This advice is quite precise about where it applies. If you're at a startup that is undercapitalized, working you 12-16 hours a day, 7 days a week, with poor management and no opportunities for anything but building and maintenance, you can actually wind up worse off than when you went in: no built-up network and nothing that would make you "VP at Google" material, and in the case of startups doing pay cuts (in an environment of ever-rising rents), even less money than when you started(!) He is referring to working at "decent or better" startups; problem is, you may not know you're not working at one of those until you actually work at another one.
The rest of his advice is probably worth listening to, but the above part should be considered very carefully.
The reason is that if you want to work hard for a startup, you need to ditch the role mentality. You have to be all in on the company, all day. You have to think like a CEO without being a CEO, and without access to all the information that comes with it. You also don't get comped for it immediately.
- Joined a company just as they got seed funding. Wrote code for 1.5 years. Constantly fought to understand why we were building what we were and where I could cut corners while still being proud of my work.
- Company got acquired. Took as job as sales engineer. Gave 6 demos a day for 9 months.
- Asked to scale my role. Turns out that's product marketing, so hired my replacement and moved to marketing. 2 months in, we fired my VP and I started reporting directly to CEO. Did this for another 7 months.
- More marketing churn, I ended up running marketing (team of 2). 1 left, hired 4 total more over 8 months.
- Decided I was leaving, told my CEO with 6 months notice. Ran the search for a new CMO (obviously the CEO had final say, but we didn't have many significant disagreements).
At every one of these steps, I freaked out about my ability to perform. I'd be up in the middle of the night, or stressing about not understanding anything. I wasn't leveraging my skills -- I was stepping into gaps the company needed filled and backfilling the roles I was leaving.
If you can find a company that will let you do this, you come out with an AMAZING skillset. I'm 30, and I haven't tested my ability to get a VP-at-Google job, but I'm not finding anything in starting my own company that's a total surprise. The breadth and exposure I got from trying different roles at a startup every 6-12 months has been frighteningly valuable.
You can't stay heads-down and think writing code is all the your startup needs. You need to think like a founder for 5 years, without any of the upside, and you'll get a huge amount of intangible value from the experience.
I got some things out of of it, no question, but absolutely nothing compared to what I would have gotten at a high-quality company that had reasonable hours, plenty of capital, very ambitious people (no one who worked there is anywhere near technology now - most are 9-5 or non-technical consultants), interesting technology, etc. The most important thing I got was "be incredibly careful about who you work for and what promises you choose to believe", but saying to people "don't be naive / foolish" is easier to say than it is to evaluate the intentions and capabilities of founders / companies. The second most important thing would be the ability to say "I've been through the wringer before."
The quality of companies varies wildly, and the wrong environment will do very little for you. Some wind up at ones near the bottom of the quality pile and having the ability to recognize that you're at one isn't a given.
People don't generally 'apply' for a 'VP-at-BigCorp' jobs. They either enter the game through their network, or get promoted in house.
Which is why it all comes down to how much good your network after a while. No matter how good you are, which college you went to, who are your friends etc sort of stuff matters way more than what the person can actually do. If anything, the real capability of the person may not even matter, most big companies run like well oiled machines, some one at the top is needed only to prevent what might be 'obvious' mistakes.
I'm pretty sure that is the only part of the advice that wasn't a joke.
3 main rules to live by:
1. The easiest way to increase your ability to save (other than a windfall inheritance) is to earn more money. Live a balanced life, but make sure that focus includes a strong career track with 1, 5 and 10 year goals. As has been discussed elsewhere at length, popular culture likes to play up the person that worked at a startup and sold their options for millions. This is very rare (most options are worthless or end up being worth less than the cash one gave up in the form of a lower salary to get them). Most 'rich' people are those that work hard and earn above average salaries over long periods of time.
2. As soon as practical, at every stage of your life live below your means. This isn't practical early on when some people are just scraping by, but once you start earning some real $$ learn from times when you had less $$ and live happily well under your means. If you earn $150k, live like you earn $100k. As one earns more it's fine to spend a bit (maybe you have a somewhat expensive hobby). Saving every penny eating beans and rice your whole life is no way to live. However, so long as you live well under your means you'll do very well. One of the biggest mistakes I see high earners make over and over is that they increase their spending as fast or faster than they increase their earnings. I can't tell you the number of "millionaires" I know that have trouble paying the electric bill some months. Don't fall into this trap.
