
Ask HN: How to earn over $250K a year? - ask_high_earner
I&#x27;m in a weird spot in my career.<p>On the one hand I&#x27;m already pulling a decent salary, $155k, and I&#x27;ve been consistently raising that number in the last couple years.<p>On the other hand, I recently married, and I might have kid(s) in a few years. My wife is in a low-paying profession. I&#x27;m having a hard time imagining how to raise it any further. Specifically, how to double (and then quadruple) it.<p>I&#x27;m a proficient JavaScript engineer working remotely from somewhere cheap, so living expenses aren&#x27;t a concern for me (as opposed to someone living in, say, SF or NY). I have a good job at a good company, but I would jump for, say, a 20% pay bump. I have done so in the past and it works pretty well.<p>Do I move to management and forget all about coding? Is this worthwhile? Is there money to be made or will I just loathe myself for making the switch and barely make more money than I am making now?<p>Do I learn about investments? I read index funds are one way to earn money. There&#x27;s also private investing, etc. But I know literally zero about any kind of investments.<p>Any and all advice will be appreciated!
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cl42
One thing you didn't really bring up is the sort of life you want to have.
Generally speaking, people think of an annual salary as a end in itself, when
it is really a means to an end.

For example, if you are living in a small town and making $155K/year, your
standard of living is likely significantly higher than someone making
$250K/year but living in Manhattan or Soma.

You can double your salary by finding a second job. You'll make $310K/year,
work 80+ hours a week. Would you be willing to do that? I imagine probably
not.

Finally, what sort of time frame are you on? Specifically, do you want to make
more $$ to pay for kids next year? More vacations? Retirement?

Investing $25K/year in an index fund will increase your long term net worth /
assets, but it won't feel like you've increased your salary, especially in a
market where you might lose money one or two years in a row. This might also
make it impossible to pay for daycare, cribs, and nannies if you're ultimately
doing this to pay for kids.

So ask yourself (or tell us): (1) what are your goals / why do you need the
money, (2) how much are you willing to sacrifice to get it, and (3) what is
your risk profile?

If you want some reading material, this is a good blog:
[http://www.freedomthirtyfiveblog.com/](http://www.freedomthirtyfiveblog.com/)

~~~
wfunction
> You can double your salary by finding a second job. You'll make $310K/year,
> work 80+ hours a week.

That's not even as easy as you mention it though, is it? If it's a regular
office job, that implies you won't be in the office at the same time everyone
else is. Which means you won't be getting the job (or will be fired).

~~~
drewrv
OP says they work remote. One could get two remote jobs, and choose employers
based on their time zone such that their business hours don't overlap much.
But the point stands: this would be a terrible way to live.

~~~
tluyben2
It would be hell imho. I worked 2 '9-5' jobs for a brief moment in my high
school years; strawberry picking in the morning (5-14ish without break) and
working in a distribution center (16-1ish with a break); that was hard, but it
made a lot of money and was mind numbing so I was doing assembler in my head
(ah to be young :) and writing assembly / drawing game sprites on scraps of
paper in my pocket. It was ok.

Many years ago (<2000) I worked on one fulltime job remotely and then had
another fulltime in the evening; that was coding; Java during the day, Delphi
in the evening. That was extremely hard; no time for your brain to let up and
(my pet peeve) you cannot walk during coding, wrecking for your body. Although
I did sports for 1 hour in between, it didn't really help; because your mind
is spinning all the time you cannot really relax. Also sometimes one job
(because of the nature of programming), jobs bleed over into eachother; you
will have missed a mini deadline for job 1 and then you will have to either
tell them you're late or job 2 you're late; strawberry picking or distribution
centers _have_ no deadlines as such.

Offtopic;

What I took from it is that when I first worked those hours; a) it was
physical work which kept my body ok (strawberry picking is hell on some people
though; I didn't mind it) b) because my programming target (MSX with Z80) was
completely kept in my head; all assembly instructions (I still know most of
the hex codes and all assembly codes), VDP (video display proc), relevant
parts of the BIOS and sound processor instructions were easily kept in my head
so I _could_ code during walking. This became impossible around the end of the
80s.

Although I do still program the MSX (and others) for fun, my personal goal is
not to go back to the 80s but to make programming in my head possible again.
Not sure if i'll ever get there but I will die trying.

