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Comment by gjkood | Hacker News Reader

There's a common saying "Nobody ever gets rich working for someone else". I am not sure how much that is backed up by any statistics but the Bay Area and employees of unicorns or Google/Apple/Amazon/Microsoft/... may be outliers to this adage.

Anyway the point I am trying to make is that as an engineer you either have the choice of working for an employer and living an albeit comfortable life (without any risk) or going it alone or starting your own venture with all its associated risk/reward profile.

You have already indicated that you believe in this adage and took the necessary steps to increasing your worth and would continue to take the same approach in future.

What somebody is worth is what the market is willing to pay for them either in salary or by investing in their venture.

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This adage is used mostly by snake oil salesmen slinging get-rich-quick schemes. Working for somebody else is probably the best way to get rich. Putting a qualification here, rich is not filthy rich, but affluent to comfortably rich.

   >but affluent to comfortably rich.

What does that even mean? It's kind of rare that someone will pay you enough money that you can live off your investments.

Uh, no. This adage is very very true. Sure, you can get a comfortable six figure salary, but that is by no stretch of the imagination "affluent".

I'm defining rich as making 7 figures a year. I think that's a pretty fair assessment. You'll never get that working for someone else (especially as an engineer), barring extenuating circumstances. High equity employee #1 or co-founder is the way to go.

High risk, high reward.

You will get affluent in 10-20 years. That's my point. You get rich slowly, not quickly.

And wealth is not defined by how much money you make, but by how much money you have.

You will probably not become a millionaire unless you have no family, you never get laid off/let go, and your salary scales with inflation.

There are other considerations as well, including cost of living (most high salary jobs are in high-cost areas), liabilities (debt), and so forth. If you want to get rich (again, 7-figure range), this just doesn't seem like a good bet to make.

My personal slant on things is that even if you do become a millionaire, let's say in your 60s, who cares? The point is to get rich while you can still enjoy your money. There's no virtue in being buried with your treasure.

Well said. Also, when most of us are 60 (20yrs? 30yrs?) a million wont be worth that much.

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.

$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.

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.

[1] https://www.glassdoor.com/Salaries/new-york-city-software-en...

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.

$1k for other 'expenses' is huge. You can drive that down at least by half with wiser spending.

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.

Food, insurance, gas, water, electricity, student debt, etc. At least by half? Come on. Let's be real.

You might want to save, but there's no need to be a total miser on any >100k salary.

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.

[0] https://smartasset.com/taxes/new-york-tax-calculator

> Heck, your marginal tax rate isn't even 40%

That's wrong. The marginal tax for even a $50,000/year earner in NYC is over 42%.

Source: http://arjun-menon.github.io/taxes-in-nyc/?income=50,000

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.

> Your link is in error, it treats Social Security tax as continuing past $118k.

Actually, the tool does stop adding Social Security after the income limit: http://arjun-menon.github.io/taxes-in-nyc/?income=200,000

> 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%.

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.

> 3-4k is easily rent in NYC

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.

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.

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.

>Top companies are routinely paying $200k-300k these days

Yup, all four of them - Apple, Facebook, Google, Netflix.

</sarcasm>

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.

https://www.glassdoor.com/Salaries/principal-software-engine...

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.

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.

Unless you're Norvig or Dijkstra.

Per Quora, the highest tech executive position (CTO) pays in the lower $200Ks (non-founder, up to $75M):

https://www.quora.com/What-would-a-CTO-compensation-equity-b...

Per CIO magazine (2015), CTOs make up to $220K, directors up to $174K:

http://www.cio.com/article/2878056/salary/tech-salary-guide-...

Pretty much all surveys show similar ranges. Do they all "skew heavily downwards"?

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?

New grads at Google get paid around $170k a year. https://www.quora.com/What-is-the-salary-for-graduates-start...

What's the difference between a tech lead and an engineer?

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.

Thanks. I know about that but was not separating tech leads from other engineers. (To me they are just more senior engineers.)

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.)

Wayfair does, in Boston.

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.

How can that be a meaningful statistic when "principal" means vastly different things at different companies?

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.)

Not sure why Apple or Netflix show up on your list. There is about 50 companies I can think of above them.

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)

Have you seen the thing about how there are no rich Americans?[1] No matter how big my house and expensive my car, I'm not rich, heavens no, that guy over there has a bigger house and a shinier car, he's rich. And of course he'll tell you the same thing.

$200k/year is most definitely rich by the standards of most of America. If you think that's silly, hang out with someone who makes $30,000 a year and think about how much $200,000 would change their lives.

[1]http://www.slate.com/blogs/moneybox/2015/03/03/how_americans...

>as an engineer you either have the choice

I don't feel like I do. I cannot afford to battle patent trolls when something I produce somehow infringes on their "intellectual properties." There has been some progress, given the Alice vs CLS Bank decision, but there's still lots of patents flying around out there like this one (https://www.google.com/patents/EP2973038A1) where Google attempts to patent "Classifying resources using a deep network." Given that there's a very real threat of bankruptcy for even trying to start my own venture, I plod along at my position which is automating thousands out of their jobs while I make a minuscule fraction of what those people were once paid.

There is a tremendous amount of risk to go it alone, especially when the alternative is so comfortable and risk free. By all definition you would be crazy to go it alone. The statistics seem to point in that direction.

But then again the reward profile if you are in that 10% to 5% that succeed and have the stomach to continue for the long haul is huge.

I personally am a victim of the 'Analysis Paralysis' that your are alluding to and understand the hesitancy in taking the first step. There is plenty of risk out there and its good to be wary, but if you never take that first step you will never know what your future could be.

Maybe its better to try and fail than never to have tried at all.

Time is not on your side and none of us are getting any younger. (Sorry for all the cliches).

>the alternative is so comfortable and risk free

I've seen people with a decade of experience on the job "disappeared" and there's little more than an email to the staff telling us they are gone, effective immediately. I don't consider that comfortable or risk free. Especially true if one is in charge of systems, because of stories about loose cannons like

https://news.ycombinator.com/item?id=12179637

>Maybe its better to try and fail than never to have tried at all.

I hear this sentiment mostly from upper middle class people who can fall back on family if they fail. I don't meet a lot of people who have experienced true financial ruin, recovered, and are willing to risk going back. A lot of us are as hungry as any entrepreneur. We simply don't have the safety nets. I don't know your case. Maybe you're as "financially independent" as I am, but advice like that sounds condescending in such a context. Of course they'll walk the tightrope. They've got a net.

https://news.ycombinator.com/item?id=10979926

> I plod along at my position which is automating thousands out of their jobs while I make a minuscule fraction of what those people were once paid.

If you were paid the salary of all those you automated out of a job, there'd be zero incentive for anyone to buy your product.

You don't start a company because you might get sued for infringing on something with an idea you don't even have yet? Okay...

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