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Did you get a job offer this year?
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I have worked at TikTok US core tech for 3 years. AMA.
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What do vegetarian Indians eat for protein?
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Electric cars depreciate 10 times faster than gasoline cars
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Very thin yoga pants
I recently hit $5M NW, roughly as $2.5M primary residence, $2M stock investments, $1M retirement accounts, $2M in rental properties, and -$2.5M in loans at interest rates <3%. My perspective on rental properties has been, buy and rent where it's easy for me to property manage myself. And I kinda enjoy this, I do love doing home improvement work, but it's kinda annoying yet rewarding in its own way. But in $2M in rentals, I just get $40k/y in income, the property taxes are about $25k/y. My leverage on the rentals is very low, they're mostly paid in cash. They're mostly a diversification & hedge play, so I could buy a house in e.g. Palo Alto, Menlo Park, or Ross if I decide to. I am changing jobs to something pre-IPO, and the rental properties will no longer be easy to manage. I can buy flights to see them, I could hire a property manager, I could sell them vacant. But with the new job, my liquid cash equiv comp changes from $800k to $260k, so I'll be eating into savings. I'd love to hear other people's thoughts on this investment allocation given I'm at a career pivot point. I have young kids. Like 10+ years from college.
You can control or predict only so much of your financial life. You have enough to not worry about over optimization. I'd rather let go and explore new areas of life in the remaining time that I have.
This is a question that I think about a lot -- How and when to transition from asset accumulation to other priorities? Not that I don't love working, I actually really enjoy working. But risk is a lot of fun, and I no longer need to optimize for liquid TC. Or even TC at all. Where I am at now, which I'll constantly re-evaluate, is that I should continue working but take on far, far more risks than working at FB. I could totally make it completely transitioning careers and running a white water rafting company up in the mountains. But I love tech. I want to create the next things. So that's why I'm doing this job transition. That said, what % of my portfolio should be in stocks vs. rental properties, I want to get a baseline for that so I best optimize for my future options & how my kids go to college, etc.
Sorry I don't have an answer to a proper asset allocation ratio as I'm in my early 20s. FWIW, my NW is tech heavy. You can get a no conflict finance advisor. Pretty early in my career but I work in bursts for my TC and enjoy the rest of the time doing things I like which also includes working (but not for TC)
First of all, congrats. Guessing L7 with stock appreciation? I think biggest tip is to hire property manager ASAP. Also consider getting rid of those properties and buying elsewhere if you choose to. For context, I get half your rental income with only 20% cost (in Austin).
Austin is a hella smart place to have real estate investments right now, props to you !!! I'm actually just what they say an "L6+" on the Eng side, where I always do a lot more than regular L6's but... anyway :). They do reward me, in their own way. I was also generally talented in the stock market (early AAPL, AMZN, NFLX) until recently when I thought we were actually going into an apocalypse. But but my 5+-year doubt in my skills led me to transition capital into physical assets. I'm not convinced that property managers are a requirement, I think they are a scaling tactic. I enjoy doing property management. But if changing from my ~3 properties in Bay Area/Seattle to ~10 in Austin, they would be a necessity. But it's a question of, what is the right asset allocation? For people who like property investing, do they do 50/50 equities vs. properties? Or should properties be a lower %? Especially since my loans on them are minimal.
Imo, stocks will always outperform real estate but real estate will have more stability/ less volatility. Main benefit of real estate is cheap leverage and diversification (turns out to be a great bet against inflation right now for example). Funny enough, I have no loan / leverage in my property, so I kinda broke that myself. Getting a home in Austin was not easy though, couldn’t win without going all cash.
You have lotta money. Try not stressing about it and live a nice life
I am so fundamentally grateful for being in this position. I have worked for a long time, but so many never get close to this. I realize this and try to do what I can to advocate for more equity. I am not stressed, in fact, I realize what I have and I use that to feel confident in taking significant risks going forward. Maybe they'll work, maybe they won't, I think my kids will be generally OK, which is now my priority. I do generally wonder whether my asset allocation is optimal tho. The cash sunk into the rental properties will grow with tech real estate but it's probably not going to grow like FAANG/"FAAMG" stocks.