A 7 figure annual income is setting the affluent definition very high.
You can work at Google for a decade and end up a multi-millionaire, with enough money to retire to most places in the US.
From your other comment, it seems like you haven't done the analysis on this. Top companies are routinely paying $200k-300k these days. That's enough to save a million dollars over a decade even if you have a family.
You're very likely talking about the top 0.1% employees at the top 0.1% of companies.
Every time salary is discussed on HN, inevitably someone brings up this "fact" that engineers are "routinely" making $200K or $300K or $400K or whatever other ridiculous figure. Given average Bay Area software engineer compensation being between $100K and $140K depending on your source, even at $200K we're probably talking at least 1 or 2 standard deviations from the mean. But there's no fighting HN anecdotes. There's always someone here who knows That Guy At Google Who Makes $300K or That Buddy's Roommate That Gets $400K Straight Out Of School At Facebook, and suddenly this turns into "everyone must be earning that much." Come on.
Yes. It is surely possible to work at Google for a decade and end up a multi-millionaire. It's possible to bowl 300, too, and hit 3 hole-in-ones in a row. It's astronomically more likely most people who work at Google or any other software engineering role for a decade will not end up multi-millionaires. Pretending otherwise grossly overstates the (admittedly okay) lifestyles and salaries most tech folks enjoy.
This is all in the greater thread's context of whether you are more likely to get rich working for someone else or yourself. Sure, only the top engineers get paid $300k+/year, but an even smaller number of founders are able to pull that sort of effective salary. I'd wager that these days a smart engineer is financially better off at a big co than even starting a startup.
For more specifics, large, prestigious companies such as Google have salary and equity bands based on levels. The majority of engineers at Google are going to be above $200k total comp (salary + bonus + equity). Here's a glassdoor link for context: https://www.glassdoor.com/Salary/Google-Senior-Software-Engi...
> This is is all in the greater thread's context of whether you are more likely to get rich working for someone else or yourself.
The point I'm trying to make is that both likelihoods are very small. Maybe you have a 1 in 1000 shot at becoming a multi-millionaire by working at BigCo vs. a 1 in 2000 shot at a startup. Some people are claiming that Google, Facebook, etc. are simply pumping out millionaire after millionaire and this is obviously not true. And when you call them on this, they trot out the usual "Bbbbut I know That One Guy At Google Who..." anecdote to somehow prove that everyone in the valley is printing money.
I generally don't trust equity figures when looking at Glassdoor, because there are no details. My guess is most of what's self-reported as yearly equity is really just signing bonus equity that vests after 4 years and then you're back to making base salary.
Fair point, though I do believe it is reasonably common for a new grad that starts at FB, Google, etc. to have saved a million within 13 years. (An individual making $200k/year can readily save $80k/year)
> My guess is most of what's self-reported as yearly equity is really just signing bonus equity that vests after 4 years and then you're back to making base salary.
Generally, I think people would be reporting what they are going to make this year. (e.g. #shares vesting this year * value).
Companies continually issue refresher equity as time goes on. At year 2, you'd be expected to be vesting significantly more equity than you did at your start date (especially if you have been promoted)
In support of your argument, I would be surprised if the key engineers in large companies (ex: Jeff Dean, Peter Norvig, Yann LeCun, Andrew Ng, ...) aren't earning 7 figure annual incomes, especially after stock incentives are taken into consideration. They all work for someone else.
Instead of downvoting, please check the median salary for a PRINCIPAL software engineer on Glassdoor (it is self-reported, I believe) - it is 140K, nationally.
Glassdoor skews heavily downwards. Even for companies I've worked at, where I knew what everyone made, its data was roughly 25-40% below reality.
Also, why look at median salary? We're arguing over whether it's "possible" to become affluent as a mere employee—even if only the top 20% of engineers are capable of it, it's certainly possible.
Maybe I am a total loser, but I am not aware of any companies which "routinely" pay $300K for technical positions, not even at the Director level, in the Boston area.
