Hacker News Reader

Comment by joss82 | Hacker News Reader

I agree on all points except this one:

> Don’t assume you’ll make this much money forever.

There is a 90% chance that your salary will increase by 10% per year, on average, during your career.

On average means that sometimes your company will find a lousy excuse not to give you a raise on a given year (you know if it's your fault or not. If in doubt: it's not your fault, they are just being cheap, and you are letting them get away with it).

When this happens, you need to look elsewhere for a better paid job (which are also, on average, more interesting than worse paid ones).

Given that you apply this advice, and barring any black swan event such as the dot-com bubble bursting, you should be able to earn more and more as time passes.

Use this to your advantage!

View on HN

Individuals aren’t averages and past performance is not a guarantee of future returns.

There are a huge number of folks making high 6-figures or low 7-figures over the last decade due to tech stock growth. An entire generation of programmers has no idea what a buyers market for talent looks like. SAVE.

I disagree with this advice for young, healthy, not-having-kid-right-now people.

To save means keeping money in a low interest rate account, which lowers your short term risk and increases your long-term risk (you are not enjoying the higher returns of high-risk, high-return, investments such as stocks over the long term).

As young people, you should think long term.

If you want to minimize short-term risk in your life, then please, by all mean, save!

But be aware that there is no free lunch, and reducing risk right now will most probably reduce your opportunities in the long term.

Please take into account that I am reasoning with averages and averages are just a massive simplification of real life.

Adjust according to your own assessment of your context and situation. Don't follow random advice from strangers on the internet.

"But be aware that there is no free lunch, and reducing risk right now will most probably reduce your opportunities in the long term."

I would buy this t-shirt. This is so true. At certain points in your life you can take wild risks - eg. work for a company that has 4 months of runway and live on the co founders couch. This type of opportunity can teach you more in 4 months than 4 years at other positions. Small companies having difficulties can be a fun place to lead, fix and build. You will have plenty of years to do: 2 hour code reviews, long sprint planning sessions and write endless unit tests.

Yes, by all means invest your savings, my point was just not to spend it and allow lifestyle inflation to put you in an untenable position when the good times inevitably come to an end.

I wouldn't interpret save as keep it in a low-risk low-rate vehicle, but to not spend it. Investing is a form of savings. That said, keeping a certain amount of money in a liquid safe vehicle is also a good idea so you have f–ck you money/what if the economy crashes or there's a global pandemic and I lose my job money. In your twenties you should, at the very least, max out your 401(k) and/or IRA options and have that all or mostly in index funds (I can remember analysis paralysis when I first saw the investment options in the 401(k) when I was young and ended up not investing at all. None of the information in the literature was helpful at all. My short-form advice: look for a low-cost index fund. You're not going to beat the market unless you're lucky and even if you are lucky and you're not going to be consistently lucky. People whose job it is to figure this out never consistently beat the market (and most underperform index funds in the long run), and neither will you.

In my mind the risk is to be heavily concentrated in tech (or even in a subspecialty of tech). Investing in diversified stocks is somewhat risky, but way less than putting all your eggs into the basket "tech jobs will always pay me $200k+ no matter what".

> and barring any black swan event such as the dot-com bubble bursting

Stuff like that is the point of the sentence you're replying to. And how can you be so confident about the salary growth over whole careers in software? If you laid 30 year careers end-to-end, the entire industry of software has had enough time for about 2.

In the course of my career there's been the late 80s/early 90s recession, the dot-com bubble, 9/11, the great recession and 2020 to just pick a few of the highlights. After a while, you gotta think that maybe white swans aren't as much the norm as we've been led to believe.

I think you are wrong about the confidence of a monotonically increasing salary across your career and lifespan (at least in terms of purchasing power)

I think you are right that certain things cluster together: Jobs where you are treated like crap pay you like crap, jobs where you are paid in riches treat you like a princess. Exceptions apply.

I think they might be talking more about when you are in a “golden handcuff” situation due to RSU appreciation. For example right now because of appreciation I don’t think I could find another job willing to beat my current comp (except maybe in finance which I don’t really want to do). That may still be the case when my grants run out, especially if they appreciate more. In that case you have to just suck it up and accept that you are not inherently deserving of that level of comp

I know many more extreme examples where friends working at startups hit it big. No, a 25 year old SWE is not going to be able to job hop to another job paying them $1m/y right out of the gate

> There is a 90% chance that your salary will increase by 10% per year, on average, during your career.

I'm not sure where you are or how old you are but after 10-20 years this definitely does not hold. Often you'll have to take a pay cut to get good skills.

I'm in France and I am 38, working in IT for the last 17 years.

I noticed a positive correlation between salary and skills. The higher the pay, the more I learnt on the job.

But maybe I was just lucky to pick Python before it was cool and just ride the wave.

I took a massive pay cut when I stopped freelancing and started a product company instead, but it was totally worth it in the long run.

Make sure you take a pay cut for the right reasons, and for the right amount.

I've had lots of periods of stagnation in wages. You will reach plateaus in wages. And a quick back of the envelope shows that my wage growth has averaged out to about 5% a year. Without changing what I do or where I live (and having higher cost of living for the latter), I don't expect my salary to increase significantly in what remains of my career.

I was similar. My salary doubled then pretty much was flat for 10 years and only recently went up again.

So I calculated mine. 5% YOY over 35 years.

You can do 10% YOY during the first decade, maybe even the second. It gets harder after that. 10 years experience makes you much more valuable than a first-year worker, but 30 years doesn't make you that much more valuable than someone with 20.

10% increase every year means around 160% increase in 10 years, 570% increase in 20 years, 1640% increase in 30 years and 4420% in 40 years.

That seems a bit unrealistic to me.

To me the best defence is just always making sure you can later get what you are paid somewhere else. The people who take salary cuts later in life seem to be old people who didn't keep their skills up or adapt to a changing world where degrees were an ever harder wall to break through.

If you are regularly applying for jobs, it should be apparent when your value is declining.

I know a bunch of software engineers who haven't followed this trajectory, and I suspect that's where the this advice was aimed.

Particularly if you start off recently(ish) on the SWE FAANG track and were lucky with RSU timing etc., you'll find a lot of the options that come your way don't pay nearly as well. But you may find them exciting anyway.

Reply on news.ycombinator.com