~~~
wocg
_make programming in my head possible again. Not sure if i 'll ever get there
but I will die trying_

Is it due to age that you can no longer do this, or something else? Good luck
with it! I've never actually "programmed in my head", but I definitely think
about my projects while out hiking or whatever.

~~~
tluyben2
It is because of the many many libaries you need now to make something. When I
get to write embedded or doing algorithms then I do my best work walking in
nature but that is only like 10% of the job. The rest involves looking up
library docs or stackoverflow help for badly written, fast changing libraries.
The last time it worked were Django APIs. Django is actually stable and we use
only multi year stable libs. But frontend: I cannot remember the 1000s of edge
cases and they also change per library often. Outside JQuery I guess.

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ChuckMcM
I recommend you read the Mr. Money Mustache site[1], it has some great tips
(although a bit US related). But one of the insights which is relevant to your
question is this: Why work alone? Let your excess money work along side of
you.

So yes, you have to learn to invest your savings so that they are growing in
value while you don't need that money to live on. And because the rate at
which they grow is proportional to how much you have saved, the more you have
saved the more "extra" money you will get each year. Let's say you're 25 and
you are banking $50K of your $155K salary every year, ($22K into 401k, and
$38K into savings). If you're savings makes an average of 5 - 6% per year,
then after the first year you are "earning" an extra $1,900, the second year
($39,900 + $38) an extra $3,895. Etc. 20 years later you are earning an extra
$63K a year in interest on $1.3M in savings. Plus your 401K is worth another
$1.3M so you're net worth is $2.6M and if you can start paying yourself about
$100,000 a year for ever (nearly all money you keep since its taxed
differently than regular income).

But if you want to live a lavish lifestyle and own a jet etc, better shoot for
becoming an overpaid member of the C suite (CEO, COO, CTO, CIO, Etc).

[1] [http://www.mrmoneymustache.com/](http://www.mrmoneymustache.com/)

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hijinks
If you are anywhere other then NY or SF Bay area you are throwing money out
the window on other expenses. I make 185k a year and support a family of 2
young kids and a stay at home wife in the SF Bay area.

Sure we manage money and things are tight but we get by so I'm having a hard
time thinking how 155k can't support a family if you live in cheaper areas.

Maybe look at cutting expenses first.

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kasey_junk
At a certain point it becomes important to be attached to the revenue of a
company. Whether that is by direct billing as a consultant, being a founder,
or a principal, or some other position where your income is not dependent on
salary.

Moving to management in and of itself does not accomplish this, but in many
organizations managers are easier to tie to revenue, which is why it seems
that way. At the end of the day, all the people I know that make a lot of
money did so by running their own businesses in one form or another.

~~~
cl42
I wish, I wish I could The Economist article on this, but searching online for
"how millionaires become rich" and similar things is an awful way to find
useful info. :)

However, I remember reading in The Economist that the majority of millionaires
(you can debate if that's real wealth or not) become that way through
_PROFESSIONAL_ jobs: law, management consulting, investment banking rather
than entrepreneurship. Arguably, being a partner at a law firm does tie your
success to revenue of the firm, but not sure if that's what you meant.

~~~
superuser2
You become a millionaire by making an average middle-class salary ($45k ish),
marrying someone else who does the same, setting your 401k to 15%, and waiting
a few decades. That does not make you rich, it is simply the prerequisite for
retirement.

"Millionaire" at 25 means rich. Millionaire at 50 means it is at least
plausible you will retire without wrecking your children's finances to keep
you off the street in old age.

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cdnsteve
There is more demand for engineers than managers and you won't be able to work
remotely if you're a manager, in most cases. Meaning you'll need to move to a
major urban centre so even if you manage to pull in a bit more the cost of
living will swallow any gains.

Why do you need more? Instead consider changing your lifestyle habits. Try
living on half your take home pay (still very healthy) for the next 6 months.
Track your spending. Save the rest. Read up about money management and
investing. ETF funds have lower fees but you can still easily lose your
savings if you're not careful. Start small and keep going.

Take up a side project, when you feel you have the energy and pull back when
you don't.

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gonyea
Do not work a second job. You'll do neither job well and will never move up or
be seen as reliable. You'll also burn yourself out.

To make over $250k, the more common path is to make (roughly) what you're
making now and get the rest in the form of stock. Real, liquidable, publicly
traded stock. So go to places like Facebook, Google, Apple, etc, and they'll
be able to pay that much (if you convince them to!).

Even if they don't, a year or three of good performance will put you in that
ballpark.

------
sl8r
Tactically, for the tech industry:

1\. Earning potential is higher in management, if you can make it to a
director-level or vp-level position at a major public tech company; take a
look at the relevant comp figures for Facebook, Google, Microsoft, etc. on
Glassdoor.

2\. Being a sales rep at an enterprise software company with an aggressive
comp plan is another option, if you can do the work. As @kasey_junk noted,
this is because sales is compensated on a percent of revenue basis.

You might also look at technical consultancies, or try to become a technical
expert for pe/vc firms.

Gaining wealth through investing your own money is hard; even at a market-
beating 12% a year, it would take you more than 20 years to turn $100k into
$1M. You _can_ make money this way, but you need to manage a fund. The entry
point is an analyst role at a hf/pe/vc firm.

I think @kasey_junk is 100% right; ultimately, you need to tie your work to
some kind of economic value. We as humans are bad at assessing indirect value
creation, so the roles that tend to achieve this tied-to-economic-value comp
in practice are [1] sales, [2] investment professionals, [3] substantial
equity owners.

------
tonyedgecombe
"Money has never made man happy, nor will it, there is nothing in its nature
to produce happiness. The more of it one has the more one wants."

Benjamin Franklin

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baccredited
This has everything you need:
[http://www.mrmoneymustache.com/2013/02/22/getting-rich-
from-...](http://www.mrmoneymustache.com/2013/02/22/getting-rich-from-zero-to-
hero-in-one-blog-post/)

I personally ignore most of MMM's frugal lifestyle stuff and focus on the
saving 25x your annual spending part.

I highly recommend the book Your Money or Your Life as well. You don't need
250K/yr (unless you are using the surplus to achieve financial independence).

[http://www.amazon.com/Your-Money-Life-Transforming-
Relations...](http://www.amazon.com/Your-Money-Life-Transforming-
Relationship/dp/0143115766?ie=UTF8&keywords=money%20or%20your%20life&qid=1465480773&ref_=sr_1_1&sr=8-1)

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zenlikethat
You won't get a $250k salary as a "proficient JavaScript engineer" living in
the Midwest. For that much money one could hire 3-5 reasonable developers a
year in the Midwest. Developers in the Bay Area earn six figures because the
cost of living is so darn high. If you jump jobs make sure it's for a 20%
increase INCLUDING the cost of living difference otherwise you might be losing
money (unless you just want a situation change that badly).

In order to earn that much you have to actually prove that you can provide a
multiple of that value. That most likely means moving into management in some
fashion.

Investments won't help make you money immediately, it's much more a "twenty
years later" type of deal.

