I've seen the same attitude a lot of times. "I was an investment banker for 10 years but then I moved to Colorado and became a ski bum and I couldn't be happier!" Like alright man live your life but stop acting like you discovered some dark secret that anyone can reproduce. You know you ain't out here paying student loans.
I guess "Millionaire decides to stop working" wasn't an enticing headline for the author.
100% - all my arty, bohemian friends have trust funds.
Most of my ski/hiker/climber bum friends are broke.
They are fortunate, then. I have known some pretty fair painters over the years--good enough to be shown in a local gallery--and they have not had trust funds. Some taught, some worked in printing production.
Yeah - if anything it's another indication of the huge bubble many of us in the tech community live in.
Sounds very "American" if you ask me
You're looking at it the wrong way (i think).
The point is not that he is starving, or that he is desperate. The point of that number is what he gave up!
The point is he gave up a job of 0.5 million, potentially 1 million in a few years. To top it off the job had reasonable hours, great people and he was getting positive feedback.
You would not expect people to give that up. The question is why?
Instead, you're pointing out how lucky he was. Well, that is his point! He was so lucky and is giving it up! Aren't you curious why?
> You would not expect people to give that up. The question is why?
I would absolutely expect people to give that up, as well as any senior economist student would tell you, the labor preference curve is backward-bending after you start making a certain amount of money.
> He was so lucky and is giving it up! Aren't you curious why?
Not in the slightest. There are multiple studies saying that happiness plateaus after a certain amount of income. It's his life and he probably found his own plateau.
> I would absolutely expect people to give that up, as well as any senior economist student would tell you, the labor preference curve is backward-bending after you start making a certain amount of money.
Are you sure this is a good student? The bend in the curve demonstrates the preference for incremental wealth. So you might forego $500k to $600k. Going down to $0 takes you through the steepest part of the curve.
(I guess with interest on savings, the person is going down to something like $25k-$40k.)
> There are multiple studies saying that happiness plateaus after a certain amount of income. It's his life and he probably found his own plateau.
I am not sure what you mean by "probably found his own plateau".
Do you mean he found he didn't need as much money to live?
> I am not sure what you mean by "probably found his own plateau". Do you mean he found he didn't need as much money to live?
He figured out that living on $150k (stated elsewhere) and doing his own thing 24/7 gives him more utility and satisfaction than earning $500k and working at Amazon full time.
Neither one is particularly interesting, because it's already in dream territory for most people and if you gave them a choice of living on $150k and working on their own business (an enormous safety net), most people would be happy with those options.
But a plateau would just mean he quit advancing. This guy didn't stop on a plateau, he stepped off a cliff. That's a pretty big difference.
Also, the people (me included) that don't question "why" are the people that would do the same if they had the opportunity.
Of course anyone can create the opportunity for themselves, and of course the income and spendings are relative, but no matter how you slice it, a half a million safety net, or even 1/10th that, is still a pretty big help to take the decision.
He didn't give anything up. He can have his job back anytime he wants it back realistically. Title should be "Quitting your 9-5 is easy, just make sure you are loaded with $$$ and have the most in demand skill set on the planet."
500k/year in your last year is "nothing",
Please. It was perfectly obvious from context that the "nothing" he was referring to was his "new thing". No product, no customers, no brand, no marketing, no customer discovery, etc... that's pretty much "nothing" in terms of starting a business.
It's not like he claimed to be broke, or a destitute, homeless, bum. If anything, I kinda feel like we should give the OP credit for being transparent in a way that most people aren't.
"All I got was a small loan of a million dollars"
This was the exact thought I had when I read the article. It's not even that far away from it, his yearly salary is half a million.
You see a lot of that in some odd lifestyle bloggers and media folks.
They have a bunch of money, move upstate, talk about all these crafty / cosey things they do and how great a life choice they made and contrast it with a lot of bad things .... that are the only reason they can make the choices they can now.
I’m about to downshift myself. I have no illusions how much lower my cost of living will be due to selling my big city house and needing a comparatively tiny loan for the next one.
I’m reminded regularly about a line from the Dalai Lama. When we are young we sell our health for money and when we are old we will pay anything to get it back.
My original life plan was to do this maybe 8-10 years earlier. But the startups I picked didn’t go big (I chose for impact not cash out potential), two recessions and a divorce. And I can only do this now because I have simpler tastes (except for tools).
Yeah I think that quote is a lot more apt than some of the descriptions we see otherwise.
I'd like to do it, maybe try my hand at woodworking.
One thing I left out that your other comment brought to mind is that I don't think the lifestyle bloggers are accomplishing anything. I do feel we're shorting ourselves by hyperfocusing on a narrow field, since innovation is quite frequently the art of applying knowledge from other domains. But I don't say it often because I've seen that proselytizing about taking a breath and engaging with your surroundings just makes people double down. It's a thing I think you have to feel to understand and lecturing people about it works against your aims.
I come at it sideways by trying to encourage people to have more hobbies or at least see the sights/local events.
Yes, I saved a lot. About $1M in liquid assets. But I meant that I'll start with no income, no product, no business. I'll write another post about how I set up my safety net.
I know you're looking for attention or validation, but I have a feeling you'll probably get more negative attention than positive when you seem to be equating having $1M in liquid assets to "starting with no income, no product, no business".
$20k a year in interest after taxes if he’s not a complete moron. I could survive on around $45k a year (including health insurance) so I could putter for a long time before I had to deliver something.
But domain knowledge and contacts will probably be the biggest assets OP turns out to possess. Don’t undersell those.
~$100k/year if returns are based on 10%. Aka, what some people use for expected S&P returns to beat
I have 80%+ in short term US treasuries and CDs (the rest in some stocks that I've held for a long time). I have no interest in the upside of the stock market right now. I'm already doing something speculative myself.
If you're working out a budget to allow you to quit your day job you'd better have all of the numbers in post-tax dollars or you're gonna have a bad time.
We're taking about a pre-tax salary at 500k. Capital gains means no payroll taxes and discounted long term taxes too.
And 80k is still well over the average household income
That's mostly capital gains. He won't earn that in steady dividends to live off of.
