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I値l be leaving my job next month to start a start-up with a couple of friends. I feel we have a viable idea and the right team. I値l be moving from Seattle to San Francisco to be with the other founders. I want to tap the FWF collective knowledge pool to help evaluate my plan for the next month to ensure I知 in the most financially stable position when I make the move.

Here痴 some baseline information:

  • Age: 23
  • Current Annual Income: $105,000
  • Net Worth: $175,000: $40,000 cash, $70,000 non-retirement liquid assets and $65,000 retirement liquid assets spread across Roth 401(k) and Roth IRA
  • Debt: $0


Here are the monthly personal expenses I知 projecting:

  • Rent: $825 (already found a place)
  • Utilities: $100
  • Cell: $0 (family plan)
  • Transportation: $50 (public transit)
  • Food/Entertainment: $500


The business expenses are a little fuzzy since I知 not too familiar with it but should be fairly low. Since 1) we won稚 be hiring for a while and 2) our only capital expenditures will be computers and server space.

Erring on the side of caution, I知 rounding up the total combined personal and business expenses up to $2,000/month. The worst case scenario is that I don稚 pull in any income for the next couple of years at which point I'll re-enter the corporate world.

Here are the things I知 doing to take advantage of my current financial situation:

  • Tax Loss Harvesting
    I posted about this a little while ago. This will allow me to offset some capital gains at my current higher tax bracket.
  • Capital Gains
    I値l hold off on selling any assets with capital gains until next year when I値l be in a lower tax bracket. I still need to figure how to optimally maximize my tax benefits w.r.t. tax loss harvesting.
  • Health Insurance
    Since I知 <26, I can still be a dependent under my parents' health insurance thanks to the healthcare reform law. My current insurance is still better ($0 co-pays) so I知 getting all of my health exams done while I知 still employed.
  • Credit Cards
    I知 applying for as many rewards and CashBack credit cards as possible under my current income.
  • Rollover Roth 401(k) to Roth IRA


What else can I do to take advantage of my financial situation? Thanks!

Member Summary
Most Recent Posts
OP could you comment on your friends and family reaction to your decision to leave the 6 figure job? i'm beginning to re... (more)

motuwallet (Jan. 12, 2012 @ 10:00p) |

Update?

JTFH (Feb. 24, 2012 @ 6:02a) |

Will be creating a new update thread shortly

seattlesalaries (Apr. 18, 2012 @ 3:43a) |


Make sure you properly draft the partnership/corporate agreement for your startup.

Also, you're making $105,000 a year, and you're letting someone else pay for your cell phone? Maybe you should reimburse them for your portion.

If I lived in the city I would defiantly own a bike again. Stay in better shape-- always a plus, and cut down transportation costs. Though this has probably already gone through your head =)

elmike12 said:   If I lived in the city I would defiantly own a bike again. Stay in better shape-- always a plus, and cut down transportation costs. Though this has probably already gone through your head =)
Not letting the man keep you down, eh?

seattlesalaries said:   I知 applying for as many rewards and CashBack credit cards as possible under my current income.Suggestion: AMEX SimplyCash (OPEN discounts, 5% on office supplies, etc.)

Looks like you're doing a lot of things right and in a lot better shape financially than many who go down this road.
Not clear whether you are asking for any advice about the business, but to stress Rajjeq's point about the corporate docs - make sure you have an attorney draft/review them and make sure there isn't anything in there that would be a deterrent to future investors.

Also, depending on whether you are an end-consumer service, your server/bandwidth costs may increase significantly if you are successful. Make sure you plan for a revenue or investment ramp to handle this.

A long time ago, I made this same leap to start a company from a job that paid much less and with far less in the bank. It was the best decision I ever made, personally, professionally and financially.

Feel free to PM me with questions that you might not want to ask everyone.

