Many more people become rich from careful career planning and money management than do from starting companies. The difference between the approaches isn't the potential, it's the speed and the risk.
Also, let's not confuse "startup", a single project requiring one's all, with "ventures", a diverse portfolio of small businesses seeded with one's capital but managed and run by domain experts.
Personally, I think the finger in many pies approach is far more interesting and rewarding, since you're hedging your bets.
Just to be clear about one thing: even in successful VC-funded companies with actual exits, 50MM is an anomaly. I have a bunch of friends who have sold companies, and in the crazy-talk best case, one of them got ~$10MM, and it wasn't his first 7+ figure win.
The companies that go for mid/high 8 figures are all apparently VC-funded, most for multiple rounds, meaning that any given founder might be hovering near single-digit points of equity.
Going after a "fuck you" $50MM payday seems like an awfully bad idea. It's not going to happen.
Right. In the average case, you have almost as much opportunity to money manage, etc. as a professional and thus wind up with big savings. The bonus is that you increase tremendously your chances of becoming rich in a shorter term.
Plus you get to control your own destiny, which humans really crave.
I see what you mean but I'm having trouble translating this from lawyers to computer programmers. You can get a programming job at a large company and then impress someone with your skills and become a tech lead and an engineering director and eventually a Senior VP, is that what you mean? The odds for a hard working hacker of getting rich that way seem worse than for an attorney of becoming a partner, or for the same hacker of getting rich through a startup.
In my experience everyone who got rich did it by owning a significant stake in a business (not necessarily a startup or even anything high tech.) I'm aware there are people who got rich from writing bestsellers or becoming movie stars but I don't know anyone like it and I think such people are extremely rare. And I may be wrong but I would be inclined to classify hackers who got promoted to VPs and CTOs together with the movie stars.
I don't really know much about the ownership structure of law firms, but I always assumed becoming a partner is a big deal because it means co-owning the firm in some sense, and getting a share of profits directly, not through salary and bonus. So that's why I figure this is different.
I'm having a hard time addressing your concern, because your notion that it's harder for a developer to eventually become a director or VP than it is for a lawyer to become a partner is neither (a) supported with any evidence or (b) apparent from my experience.
I don't know anybody that you know who became rich, and so that whole second paragraph sails right past me. Especially when it concludes with a suggestion that hacker VPs are as rare as movie stars.
As for the partner track at law firms, uh, fine. Substitute MBA -> investment banker, or CPA -> CFO, or Med School -> Anesthesiologist, or any number of other careers that don't have partner tracks.
Even if your salary never breaks $110k as a dev, you're still fantastically lucky to get that in any career, and perfectly capable of becoming a millionaire. So, I guess, cry me a river about how hard it is for techs to succeed without starting entirely new businesses?
Finally, let me just leave you with an uncomfortable truth: it is a safe bet that you will never get rich starting a company, or any number of companies.
If your definition of rich is $110k salary or owning $1M in assets (which translates to relatively safe passive income of $40k before tax, according to the financial planning books I read) then sure, you can absolutely achieve it with careful career planning. I don't believe that's what most people would call "rich" though. There are actually people who will tell you that $100k in the Bay Area is "barely breaking it even" (not that I agree.)
I freely concede I could be wrong with respect to directors and partners. I work at a software company and my girlfriend works at a law firm.
I absolutely agree with you that the odds of getting rich by starting a company are low, all I'm saying they're better than the odds of getting rich by other means.
We're off in a little rat trap now about what the terminally awesome state is in any given career. If we were talking about salespeople, someone would be saying, "yeah, but how likely is it that you'd ever be a CEO? And hey, if you're a CEO, you might as well have started a company anyways, because most of your wealth comes from a stake."
But it's just a conversational rat trap. Unless your definition of "rich" means "owning a private jet", you never have to come close to being a VP/Engineering to become rich over a carefully managed career. You just have to be good with money.
That is very misleading. There is a difference between having a million in the bank, and having a home that is worth a million. I would choose the first.
I'd definitely choose 1M in cash over living and owning a home worth 1M. The home is both illiquid and necessary: when you sell your home and cash in on the million, you've still got to find a new place to live. Given that you want to live in the same city (or state, etc.) and that you probably need space for all the stuff you accumulated, your office, and that fabulous kitchen, how much do you think you'll spend for a new home then?
A home is only a solid investment if you're living in it. The real value of a home is in that it gives you something you want and need: a roof over your head in a place you want to live.
But if you're paying a home loan on a second home, it's an investment asset just like any other asset and is just as vulnerable to market fluctuations.
Actually, the home that you're living in isn't that solid of an investment...it's more like forced savings. Generally you'll come out ahead (versus if you rented), but depending on the market, it could easily take 10+ years before it works out in your favor.
If you can buy property and then have other people pay the mortgage for you, now THAT is a solid investment.
I would buy real estates. Given a million bucks, I would buy five $175,000 homes and rent all of them out. By then, I could build whatever I want without needing outside money.
The best thing about this strategy? It can happen slowly and sequentially with minimal risks.
I don't think real estate is that safe and assured of an it'll make you rich. The Irish recession is caused primarily because the economy was held up by the real estate business. Now there are too many houses and nobody willing to buy any. As a result, the value of real estate has dropped and people with your money making plan have found themselves losing money instead.