These are fungible. (We're already averaging out volatility)
> "starting with no income, no product, no business".
Getting a sustainable business is not easy. Lots of groups don’t get there with $10’s of millions in venture capital. So from a business prospective he is starting with nothing but does have a personal safety cushion.
One small loan of a million dollars!
Those two things are not equivalent to me. Yes I have savings, but I also have no income right now.
You are correct! But the way you phrased it makes it sound like you are experiencing a hardship, which I think most would disagree with. Don't get me wrong, I think you should be proud, you clearly did a lot to earn your savings, but you're trying to make it sound like retiring young with $1M in liquid assets part is the difficult part when its probably the easy part. You don't have to work for a very long time, or at all!
Not at all. I live a very comfortable life and I don't expect it to change. Wasn't my intention to make it sound like hardship. But I don't have infinite runway, so I do have to make something.
Unless that $1M is stuffed under your mattress, you likely have some income from is. Even sitting in a CD at 2% you'll be pulling in $20k/year - that's not "no income".
What I think you mean is you don't have steady W2 income from an employer.
True. I've put most of it in short-term US treasuries at ~2.5%, so making about that much after taxes.
I would much prefer reading a post about quitting to do something off your own, or just about setting up your own thing, without the money angle.
A different post would inspire me to try too. A post like this one makes me sad to be less privileged.
And I'm not saying that to make you feel bad or anything. People have different circumstances and make different choices for themselves, some biased by the circumstances and some not. I'm just saying it as a consumer of a text. Just throwing my opinion with no expectations of anyone catching it.
I mean, savings accts are paying 2.2 percent right now, and while it's a drop in the bucket compared to senior developer wages at AMZN, you're looking at 20k in interest accrued annually, which is basically what each of my parents live on in middle America.
Depending on where you live, who you support (or are supported by), and how capital intensive your independent business is, that could be plenty. Plus, you've already got a book deal worked into the business plan it seems.
I get your point, but if you’re not making any income from $1m in liquid assets you’re doing something wrong.
You can easily make in interest what many people make in salary. Please just drop the "starting with nothing" part of your story. No one ever has viewed $1M as "starting with nothing".
Good luck. Cautionary tale: I have a buddy that was in a similar situation (more than $1M actually). He started a business, was careful, and after a few years went bankrupt because the business never gained traction. He sure wishes he hadn’t gone down that path. He’ll probably never get back to where he was. Just a regular developer now. If you ask him if the experience was worth it, he’d tell you no. So be careful.
I did something similar 4 years ago. It was the best decision I have ever made. I did consultancy, sold myself cheap compared to the big consulting companies and helped several startups becoming real businesses. I loved it, every day was awesome!
Even though I sold myself cheap, I still made more money that the salary I would get if I had worked for the big consulting companies. The biggest challenge is selling yourself, and I am not very good at it. Still it worked out great for 2 years until I joined a startup as the first employee which has gone from 3 to 100 employees in just 2 years.
If I was employed at a regular company, I would never have gotten the chance to join that startup.
That’s awesome - congratulations! I’m glad it worked for you.
You don't need income with $1M. If you chuck that into an index tracker you can safely withdraw $40k a year...
Author here. My expenses are more like $150K a year, so my runway is only a few years. I have a family, two small kids (4 and 2), and live a comfortable life in Seattle. I could obviously adjust my standard of living, move somewhere cheaper, etc, but I didn't want my family to have to change anything from this experiment I'm doing with my life.
I hope you still have good health/life insurance. Maybe you are young but life changing events can happen to anyone as it did to me.
I do. Got a $5M life insurance, and disability insurance that pays $10K/month if I can't do my work anymore. Got a high deductible health insurance through the ACA exchange. Life and disability insurance were quite cheap actually: about $3K/year in total (age 35 and good health). Health insurance is obviously expensive. The cheapest is about $14K/year here in WA for a family of four (which is what I got). Deductible is about $7/$14K IIRC.
> The cheapest is about $14K/year here in WA for a family of four (which is what I got). Deductible is about $7/$14K IIRC.
Just think, you need to have $21k in medical receipts before you can even break even. ACA is such a joke and yet many people in our society believe MORE "free" healthcare will drive prices (ie. taxes) lower.
I understand you here. I just quit a financial startup. My runway is more than 10 years because I only have to take care my mother (Yeah, Single forever!). The real issue is mental health, that would lead to physical health if not aware!
hey man. just FYI i'd kill to be in your shoes.
- almost broke startup founder
I am also living in Seattle area with couple of kids and my expenses are in the same ballpark.
Someone used to spending ~500k a year is not going to want the quality of life change of moving to 40k a year income. Their family would also not appreciate it.
The best thing I ever did for the family budget is work out a plan ahead of time for windfall money. Odds are OP will never make this much money again. Spending like this is the new normal is how rock stars and athletes end up broke at 40. You have to get out ahead of it.
Since OP has a million saved I’m going to assume they had a similar plan in place. But. $150k a year with young kids (they haven’t begun to get expensive yet) in Seattle is pretty high. Getting that down is a good deal of effort that will distract from running the business.
>>Odds are OP will never make this much money again.
I hope these kind of things are taught to people early. Somewhere in school, or may be at a level of a social value system. The default every day mode for most people is to work very hard and fail. In fact you are lucky to achieve mediocre success even after working insanely hard.
>>The best thing I ever did for the family budget is work out a plan ahead of time for windfall money.
Yes the best thing to do in case of a windfall period is to take all the money and put it into some kind of an investment. So that when the gravy train stops, you have something to fall back on.
>>Spending like this is the new normal is how rock stars and athletes end up broke at 40. You have to get out ahead of it.
It isn't just rock stars and athletes, its your every day cousins and uncles, who have some career run, spend like no tomorrow, when the gravy train stops, they realize they have their best years behind them, all their money is gone, and nothing that they can do will help them even get by, let alone take them back to their past glory.
>>$150k a year with young kids (they haven’t begun to get expensive yet) in Seattle is pretty high. Getting that down is a good deal of effort that will distract from running the business.
A lot of people will be willing to show sympathy to you if you met with an accident and bad things happened to you beyond you control. But if you threw away a perfectly fine opportunity and asked them to settle for less, they would be asking why should they even be doing it at all.