Good luck!

seattlesalaries said:   I値l be leaving my job next month to start a start-up with a couple of friends. I feel we have a viable idea and the right team. I値l be moving from Seattle to San Francisco to be with the other founders. I want to tap the FWF collective knowledge pool to help evaluate my plan for the next month to ensure I知 in the most financially stable position when I make the move.

Here痴 some baseline information:

  • Age: 23
  • Current Annual Income: $105,000
  • Net Worth: $175,000: $40,000 cash, $60,000 non-retirement liquid assets and $75,000 retirement liquid assets spread across Roth 401(k) and Roth IRA
  • Debt: $0

Here are the monthly personal expenses I知 projecting:

  • Rent: $825 (already found a place)
  • Utilities: $100
  • Cell: $0 (family plan)
  • Transportation: $50 (public transit)
  • Food/Entertainment: $500

The business expenses are a little fuzzy since I知 not too familiar with it but should be fairly low. Since 1) we won稚 be hiring for a while and 2) our only capital expenditures will be computers and server space.

Erring on the side of caution, I知 rounding up the total combined personal and business expenses up to $2,000/month. The worst case scenario is that I don稚 pull in any income for the next couple of years at which point I'll re-enter the corporate world.

Here are the things I知 doing to take advantage of my current financial situation:

  • Tax Loss Harvesting
    I posted about this a little while ago. This will allow me to offset some capital gains at my current higher tax bracket.
  • Capital Gains
    I値l hold off on selling any assets with capital gains until next year when I値l be in a lower tax bracket. I still need to figure how to optimally maximize my tax benefits w.r.t. tax loss harvesting.
  • Health Insurance
    Since I知 <26, I can still be a dependent under my parents health insurance thanks to the healthcare reform law. My current insurance is still better ($0 co-pays) so I知 getting all of my health exams done while I知 still employed.
  • Credit Cards
    I知 applying for as many rewards and CashBack credit cards as possible under my current income.
  • Rollover Roth 401(k) to Roth IRA

What else can I do to take advantage of my financial situation? Thanks!


Are you really here to look for financial advise or are you here to boast about how much money you make? =)

How does a 23 year old have a 200k net, and 105k salary?

Even more strange, that you'd risk the job for a startup... Do the startup over Skype and keep your gravy job for a couple more years.

Seriously, you should think long and hard about giving up what you have achieved in your few years in the workforce and moving to an uncertain startup.

No advice here but I applaud you. Take your risks while you're young and don't have a family or house to maintain. If you're well educated and hard working, which I assume you are, you can replace a 100K job on the west coast fairly easily. I just wanted to paint the other side from those saying how awesome your "gravy" job is now.

Rajjeq said:   Make sure you properly draft the partnership/corporate agreement for your startup.

Also, you're making $105,000 a year, and you're letting someone else pay for your cell phone? Maybe you should reimburse them for your portion.


Thanks, I'm definitely going to have the partnership agreement reviewed independently by an attorney. As for the cellphone plan, I'm paying for the entire plan now, but when I move, my parents will take over the plan.

JTFH said:   How does a 23 year old have a 200k net, and 105k salary?

Even more strange, that you'd risk the job for a startup... Do the startup over Skype and keep your gravy job for a couple more years.


I was lucky enough to major in computer science and leave college debt free with the help of scholarships, parents and internships. As for the gravy job, at a certain point money stopped becoming a motivating factor since I was no longer enjoying it. I'm only 23; life's too short to keep doing something I don't like. I've built up enough of a financial cushion these past several years to give myself the freedom to explore other opportunities without the constraint of money.

GQUnknown said:   Are you really here to look for financial advise or are you here to boast about how much money you make? =)
If I really cared so much about the money, I wouldn't be quitting

GamingG said:   elmike12 said:   If I lived in the city I would defiantly own a bike again. Stay in better shape-- always a plus, and cut down transportation costs. Though this has probably already gone through your head =)
Not letting the man keep you down, eh?


More like the 115 degrees weather and 30 miles distance from my home to work.

