500k/year in your last year is "nothing", huh? It really undercuts the entire thrust of the post, because you're starting with a nice big war chest and a hell of a safety net, not "nothing".
The point is not that he is starving, or that he is desperate. The point of that number is what he gave up!
The point is he gave up a job of 0.5 million, potentially 1 million in a few years. To top it off the job had reasonable hours, great people and he was getting positive feedback.
You would not expect people to give that up. The question is why?
Instead, you're pointing out how lucky he was. Well, that is his point! He was so lucky and is giving it up! Aren't you curious why?
I would absolutely expect people to give that up, as well as any senior economist student would tell you, the labor preference curve is backward-bending after you start making a certain amount of money.
> He was so lucky and is giving it up! Aren't you curious why?
Not in the slightest. There are multiple studies saying that happiness plateaus after a certain amount of income. It's his life and he probably found his own plateau.
Are you sure this is a good student? The bend in the curve demonstrates the preference for incremental wealth. So you might forego $500k to $600k. Going down to $0 takes you through the steepest part of the curve.
(I guess with interest on savings, the person is going down to something like $25k-$40k.)
> There are multiple studies saying that happiness plateaus after a certain amount of income. It's his life and he probably found his own plateau.
I am not sure what you mean by "probably found his own plateau".
Do you mean he found he didn't need as much money to live?
He figured out that living on $150k (stated elsewhere) and doing his own thing 24/7 gives him more utility and satisfaction than earning $500k and working at Amazon full time.
Neither one is particularly interesting, because it's already in dream territory for most people and if you gave them a choice of living on $150k and working on their own business (an enormous safety net), most people would be happy with those options.
But a plateau would just mean he quit advancing. This guy didn't stop on a plateau, he stepped off a cliff. That's a pretty big difference.
Also, the people (me included) that don't question "why" are the people that would do the same if they had the opportunity.
Of course anyone can create the opportunity for themselves, and of course the income and spendings are relative, but no matter how you slice it, a half a million safety net, or even 1/10th that, is still a pretty big help to take the decision.
Please. It was perfectly obvious from context that the "nothing" he was referring to was his "new thing". No product, no customers, no brand, no marketing, no customer discovery, etc... that's pretty much "nothing" in terms of starting a business.
It's not like he claimed to be broke, or a destitute, homeless, bum. If anything, I kinda feel like we should give the OP credit for being transparent in a way that most people aren't.
They have a bunch of money, move upstate, talk about all these crafty / cosey things they do and how great a life choice they made and contrast it with a lot of bad things .... that are the only reason they can make the choices they can now.
I’m reminded regularly about a line from the Dalai Lama. When we are young we sell our health for money and when we are old we will pay anything to get it back.
My original life plan was to do this maybe 8-10 years earlier. But the startups I picked didn’t go big (I chose for impact not cash out potential), two recessions and a divorce. And I can only do this now because I have simpler tastes (except for tools).
I'd like to do it, maybe try my hand at woodworking.
I come at it sideways by trying to encourage people to have more hobbies or at least see the sights/local events.
But domain knowledge and contacts will probably be the biggest assets OP turns out to possess. Don’t undersell those.
And 80k is still well over the average household income
Getting a sustainable business is not easy. Lots of groups don’t get there with $10’s of millions in venture capital. So from a business prospective he is starting with nothing but does have a personal safety cushion.
What I think you mean is you don't have steady W2 income from an employer.
A different post would inspire me to try too. A post like this one makes me sad to be less privileged.
And I'm not saying that to make you feel bad or anything. People have different circumstances and make different choices for themselves, some biased by the circumstances and some not. I'm just saying it as a consumer of a text. Just throwing my opinion with no expectations of anyone catching it.
Depending on where you live, who you support (or are supported by), and how capital intensive your independent business is, that could be plenty. Plus, you've already got a book deal worked into the business plan it seems.