True. It's hard to regress on the standard of living, especially with a family. I wasn't spending $500K/year though :) I still made sure I abundantly lived within my means.
Perhaps, he was earning 500k but not spending that much. 500k would give you around 300k after tax. Half of 300k can easily be spent in order to have normal life.
And have to live like a normal person, no high-rolling.
Which isn't enough for a family of four, especially with health insurance. Ask me how I know. I'm hoping $2M will do it for me.
What kind of skill sets do you have to warrant Amazon paying you that much? What kind of skill sets do developers have at this level that differentiates them from everyone else?
Amazon’s stock has gone up a lot. Likely that has a lot to do with it but if this is all base salary that’s awesome.
Usually big stock grants go out to those who have shown themselves to be force multipliers. If you can make everyone around you more productive than you’re contributing in ways that make companies like to put golden handcuffs on you.
My base was $160K, and the rest stock. If the stock didn't increase so much since 2016 I would have made around $380K each year in the last 3 years.
Good for you! Honestly I don’t understand the criticism on one sentence of your post and it made sense to me.
“Now that I have some runway I’m going to build something from scratch”? Probably wouldn’t satisfy those that could only dream to make $500k and are frustrated you don’t appreciate it I guess.
I’m not making that much but your post makes sense and resonated with me.
The problem is the wording. Author makes it sound like they'll be pulling themselves up by their bootstraps when they're really just standing on a giant pile of money (which they earned rather than inherited, to be fair). People have a very negative reaction to this because they see it way too often in the rhetoric of certain political groups.
$1M is nothing when you could double it in a few years.
Anyways good luck with your startup, and you can always go back, and take your quitting just as a vacation (many of my friends and I were doing the same thing, it's totally normal).
You probably don’t want to post this stuff so directly on net..
This is true. But how do you know he's not using a fake name / pseudonym?
Most people would happily struggle for independence on half of "nothing".
Now, as warped as this all seems, this pales in comparison to what some tech people make in finance.
I think they meant the business has no base.
Capital helps. It won't make you profitable though.
I'd guesstimate he has 3m saving optimistically right now. In my developing country, this is definitely a retirement.
EDIT: oh he just said $1M saving there.
It's really hard to have exactly nothing. You can have much less than nothing, through student debt, and slightly more through and savings. Even then, a college education has worth (excluding philosophy) so no money might not mean no things. In the the end, nothing is as complicated as nothing.
Gentlemen, when I first started Reynholm Industries I just had two things in my possession. A dream, and six million pounds.
I’m going all in on independence, and I’m going to try to make a living with my own bare hands starting from nothing.
500k/year in your last year is "nothing", huh? It really undercuts the entire thrust of the post, because you're starting with a nice big war chest and a hell of a safety net, not "nothing".
Author here. I got a big bump from $230K to $396K in 2016 when I got a competing offer and Amazon matched it so that I wouldn't leave. From then on, the growth from $400K to $500K happened because the AMZN stock nearly tripled in that time frame.
Thanks being quite open about what's changed the trajectory!
I do share the same sentiment as yours. I'll be closely watching your experiment and hopefully learn something from you!
Good luck and best wishes!
Well, this just illustrated why a company shouldn't play the matching game. What did Amazon get for matching the offer? They got to keep you for a couple more years at a premium. I'm sure you did some good things in those two years, but the accounting side would probably have a difficult time assessing the real value of those two years.
Huh? This seems like a non-sequitur. What does leaving in 2 years have to do with your worth this year? How many years would he have to stay to pay off this year?
By that logic hires are bad deals if they ever eventually leave because you "lost" the money of their last n years.
Hiring a replacement would cost them a lot of money and the replacement would also expect $400k for the same responsibilities anyway.
might have been just to avoid letting that particular skill set and experience go to a competitor. the value of that competitor getting that person was more valuable than amazon keeping him/her.
with Amazon's reputation, i imagine it's pretty difficult for them to hire and retain talent.
This is largely due to Amazon stock appreciation. Amazon does not pay senior engineers $400K, let alone $500K. In FAANG, a typical non-promotion raise is 5-8%.
The author could probably have been a bit more specific and noted that his income was actually quite likely to go down for the next several years, but it wouldn't have made for such a compelling post.
Amazon adjusted my comp to ~$380K in 2016 after I got a similar competing offer. It's true that I would have made a bit less if I stayed, but it was still going to be around $500K assuming the stock price remained the same.
For the record a big chunk of that is also going to come from stock appreciation, which Amazon has done exceptionally well over the last 8 years.
Disclaimer - I'm also at Amazon, but I joined at the peak stock price :(
> I made $75K in my first year and that gradually grew to $511K by my last year.
Wow, I'm envious of this rate of internal raises. Is this consistent within Amazon's culture, or other SV companies?
I've found (in the small-town Midwestern shops I frequent, not in the FAANG bubble) that I have to change employers to do better than a token 3-5% annual raise, even if my value to the company is increasing much more quickly.
I've even been heartily congratulated and thanked at my annual review for completing successful, profitable projects in my first year at one job, and offered a reward of a $1/hour raise. I was a bit shocked, as that represented a pay cut when you factored in inflation. They 'capitulated' to an increase of $1.50/hour, which was just about keeping up...had to go look elsewhere to do better.
He thinks all these things are attributable to his own performance, and that all he has to do is get hired by another FAANG and things will be just the same. Later, he may well be hirable but this type of advancement doesn't happen without a serious amount of timing/Luck and those stock market gains aren't typical either.
I guess you could look at it as an act of generosity. the more people quit from those jobs, the more there is for everyone else. :)
I'm totally fine not getting back the same compensation, level, company, etc, if I had to get a job again. I'm relying on being able to find a job that covers my expenses though, which I'm reasonably confident in.
Not being rude to the author, but I wonder how much of this is naiveté of young age.
He definitely had early career success. Like most people in his situation it can be very hard to understand how hard life can be at the opposite end. When you are young, and have this kind of success without prior equivalent failure it can be hard to grasp how much you'd have to work to make that much on pure hard work and merit. It's easy to spend and throw it away, or even not respect the uniqueness and blessed situation you have now.
