SWE financial Independency

New / Eng
Ama B.O

New Eng

PRE
Amazon, Google, Facebook
 Ama B.Omore
Jun 1 23 Comments

What's a typical and practical way for a software engineer to move towards financial Independency?

- How many years and how?

Note: for instance let's say:
- the target savings would be 2M USD.
- cost of living "excluding" housing of 60k / year.

Please think practical about career progression, possible investments, housing (buying vs renting), 401 etc.
Only consider "base salary" in your figure/plan. Not TC.

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 TOP 23 Comments
  • Facebook tTFN31
    I don’t get why people want to waste their youth saving like this. Why not just spend everything you earn to have fun and then kill yourself when you’re old?
    Jun 1 6
    • Ascension Health / Eng
      goback

      Ascension Health Eng

      PRE
      Facebook
       gobackmore
      What if I realized the opposote?
      Jun 1
    • New / Eng
      Ama B.O

      New Eng

      PRE
      Amazon, Google, Facebook
       Ama B.Omore
      OP
      Sure you could..you could be one of those few who would do that there's always anomaly in the society.
      Jun 1
    • Facebook tTFN31
      Lol I haven’t seen a single old person who seems happy. Not at all like how people are enjoying themselves in college. They just seem “okay”, trying to convince themsleves to be satisfied with what they have and don’t think about what they can’t have.
      Jun 1
    • Google / Eng QrJx75
      You haven't been around enough old people
      Jun 1
    • Bank of America / Eng jkQk45
      Because kids, family, etc. If you’ve none of that, then I suppose you could party-hard & then go when you choose.
      Jun 1
  • Microsoft wakado
    You will find many of us at Reddits r/financialindependence, easy to do, start young and be done in 10-15 years if you want. I have 200k net worth and only 2 years into full time work
    Jun 2 10
    • Microsoft wakado
      Pretty much, if you spend 40k a year, that is 1 million you need to save. There is definitely more to it, but that is the gist, we are looking to retire with 1.5-2.5 million in ~10 years from now
      Jun 2
    • Google / Eng QrJx75
      That's a good role of thumb. OP, if you're interested, it's also known as the 4% rule. It works 96% of the time.
      Jun 2
    • New / Eng
      Ama B.O

      New Eng

      PRE
      Amazon, Google, Facebook
       Ama B.Omore
      OP
      That's amazing, it helps so much. It gives clarity.

      Thank you Wak..
      Thank you QrJ
      Jun 2
    • New / Eng
      Ama B.O

      New Eng

      PRE
      Amazon, Google, Facebook
       Ama B.Omore
      OP
      So is there a good place to learn more?
      Jun 2
    • Google / Eng QrJx75
      YouTube is a great place to learn!
      Jun 3
  • Expedia / Eng HelloDolly
    I'd say striking a balance between reaching this goal and also enjoying the present is key.. At first I was saving up everything I had made, but I soon realized its not what I wanted, even if I get to that financial independance quite quickly.. I won't be wasting money on shit like new expensive cars, but I do go out once a week, go on vacation 2 or 3 times a year and enjoy myself.
    Jun 1 0
  • OpenTable Meliodas
    Figure out the target number you want, divide by the number of years to get there, then save that much per year.

    We’ve always tried to live off of one income and save the other.
    Jun 1 0
  • Google / Eng QrJx75
    If your at FAANG I think you can do it by yourself within 10-15 years depending on hard you push and skill level. If you have a partner that's a high earner, you can do it faster.

    If only considering base, you're ignoring over 50% of the actual income... I'm curious why you added this constraint
    Jun 1 2
    • New / Eng
      Ama B.O

      New Eng

      PRE
      Amazon, Google, Facebook
       Ama B.Omore
      OP
      I added the base salary only constraints because I presume that outside the base salary, it would either be stock options or RSU which together make the whole TC.
      Knowing that stocks are very unpredictable and we're talking about a long-term holdings...then they may turn out to be of no value at a very later time in the future hence the reason to just look at base salary and go with that.

      Am I right or am I totally off please advise.
      Jun 2
    • Google / Eng QrJx75
      Stock options are very different in risk than rsus. For options, I totally agree. You need to wait an indefinite amount of time before you can sell and liquidate that amount (if even).

      Rsus, particularly for a public company, will be vesting in monthly/quarterly chunks. You have the option to sell relatively immediately. This allows the employee to use the RSUs value to reinvest in broader, less riskier assets. You do not have to hold on to that stock long term.
      Jun 2

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