GQUnknown said:   

Are you really here to look for financial advise or are you here to boast about how much money you make? =)
Only to the people who are susceptible to envy and or jealousy!

seattlesalaries said:    [snip] at a certain point money stopped becoming a motivating factor since I was no longer enjoying it. I'm only 23; life's too short to keep doing something I don't like. I've built up enough of a financial cushion these past several years to give myself the freedom to explore other opportunities without the constraint of money.


Well done. Follow your blis_s.

(turns out that blis_s is one of those words that gets autolinked because Tim/whatever company bought him needs to make money).

How old were you when you graduated with your CS degree?

baller ITT... Ill probably be 35 before I have 175k net worth

OP don't listen to people who say don't leave the gravy job. You have been able to amass quite a good sum of money in such a young age. It is a good indication that you have a good head on your shoulders. This country needs more people like you who can take the risks and have the ability to create something new and employ more people in the future. If the venture fails, you would still learn from the experience and can easily get a similarly paying job.

Take the risk and follow your heart.

seattlesalaries said:   Rollover Roth 401(k) to Roth IRA

Too bad your 401(K) is a Roth and not a regular 401(K). However, perhaps you can contribute to a traditional IRA and take the tax deduction this year. Then convert this traditional IRA to a Roth IRA once you join the start up and pay at a lower tax rate due to lower income.

A few years back, I had $0 earned income one year due to being in school and unemployed. I figured out I could convert about $20,000 - $25,000 of a regular 401(K) to a Roth IRA completely tax-fee. Even converting above that amount, you'd still be at a lower conversion tax rate than you are now. If somebody will have low income over multiple years, they can spread out the conversion over multiple years to maximize the tax benefit.

First for a startup to really make it the founders all need to be prepared to work their hiours i mean all of you working 80+ hours for years.
How viable? Have you all been working part time after work and weekends testing out this idea? Can you keep your gravy job for a few more months and work this idea nights and weekends? Likely given location a CS job you really do not need to all be in the same location for that. How far along is this idea? Is it in pipe dream or do you have a working prototype or buggy prototype yet? Work 40+ hours at it while keeping current saving the extra investment money for a while and get a prototype all teh legal documents and everything handled before you commit to this idea. If things still look great in a few months then go for it. But make sure you have the investments money and SBIR and government money and you guys have proven that you are all all in effort wise and that the idea has potential not just some beer napkin idea before you make any leaps.

Congratulations on following your dream, but here are my couple thoughts. You're already relocating and I don't know if all of your partners are as well. You haven't mentioned if this business needs to be in any particular geographical area or if it could successfully be run from anywhere in the country. If this business doesn't have any geographical requirements, why not consider starting the business in a more business friendly state than California where your warchest will get you farther? Wishing you the best and assuming you'll have to hire on more people as well, moving to a lower cost of living area will allow you to hire additional talent at a lower cost.

seattlesalaries said:   

I was lucky enough to major in computer science and leave college debt free with the help of scholarships, parents and internships. As for the gravy job, at a certain point money stopped becoming a motivating factor since I was no longer enjoying it. I'm only 23; life's too short to keep doing something I don't like. I've built up enough of a financial cushion these past several years to give myself the freedom to explore other opportunities without the constraint of money.


This still doesn't answer his ?, though... if you were earning 105k/year and paying literally 0 taxes, 0 housing expense, 0 food expense, etc., and saved everything, you'd have 200ish (assuming you graduated at 21 and not 18 or something). Can you please explain how you managed to save up almost 200k since I am assuming you probably *did* have to pay taxes, rent, food expenses, etc?

If you lived with your parents, by all means say so - no shame in that at all, we're just curious how you saved up so freaking much in such a short amount of time beyond what simple frugality would indicate (and I have a bit of skepticism when I see numbers like this until I hear that you lived with the folks, got a gigantic leg-up from a 50k graduation present, etc etc.).