Then you reach some thing like 35-40, and realize you have no luck going for yourself anymore. The best years are behind you. And you have to put in life devastating hours only to fail. And there is nothing you can do but suffer through it.
Back from where I come we have a proverb in Dakhni Urdu which goes like this: People make the worst possible decisions of their lives when their stomach is full.
I don't need all those things anymore (and never did). I've visualized not being able to pull this off. That was very important for me to take the plunge.
> I joined Amazon as an entry level developer. Within 3.5 years I had been promoted twice to a senior engineer, and I was practically guaranteed another promotion to principal engineer this year if I had stayed.
> My potential at the company was high, I was told.
> My esteem within the company grew along the years and I was regarded an expert and a leader in my field.
> People looked up to me and respected me.
> I could have made another $1M if I stayed another couple of years.
> My work–life balance was good too, despite Amazon’s reputation.
> I didn’t need to prove myself anymore, and I could get everything done in 40 hours a week.
> My team worked from home one day a week, and I rarely opened my laptop at night or weekends.
> Also, the people I worked with were exceptional. I had three managers in total, and all were generous people with lots of empathy.
I can't fathom the number of people who would kill to have 1/3 of this list, myself included. I'm sure leaving all this behind is good for now, but, as someone else said, you're in for a rude awakening when you're back on the job market and you're grinding like the rest of us. Enjoy the vacation while it lasts.
> why not work a few more years to have a much longer runway?
Because I didn't want to keep postponing. There will always be something that I could be waiting for.
PS. Regarding health insurance. No $1.2K/month is from the ACA marketplace. I could have continued Amazon's through cobra for 1 year, but it was about $1.5K. When I was with Amazon, I think I only paid $300/month.
Looks like lots of comments here are negative. I hope it doesn't deter you or get you down. It's tough to leave a high paying job to pursue something different and I wish you all the best.
It's interesting timing to quit now. If you have 45 years to work, why not work a few more years to have a much longer runway?
Safe withdrawal rate now is $40k...if you did 3 more years to and saved $2 mill, that's a double of your safe withdrawal rate to $80k. You're doing 40 hours a week on a good team...
Also I saw you put your health insurance is $1.2k per month...Amazon's health insurance../sucks?
Well I sure hope going off on your own helps you gain some humility. This whole post just reeks of first world problems™
Yes you can still be miserable with a ton of cash but I'd rather cry in a Corvette than on a bus. Hoping to see a follow up post from OP after they've gained some perspective.
My spidey sense tells me the op just needed a reality check, a long vacation and some introspection.
What, you also don't casually make half a million a year and think that's peasant salary?
"How I plan to survive for a couple of years with $1 million in savings while I rediscover my creativity - AMA"
Here we go. Another humblebrag.
$1m is not enough for most people in the US to never work again, unless they are quite frugal. It's barely enough to retire with.
What bubble/ivory tower part of the country are you in? $1m is enough. Especially with a paid-off mortgage. Most people get by for way, way less than that.
In the bay area and almost everywhere on the west coast you are looking at over $1k/month in property taxes for that house with a "paid-off mortgage." In most states you never really "own" your home. You only own it while you pay tax every six months until you are dead.
There's more to the US (and the world) than the West Coast.
I think the commenter's point is yes you could cash out and move to nowheresville with a cheap house, but there's no point in playing that hypothetical game because it doesn't end (live in the ghetto! Your house is valued at $10k, aren't those low low property taxes sweet??)
They making the probably-fair assumption that these hypothetical people want to live at least close to where they're rooted their lives.
Yes there’s also New York, Chicago, London, Paris... ;)
Why would you retire in a high cost of living area?
Because you like living there
The vast majority of people don't get to make those sort of decisions. It's a matter of "where can I live?", not "where do I _want_ to live?"
So, the ivory tower remark seems appropriate.
If at any point in ones life you’ve made over $300k, I doubt $40k a year would feel like anything other than relative poverty - not that that’s a terrible thing. It’s plenty of money except if you’re used to vacations to Europe in 4 star hotels, nice gym and golf memberships, cars, etc.
>If at any point in ones life you’ve made over $300k, I doubt $40k a year would feel like anything other than relative poverty
Neither here nor there. The GP was responding to "$1M is not enough for most people to retire on."
>$1m is not enough for most people in the US to never work again, unless they are quite frugal.
i.e. "$1m is not enough for most people in the US to never work again assuming they want to live to the standard that I have become accustomed to."
Which very likely does not apply to "most people". We do pretty well for ourselves and it's easy to forget that "most people" live paycheck to paycheck on far less.
Florida is popular retirement destination in US and comfort living cost there for 2 people is about $50K annual without taxes. Part of the high cost is that most people in our generation won’t have paid off their mortgage and monthly $1500 expense is expected just for that. Add on the top property taxes, high cost of medical, high cost of smart devices, phone plans, eating out even once a week - etc. If you have kids who are still dependent then you can easily add another significant chunk.
+1 for Florida. You can buy a 3 bedroom home on a barrier island within walking/biking distance to a pristine beach for $500k. Even less for a nice condo.
$1m + paid off mortgage are probably enough for most of the country. You'll still need to be frugal, depending on your age.
Not with inflation
The 40th percentile income in the US is $43.3k , with 126 million households , that comes out to about 50 million households that make less than $44k.
To put my feelings bluntly, get out of your bubble.
Just my insurance is $20K/year (health, life, disability, home, auto, umbrella). Then $10K/year in property taxes. Then $30K/year in mortgage interest. That's already $60K/year and doesn't include food, utilities, schools, etc.
Median household income is $60k in the US. So, $40k for 1 person is probably enough.
What is the average household income in the US?
> you'd have $275k net. If you remove generous expenses, you have $200k a year in savings.
In Seattle Washington? You'd have an extremely hard time making ends meet on $75K, it certainly isn't "generous." For example median home value in Seattle is $725K.
My expenses are about $150K a year.