3. Invest, but do so in a diversified and conservative fashion. Slow and steady is the key. Trying to "get rich quick" is also an easy way to "get poor quick." Build a reasonable pool of assets and invest when the market is up or down, just keep investing throughout your life. The math shows time and time again that people are horrible at timing the market. When everyone was in a full blown panic in 2008-09 the smart person just kept investing. Every $ the they invested is now worth 2-3x. Those that panicked and pulled out or stopped investing missed out big time.
I bought individual stocks, made a lot of money in a short time, then lost it just as quick. So i moved to leveraged mutual funds. Made crazy money real quick, than slowly lost it as the market became more volatile. Then I switched to just plain old index funds. I make a modest return in comparison to those leveraged funds, but when the market turns, I've lost less than a modest amount, so overall it has proven more profitable.
1. The Richest Man in Babylon
The $7.89 I spent on this book, which I read in a single night, is the best investment I ever made.
2. Think and Grow Rich
An older book, but there are some golden nuggets within.
I can't say I've adopted the whole thing, and the tax structure in the UK seems to be less advantageous to this strategy than the US, but I've foudn reading it has dragged my spending down and savings up - mainly by raising the question of what do I really value enough to spend my money on it.
If you want to get rich, your best bet on a risk-adjusted
basis is to join a profitable and growing public company.
Google for short. Make $200-500k all-in a year, work hard
and move up a level every 3-5 years, sell options as they
vest (in case you joined Enron), and retire at 60, rich.
This plan works every time.
I think a better approach would be the following:
1. Become freelancer.
2. Do what you love and do it well. If you're passionate enough about your job you should be able to increase your rate over time.
3. In western european countries: aim for at least 100.000 EUR a year.
4. Live cheap and save up. Invest the cash you don't need at any moment in real estate (house) and index funds.
5. Travel around the world and find a nice cheap country you could enjoy your life in.
6. Emigrate once you have enough money to live comfortably in your country of choice.
That's my plan at least. Currently I'm on a 'holiday' (2 months) in Thailand. I figured the following:
- In Thailand one can live (bare minimum) for around 500 EUR a month (some Russians in my co-working space live from that amount).
- Property can be bought for around 50.000 EUR in Pattaya. Not really huge, but decent with shared gym and swimming pool in apartment complex.
- 100.000 EUR invested in indexfunds should net me on average around 6% a year after taxes, i.e. 6000 EUR a year or 500 EUR a month (7% historic average minus ~1% tax).
- With no monthly rent to pay, I'm should be able to live a bit more comfortably compared to my Russian co-workers here :)
- I could fully focus on personal software project and hopefully that will add to my income over time.
I won't be financially rich, but I would have financial independence and could do what a love in a country with nice weather, good food and nice people - it's another form of wealth.
- Visa renewals. Leaving the country every 90 days to renew your tourist visa gets old fast.
- Finding a country that is both stable and has a low cost of living. I was in Bangkok during the last revolution when the current military junta took over. The airport shut down and I had to take a bus past a lot of guys with machine guns to get out of there.
- Starting a family changes things. Poor countries have poor education systems. I enjoyed my visit to Pattaya, but wouldn't want my kids passing by "walking street" on their way to school.
- You lose some small niceties like Amazon Prime and Hulu :)
When I was younger I had the same big ideas about traveling while earning a living as a single guy; current fashion is to call it being a "nomad". There are more and nicer coworking spaces now but it's still just working during your vacation.
I ended up grinding at a big tech company, saving/investing a lot more than other people who were living it up, and then retired (very) early. I also grew up a little during the process and wanted more than just an ocean view and party life. That happens to most people, although not all as you can see with a trip down Walking Street.
Life in Thailand works for me and my family. No visa runs if you have a spouse or retirement visa. Most modern conveniences are available. Speaking the language with a good accent helps a lot.
But costs are surprisingly high if you want a "normal" life. Cars are way overpriced due to high tarrifs. Electronics are pricey as are many western foods. My kid goes to an international school, which is really the only viable option for education, and that costs about US$10,000 per year. Real estate in the US varies greatly in price, which means someone like me who wants to live away from a city could get a ranch in the southwest US quite cheaply. But in Thailand land prices are kind of high almost everywhere. We have land near Khao Yai National Park about two hours from Bangkok; it's very nice up here.
Long story shorter, life changes a lot as you get older; you want different things. The advice in the article worked for me. If was to do it over again I would be tempted to try the "nomad" life as a freelancer. But knowing what I do now I would probably repeat what I did - work for 20 years at big tech co, take nice annual vacations, save a lot, retire early.