1) Going to work for a startup ( they have it, you are joining), going to work at a startup ( they have it, you are joining and getting a little piece of the pie in the up round) and starting a startup (it does not exist, you are all getting equal voting rights ) are three different things, which one are you doing?
2) Never start by relocating for the latter two unless you are the kind of person that does not give a crap about living in an extended stay hotel for months at a time
3) Realize that in either of the latter two you will be putting your own money at risk, sometimes quite a bit and hoping that you would be reimbursed at some point in future. It would not be for equity, it would be cause you either need to get X or your company can't do Y and you can't wait.
4) Your friends will stop being your friends at the first business disagreement

If you can deal with those 4, you are good and good luck to you. If either one of those 4 is not what you can deal with, wait until you can become employee #6 or so.

seattlesalaries said:   I was lucky enough to major in computer science and leave college debt free with the help of scholarships, parents and internships. As for the gravy job, at a certain point money stopped becoming a motivating factor since I was no longer enjoying it. I'm only 23; life's too short to keep doing something I don't like. I've built up enough of a financial cushion these past several years to give myself the freedom to explore other opportunities without the constraint of money. Yeah, I have a degree in CS too, but I have never made over 100k... The average starting wage of a CS graduate is 56k, the 10 year average is 98k. And that's IF you can find a job, I know I had to take a barely paid internship out of college due to depressed hiring, and the economy is much worse now.

At 23 you have not earned the right to hate your job... Discipline is more beneficial to you than anything else right now. Stick it out for 3 more years, diversify and you'll have half a mill at 25... Or quit, fail at the startup (hey, it's possible), burn your capital and end up with a weak resume, poor references and no job prospects.

Gotta say, this smacks of fakepost...

JTFH said:   seattlesalaries said:   I was lucky enough to major in computer science and leave college debt free with the help of scholarships, parents and internships. As for the gravy job, at a certain point money stopped becoming a motivating factor since I was no longer enjoying it. I'm only 23; life's too short to keep doing something I don't like. I've built up enough of a financial cushion these past several years to give myself the freedom to explore other opportunities without the constraint of money. Yeah, I have a degree in CS too, but I have never made over 100k... The average starting wage of a CS graduate is 56k, the 10 year average is 98k. And that's IF you can find a job, I know I had to take a barely paid internship out of college due to depressed hiring, and the economy is much worse now.

At 23 you have not earned the right to hate your job... Discipline is more beneficial to you than anything else right now. Stick it out for 3 more years, diversify and you'll have half a mill at 25... Or quit, fail at the startup (hey, it's possible), burn your capital and end up with a weak resume, poor references and no job prospects.

Gotta say, this smacks of fakepost...


I'm with JTFH here - I don't know why all these people talk about "swinging for the fences" when you're young and have no obligations... seems to me that unless the quality of life at your current job (cough cough MS?) is atrocious, it makes more sense financially to keep banking on your salary. If you've put away nearly 200k at your current age (which again seems a little suspect absent some indication how you managed to save almost 100% of gross salary), you could do the same for a few more years and like JTFH said have half a mil solid by late 20's, even if you drastically scale down your savings. That looks like an easy choice to me...

JTFH said:   seattlesalaries said:   I was lucky enough to major in computer science and leave college debt free with the help of scholarships, parents and internships. As for the gravy job, at a certain point money stopped becoming a motivating factor since I was no longer enjoying it. I'm only 23; life's too short to keep doing something I don't like. I've built up enough of a financial cushion these past several years to give myself the freedom to explore other opportunities without the constraint of money. Yeah, I have a degree in CS too, but I have never made over 100k... The average starting wage of a CS graduate is 56k, the 10 year average is 98k. And that's IF you can find a job, I know I had to take a barely paid internship out of college due to depressed hiring, and the economy is much worse now.
That simply means that you selected CS as a degree so you can make money not because you love what you do and it is a way to make money. People with those degrees are everywhere.