Fixed costs per month:
* $5K mortgage
* $1.2K health insurance
* $300 life and disability insurance
* $800 utilities
* $2K home services: nanny, sitter, cleaner
* $800 school / preschool and kids activities
* $2K groceries, essentials, etc
I have a family, two small kids (4 and 2), and live a comfortable life in Seattle. I could obviously adjust my standard of living, move somewhere cheaper, etc, but I didn't want my family to have to change anything from this experiment I'm doing with my life.
I live a comfortable life in Seattle and my mortgage is $3k a month including taxes, in a house that’s too big for us to keep clean. I think “comfortable” might be understating things.
If I moved into my neighborhood now it might be closer to $5k (without a bigger down payment) but I wouldn’t recommend it.
$5K includes property taxes, HOA, and home insurance. The total was $4K originally when I bought a $850K townhouse in 2015. But I refinanced recently to get some cash out and that got it to $5K.
As someone trying to do something similar in 5 years (not nearly in the same situation), I'm having a hard time imagining why you would refinance and take money out (and not the opposite, refinance and pay things down or pay off your mortgage completely).
A lot of the things in your post resonated with me, but seeing this in the comments really got me curious about your math.
Good luck with your endeavor!
I didn't need the cash out, but it adds a bit of a safety margin. Liquid cash gives you optionality. For example, if things don't work out as I hope, I could use that cash to try to buy another small business, or something like that. It would have been harder (or impossible) to refinance without a steady paycheck, so I planned for that while I still had the job.
My mortgage interest rate is 4% and I've put the cash I've withdrawn in short term US treasures at 2.5%, so that cash is only costing me 1.5%.
Another reason I did a refinance was that when I bought my house I had only been in the US for 2.5 years and my credit score wasn't great (in the 600s IIRC). I could only get an 5/1 ARM loan that was about to start becoming variable at a higher interest rate.
Wow how much nanny-ing are you getting for $2k a year?
Those are monthly costs
$2K home services: nanny, sitter, cleaner.
Spends more per month on luxuries than most people make in the US, cries.
Get a grip, dude.
>In Seattle Washington? You'd have an extremely hard time making ends meet on $75K, it certainly isn't "generous."
Renting an 1800 sq ft 3 bedroom house is $40K/year. That leaves $35K. Per month that's almost $3000.
If you are having an "extremely hard time" paying for everything else with $3000, you may want to reevaluate your lifestyle.
I'm not saying it's a fantastic lifestyle, but it's not a poor lifestyle. You'll still be able to afford a lifestyle better than most of the country.
I agree with you but grocery and other essentials bills itself comes out to be $2000 per month for family of 4. If you don’t care about organic food shopping, specific brands for quality and relying heavily on Wallart then it is possible to lower this at $1000. The eating out lunch at work itself is usually $300. Phone + cable + internet bills in family would add another $300 even when you haven’t upgraded in 4 years and so minimum TV subscription. The cost of gas and 2 car maintenance + insurance easily adds up to $500/mo. Replacing car, even mid end, adds another $500/mo for next 5 years. Computers, house maintenance (essential servicing) etc will add another $300/mo spread out. We haven’t yet got to various other utilities, schooling, dentist, optometrist etc.
I suppose bare minimum essential is probably $1000/mo but if you set needle to little above middle class but way below “rich” (which is not same as median) then $3000’for “everything else” is not sufficient.
I live in Seattle, none of my friends work in tech, none of them make anywhere near 75k, try cutting that number in half. They aren't living in condos in cap hill with the other high earning tech folks but believe it or not they aren't struggling to eat at night either and live comfortable fulfilling lives.
You'd have an extremely hard time making ends meet on $75K
That isn’t much less than the median income in Seattle.
It's generally a bad idea to buy a house, so I don't really see how the median home value is relevant.
>It's generally a bad idea to buy a house
I get that everyone's priorities are different, but I'm always amazed that ultra high income earners don't do this (this being live well below means, invest the rest in index funds then go work on passion projects, hobbies, focus on family). Lifestyle inflation and projecting status is a pricey hedonistic treadmill that is ultimately unrewarding.
Most people that make a lot of money probably like their jobs. It is probably quite difficult to get really good at something you don't actually like doing.
People get addicted to the power that resources bring. Buying things because you like them, eating whatever you want whenever you want (and not having to travel for it), the ability to follow whims and flu around the world.
The problem there is you’re just responding to whims, and everything will start to feel the same.
lifestyle creep is real
Lots of people used to taking home 275k aren't going to transition well to 40k which depending on where you live could feel like you are only slightly above poverty level.
yeah, going up is obviously fine, but it quickly becomes your new normal. Going back down is...painful.
Even for simple things. I grew up without A/C in an apartment with leaky windows that would get way too cold at night. Never bothered me. I was used to sweating a lot in summer and using a lot of blankets or standing by the oven while we were making dinner in winter.
Today? The moment the temperature is a little off I WANT TO DIE. I can't get any work (or anything really) done, and I'm likely to get sick. Im a wuss now. Central air/heat (or heated floors if we're gonna get fancy) or I'm sad. My young self from 30 years ago would laugh his ass off at how useless my current self is. Wealth can spoil you really quickly.
A good balance between risk and returns is often considered to be 10% annualized. Annual comfort living expense for family of 4 is at least $120K net in most urban areas. Adding taxes, your gross would be around $150K. So $1.5M in investment is often considered good in theory for achieving financial independence.
The big issue however is that returns are averaged over long duration and so on some years you can end with as little as 2-3% or even negative. So you need to have 25-50% cushion to ride out bad turns in economy where you will be eating up principal itself. This is also important for any unforeseen circumstances such a medical issues that might rack up huge out of pocket (especially in US). Or children leaving for college needing to pay as much as $50K in tuitions. You also need at least 6 months of buffer ($50K) in case some bad event triggers losing your investment, for example, someone trying to to sue you. Given all these more practical investment asset size is $3M for financial independence.
Is your "$40K" number from the so callled 4% rule?
> When I first hit $100K income, I would take a peek at my W2 for a few days admiring the six digits, but then it wore off. When I hit $200K, $300K, $400K, and $500K, it was the same thing. I would be delusional to think that earning $1M, or $10M would suddenly make it different.
>What is out there that I could do that would make me excited waking up every day for the next 45 years that could also earn me enough money to cover my expenses?