~~~
qaq
5 devs :)?

~~~
MikeTV
Yes. 3 senior devs or 5 junior devs would fit cleanly in $250k, at least in
the part of the midwest I'm at.

~~~
qaq
not counting medical benefits and overheads and significantly stretching
definition of Senior and even then seems low.

~~~
MikeTV
It's unbelievable until you actually start searching for a job out here.

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dustingetz
That number is achievable doing contract JavaScript remote work for SV based
companies if you are very good and can prove it

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canterburry
Earlier Thread

[https://news.ycombinator.com/item?id=11535252](https://news.ycombinator.com/item?id=11535252)

------
tiredwired
Run for a political office.

~~~
downrightmike
A house of reps person only makes $174k

~~~
cweagans
Yeah, but they only have to work like half of every year, and "work" is a term
I use loosely here.

------
erik998
Before doing anything mentioned, figure out if you can change your employment
status to an independent contractor via an S-Corporation. This will allow you
greater flexibility in creating a defined benefit plan and minimizing your
taxes.

[https://www.irs.gov/retirement-plans/plan-participant-
employ...](https://www.irs.gov/retirement-plans/plan-participant-
employee/retirement-topics-defined-benefit-plan-benefit-limits)

You will need an attorney/accountant/actuary to make sure your S-corporation
is valid and does not ever create some situation where you lose that status.
Then you need a good accountant that knows the ins and outs of keeping track
of your S-corporation accounting especially two corporate-level
attributes—earnings and profits (E&P) and the accumulated adjustments account
(AAA).

Then you will need an actuary. Most actuaries have transparent pricing like
the following:

[http://pensionspecialist.net/defined-benefit-
plans/](http://pensionspecialist.net/defined-benefit-plans/)

The goal for a single owner S-corp will be to maximize your salary to defer as
much as possible. The money put into your defined benefit plan is tax
deductible. The contribution limits are high and are set with your actuary.

Your goal will be fund your benefit plan up to 2.5 Million. When your retire
(early at 55 is possible I think), you can take the lump sum or an annuity. At
this point you pay taxes on it.

Meanwhile, you can manage and invest your fund according to what you and the
actuary think is best. The investments/contributions/plan will change due to
various factors.

I believe when you hit 2.5 Million you are fully funded. You can freeze your
plan at that point or continue funding it. Ask an actuary.

This is what doctors, attorneys, and high earning consultants do. Very few
corporations provide this any more.

If you want to look at examples, put your zip code into this page:
[http://search.pbgc.gov/search/InsuredPlans/InsuredPlans?quer...](http://search.pbgc.gov/search/InsuredPlans/InsuredPlans?query=&ipcol=nc&filter=c&tab=ip&ip_type=c&page=1)

The added benefit is that your pension is insured by the government via the
PBGC. For small firms the insurance rates are affordable.

[http://www.pbgc.gov/prac/prem/premium-
rates.html](http://www.pbgc.gov/prac/prem/premium-rates.html)

Here is a sample of deductions per plan. It seems dated, these amounts should
be more by now.

[http://www.412iplansinc.net/whatis412i.htm](http://www.412iplansinc.net/whatis412i.htm)