You can go to, say, Poland. It's just slightly more expensive than Thailand. No Visa renewals.
> - Finding a country that is both stable and has a low cost of living. I was in Bangkok during the last revolution when the current military junta took over. The airport shut down and I had to take a bus past a lot of guys with machine guns to get out of there.
EU countries are more stable.
> Starting a family changes things. Poor countries have poor education systems.
Poland scores very high in terms of education. No district schools BS.
> You lose some small niceties like Amazon Prime and Hulu :)
Is that meant literally? And for how long can one stay there as a foreigner? How about working remotely from there for companies outside Poland - allowed?
As an EU citizen, forever. For everyone else, the same rules apply as always. Working for companies outside Poland shouldn’t be an issue either way, you just still have to tax your income correctly?
I've tried but Hulu even blocks VPNS :(
You can also buy a condo in las vegas for $50k USD too. You still have a developed country where you can speak the language and the bay area is a cheap one hour flight when you need to get more work.
Not everyone can just waltz into Google. For starters, there are tens of millions of developers worldwide and only tens of thousands of total Google jobs across all roles.
Google, Amazon, etc. all have a well known high false positive rejection rate, so even for developers who are qualified and would do well at these companies getting in still requires a good bit of luck. Their interviews are not bias free either, so a subset of good developers are facing a process biased against them. Those with families, for instance, probably have little time for hackathons that I'm sure help with in person or phone screen coding exercises.
Also getting into a company like Google isn't something that everyone can do, where as it's pretty easy to start freelancing (especially if you are European, hence don't need to worry about healthcare).
You can also work pretty interesting projects at a place like google. If you want to do platform library type work, the only kinds of places your likely to get that kind of work is from a place like google or other larger companies.
I think most software engineers could get into to google if they put the effort into it. If you can make it as a $100k/yr software freelancer, you could probably study 'cracking the coding interview' and make it into google.
Also realize that google hires in europe too.
The hours isn't what you think it is. There are many 9-5ers that do good work at places like apple and google. And there are other teams that work a lot. It all depends on the team. People also get more than 2 weeks vacation too. For example, the entire engineering org at apple at least gets 3 weeks of 'mandatory' vacation. One week for thanksgiving, 2 weeks for christmas. Then you have your normal vacation on top of that.
I used to think like that when I was 20. One thing I've learned (will be 40 soon) is that the time passes anyway.
If you're lucky, you'll get to be 60. You don't want to be poor when you're 60. Of course, you don't want to delay gratification unduly, but beware of doing the opposite.
The original posts which prompted this one was centering around the super-engineer who can control their own destiny and work for any company they want. Nothing in this post applies to the average engineer.
Then, there are the social factors. Your other obligations, like raising children, can get in the way, though you might say they are more manageable than intelligence and health.
Growth mindset, beyond the "bloody obvious"  interpretation of it, is not something you can state as self-evident, and evidence to support the stronger interpretations is quite scarce.
Biology is overrated. From "You and Your Research" by R.W. Hamming:
"You observe that most great scientists have tremendous drive. I worked for ten years with John Tukey at Bell Labs. He had tremendous drive. One day about three or four years after I joined, I discovered that John Tukey was slightly younger than I was. John was a genius and I clearly was not. Well I went storming into Bode's office and said, 'How can anybody my age know as much as John Tukey does?' He leaned back in his chair, put his hands behind his head, grinned slightly, and said, 'You would be surprised Hamming, how much you would know if you worked as hard as he did that many years.' I simply slunk out of the office!"
Other anecdotes lead me to believe the primary difference between those that are and those that might have been is hard work.
> You might not have the health and the endurance to work on demanding high-end projects long enough to get really good at those kinds of projects.
Bad health is a rough deal for anyone. But it is possible to succeed in the face of it. Look at Goddard. There's a good argument that he didn't reach his full potential because of his health, but he still did some truly great rocket science.
> Your other obligations, like raising children, can get in the way
Rather than get in the way, I think they are often essential. I imagine it must be hard to do great things if you're personal life isn't in good shape.
There are real obstacles to "greatness", I think. Things like access to education and financial security. But I find it hard to believe that biology, health, and domestic life are enough to stop a dedicated person from performing great feats.
You have added a whole load of random obstacles to our average engineer, like making him in poverty, setting him the goal of greatness and suggesting he's sick.