At $500k, with UK tax rates (probably higher than US), you'd have $275k net. If you remove generous expenses, you have $200k a year in savings. Five years working would get you $1M.
With $1M, you would probably never have to work again (~$40k in safe withdrawal per year).
Then you'd have the ability to pick any job, irrespective of pay. Go help charities, help with research, spend all your time on open source projects, whatever you want.
OP is getting crapped on a bit here, but I think he's doing the right thing for himself. I've not done as well, but well enough to realize that past a certain point, money just isn't worth as much as a lot of other things in life. And if having money doesn't buy you the freedom to take some risks or time off, it might be worth even less than we think.
It's worth asking yourself regularly not only "Am I being paid enough?" but also "Am I being paid too much?".
Most of the comments seem to not understand that he wasn't developing per se anymore. He was managing, which explains the larger payout.
In addition, I greatly dislike how the top post is negative on the story: it disregards the idea behind the post and instead replicates the typical "you have things good so fuck you" response.
Not the author.
One issue I see is that you'll always face this same question again and again, as risks are way less quantifiable than one expected. I was at multiple occasions that I made up my mind to move on, but at the juncture of making decision, the previous thought process just fell apart for no reason; because when risks become more realistic, its mental pressure is way heavier than the expectation.
I have personally had this happen, also. The "inertia" of the current situation is almost always underestimated. Kudos to the author and his ability to move on...
Yeah. Or like why not build something on the side first? If he was in fact only working 40 hours (which is mind blowing, but I guess there’s no reason to lie), he could have easily bootstrapped an idea to revenue in 6-12 months all while making that insane amazon money.
Amazon has a policy that they own all the code you write unless you get it signed off by them as a project that is not related to ANY of their businesses. With Amazon being in so many businesses, they will almost certainly deny whatever idea you want to work on because they have something they claim is related.
He could still do it but that is risky as he could get sued later and I have even heard that it can block any future sale until it gets ironed out.
My employment contract prevented any kind of outside work so that wasn't an option. Even if I could, it would still have been hard. I'm making this change to improve my lifestyle, and working nights and weekends in addition to a full-time job and raising young 2 kids doesn't sound like an improvement. Maybe if I was desperate I would have, but it wasn't the case.
Why not stay there and milk it for a few years? Once you have that safety net built up, there is little reason to care. So do as little as possible... Come in late, leave early. Do this a little bit at a time. With your good reputation, you can probably get another mil out of them.
Until you're bored of it. It's the same kind of handcuffs as freelancing.
Everyone here is bent by the $500k, but nobody is mentioning working for yourself can lead to less autonomy as you have to take on lame projects just to pay the bills, or the product your customers actually will pay for is not he one you want to build.
Ideal autonomy is getting corporate patronage to mange your open source project.
the 500k is due to Amazon's stock value going up. The amount of stock you'll be receiving is set several years out and is frequently a major portion of your salary. Amazon's stock tripling has put many people at high salaries.
OP is an SDE3, which levels.fyi puts at $154,259 base, $150,648 stock, $19,227 bonus. The stock goes up 3x in the years between the grant and when you vest, you are making tons of money. Most people don't expect Amazon's stock to triple again in the next few years.
Thank you for clarifying!
From the description in the blog post, the author was a high performing L6 SDE getting paid the rates of an L7 SDE because he was about to get promoted.
Amazon has very few L7+ SDEs (~1% of SDEs). So when you read that salary, you have to remember the author is relatively rare even within Amazon.
Yes, I was told to not expect another big increase after the L7 promotion.
It may be time for me to start listening to the people saying a bear market is coming.
I've heard of Amazon paying between $200 and $300K for software engineers, but this is the first time I've heard of them paying $500K!
Goodness, I don't have any work/life balance now, so it really makes me wonder if I shouldn't start applying at Amazon.
I’m going to suggest earning 500k in the previous year opens up this as an option
That's true. Just for the record though, I wasn't in a soul crushing position. Things were good, but I'm vastly more excited about the new path I'm about to take.
About the handcuffs, tbh it's not just the money. There's also other intangibles. I had built a lot of connections and a good reputation inside the company, and by leaving I've lost access to that. I could reason about the money in a spreadsheet, but the other things were harder to value.
The golden handcuffs are real.
From my own experience feeling trapped in a job that makes significantly less than $500k, and those of several friends, sure it may be a privileged position to be in, but the human mind doesn't care whether it should be feeling a huge mental burden.
Taking the leap and giving up a well paying but soul crushing job is hard. And it can feel really isolating and guilt inducing, when you certainly can't talk about it to your friend who is barely making ends meet and yet has a job seemingly less soul crushing. I'm sure they would tell you to go cry in your pile of money.
But work is most of life and I basically see finding work you like as a primary means to happiness. I've been scoping out interest for a coaching business around this topic lately and it seems that a lot of people have this problem. Heck, the "is freelancing the best thing ever or your worst nightmare" posts seem to come up every other day. I'm glad we are taking about it.
The declining motivation with increasing scope really resonates with me. I often feel the same.
And I feel that his career trajectory is pretty typical - you start building cool stuff in a small team and you end up trying to coordinate large groups of people (who a typically the managers of the people who will build the cool stuff).
Holy fuck, the cynicism and negativity here is totally out of control. What started as a very interesting post on the merits of extrinsic motivation vs intrinsic motivation has turned into "let's shit on somebody for pursuing their dream". This is pathetic.
> The last couple of years, however, were quite different. I was leading the most important project in the history of my department, with many stakeholders and complex goals.
Well yeah dude - you started at 75K and now you make 500K - bigger salary = bigger obligations.
The idea of "enough" in the book by Joe Dominguez.
This is a very common theme. Once you reach a certain threshold of income (not everybody though) you start valuing freedom, flexibility, traveling and start looking beyond work. This is primarily because money has lost its forcing function. Even if you have the best setup in terms of work, compensation, co-workers, you lose motivation and drift away. This isn't true of everybody though, most successful entrepreneurs despite earning massive amounts of money, are still as hungry, motivated, and dedicated to their work as the first day.