Even though I sold myself cheap, I still made more money that the salary I would get if I had worked for the big consulting companies. The biggest challenge is selling yourself, and I am not very good at it. Still it worked out great for 2 years until I joined a startup as the first employee which has gone from 3 to 100 employees in just 2 years.
If I was employed at a regular company, I would never have gotten the chance to join that startup.
- almost broke startup founder
Since OP has a million saved I’m going to assume they had a similar plan in place. But. $150k a year with young kids (they haven’t begun to get expensive yet) in Seattle is pretty high. Getting that down is a good deal of effort that will distract from running the business.
I hope these kind of things are taught to people early. Somewhere in school, or may be at a level of a social value system. The default every day mode for most people is to work very hard and fail. In fact you are lucky to achieve mediocre success even after working insanely hard.
>>The best thing I ever did for the family budget is work out a plan ahead of time for windfall money.
Yes the best thing to do in case of a windfall period is to take all the money and put it into some kind of an investment. So that when the gravy train stops, you have something to fall back on.
>>Spending like this is the new normal is how rock stars and athletes end up broke at 40. You have to get out ahead of it.
It isn't just rock stars and athletes, its your every day cousins and uncles, who have some career run, spend like no tomorrow, when the gravy train stops, they realize they have their best years behind them, all their money is gone, and nothing that they can do will help them even get by, let alone take them back to their past glory.
>>$150k a year with young kids (they haven’t begun to get expensive yet) in Seattle is pretty high. Getting that down is a good deal of effort that will distract from running the business.
A lot of people will be willing to show sympathy to you if you met with an accident and bad things happened to you beyond you control. But if you threw away a perfectly fine opportunity and asked them to settle for less, they would be asking why should they even be doing it at all.
Usually big stock grants go out to those who have shown themselves to be force multipliers. If you can make everyone around you more productive than you’re contributing in ways that make companies like to put golden handcuffs on you.
“Now that I have some runway I’m going to build something from scratch”? Probably wouldn’t satisfy those that could only dream to make $500k and are frustrated you don’t appreciate it I guess.
I’m not making that much but your post makes sense and resonated with me.
Now, as warped as this all seems, this pales in comparison to what some tech people make in finance.
Capital helps. It won't make you profitable though.
EDIT: oh he just said $1M saving there.
Wow, I'm envious of this rate of internal raises. Is this consistent within Amazon's culture, or other SV companies?
I've found (in the small-town Midwestern shops I frequent, not in the FAANG bubble) that I have to change employers to do better than a token 3-5% annual raise, even if my value to the company is increasing much more quickly.
I've even been heartily congratulated and thanked at my annual review for completing successful, profitable projects in my first year at one job, and offered a reward of a $1/hour raise. I was a bit shocked, as that represented a pay cut when you factored in inflation. They 'capitulated' to an increase of $1.50/hour, which was just about keeping up...had to go look elsewhere to do better.
I do share the same sentiment as yours. I'll be closely watching your experiment and hopefully learn something from you!
Good luck and best wishes!
By that logic hires are bad deals if they ever eventually leave because you "lost" the money of their last n years.
The author could probably have been a bit more specific and noted that his income was actually quite likely to go down for the next several years, but it wouldn't have made for such a compelling post.
Disclaimer - I'm also at Amazon, but I joined at the peak stock price :(
> My potential at the company was high, I was told.
> My esteem within the company grew along the years and I was regarded an expert and a leader in my field.
> People looked up to me and respected me.
> I made $75K in my first year and that gradually grew to $511K by my last year.
> I could have made another $1M if I stayed another couple of years.
> My work–life balance was good too, despite Amazon’s reputation.
> I didn’t need to prove myself anymore, and I could get everything done in 40 hours a week.
> My team worked from home one day a week, and I rarely opened my laptop at night or weekends.
> Also, the people I worked with were exceptional. I had three managers in total, and all were generous people with lots of empathy.
I can't fathom the number of people who would kill to have 1/3 of this list, myself included. I'm sure leaving all this behind is good for now, but, as someone else said, you're in for a rude awakening when you're back on the job market and you're grinding like the rest of us. Enjoy the vacation while it lasts.
