"Building something interesting requires a surplus of time and money. Salaried jobs provide neither."
The trap is not the salary job promotion, but the raise of middle class lifestyle. You wont leave middle class, as long as you raise your lifestyle with every income increase, and stay in dept.
The solution is to keep a frugal lifestyle. e.g. my lifestyle is around Euro1000/month, even including my sailing boat. A typical good payed coders job leaves Euro2000 surplus every month. So working for salary for one year means, that I have two year runway to work for myself.
This. I live like a student still. Class wars is a zero winners game. Expensive toys and things buy me nothing. My entire worth is about 600GBP. I shop at the cheapest places and grow some of my own food.
I have no intention of using the extra time I'm gaining doing anything other than having fun. I can afford to take 7 years out now which is good for 10 years work.
I too have a boat (a widebeam canal boat) which is being slowly refurbed in my spare time. When it's done, I'm living on it with my family.
If this lifestyle is important to you, it seems natural that you'd want to find a lifelong partner that has similar feelings. One of the most common reasons for divorce is disagreements about money.
My expenses didn't go up when I began my relationship with my wife, and went up about 15% when my daughter was born. From $1400/mo to $1600/mo for the whole family.
People get into mortgages, in new car payments, etc, and into a deeper debt trap every time
"The solution is to keep a frugal lifestyle. e.g. my lifestyle is around Euro1000/month, even including my sailing boat. A typical good payed coders job leaves Euro2000 surplus every month. So working for salary for one year means, that I have two year runway to work for myself."
My situation is similar (including € but no sailing boat), I try not to live beyond my means but not only that, to save some money, and not "try to fill my salary with expenses"
> People get into mortgages, in new car payments, etc, and into a deeper debt trap every time
Only if they choose to.
I haven't got caught up in upsizing (lifestyle, houses or even having a car). My aim is to pay off my mortgage as soon as possible, and that's made easier in a few years when our childcare costs will drop dramatically (nursery is frighteningly expensive!). Our lifestyle isn't completely frugal, but we keep most of our holidays in the UK visiting friends/family, rather than splurging on worldwide travel. Most of the money from bonuses, share options (those were the days) and pay rises go towards paying off chunks of the mortgage rather than upgrading lifestyle.
Good public transport (London, UK) means that owning a car isn't a necessity; buses/trains/tube/taxis will do most of it and there's Zipcar or other rental cars to fill in the gaps.
Where do you live in Europe? In western Europe (France, UK, Germany, Netherlands, Belgium, etc.), 30-35k+ is a common starting salary for an engineer with a MSc.
I'm in Austria, a C/C++ developer (Java, Android variant too, but I'd rather not work in it) with systems programming experience, and now 4 years of mobile work. The salaries around these parts are close to the GP scale, but not quite there ..
Before or after tax? In The Netherlands a good developer can earn between 3000 and 6000 per month before tax.
Tax is high, mainly thanks to the massive subsidies given to house owners - mortgage interest payments are subtracted from pre-tax wage before the tax is calculated. As you can guess, it's normal here for people to max their loans and go for interest-only repayments..
You're basically just renting the house from the bank. And this is common (not good, but common) in every country where interest is tax deductible, because you can multiply your 'renting' power by your top marginal tax rate.
That's especially true for high-paying jobs in finance, law or management consulting. Here your wage raises so fast that most people don't see how their tastes are evolving. For example, after 2-3 years most cannot go to a nightclub without buying a bottle of champagne.
I quit Bain right before my first big pay raise and I feel that was a good decision. I eat pasta more than often but most of my friends who stayed have lost sight of their dreams. "I would like to quit but I can't" is something I hear SO often.
I actually once read something like financial companies prefer to promote people with family, house etc instead of single guys because that's the way you lock them down. If they cannot afford to quit the job you basically own them and you can exploit however you want.
I think in a similar fashion to the writer but have a different approach. By learning to live with very little and be happy with the minimum, I'm not afraid of having to leave a place and give up a nice salary. Having the money is a nice plus and I can enjoy buying stuff and nice restaurants, but I don't make it part of who I am or the foundation of my happiness. Or at least I try ;)
Another related problem is called "golden handcuffs". Many work in jobs that provide great salary and/or benefits and would like to leave, but they think that they will sacrifice their family's well-being by leaving. I was like that for years and recently switched to a new job that is a lot better for me. It is still far from perfect: I am more stressed-out, and I work more hours. But, the pay and benefits are better, and my skills and marketability are improving. I want a job that I love, and I'm still working on finding that, but if you have "golden handcuffs", don't fall into the trap that you can't do better. If you are aren't struggling and learning and you are unhappy and spreading unhappiness, you are a drag on yourself and everyone else. You can't always be unhappy, in fact you may continue to be unhappy (I am, or at least I tell myself that I am), but if you find yourself making others unhappy and feeling that they should realize that they are unhappy as you, that is not a good situation, and you need to change. There are plenty of other opportunities out there, but you won't find them unless you are looking for them. Just decide what you want, and do your best to make it happen. Don't buy into the self-help books either. They make promises they can't keep.