I love these kind of articles where people are transparent about their salaries. I don't quite understand the envy and the backlash the author receives. With such a negative reaction, I doubt we'll see too many articles like this in the future (who needs all the negativity?).
I'm a software developer myself for +10 years and haven't made $500k in my whole career and for some reason I don't feel any envy for him. On the contrary, I am glad that we're in an industry where people can earn this big.
That's great if you can earn a lot of money and save up for early retirement. But, that's not what's happening here. It looks like by his own admission of "running out", that he really hasn't been saving aggressively and will be back in the job market in a few years, possibly with a rude awakening. I see these types all the time: making a ton a money thinking they're on top of the world, the same ones saying how they don't mind higher taxes.
I don't know how long the good times will last, but I don't think we can just count on super high demand for developers forever. There will come a day when the market balances out the supply and demand in favor of employers and when that happens people like this guy are going to really regret their earlier choices.
I do think this is stupid on the surface, but better overall for the economy.
If people have the ability to make things themselves and build a business, then should pursue this under the banner of providing greater choice to consumers.
Particularly if the entire industry is bifurcating between a few enormous, ossifying tech conglomerates.
We have saying in Czechia along the lines "he is dissatisfied because he has it too good".
I've had friend of a friend like this who ended up in suicide, because he was unable to replicate his success in big company.
I wish him luck regardless.
As someone who did something similar and blew through a lot of money I would now recommend to milk this for a few years until you are truly financially independent. If your business doesn't go well it may be hard to jump back on the gravy train.
You’re right. I don’t need to be disruptive though. I just need to earn enough to cover my expenses. It can even take a couple of years until I break even.
Now the hard part will be finding a way to be disruptive/innovative after so many years of monotonous work and so much time being brainwashed by the solopreneur propaganda/filter bubble.
I have no interest in retiring. I like working, and I would miss it if I stopped. And I’m not a believer of the traditional deferred life plan. I prefer doing it now rather than in 10 years.
If you are making $500K an year. By many a definition, you are already on a way to NOT needing to work ever in a few years, than even working for yourself.
Why would you throwaway an opportunity to amass like $5 million in 10 years, and then put it in a retirement fund and just retire. Instead of throwing it all away and starting all over again on something that is known to work in only exceptional cases(start up lottery).
Looks good on paper and all. But not a smart move.
This might just be envy speaking, but I don't feel like this was a very tough decision (not that it needs to be!). Either way, congrats on the early retirement!
I couldn't do a side business while working from Amazon. My employment contract prevented it.
But even if I was allowed, I probably still would have left first. It's hard working full-time, raising kids, and doing a side-business. If the circumstances were drastically different I could have done that, but I didn't need to.
About risk to the family: If I don't manage to pull this off for whatever reason (run out of money, get bored, find it too hard, etc), I'll just go back on the job market. I promised my family that our lifestyle won't change, and if our savings drop below a certain threshold I'll get a job and make sure our expenses are covered. For catastrophic stuff I got abundant insurance (life, disability, health) to protect the family. If we end up spending all our savings, we can consider it an advance from retirement and I’ll make up for it later.
"My target is to cover my family’s expenses before I run out of savings"
On the one hand I applaud people chasing their dreams, taking risks to start something new etc, but on the other hand, it seems like he's putting a lot of risk on the family and even seems a bit selfish to me.
Wouldn't he be better off starting a fulfilling hobby, or trying to negotiate a 3 or 4-day work-week and starting a side business, etc?
> Why I quit a $500K job at Amazon to work for myself
Presumably, the answer is "because I already earned all the money I wanted to earn".
> What kind of companies pay software engineers 300k+?
The big ones. Google Facebook Microsoft Amazon.
> Is it realistic to make 500k-1 million+ at these companies as a developer?
It's realistic but not a given. You've gotta be into staff software engineer+ range to be making that much. Plenty of people never make staff.
> How much is it in stocks/rsus vs salary at that point?
Probably around 50/50. 50 salary 50 bonus + rsus. Or maybe even 40 salary 60 bonus + rsu.
> What skillsets do these people have?
Be one of the better software engineers at a company that can curate top engineers.
Strong communication, high interpersonal skills, ability to lead complex software projects, high intelligence, fast learner, breadth and depth of understanding of software. Plays well with others. Generalist -- able to work in a variety of languages with different tools, with no hesitation to learn and quickly understand new environments. These engineers may be domain experts at specific things, but they are by no means pigeonholed.
Usually, but not always, these engineers are also very productive and motivated.
300k+ is senior. The higher ranges would be principal / individual contributor. This is a pretty common pay scale in the Bay Area. https://levels.fyi
Thanks! Roughly, what does is the difference between a senior and principle engineer? How common is it to reach senior for a normal dev vs principle?
Senior at a lot of the larger companies I've interacted with is often a kind of a "terminal level", meaning that you're not expected to rise above it, and can comfortably spend most of your career at that level.
Staff, sr staff, principle and other monikers are usually about affecting change at the scale larger than your team, operating at larger scope, and growing people around you.
Senior would be someone who takes the lead on projects in their domain across their team/other teams. Principal would be responsible for leading overall architecture for multiple teams/departments or a super expert in some domain. At Google, probably less than 1% will reach principle, I've heard around 25% of engineers are senior+.
It's not realistic, but it happens. Especially with RSU appreciation. AMZN's up 88 percent in the last 2 years, so if you were issued compensation plus refreshers amounting to 300k, but 200k of that was RSU, you're looking at 500k in comp when the stock doubles your grant price.
That’s close, but the majority of my RSUs vested well before the full 88% rise. I only got that much appreciation in the last vest.
Also, this was in Seattle location, can anyone shed some light on cost-of-living there compared to say Bay Area developers?
I don't work in Seattle but I was about to, it's 10% cheaper off the bat because of WA's lack of income tax (of course, Amazon also increases base salary in SFBA by about the same amount so it's a wash).
Luxury apartments are much cheaper than SF and South Bay in my experience, and I wouldn't have needed a car. Weather isn't as nice as SFBA probably, but I enjoy the weather around there. Commuting is also pretty straightforward into the suburbs.
