companies?
I've found (in the small-town Midwestern shops I frequent, not in the FAANG bubble) that I have to change employers to do better than a token 3-5% annual raise, even if my value to the company is increasing much more quickly.
I've even been heartily congratulated and thanked at my annual review for completing successful, profitable projects in my first year at one job, and offered a reward of a $1/hour raise. I was a bit shocked, as that represented a pay cut when you factored in inflation. They 'capitulated' to an increase of $1.50/hour, which was just about keeping up...had to go look elsewhere to do better.
By that logic hires are bad deals if they ever eventually leave because you "lost" the money of their last n years.
I do share the same sentiment as yours. I'll be closely watching your experiment and hopefully learn something from you!
Good luck and best wishes!
Disclaimer - I'm also at Amazon, but I joined at the peak stock price :(
The author could probably have been a bit more specific and noted that his income was actually quite likely to go down for the next several years, but it wouldn't have made for such a compelling post.
Well yeah dude - you started at 75K and now you make 500K - bigger salary = bigger obligations.
Amazing.
In addition, I greatly dislike how the top post is negative on the story: it disregards the idea behind the post and instead replicates the typical "you have things good so fuck you" response.
And I feel that his career trajectory is pretty typical - you start building cool stuff in a small team and you end up trying to coordinate large groups of people (who a typically the managers of the people who will build the cool stuff).
Yes you can still be miserable with a ton of cash but I'd rather cry in a Corvette than on a bus. Hoping to see a follow up post from OP after they've gained some perspective.
My spidey sense tells me the op just needed a reality check, a long vacation and some introspection.
Ideal autonomy is getting corporate patronage to mange your open source project.
It's interesting timing to quit now. If you have 45 years to work, why not work a few more years to have a much longer runway?
Safe withdrawal rate now is $40k...if you did 3 more years to and saved $2 mill, that's a double of your safe withdrawal rate to $80k. You're doing 40 hours a week on a good team...
Also I saw you put your health insurance is $1.2k per month...Amazon's health insurance../sucks?
Because I didn't want to keep postponing. There will always be something that I could be waiting for.
PS. Regarding health insurance. No $1.2K/month is from the ACA marketplace. I could have continued Amazon's through cobra for 1 year, but it was about $1.5K. When I was with Amazon, I think I only paid $300/month.