There's no point in being unhappy just for more money.
I recently left a great job, and left a bunch of golden handcuff money on the table, for a position with far less stress and the ability to pretty much chart my own course. Bonus: I'm learning a bunch of new stuff (getting paid to go to school is a really good deal).
There is nothing wrong with being promoted. You just need the self discipline to realise that like everything in life, it is only temporary and you need to be ready for the job and salary to disappear at any time and for any reason. Greatly increasing your living expenses makes no sense when getting a sizable pay rise.
This advice is also similar to what I tell undergrads who are about to step out into the workforce for "just a couple of years before going back for grad school." A few people do it, but the vast majority will get used to the new salary, get married, and that pretty much ends it.
I tell them that the experience, particularly at a google/MSFT/apple, is worth getting because you'll have a much more well-rounded perspective than those who come straight from undergrad. But no matter how frugally you lived while working, it's the strong spouse that is OK with a 10x pay cut (> $220k -> $22k, at least for me in the sciences).
There's a big difference between downsizing - leaving you with spare cash to do stuff with - and "Salaried jobs [...] stay the fuck away from them" which has seriously harmful potential.
A botched "promotion" attempt can also backfire for employers.
I had one joker boss/startup owner try to promote me (his words were "what job title do you want?") but had no intention of giving me a raise! Suffice to say the working relationship did not last, I went on to more than double my salary within a year of leaving.
Same thing here. I can't start a lot of things i (now) have experience to do and which i am sure will still work, just because i can't imagine myself flying coach again - and that would be the way of life for the next coupe years if i do. Was my mistake.
was flying longhaul business for years, doing consulting. then joined a startup which rocks its space - but has a strict internal frugality policy - coach at all times, no matter how long the flight (we have offices in US, EU, CN and JP).
flying ZRH-SFO every couple of months in coach really, truly sucks once you know how it feels to fly the same route in business. being able to lie down and stretch your legs...
still the best decision of my professional life :)
Business class certainly costs a lot, but I imagine you can be work-productive much more quickly after stepping off the plane if you've flown comfortably. Have you ever considered a cost/benefit analysis of this decision? I'd be interested to know the results.
oh, i agree completely and basically know the results. business class allows you to work in the plane, as you have power outlets and more importantly, space. once the guy in front of you leans their seat back in coach, you can't work on that presentation any more.
stepping off a 12h flight and working the next day is possible in coach though. your body doesn't like it, but it is manageable, however super inconvenient.
Out of curiosity, what is the startup? Not trying to pry, but I'm curious what industry you're in and whether you're profitable or funded, since it is a bit strange to have the money to run four offices so far apart, insist on in-person travel and yet still have these problems.
won't name it, but all international expansion is self funded (and it is more than 4 offices). we focus on a single industry, delivering enterprise products in a SaaS model. we're not public yet, so sorry for my dancing around.
think Workday, but profitable, growing 100% YoY ;)
and frugality is a mindset, not a problem. overall it is a very good way to keep the business successful, our founders are all industry veterans and have seen all the mistakes of the various bubbles before. our kitchens in the bay area offices have coffee, soft drinks, some granola bars and bananas - nothing crazy like chefs or a starbucks.
that business class thing is my only point of disagreement.
I just checked how much Japan Airlines charges for a 1-week round-trip from Tokyo to Paris in the middle of February. ¥97,420 for "lowest coach" vs ¥1,174,490 for "normal business." A 12,514 dollar difference at the current exchange rate. That's basically 7 months rent, or 35 Nexus 4s, or 25 iPads, or 50 shares of Amazon stock, or really just a lot of money for a nicer seat on the same plane arriving at the same time.
I just did this search, you can find it for around $3k (yes, business class NRT-CDG) with a stop, cheapest without stop around $5k
You can get 1st class with a stop for 10k, but really, Business class is more than enough =) Especially for a meeting with clients that may pay itself in a short time.
The alternative is to fly on an airline with a decent economy class. I was astounded how much better British Airways World Traveller Plus was than the basic World Traveller, for not very much money at all.
Yes, Coincidentally I just heard that 'Economy plus' is considered by BA to be a different class, rather than 'Economy with better seats' so that's a good option
One policy I've implemented in my group at an SF startup is when I want to promote someone into a new role, I first put them in the role before giving them the title and raise. That gives them a chance to evaluate how much they actually like the role, while giving both sides outs if the role doesn't end up being a good fit.
I've done this with two lead PMs and an engineering lead so far, and it's been met with a positive reception.
The trap is not the salary job promotion, but the raise of middle class lifestyle. You wont leave middle class, as long as you raise your lifestyle with every income increase, and stay in dept.
The solution is to keep a frugal lifestyle. e.g. my lifestyle is around Euro1000/month, even including my sailing boat. A typical good payed coders job leaves Euro2000 surplus every month. So working for salary for one year means, that I have two year runway to work for myself.