What kind of companies pay software engineers 300k+? Is it realistic to make 500k-1 million+ at these companies as a developer? What sort of title/level are these developers at? How much is it in stocks/rsus vs salary at that point? Can someone lay out a traditional example at this level? What skillsets do these people have?
I'm currently working alone making less than 10K per year. My networking is not great and I wasn't able to land a job in many smaller than Amazon companies. I wouldn't leave even a 50K job, let alone an order of magnitude of that.
It's his life and his choices, but many of us have it quite hard.
I promised my family that our lifestyle won’t change. If I don’t make this work, I’ll go back on the job market.
This is one of the most yikes worthy posts I've ever seen on hacker news. I wonder what OP's wife thinks.
I will spend a couple of months exploring some idea. Then will test something in the market and iterate/change based on market feedback.
What are your plans now? How are you going to get started? Any direction you want to take or will you first take a few weeks/months off to re-direct?
Seems like classic case of lack of empowerment. If you find most of your energy getting spent in convincing “stockholders” all the time that you are doing the right thing then your org has much bigger issue.
My base was $160K for a long time. I think it's the max at Amazon. The rest was stock. I got lucky that AMZN stock grew a lot in the last few years. Without the growth it would have been about $380K/year (i.e. that's what I was granted originally before the stock grew).
I'm not following how $380k is the baseline. Were the grants based in dollars or in AMZN shares? I assume it was based in shares and if the stock had fallen you'd have made less?
The grants were based in AMZN shares. Yes, if the stock had fallen I would have make less. If it falls significantly (happened only once in 2014-2015 when I was there) the company typically tops you up with the difference (or part of it).
Likely he was just receiving X years of stock grants every year, which at some point start overlapping + stock market gains = 500k a year.
How do you make 500K at Amazon, is that 200K base, 50K bonus and 250K in stock ?
Time and dreams are more important than money, if you are smart enough to make 500k, i'm sure even in the worst case scenario, you will do OK. Solider on brother.
Author here. Agree. But I bet most of the audience here is already earning enough. Once you cover the basics, the returns of additional income diminish quickly. I chose to say how much I was earning just to emphasize that everything was really going well at my job, including compensation.
No offense, but there are people all over the world reading HN. We’re not all living in a country that can pay SW engineers such large salaries. Good for you and all the best, but please try to think of us living with 15k€ per year. The reason you’re getting a lot of negativity and envy is because we’re living in different environments and we can’t relate to what you’re describing. Anyhow, I hope your decision plays out and you finally find what you’re looking for, even if I don’t agree with you.
None taken. I grew up and worked in Europe in a country with a median household income of $20K. I understand and been through different circumstances. However this happened to be my situation and I’m describing it as it happened. I think my general point still stands though, that motivation through rewards wears off quickly after clearing a certain level of necessities.
Have you ever thought that the amount of motivation for money is the issue? In other words, what if the main factor that motivated you to work hard was not money? What if you kept the job but you shifted your motivation on producing impact for other people instead of yourself? To add to your point, even if you do build a successful business, you'll get to a place where you will have this same problem correct of diminishing motivation correct? In summary, I think it is necessary for us to sit down and ask ourselves what are living for?
What I found is that there are some motivators that don't diminish. I'm pursing earning a living fueled by those intrinsic motivators instead of by money, fame, promotions, etc.
Not to mention paying 37% taxes, plus whatever state tax quickly turns $500k a year into around $300k take home.
In addition, the problems he now chooses to work on may not prove to be so important, as the very same motivation he lost at Amazon will remain missing until near the end of his runway.
Thus I can foresee an abstract quality to problem-selection, rather than a "damn this needs to be fixed as it's bringing me down on a daily basis" drive to build great things.
I hope to be wrong of course, good for him.
I hate seeing negative numbers accumulate in my bank account. I hope that will be enough extrinsic motivation to get me to do something profitable ASAP :)
Yea, probably a lot of people would ... for that kind of money. I guess it really depends on the person. Some crave money even if they are super rich. Some just want to have a happy life (no matter what money) - whatever that means for a person - focusing on a hobby, helping others, reading, etc.
The tl;dr is that when someone is paying you $500k a year then the work itself might not be all that motivating. However, within time, the money isn't enough to motivate you either.
You gotta wonder, though, what the rest of the world would think if they stumbled across this kind of blog post.
Interesting read, I think you'll make a great open source developer!
> Now that I can use Twitter without being subject to Amazon’s social media policy
What is their policy?
I had to disagree and commit sometimes or commit to a compromise that I didn't like. I didn't mean anything nefarious. Just the usual stuff that happens when doing something with a group of people and many stakeholders.
I plan to avoid this by being in charge :) ... If in the future I hire employees or get a partner, some of this might still happen obviously. But I still expect it to be significantly less than at a corporate job.
> doing things that I’d rather not do
What were these things?
Do you think you would be able to avoid these things at your new business?
Would you, if you were him?
How much would you consider it to be your "fair share" out of those money?
Do you support a wealth tax?
Neutral. I promised my family that our lifestyle won’t change. If I don’t make this work, I’ll go back on the job market. If we end up spending our savings we can consider it an advance from retirement and I’ll make up for it later. I got insurance to cover for catastrophic situations.
OP - what does your wife think of this decision?
TL;DR OP liked his job, but his motivation was decreasing. Could be possible earning much more in the next few years. Gonna build his own things from now on.
Long story short money is not everything. I understand it. I'm currently unemployed working on my own things and I pretty like it. Although I don't have that much money saved and probably I'm gonna find work soon, I've found out that I'm that kind of person, who wants to explore the world by myself and on my own terms.
Yes, about $100K of it was.
Is 500k due to stock appreciation?
.... to get some sweet sweet HN Karma points ?
500K/Year is a good enough motivation for me, Jesus! And only 8 years at AWS? I'm probably working for the wrong team.
500k job lol your such a liar... more like 50k.
"because i like hearing the sound of my own voice when i repeatedly reread my blog, even though, you know, i have nothing insightful to say really"
I agree. Just started with Wordpress and I'm still figuring out how to get rid of all the unnecessary stuff. I made sure I didn't have any creepy analytics though. The third-party JS is just fonts from Adobe.
I shouldn't have to run JS from both your site and a 3rd party just to view a text blog post.