
Ask HN: What are the best strategies for a new grad engineer to build wealth? - lowiqengineer
I know about a few finance blogs but most don’t address folks like me - single, no debt, but crushed by high rent and a mediocre 401k match.<p>I currently put in 28% of my pretax income into my 401k and have been for 4 months now (only started using it in December 2018). So far it is not much and I have a similar amount in my mutual fund portfolio, but I’m concerned I bought in at nearer to the peak of the market.<p>Since my net worth is already pretty mediocre, what can I do to increase it more quickly? I’ve considered switching jobs but I’m resigned to the fact that I can’t get into Google or FB, and my current total compensation is unlikely to rise even to new grad G&#x2F;FB levels.<p>Is it hopeless for me or should I keep pressing?
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arthurcolle
28% is huge. Good job for doing that. Not many more options here. Reduce
expenses or increase income, but remember to live a little! Also noticed your
username and your thinking that you "can't get into FAANG." A lot of
interesting work is being done at companies that aren't Internet company
superstars, and if you enjoy what you're doing, you shouldn't be so hard on
yourself. Just my $0.02.

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lowiqengineer
I already work at a FAANG, the problem is my rent is absurd (~3k all in) and I
have a higher tax burden than HQ. Also I work at the FAANG that isn’t
respected and pays poorly - feels like reading HN is just a series of
microaggressions some days.

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RayMan1
What are you renting for 3K? Seems to me your rent is your biggest problem
here.

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lowiqengineer
A < 500 square foot studio. It’s close to work at least.

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gshdg
Consider a room in a share instead? There’s a reason that’s the norm for the
first 5+ years or so of a new grad’s life in a major city.

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lowiqengineer
That's basically my only limit. I refuse to have a lower standard of living
than my parents did when they immigrated to this country. And at best, I'd
save $12k more a year, which is good, but that's like half of a FANG bonus.

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hello_moto
From the tone of your responses in this thread, you are definitely comparing
your financial situation with your peers of the same age but at the same time
you aren't getting paid like them and you have given up pursuing similar
opportunities like your peers (or you missed the boat..)

There are a few ways to increase your net worth:

Spent less, move outside bay area.

Go work at Faang, but make sure you a++ the interview to negotiate higher pay
and make sure you have competing offers as well. Kinda like hoping the stars
align.

You can work day job and make money after work. Consulting, babysitting,
dogsitting, sell cracks, online business, mlm, sell dreams (buy my interview
preps to score 6 digits job), etc.

Jokes aside, welcome to the new phase of your life. This is when nobody can
tell you what to do and no one can help you to decide what's best for you.
Only you can decide what's best for you.

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gshdg
If the 401k limit is no less than 28% of your income, that’s a fairly low
salary, although not totally unreasonable for a new grad.

My suggestion would be to focus on getting to be an excellent engineer. Ask
for raises at every cycle. Put in 18-24 months at your current job. Then you
should be able to get significantly higher comp at the next one.

When you get a higher salary, don’t increase your expenses.

As a new grad you’re not going to become a millionaire overnight. Building
wealth is a game of patience.

But you’re already saving a lot, and that puts you ahead of the curve.
Especially since you’re doing it early in your career when it will have the
most time for interest to compound.

Put in 10 years of career growth without spending growth and you’ll find
yourself socking away a whole lot of money. Put in 20, 30 years and you’ll
find that wealth has grown.

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lowiqengineer
The limit ($19k contribution) is around 17% of my pretax, I'm just
frontloading it right now. A lot of my friends put in 90-100% into their 401k
because they are already wealthy.

Our compensation cycle is 1 per year, and it's unlikely to get more than a COL
raise at my company unless you have top 5% performance. I've tried getting
other offers but the best I've gotten is still less than Google new grad (I
now have ~1 yoe)

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jklein11
What do you mean by frontloading?

Also, that is a pretty solid salary for someone with 1 year of experience.
Congrats!

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lowiqengineer
I’m putting in more at the start of the year to reach the cap faster.

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jklein11
What is your reasoning for doing so? That sounds like a lot of extra work for
not a lot of benefit.

TBH it sounds like you are treating building wealth like a sprint. It is more
like a marathon