I find in these conversations that some people are talking about salary and others are talking about salary + bonus + stock options. In particular, the stock option portion to me (but YMMV) seems disingenuous.
As an example, I'm in the Boston area and ~2 rungs away from a "director" type title, working at a company known to not pay top dollar and without things like stock. It wouldn't take much stock for me to enter into the range that's being discussed here, albeit likely the lower side of it. OTOH none of the people I talk about this stuff with are remotely near the top end of that range when you take stock options out of the picture.
Google and Facebook etc often give 'restricted stock units', ie stock that vests over time. That's almost as good as cash, since you can sell them anytime after they are vesting.
Stock in startups and options in general are a gamble, of course.
They're way better than startup-y options, definitely. However if for some reason I don't stay there long enough, it's not at all the same as cash.
They're still plenty valuable, as opposed to startup options which I consider worthless, but my point was that IMO this is one of the sources of all of these debates as to how much people make. Some people will count them and others won't
At Google you wait for a year, and then get stock vesting every month. I just treat it like monthly salary (and don't even pay too much attention to how much unvested stock I theoretically have: if I stay, they'll top it up anyway; if I leave it's gone.)
Yes, totally agree, if you want to compare numbers, you have to agree on what you compare.
In theory, we could just always talk about total compensation, and just plug in standard financial valuation models. (Those models would typically value startup equity at close to zero value---especially the kind of equity that tends to get horribly diluted.)
Because these companies don't exist. Top companies pay SDE3s and tech leads like 300-400k. Medium-sized companies in high cost of living areas pay directors around that much. No one pays engineers that much. Literally no one.
No, they just don't consider the millions they receive in stock. Given that an intern at Facebook earns $8000 a month plus free luxury rent, do you honestly think a director makes only 70% more in a tech company?
At most companies tech lead means someone who is planning the technical work of a team, but is not the manager. The tech lead is an engineer. So that company has separated manager and tech leadership. Google works this way. There are some groups at google where someone does both tech lead and manager, they call that person the TLM.
I have a friend that works there as an engineer and as far as he has told me they pay about average to a bit below average and the engineers sit in an open plan office.
Just checked glassdoor, and a senior software engineer makes ~114k so that gives you a pretty good idea of their compensation structure...average.
Not to call you a liar or anything, but I get emails from wayfair recruiters all the time and my understanding of their compensation has led me not to respond but I'd love to be wrong.
There a lot of jobs that pay that much in other comapnies in and outside of tech, although you will be expected to do more than just excel at a profession (read go to management).
There are also many more tech companies which will give such salaries to distinguished engineers.
edit: Reading your other comment, median is not the right parameter to compare in this situation.
There's a few more companies paying well than that.
But, yes, the limitations of popular knowledge are part of the reason why we wade through lots and lots of applications from people who have absolutely no clue at Google. (The most clueless just haven't heard of the less well-known companies that also pay well.)
$200k-$300k in places like San Francisco and Menlo Park. Clearly, you don't understand how cost of living works. Also, to make that much, you need to be at around a level of SDE3/tech lead, which is by no means easy (a decade of making low six-figures & some political panache). See this top answer on Quora, for a pretty detailed analysis: https://www.quora.com/Will-I-be-able-to-become-a-millionaire...
You might be able to become a millionaire in 25 years assuming a frugal lifestyle and no big life event costs, but that's optimistic.
You can argue all you want, but I understand how cost of living works plenty well. SV is expensive but not so expensive that it wipes out $200k in income. If you're careful about expenses you can easily put away tens of thousands annually.
This is backed up by own personal experience as a developer in NYC (hardly a low cost area). I expect to have a million dollars saved up within a decade and I certainly haven't relied on political panache to get there.
Sorry for seeming incredulous, but if you're saying that you're saving 100k a year in NYC, then you must be making like 400k or living in a cardboard box.
Even with a 300k salary, you could only save 10k a month if you only had 5k worth of monthly expenses (3-4k is easily rent in NYC).