I'd agree that he probably need to find a job that pays better, get well and have smaller goals before he succeeds.
If you're already a good engineer, then it's much more likely that you can become a great engineer. I'm still not convinced that every good engineer can become a great engineer. Maybe most? I know that I have a memory-related lack of attention to detail that I've never been able to get rid of entirely, regardless of adherence to lists and standards and specs and so on. I basically can't maintain an event-driven workflow and it causes problems. I've gotten around it by going into mathematics and programming, which are relatively stateless, but I can easily see myself reaching "good" engineer status but not "great" engineer status.
I've largely dealt with it by moving into CS theory and AI (which have less of that) and by using Google's reminders system (inbox, now, keep) to deal with the remainder. Just, whenever I have to do engineering, it's always going to be more difficult for me, and since I'm damn good at math there's no real reason for me to focus on engineering beyond the level where the other things I'm doing don't take hits from it. And unless I manage some kind of transformative pivot or redefinition, it'd be pretty stupid for me to focus on being a great engineer, and I'm not sure I'd be able to. I certainly am never going to be as good an engineer as I could be a computer scientist.
Most people in the US will die having never been rich by any measure and having never done any better than living paycheck to paycheck, at best. 25+ years of wealth at the end of your life puts you solidly near the top of the pile.
And financial independence anywhere in the world is a whole different ballgame than living "rich" in a developed country (particularly the US).
My dream is to be financially independent and work on my own software projects full time.
I'm guessing you're relatively young. What I wished I'd learned earlier is the future comes faster than you think, and the earlier you start planning and saving for it (partner, children, ill health) the easier it is.
I'm 34 now. I've dealt with some heavy stuff. Lost my parents and a sister in a car accident when I was ~20 years old.
I agree that the future comes faster than one might think, which is why I'm in such a hurry to achieve my dream future before I'm 40 years old, so I got still plenty of time to enjoy it. My little sister certainly didn't get the chance to live her dream future.
The trick is that your calling may change -- many children young folka grow to desire children, many lonefolk grow to desire a partner or would be happier with one -- so it helps to prepare for potential changes in your motivations and desires. Saving money is a great way to prepare to change. As is investing in a marketable skill.
Since then I've spent a lot more time thinking about what I want to be doing: work has been slack so I've had fewer chances to see how I now am decomposing software. But I've started to enjoy programming again :)
Really? That's a better return than I'm seeing averaged over 10 years.
.... or much of anything, really.
- 100.000 EUR invested in indexfunds should net me on average around 6% a year after taxes, i.e. 6000 EUR a year or 500 EUR a month (7% historic average minus ~1% tax).
- With no monthly rent to pay, I'm should be able to live a bit more comfortably compared to my Russian co-workers here :)
Inflation should not be an issue.
Still the bigger plan is to make extra money by working full-time on my own projects. So the goal is to increase investments every year and also the profit from investments.
@onion2k: The book isn't saying you can live forever for that amount. It's a calculation I made for myself based on the historic average profits of the stock market in the long term (based on ~100 years of data). I'm living for 2 months in Thailand and I can have a basic living here for 500 EUR a month, especially if I have a fully paid for apartment. That's a basic living without much luxury, but a good starting point to full-time commit myself to my own projects. And hopefully build more income that way. I also don't have wife, kids, etc…
Lolwut? Sure it's better to be young and rich but don't discount the comfort of being old(er) and rich.
That said, your plan sounds pretty good. How does your plan change if you want to raise kids?
If I'd have kids (and wife) I'd need way more money of course. But I don't want kids of my own. This opinion of me hasn't changed in the last 10 years and I don't think it'll change in the future. I believe there are already plenty enough people on earth and more people wouldn't make the world necessarily a better place.
Not contradicting your decision, but I have to argue this point. There are not enough creative, educated, tolerant, empathetic people in the world. Every educated tolerant person with empathy is a little win for civilization. So, if you think you can make or train one, then there's an argument for having or mentoring kids.
"But for all that is good and holy, don’t join a startup for the fucking money."
If you're joining or starting a company because you think you're going to buy a yacht and a small island, stop it! Recently I've seen some Founders tweeting things that make me shake my head every day. You're not going to be rich unless you have that once in a lifetime solution no one else is building. That's why it's called, "winning the startup lottery." It's still a fucking lottery. :)
It does not require the equivalent to winning the lottery to get rich with a technology business. The odds are several magnitudes greater that you'll get rich creating a technology business than playing the powerball.