I guess you could look at it as an act of generosity. the more people quit from those jobs, the more there is for everyone else. :)
He definitely had early career success. Like most people in his situation it can be very hard to understand how hard life can be at the opposite end. When you are young, and have this kind of success without prior equivalent failure it can be hard to grasp how much you'd have to work to make that much on pure hard work and merit. It's easy to spend and throw it away, or even not respect the uniqueness and blessed situation you have now.
Then you reach some thing like 35-40, and realize you have no luck going for yourself anymore. The best years are behind you. And you have to put in life devastating hours only to fail. And there is nothing you can do but suffer through it.
Back from where I come we have a proverb in Dakhni Urdu which goes like this: People make the worst possible decisions of their lives when their stomach is full.
It's interesting timing to quit now. If you have 45 years to work, why not work a few more years to have a much longer runway?
Safe withdrawal rate now is $40k...if you did 3 more years to and saved $2 mill, that's a double of your safe withdrawal rate to $80k. You're doing 40 hours a week on a good team...
Also I saw you put your health insurance is $1.2k per month...Amazon's health insurance../sucks?
Because I didn't want to keep postponing. There will always be something that I could be waiting for.
PS. Regarding health insurance. No $1.2K/month is from the ACA marketplace. I could have continued Amazon's through cobra for 1 year, but it was about $1.5K. When I was with Amazon, I think I only paid $300/month.
Yes you can still be miserable with a ton of cash but I'd rather cry in a Corvette than on a bus. Hoping to see a follow up post from OP after they've gained some perspective.
My spidey sense tells me the op just needed a reality check, a long vacation and some introspection.
>What is out there that I could do that would make me excited waking up every day for the next 45 years that could also earn me enough money to cover my expenses?
At $500k, with UK tax rates (probably higher than US), you'd have $275k net. If you remove generous expenses, you have $200k a year in savings. Five years working would get you $1M.
With $1M, you would probably never have to work again (~$40k in safe withdrawal per year).
Then you'd have the ability to pick any job, irrespective of pay. Go help charities, help with research, spend all your time on open source projects, whatever you want.
They making the probably-fair assumption that these hypothetical people want to live at least close to where they're rooted their lives.
So, the ivory tower remark seems appropriate.
Neither here nor there. The GP was responding to "$1M is not enough for most people to retire on."
i.e. "$1m is not enough for most people in the US to never work again assuming they want to live to the standard that I have become accustomed to."
Which very likely does not apply to "most people". We do pretty well for ourselves and it's easy to forget that "most people" live paycheck to paycheck on far less.
To put my feelings bluntly, get out of your bubble.
In Seattle Washington? You'd have an extremely hard time making ends meet on $75K, it certainly isn't "generous." For example median home value in Seattle is $725K.
Fixed costs per month:
* $5K mortgage
* $1.2K health insurance
* $300 life and disability insurance
* $800 utilities
* $2K home services: nanny, sitter, cleaner
* $800 school / preschool and kids activities
* $2K groceries, essentials, etc
I have a family, two small kids (4 and 2), and live a comfortable life in Seattle. I could obviously adjust my standard of living, move somewhere cheaper, etc, but I didn't want my family to have to change anything from this experiment I'm doing with my life.
If I moved into my neighborhood now it might be closer to $5k (without a bigger down payment) but I wouldn’t recommend it.
A lot of the things in your post resonated with me, but seeing this in the comments really got me curious about your math.
Good luck with your endeavor!
My mortgage interest rate is 4% and I've put the cash I've withdrawn in short term US treasures at 2.5%, so that cash is only costing me 1.5%.
Another reason I did a refinance was that when I bought my house I had only been in the US for 2.5 years and my credit score wasn't great (in the 600s IIRC). I could only get an 5/1 ARM loan that was about to start becoming variable at a higher interest rate.
Renting an 1800 sq ft 3 bedroom house is $40K/year. That leaves $35K. Per month that's almost $3000.