And keep in mind that making 300k-400k is not typical.
Only if you insist on living by yourself, or renting a luxury apartment with your friends/family in Manhattan. Going under $2k a month is easily possible if you have a large, multiple earner family or roommates, especially if you live outside Manhattan/Brooklyn. Plenty of New Yorkers manage with incomes less than $60k, and if you can live like them, saving 10k a month on a $300,000 salary is easy.
There is nothing requiring you to spend a certain amount of money just because you are earning a certain amount of money. We don't have sumptuary laws, after all.
I make substantially less than 400k and I assure you that I do not live in a cardboard box.
$5k is high for monthly expenses. I rented a single bedroom in Manhattan for $1850 and you can save even more if you're willing to live with roommates.
I'm not sure what I can do to convince you I'm not lying, but consider that median household income is less than $100k in both SV and NY. If the average person can get by on <$100k, why wouldn't you be able to save tons of money if you're making $200k? I have friends getting by on $40k in NYC. Can you imagine how easy it is to save if you match your lifestyle to theirs?
Of course, it's not going to buy you a luxury lifestyle. But personally I'd rather maintain a high savings rate than live in a glitzy apartment and spend thousands on bottle service.
Ok, so maybe I'm just bad at math. I know that if you make 200k as an engineer in NYC (which is STILL high[1]), you make around 10k a month after taxes.
10k - 2k for rent - 1k for expenses = 7k saved if you don't go on vacation, and literally do nothing that costs money for ten years. Even saving 7k a month, you won't save 100k a year.
You are exaggerating NYC income taxes. At $200k, your effective income tax rate if you file single, including FICA, is 33%, not 40% [0].
Heck, your marginal tax rate isn't even 40%, and all those numbers are without taking a 401k tax deduction.
People get this crazy idea that $200k isn't rich in NYC or SF. It is very, very rich, even for the area. COL adjustment for rent and groceries shaves off $15-30k, but it doesn't keep scaling up from there.
There's actually no contradiction. Marginal tax rates go down 6.2% at 118,500 when social security cuts out, and they only go up about 3% from there to 200k.
It's kind of outrageous, marginal tax rates going down for high earners, but there we are.
But thanks for pointing out that I had the wrong zip code, so I missed NYC income tax, which is 3.65% marginal, bringing average tax rates at 200k to 36%, not 33% (albeit with zero deductions and exemptions, which obviously isn't reasonable, you'll deduct state income tax at the very least and shave off 1.4% immediately).
Your link is in error, it treats Social Security tax as continuing past $118k.
> you'll deduct state income tax at the very least
The tool also factors in state income tax deductions. You'll see it deducted in the link above
The tool reports the marginal tax rate for a $200,000 earner as ~36%.
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But yea, you're right, it sucks that $50k earners are taxed even more % than $200k earners. The employer pays payroll taxes of 7.65% (6.2% + 1.45%), so actual marginal taxes are ~50% from an employer cost perspective. It's truly insane.
7k is about right. My average savings rate over the past 3 years has been $6k and it's increased as my salary has.
You're forgetting to include investment gains. With them, I can go on regular vacations and still reach $1m within 10 years.
Also, since someone else mentioned it, my model conservatively assumes a 4% inflation rate. Over the 3 years I've been tracking, my model has consistently underestimated the growth in my savings.
It's not huge. That's bills together with all of your everyday spending. It's certainly possible to get that down to less than $1000 a month but you can easily spend $1000 a month without doing anything extravagant.
A lot of people make TL within 5-7 years, its not that uncommon (although we are talking about top 1-5% of programmers). Saving $1MM on west coast salary in 10 years is really doable. I am on track to do it in effectively 7 years or so.
You can work at Google for a decade and end up a multi-millionaire, with enough money to retire to most places in the US.
From your other comment, it seems like you haven't done the analysis on this. Top companies are routinely paying $200k-300k these days. That's enough to save a million dollars over a decade even if you have a family.