Being worth $4 million, and having a small business that generates $650,000 per year in profit, is rich.
Getting rich with a start-up in Silicon Valley, given the approach used there, is like playing the lottery. The start-up lottery you're referring to only exists in SV / SF. Nearly everywhere else, the fundamentals of having an operating business still rule - in that world, a lot of people get rich running smaller technology businesses. $50 million or $500 million rich? Nope, $5 million rich. Silicon Valley is mostly all or nothing, and that's what makes good outcomes so relatively rare.
That's definitely very, very well-off, if not F-U rich. And it's very "safe", unless your $1M in revenue hinges entirely on one or two clients
The amount of connections one would need to start a business tomorrow generating $500k in annual profits is insurmountable.
Being a successful consulting agency or freelancer is attainable in two ways:
1. Know a lot of people at a lot of very large companies that are willing to throw you a bunch of work.
2. Build up clientele for a very long time making no money until you hit critical mass.
When I was freelancing it was one of the worst experiences of my life, so of course I'm bias. But I want readers to know that there are 2 sides to every coin.
This, of course, depends on the individual. Many people are completely inept at running a business and would do much better at powerball.
I'm talking about consulting, franchises, etc. You won't hit it out of the ballpark and TechCrunch won't feature you, but you sure as hell will have money in the bank.
How you use that money is up to you
It's only a few startups that are purley technology startups, the majority are actually traditional.
Microsoft is a tech company; it's business is making and selling technology.
The small eCommerce store that does about $0.5M in revenue using wooCommerce? That's not so much a tech startup as it is a tech-assisted startup. Yet, people continue to confuse the two.
I think the instances where that actually happens are balanced out by the instances where your work will be valued at less than what it'd be worth had you worked at Google.
That claim has never made any sense to me (I think I first saw pg make it). In my experience, there's little to no practical difference between working as a developer at most startups and doing the same at a bigcorp in terms of experience. There's certainly a lot of rah-rah-rah about the "startup culture", but places like Google try very hard to make their employees happy as well.
There might be a little more cowboy coding at the startup and a little more bureaucracy at the bigcorp (though it's a good manager's job to shield engineers from that bureaucracy), but your future job prospects are almost always better when you've got a bigcorp stint on your resume.
Getting on with the Google's or the VC backed "change the world" startups aren't the only ways to get rich in tech.
It requires a good mixture of luck and keeping your ear to the ground to find an undeveloped but large market niche, and a good crystal ball to know which features are worthwhile. I'm not saying it's impossible, but it's far from a certain path to victory.
People tend to think that startups are for young people, but most successful startups are actually founded by 40-something year-olds for this very reason.
That's a bit exaggerated IMO. Granted, it's harder now than 15 years ago to find something under(not un-)developed on the Web e.g. that seems doable and interesting, but if you keep an open eye, you see opportunities every day and wonder why something that seems useful hasn't been done (or done properly). Some of these potential products will be very hard to develop fully and never be perfect, which doesn't make them less interesting (the opposite is true perhaps - does Google Search work perfectly?), only a bit scarier. As for which features are worthwhile: a lot of wisdom has been written down about this - it's important to look at the product from the perspective of a user. If you lose that perspective, talk to real users.
The rest is hard work and that's easier and more rewarding if you work for yourself, I believe.
My advice is that if you find yourself thinking "XYZ would be nice to have, why hasn't someone done this?" or "all solutions for XYZ I can find are terrible, why hasn't anyone done it right?", just sit down and attempt to do it, if it fits your skill set somehow (doesn't have to be a perfect fit and you don't need an MBA!). People are getting rich like this all the time. Don't look for "unicorn" ideas, you don't need to chase billions to retire comfortably.
That's just a tiny and in the long run, insignificant part of building a startup. Bad choices fail quickly, you can choose something else.
I do fairly well for compensation but the way the market has been, I feel like I'm short-changing myself by not taking a shot at a career with the really big players, and I'd love to retire within the next 5-10 years as well. (obviously I've started saving already)
The project started as a hobby/side project when I was 24-25, it got funded and incorporated when I was 27.
Assuming you're not in a position to get the typical pedigree associated with the preconditions, e.g. Stanford/MIT/ C.S, how does a "typical" engineer become amazing. I would love a comprehensive guide on how to do this.
Being great at your job is one thing, meeting the preconditions associated with getting rich in tech, is another.
I never learned how to deal with stress and the stress from the job caused a mental illness that forced me to go on disability.
