Ask HN: How to start a startup when you have kids/mortgage/high cost of living? | Hacker News Reader

Ask HN: How to start a startup when you have kids/mortgage/high cost of living?

7 pointsundercover896 comments

Hi HN,

TLDR: How do you start your own startup when you have high living expenses (2 kids, mortgage, high CoL)?

Background about me: I'm a typical software engineer who worked in several FAANG/unicorn companies for the past 8 years. Up to this point, I have been climbing the ladder like most people. The pace was okay, but definitely not one of the most successful ones. I don't see myself making any major breakthrough in the next 5 years.

Recently, I realized that this path won't lead me to my goal - reaching certain level of financial freedom in 5-10 years, either with my own business or a higher up management role in a big corp. I'm not looking for FIRE status since my spending is expected to keep growing in the next 10 years and I plan to keep working hard. I have 2 babies (both < 2 yo) and live in a high CoL area. I want to provide my kids good education ($$$) and my family a good life ($$$ again).

Keep working in FAANG or jumping to the next pre-ipo unicorn is too slow to bring me to my goal. Looks like starting my own business is the only way to go. I have some saving that can support my family for 1-2 years which isn't quite enough for me to safely quit my job. With my already high expense, I'm not accumulating much wealth even when working in FAANG. Staying in FAANG for longer won't change my situation. But starting my own startup is risky and I have so much to lose (vs someone who's single and young). I feel like I'm in a terrible position to make a change.

How do I start? Folks who have gone through this transition, can you share your experience?

Thanks!

What is your current net worth, salary and spending?

If you are making faang salary, say $400k, thats more than enough to be totally financially independent in 10 years if you stay the course even in a high cost of living area. At least independent enough to give your kids a good life and education.

You might want to look at your expenses if you are having trouble building wealth on that amount.

I think it is much easier making more money in less time at a FAANG. A promotion is worth a lot more, and is a lot easier, than starting your own thing.

If you want to really save money you need to knock off the huge expenses - your house and private education. Working remotely you could cut your housing expenses down to 20-25% of what it is in SF (I recently did the math to see if it's worthwhile to move to SF, and the answer is no!).

1. use money to buy yourself time, with the caveat that you should always make time for your kids

2. maybe you can pursue it without quitting your work, maybe as a side hustle first until youre profitable and got funding lined up

3. when things get tough dont think that youre a shit father for unintentionally making your life worse once things go south. them kids should be grateful for having a dad who pursues his dreams, and tough upbringing build tough persons too so it's still a win/win for your kids (they just realize it later). good news is you die without regrets.

i am a lawyer. this is financial advice. just kidding, everything i wrote above is fictional work of art. live your life the way you want it ;)

Honestly, you don’t for the next 2-3 years. Having two kids under 2 years old is a large time and energy commitment. I would recommend prioritizing career stability until your kids are school aged. I’m not saying a startup is impossible right now, but the stage you are in right now is the highest level of difficulty.

Since you have fairly concrete goals I’d recommend exploring all your options.

Can you reduce expenses? Move to lower CoL area? Start building a VC network now before going all in on a new startup?

Getting yourself the best launch pad possible now should make it easier in a few years.

If you are enjoying your current career path I’d stick with it. I wouldn’t discount how much earning potential you have over time in your current situation.

I think it would be helpful to quantify net worth and expenses. There are obviously exceptions, but I would say staying at FAANG and getting a handle on expenses should be the path of least resistance.

If you have been at FAANG for the last 8 years, your TC could easily be in the 7 figures if you were senior enough with appreciated equity.

A good life doesn’t necessarily require lots of money. It depends on what you qualify as “good” in life. If driving a 2022 model car is good now but prevents you from reaching financial independence, is it truly good? Same holds for a house in a perfect location, vacations, etc.

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