If you are having an "extremely hard time" paying for everything else with $3000, you may want to reevaluate your lifestyle.
I'm not saying it's a fantastic lifestyle, but it's not a poor lifestyle. You'll still be able to afford a lifestyle better than most of the country.
I suppose bare minimum essential is probably $1000/mo but if you set needle to little above middle class but way below “rich” (which is not same as median) then $3000’for “everything else” is not sufficient.
That isn’t much less than the median income in Seattle.
The problem there is you’re just responding to whims, and everything will start to feel the same.
Even for simple things. I grew up without A/C in an apartment with leaky windows that would get way too cold at night. Never bothered me. I was used to sweating a lot in summer and using a lot of blankets or standing by the oven while we were making dinner in winter.
Today? The moment the temperature is a little off I WANT TO DIE. I can't get any work (or anything really) done, and I'm likely to get sick. Im a wuss now. Central air/heat (or heated floors if we're gonna get fancy) or I'm sad. My young self from 30 years ago would laugh his ass off at how useless my current self is. Wealth can spoil you really quickly.
The big issue however is that returns are averaged over long duration and so on some years you can end with as little as 2-3% or even negative. So you need to have 25-50% cushion to ride out bad turns in economy where you will be eating up principal itself. This is also important for any unforeseen circumstances such a medical issues that might rack up huge out of pocket (especially in US). Or children leaving for college needing to pay as much as $50K in tuitions. You also need at least 6 months of buffer ($50K) in case some bad event triggers losing your investment, for example, someone trying to to sue you. Given all these more practical investment asset size is $3M for financial independence.
It's worth asking yourself regularly not only "Am I being paid enough?" but also "Am I being paid too much?".
In addition, I greatly dislike how the top post is negative on the story: it disregards the idea behind the post and instead replicates the typical "you have things good so fuck you" response.
Ideal autonomy is getting corporate patronage to mange your open source project.
One issue I see is that you'll always face this same question again and again, as risks are way less quantifiable than one expected. I was at multiple occasions that I made up my mind to move on, but at the juncture of making decision, the previous thought process just fell apart for no reason; because when risks become more realistic, its mental pressure is way heavier than the expectation.
He could still do it but that is risky as he could get sued later and I have even heard that it can block any future sale until it gets ironed out.
OP is an SDE3, which levels.fyi puts at $154,259 base, $150,648 stock, $19,227 bonus. The stock goes up 3x in the years between the grant and when you vest, you are making tons of money. Most people don't expect Amazon's stock to triple again in the next few years.
Amazon has very few L7+ SDEs (~1% of SDEs). So when you read that salary, you have to remember the author is relatively rare even within Amazon.
From my own experience feeling trapped in a job that makes significantly less than $500k, and those of several friends, sure it may be a privileged position to be in, but the human mind doesn't care whether it should be feeling a huge mental burden.
Taking the leap and giving up a well paying but soul crushing job is hard. And it can feel really isolating and guilt inducing, when you certainly can't talk about it to your friend who is barely making ends meet and yet has a job seemingly less soul crushing. I'm sure they would tell you to go cry in your pile of money.
But work is most of life and I basically see finding work you like as a primary means to happiness. I've been scoping out interest for a coaching business around this topic lately and it seems that a lot of people have this problem. Heck, the "is freelancing the best thing ever or your worst nightmare" posts seem to come up every other day. I'm glad we are taking about it.
About the handcuffs, tbh it's not just the money. There's also other intangibles. I had built a lot of connections and a good reputation inside the company, and by leaving I've lost access to that. I could reason about the money in a spreadsheet, but the other things were harder to value.
And I feel that his career trajectory is pretty typical - you start building cool stuff in a small team and you end up trying to coordinate large groups of people (who a typically the managers of the people who will build the cool stuff).
I don't know how long the good times will last, but I don't think we can just count on super high demand for developers forever. There will come a day when the market balances out the supply and demand in favor of employers and when that happens people like this guy are going to really regret their earlier choices.