If I had to do it all over again I'd develop stress management skills along with people and social skills. Getting along with people who don't understand how technology works is a big deal.
I don't know how to get back into working again and I'm 47 and barely getting by. Blew through my life savings and filed chapter 13 bankruptcy due to high medical bills. If I never developed that mental illness, I'd most likely still be working.
I don’t understand the argument for this. Isn’t the whole basis of venture investment being able to identify business that will return above the risk-adjusted return? Given many investors lack the technical understanding to know a good risk from a bad one how could this be priced in?
No, it's to generate proprietary deal flow by building a brand for your firm. YC has done this with HN and pg's essays, while a16z has done this with Marc Andreessen's incessant tweeting and all the blogging by Chris Dixon, Ben Evans, et al.
At this point, YC's/a16z's success has become self-perpetuating - the best founders/companies will apply to YC and pick a16z over other VCs, the best employees will join companies backed by YC/a16z, etc. It's no different from institutions like McKinsey or Harvard.
> you should be picking companies that YC/a16z will like.
Just look up any of the articles on YC's demo days - you've got dumb money coming out of the woodwork from all over the world, trying to get a piece of the action.
Yes, but as a VC you can offset that risk by investing in a range of startups - 9 out of 10 will fail, but the 1 that succeeds will pay for the rest plus a profit. Plus VCs have teams of researchers and analysts to inform them, and they expect the startups themselves to offer some evidence that they can win despite the risk.
You can't really offset the risk in your career because you can only work for one company at a time, and won't have access to the same information about markets and competition as a VC. For you the chance of the startup you choose to work in succeeding is basically the same as any other, although you do get to directly affect it's chances by working hard.
a16z and Sequoia might be able to pick the winners at a higher rate than other investors, but that advantage only bears itself out with a large N of companies.
At the individual case, with a single individual looking for a single job in a single company, the difference between being to pick winners 5% better than the baseline is not consequential, since the expected outcome is still "not a winner".
Some people may be able to pick winners better than others - but the effect is not strong enough to be useful in the micro scale because the odds of success are still very, very low.
VC's however, can place many bets and come out winning if they play enough.
Because this is all high variance, a large sample size favors those with skill. Small sample size favors luck.
Realistically nobody plays at those odds, the actual odds being played are much, much lower.
Which also means that, even through a long career, you're not taking on enough jobs to get a reasonable shot at a win - 10 jobs with a 2% chance of winning each aren't good odds - you have a 18% chance of scoring a win.
All the while you're giving up a lot of money to do so - BigCo's will pay you easily $100-200k more per year. So even if you switch jobs yearly, 10 jobs = 10 years = $1-2M on the table to play for 18% odds.
Which is also why investors who are able to choose well win - YC for example invests in over 200 companies a year. Unless you're switching jobs every week you're not going to be able to raise N high enough to make a difference - at YC's scale a 2% chance of winning for each company means there's a 98% chance at least one company wins.
The entire idea here is that nobody has predictive power high enough to the degree of 10% vs. 40%. Realistically when choosing between two competing startups you're choosing success odds in the low single digits.
Not to mention the rash of articles in the past week about the low payouts you're likely to get even if the company succeeds. Engineers don't walk away from modern startups with 7-figure payouts, low 6-figures is more likely. So realistically even if you are able to pick companies at a 40% accuracy (again, astronomically higher than reality) your expected payout is lower than the $1-2M you're leaving on the table in order to play.
Capital losses cannot be applied to normal income in practice in the US either, only to other capital gains.
You can deduct $3,000 per year in capital losses against normal income.
"Generally, realized capital losses are first offset against realized capital gains. Any excess losses can be deducted against ordinary income up to $3,000 ($1,500 if married filing separately) on line 13 of Form 1040. Losses in excess of this limit can be carried forward to later years to reduce capital gains or ordinary income until the balance of these losses is used up."
$150k loss? 50 years!!
In other countries, capital loss can be deducted from your normal income immediately.
Unless your next startup options (or Google/Big Co RSUS) have a 50k gain the next year(s). Then it only takes year(s).
Or if you have diversified and have market investments that likewise increase 50k and then you sell them.
While the AMT amount may be so high that a lifetime never hits equilibrium, people citing the $3000 capital loss deduction are talking about a completely different thing.
I imagine the advice for a European with a salary cap of approximately 70-80k is the same for an American with a salary cap of 85-90k: wealth is most likely only going to come from entrepreneurship or blind luck.
