What to do with FAANG TC?
asking this for genuine advice on how to properly save/invest with these high TC packages tech companies are giving out. background: - based in nyc - top 50 CS undergrad - 1 yoe SWE at big bank - 105k TC - just accepted FAANG SWE offer with 183k TC first year post grad i did no saving whatsoever and simply focused on living expenses and tackling student loan debt. within a year i was able to reduce student loan debt from 21k down to 14k. upon moving to my new role i plan on completey wiping out my student loan debt asap. but, what to do next? we’ve all heard the term “let your money work for you” but how can this actually be accomplished? as i do not come from a background where i can get advised in these topics, i am just looking to see how our community budgets and invests given the amount of money we are able to work with.
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Agreed
While Twitter's answer is a fine one for when you have your own finances sorted out, the right answer is to do your own research. Start with a web search for bogleheads, invest in the index funds they mention, and ignore all the noise. Do the charity work you're comfortable with, and pay it forward as you find appropriate. Do not let others pressure you. Optimize your personal happiness for the medium term at least and don't let people guilt you into feeling selfish.
awesome, i appreciate the genuine response!
Long term view find a low cost index fund and invest regularly
With 105k tc how did you only pay off 7k of debt in a year and not save anything? You should be making ~6k/month take home. If you spend half that on an apartment and utilities, what are you doing with the other 3k? You should have around 30k saved
You're priorities should be 1. 401k matching 2. ESPP if offered 3. Wipe away debt 4. 5k or less in checking 4. Emergency fund of 10k in a high yield savings account 5. Safer long term investments in index funds 6. A small portion can go into risky investment such as single stocks or etfs
thank you that is sound advice. was just promoted in march which increased TC to 105k, it was 85k prior. otherwise, moving to nyc alone and living alone has cost me.
Max out your 401k and ESPP. Then aim to buy a house (buy the best property you can get loan for in a nice neighborhood, rent out spare rooms to roommates to help pay mortgage). Then buy rental property or upgrade to bigger house but keep old one as rental. Keep doing that and you’ll be able to retire before you know it.
Our approach except the renting out rooms as we're a family with young kids so no spare rooms lol! But yeah buying houses in cities with good rental ROi has beeneen working well so far 😊
any Chase perks? free CPC?
Talk to a financial advisor, that's your first step. I do find it ironic that a SWE at a big bank is asking about money though ;p
Agree mostly with cholical's response here. I'd recommend reordering some things though. Your first order of business should be getting a safety net / emergency fund in place that can cover 3-6 months of your expenses. Then, focus on savings in an employer 401k, ESPP if your employer offers it, HSA, Roth IRA (do a backdoor if you are over the income limit which you likely are for a traditional IRA). Then start hitting the taxable investment accounts. For actual investments, invest in low cost highly diversified index funds. This is a great article to get started on the allocations: https://www.bogleheads.org/wiki/Three-fund_portfolio For more general philosophy, check out: 1. The Simple Path to Wealth by JL Collins 2. Set for Life by Scott Trench 3. Your Money or Your Life by Vicki Robin Generally, decide on what makes you happy in life and what your goals are. Make sure that your spending lines up with those things. Generally, the greatest determinant of your financial strength will be a high savings rate. Aim for 50%+ if you are aiming for financial independence or early retirement (FIRE). Lots of blogs on that subject if you are interested.
Also, there is nothing wrong with using a low fee robo advisor to automate the investment side for you if you are not comfortable doing it yourself. Paying for the service is better than not doing it at all. The most difficult part of investing for most people in your position is often starting.
Trade options. Listen to r/wallstreetbets
r/wallstreetbets and r/nofap ... pure enlightenment