Well yeah dude - you started at 75K and now you make 500K - bigger salary = bigger obligations.
I'm a software developer myself for +10 years and haven't made $500k in my whole career and for some reason I don't feel any envy for him. On the contrary, I am glad that we're in an industry where people can earn this big.
If people have the ability to make things themselves and build a business, then should pursue this under the banner of providing greater choice to consumers.
Particularly if the entire industry is bifurcating between a few enormous, ossifying tech conglomerates.
Why would you throwaway an opportunity to amass like $5 million in 10 years, and then put it in a retirement fund and just retire. Instead of throwing it all away and starting all over again on something that is known to work in only exceptional cases(start up lottery).
Looks good on paper and all. But not a smart move.
On the one hand I applaud people chasing their dreams, taking risks to start something new etc, but on the other hand, it seems like he's putting a lot of risk on the family and even seems a bit selfish to me.
Wouldn't he be better off starting a fulfilling hobby, or trying to negotiate a 3 or 4-day work-week and starting a side business, etc?
But even if I was allowed, I probably still would have left first. It's hard working full-time, raising kids, and doing a side-business. If the circumstances were drastically different I could have done that, but I didn't need to.
About risk to the family: If I don't manage to pull this off for whatever reason (run out of money, get bored, find it too hard, etc), I'll just go back on the job market. I promised my family that our lifestyle won't change, and if our savings drop below a certain threshold I'll get a job and make sure our expenses are covered. For catastrophic stuff I got abundant insurance (life, disability, health) to protect the family. If we end up spending all our savings, we can consider it an advance from retirement and I’ll make up for it later.
Presumably, the answer is "because I already earned all the money I wanted to earn".
The big ones. Google Facebook Microsoft Amazon.
> Is it realistic to make 500k-1 million+ at these companies as a developer?
It's realistic but not a given. You've gotta be into staff software engineer+ range to be making that much. Plenty of people never make staff.
> How much is it in stocks/rsus vs salary at that point?
Probably around 50/50. 50 salary 50 bonus + rsus. Or maybe even 40 salary 60 bonus + rsu.
> What skillsets do these people have?
Be one of the better software engineers at a company that can curate top engineers.
Strong communication, high interpersonal skills, ability to lead complex software projects, high intelligence, fast learner, breadth and depth of understanding of software. Plays well with others. Generalist -- able to work in a variety of languages with different tools, with no hesitation to learn and quickly understand new environments. These engineers may be domain experts at specific things, but they are by no means pigeonholed.
Usually, but not always, these engineers are also very productive and motivated.
Staff, sr staff, principle and other monikers are usually about affecting change at the scale larger than your team, operating at larger scope, and growing people around you.
Luxury apartments are much cheaper than SF and South Bay in my experience, and I wouldn't have needed a car. Weather isn't as nice as SFBA probably, but I enjoy the weather around there. Commuting is also pretty straightforward into the suburbs.
It's his life and his choices, but many of us have it quite hard.
I've had friend of a friend like this who ended up in suicide, because he was unable to replicate his success in big company.
I wish him luck regardless.
You gotta wonder, though, what the rest of the world would think if they stumbled across this kind of blog post.
Thus I can foresee an abstract quality to problem-selection, rather than a "damn this needs to be fixed as it's bringing me down on a daily basis" drive to build great things.
I hope to be wrong of course, good for him.
> Now that I can use Twitter without being subject to Amazon’s social media policy
What is their policy?
What were these things?
Do you think you would be able to avoid these things at your new business?
I plan to avoid this by being in charge :) ... If in the future I hire employees or get a partner, some of this might still happen obviously. But I still expect it to be significantly less than at a corporate job.
How much would you consider it to be your "fair share" out of those money?
Long story short money is not everything. I understand it. I'm currently unemployed working on my own things and I pretty like it. Although I don't have that much money saved and probably I'm gonna find work soon, I've found out that I'm that kind of person, who wants to explore the world by myself and on my own terms.