Now if you're in the US and pretend to have an EU salary by stashing away a big chunk of it, then yes that is most desirable.
I think people also make bad comparisons when doing cost of living exercises. While it is true that potentially much more $$ will be going to rent/mortgage in a high cost of living area, many other things are going to be the same as anywhere else. A $100k Tesla is $100k in SF just like its $100k in North Dakota. After tax + basic needs costs and someone in a large tech city is going to have significantly more disposable income still than someone making much lower salary with much lower cost of living.
If you take an average middle class person in the US, your company will provide you with health insurance, so that's covered. If you come down with a horrible illness and can't work, your employer provides LT disability insurance. If you run out of that, you have Social Security disability insurance. And even if that runs out, you have Medicaid disability insurance.
I won't argue that the EU provides a more comprehensive safety net (probably easier access as well), but US isn't that far behind.
Unemployment benefits in the US are both incredibly stingy and time-limited.
Another thing is that there is a strata of people who fall into the donut hole: they make too much to get ACA subsidies, and too little to get a reasonable plan (http://kff.org/health-reform/issue-brief/the-coverage-gap-un...) If you get stuck with a major condition in that situation, you're going to be in a lot of trouble, not to mention that even the insured may not have everything covered. Medical bankruptcies are the most common in the US still: http://www.cnbc.com/id/100840148
"Even outside of bankruptcy, about 56 million adults—more than 20 percent of the population between the ages of 19 and 64—will still struggle with health-care-related bills this year, according to NerdWallet Health.
And if you think only Americans without health insurance face financial troubles, think again. NerdWallet estimates nearly 10 million adults with year-round health-insurance coverage will still accumulate medical bills that they can't pay off this year."
So yes, in the US, you absolutely need your own safety net.
Rents may be high in some cities, but compare that to London or Geneva?
Unemployment benefits in the US were extended to 98 week during the last recession. That's two years. Most of the folks I know who went on unemployment insurance had no issues with getting the benefit.
I won't argue with you that the ACA has some stupid income limits. Those don't exist outside of the US?
The medical bankruptcy data that gets thrown around is misleading. It's true that a lot of people that go bankrupt have medical debt, but it's not necessarily the cause of their bankruptcy. That data came from a Harvard study that has been severely criticized.
And health can cause bankruptcy in countries with single payers. There was an article in Canada that health problems are a big cause of bankruptcies in that country as well.
Approximately 15 percent of bankrupt
Canadian seniors -- those 55 and older -- cited medical reasons, including uninsured expenses, as the main culprit for their insolvency. In fact, the rate isn't that far off from what you see in the US.
The 99 week extension ended, and it differs by region anyway:
"Workers in most states are eligible for up to 26 weeks of benefits from the regular state-funded unemployment compensation program, although ten states provide fewer weeks and two provide more. " That's nothing.
The maximum amount in California is $450 per week, not even enough to pay the median rent for a studio: ($2,722 in August 2015.) Start adding in food and bills, and it's a laugh.
The many sources I've read support the medical bankruptcy stats. I'm aware of the criticisms, but they don't seem to diminish the core case much at all. Other developed countries have medical bankruptcy, but nothing like the US.
Sure, if you pick the most expensive city in the US right now. How does the unemployment insurance in the UK stack up?
We'll just have to agree to disagree. The EU might have a very generous safety net, but it's incorrect to say that the US is that far behind.
You can repeat the experiment on other job-creating cities like New York, Boston, or San Jose. Or scale back to "cheap" Oakland (median rent ~2100) and it still looks terrible.
Let's compare just unemployment insurance between the US and Germany. Similar cases can be made for health care, pensions, time off, public/social housing, and even college funding. This doesn't even include things the US doesn't have at all, like Kuzarbeit.
US: maximum 99 weeks during the crisis, now back down to 26 weeks in most places
Germany: "benefit recipients aged 50 to 54 now receive an unemployment benefit for 15 months, those 55 to 57 for 18 months and those 58 or older receive benefits for 24 months. For those under the age of 50 who have not been employed for more than 30 months in a job which paid into the social security scheme, full unemployment benefit can be received for a maximum period of 12 months" then "If a worker is not eligible for the full unemployment benefits or after receiving the full unemployment benefit for the maximum of 12 months, he is able to apply for benefits from the so-called Arbeitslosengeld II (Hartz IV) programme, an open-ended welfare programme which, unlike the US system, ensures people do not fall into penury. A person receiving Hartz IV benefits is paid 399 EUR (2015) a month for living expenses plus the cost of adequate housing (including heating) and health care."
