My strategy is: live in the bay area so I can get paid like crazy, live a very frugal life much below my means, invest diligently, and hopefully have enough money to retire in my late 30s (in a much cheaper area, of course), so that when I'll be told that I'm too old, I'll raise my middle finger and leave the scene with the few million dollars I saved.
I wanted to pop back in time and say thanks. Yeah you didn’t retire in your late thirties like you thought you would mostly because it’s harder to make FI cash than you thought. The crash of 2020 took a few years to get passed but hey 45 is the new late thirties as they say now.
The reason I’m thanking you is you went ahead and struggled and saved anyway while things got tough and now you are free. Just FYI, I texted my QUIT to the HR bot in the Philippines just before I came back to see you.
Btw quitting is harder than you think. Just to let you know, I don’t blame you. Not quitting at 40 when you could eke bye because they offered you 2x what you’d ever made to stay; yeah the place was thalidomide for your soul but then your wife (I’m not telling) got pretty sick and that cushion was worth it.
Also: take care of your health and sleep more. An extra ten years of long hours at the terminal has left me not as healthy as I’d like.
To be fair, I don't plan to retire at 39 or 40, as long as someone hires me with reasonable compensation (2x would be a dream!). I'm purely trying to protect myself against a foobar scenario where indeed, I become obsolete from the point of view of most employers, due to "old" age.
Curious, why? I am having no problem being hireable right now at all (literally just joined a FAANG recently).
As far as I know, it would be impossible to get the same pay I'm getting now anywhere else. Even after considering the high cost of living, the spread between income and cost of living is very high, and allows me to stash away a significant amount of savings every year, to pay for my future freedom. I really doubt I'd be able to save that much if I were working anywhere else.
What else would you suggest?
Also, Austin, while not as bad as other parts of Texas, is still in Texas.
I've lived in six cities on three continents (and I'm talking signing a lease, not staying for a month) and I can assure you Austin is no better or worse than any other metropolitan area regarding... wait, what metric exactly are you using here? Weather? Burrito size? Number of smug, passive aggressive west coast urbanites per square mile?
So, what's the disadvantage?
I don't own a house here in the Bay, I dump everything in very diversified index funds and some rentals out of state, since I'm not interested in staying in this place long term and play the million dollar mortgage roulette.
The day I call it quit, me and my partner (she does well too) can move to Austin TX, or anywhere else really (we're both immigrants with citizenships in really really cheap countries), with our fat liquid assets, and not having to worry about necessarily finding work in my 40s. At least that's my very optimistic plan, it might completely not turn out like this, or I might die tomorrow.
So it's really not that much, most people who get private or state pensions get a better deal than that from a cash-flow perspective.
Again, quite possibly I'll die much younger without even enjoying any of that freedom :-)
Edit: sorry for the ninja edit. I read your comment too quickly.
1) If you keep it under your mattress it will be much less than what I described, because every year your nest egg will shrink due to inflation, so you'll just be able to take $25k non-inflation adjusted, which is a big difference from my $25k inflation adjusted (in 60 years, $25k will be $150k at a 3% inflation). My assumption is 0% real growth, not 0% nominal growth, which is what you'd get by keeping it under the mattress.
2) The 4% rule is based on a shorter retirement interval (30 years) than what I'm looking for (60 years). Try to go on firecalc.com and look for the statistical odds of 1M giving you 50k/y for 60 years: the failure rate is higher than the success rate, and that's based on historical data.
3) Yes, my assumptions are very conservative, but I don't believe index funds will return 7% nominal over the next few decades, the world is going to face too many problems in my opinion. That being said, pretty much all I have is invested in index funds despite my opinions (mainly because I wouldn't know where else to invest it, since both cash and bonds are sure losers to inflation), so in the best case I'll be pleasantly surprised.
You're assuming that he would actually want to stay in that other place long enough for the house purchase to make financial sense. You have to own a house at least 5 years for it to work out, minimum. Moreoever, in the big tech hub, you're making more money, so if you keep your living costs low, you'll bank more cash than living someplace cheaper.
If I could pop back in time, it would be to (somehow, because I didn't back in 1992) recognize that where things were at was the Bay Area, and moved there instead of staying in Phoenix.
But here is where I am, and while I make a decent salary, I certainly am not retiring any time soon.
The whole age thing is standing in sharp relief in my mind currently, because things are slightly "up in the air" at my current employer; I want to stay employed here, and I'm sure my employer wants to keep me, but recent events may potentially cause the relationship to have to be dissolved if the projects and numbers don't line up. I can understand that from a business perspective - fair's fair.
But the prospect of interviewing yet again, 3 years after getting this position, is not something I look forward to. I have new skills I can bring with me that I didn't have before, so that's a plus, but I worry that the age thing may be a barrier.
I'll probably have to lower my salary ask just to have a chance, but I won't do that unless I don't get any traction after a few months of looking - should I have to do so.
Even with that, though, I tend to wonder if the question in the minds of those hiring will be something akin to "Why isn't he a team lead or a manager?"; which is something I don't have, and have never been offered - possibly because I've never been able to stay at a company long enough to get to that level - either they go out of business or they get sold 2-3 years after I join, or the company is just too small to have any kind of way to advance you into such a position (I've found that I fit best in companies of under 50 employees, and the fewer the better).
Maybe if there's another time around coming for me, I should look into startups, though that seems like a bust from the get-go (ie - find a startup, in Phoenix, who needs a 45+ year old software engineer - that's probably a very small pool, if it exists at all).
It is what it is, I guess. I am fortunate in that I am debt free, at least.
If I could go back in time I would have the done the bay area thing when I was young too. But, life is a bit of give and take - there are some good things that happened in my life not taking that course (even if they didn't all work out as planned). So you kinda have to appreciate those parts of life and accept the fact that you are maybe not in the financial situation you wish you were in.
The only guarantee we have in life is this moment :)
"the software engineering labor market can stay irrational towards older people longer than the 2 decades past 40 where I could stay effectively employable".