Perform the same comparison between the US and Sweden (with multiple levels of UI, followed by the Job and development guarantee), Austria (unemployment assistance is payable for one year (52 weeks) and may be extended ‘indefinitely’ by application, provided that the qualifying conditions are fulfilled), Denmark (90% of their average earnings for up to four years), or the west/north European country of your choice and you come up with similarly large contrasts. When you start putting those together with their health care, housing, and more general welfare programs, the differences are not small at all.
 2010, the most recent I could find - http://www.economist.com/blogs/freeexchange/2010/09/income_i...
The usual suspects have the highest social mobility - Denmark, Norway, and Finland plus Canada.
Social safety nets actually lead to an increase in social mobility.
If you actually read the Wiki I linked you'd see that it mentions race/racism and gender/sexism as factors as well.
Which is funny because a lot of Canadians come to the US because it has better career (and salary) opportunities than Canada.
This equals a net income of 45K, which is 3.75K per month.
The pension alone should be enough to live and even travel on.
Don't accept sub-market pay and long hours in exchange for 'experience'. Other people (i.e. investors) are making money off your work. Get paid.
I did a lot better at the two startups that I worked at than the either the founders or investors did. At least I got paid; it may've been below market, but I ended up with net-positive income from them.
Probably the most valuable experience you can get out of a startup is learning that most things fail, and when they fail, they take everybody involved with them, and it's your responsibility to dig yourself out and either make them succeed or find something else that will. Only then can you make informed decisions about your career. A lot of people who join the secure, steady thing never learn this, and then they're completely blindsided when it fails too.
Where's this meme that Google just hires everybody who wants to work there coming from? Google has known-broken interviewing processes for hiring capable people (he says, bitterly, after never having had passed a phone screen with them).
Are you assuming there's no pay involved? I didn't get that from the article; it's not saying take a job for no pay. It's saying it's unreasonable to expect to get paid Google money at a startup.
In exchange for not getting paid what you're worth to Google, you get to touch a lot of different areas and get a lot of experience with a lot of things.
I chose to work at a startup after working for an established company full of very smart engineers from whom I learned tons about software development and how to operate. I left because after a number of years I felt the need to work on something new and really apply what I had learned, not just about code but building the tech-side of the company. Having a blank slate allowed me to improve in areas I thought could be done better, it showed me the short comings in other approaches. Ultimately it's been an incredible learning experience that you just can't replicate in a lot of ways. I also have entrepreneurial ambitions so joining a startup as employee #1 has allowed me to learn how to build a business at every level. Again, very valuable information that you just won't get from BigCo, MedCo, and probably not even SmallCo. I can't pay to get this knowledge, I simply can't so how do you value this? Luckily for me this is more of a thought exercise as wages in my area are somewhat depressed so a startup can offer a competitive salary.
However I have also seen a handful of graduates who got into software purely as a financial motivation, and dream of winning the startup lottery. They turn down a better job, be it salary, benefits, or a place with great learning potential for a few more options. These are the exploited, the naive.
If you are philosophically averse to this, your options seem pretty limited to me.
If you join a startup, it might be investors, as you point out. If you join a big company, it will be that company's shareholders. If you start your own company, it might be your own investors, or if you have none, the government taxing your corporate profits. Also better not start any company doing things like productivity tools, raw materials, etc. Your customers might make money off your work that way...
This comment breaks the HN guidelines. Personal attacks are not allowed here. Your other comments in the thread aren't civil and substantive either, because they're mostly just venting indignation, and in the signal/noise ratio that we care about, that is noise.
It's worth observing that the indignation was out of place to begin with—the OP not only doesn't advocate what you're railing against, he said the opposite and even put it in bold, presumably to ward off misunderstanding. That mismatch is typical of indignation, which usually pre-exists and is waiting for opportunities to vent. In other words, it's really about something else, which is why such comments always feel off-topic even when they don't appear to be. (This is not a personal critcism; I've made many such comments myself and it took a long time to figure out that doing so is not real conversation.)
HN started as an experiment in trying to withstand that, and though there's much to be unsatisfied with, at least it hasn't succumbed completely.
I don't have much respect for folks who denigrate those sorts of ambitions, especially on HN. On top of helping to continue to distort the overall shape of entrepreneurship, it's awfully close to a personal attack, as it's basically saying "Your dreams are stupid".
Now show me on the organizational chart who hurt you...