It is those who do DevOps with or without CS degrees that live, breath and eat in development and operations make well over $120k from the start. Of course their "start" is the first time they got paid to have standard corporate gig with their previous experience being involved in projects that can be fetched using SVN or git or being able to figure how to do a remote roll out of hundreds of updates on production servers in a first month at a new corporate job as he used to moonlight for an ISP, etc.

If you have a CS degree and your first job in last three years did not pay you over $100k then you wasted your time in school.

P.S. I love getting redded for presenting reality of high paying jobs in IT.

P.P.S. People who are getting those salaries reply to ads like this well before they graduate

http://philadelphia.craigslist.org/cpg/2629897650.html

IT is an Art! There are plenty Operator type jobs (AD Admin, Exchange Admin and such) paying 6 figure salaries.. If you want more you need to go above that.

jd2010 said:   baller ITT... Ill probably be 35 before I have 175k net worth

WTH? You are young and you can afford to make a few mistakes. Middle aged people cannot afford to put their families on the street. I'd say , go for it. But before you put in a lot more time or money, get 3 paying customers for your product/service.

TheDragonn said:   This still doesn't answer his ?, though... if you were earning 105k/year and paying literally 0 taxes, 0 housing expense, 0 food expense, etc., and saved everything, you'd have 200ish (assuming you graduated at 21 and not 18 or something). Can you please explain how you managed to save up almost 200k since I am assuming you probably *did* have to pay taxes, rent, food expenses, etc?

If you lived with your parents, by all means say so - no shame in that at all, we're just curious how you saved up so freaking much in such a short amount of time beyond what simple frugality would indicate (and I have a bit of skepticism when I see numbers like this until I hear that you lived with the folks, got a gigantic leg-up from a 50k graduation present, etc etc.).


Yes, I graduated at 21. College and living expenses were basically taken care of for me by the scholarship and parents (they were the heavy hitters here). Once you account for that, it's not very magical how I saved up so much. I graduated with about $60k net worth. $15k came from family over the years (e.g. cash gifts and inheritance). During the school year I worked various part-time jobs averaging between 10-20 hours a week. They ranged from tech support ($10/hr) to programming jobs (~$25/hr). During the summers I'd intern. Wages were between $25-30/hour. All of that money was rolled into the stock market so I've made some gains there as well.

After graduating, I moved into a cheap place ($500/month rent) and am still using the furniture I got in college. I still drive the same car I got in college. My yearly expenses are currently between $15-20k per year.

I have a friend who graduated with $0 net worth but has been 1) working a similar job as me and 2) lived with parents these past couple years and his net is ~$130k.

JTFH said:   Yeah, I have a degree in CS too, but I have never made over 100k... The average starting wage of a CS graduate is 56k, the 10 year average is 98k. And that's IF you can find a job, I know I had to take a barely paid internship out of college due to depressed hiring, and the economy is much worse now.

Just to give some perspective. I have friends graduating this year working for Google and their offers are $100k base and $60k stock vested over 4 years. Amazon is offering $100k with $25k cash bonus and $50k stock over 3 years. Microsoft has had to increase their compensation (third from last paragraph) recently to match companies like Google and Facebook. Does this represent the vast majority of CS jobs? Definitely not, but it's not BS by any means.

Alright, I suppose it is theoretically possible, congrats if you actually pulled it off. But my answer remains the same, 175k is not enough to walk away from employment (yet)... Your week breaks down like this; 40 hr/wk for work, 56 hr/wk sleep, which leaves 72 hours to do with what you please... Do your startup in that time.

If you can make it just a few more years, you'll be set for life (assuming non-moronic spending)... That is known. It is unknown if the startup will payoff... In my mind, the risk/reward clearly points to keeping the job and working on the startup in your spare time. Or hell, even at your 9-5 job if you can get away with it.

Numerous times I was in your position and was tempted to quit my job and go all in... I'm so glad I stuck with employment, because most likely I would have burned through my nest egg and ended up back at square one, or with my back against a wall... I retired before 30, if I had taken the gambles I'd give min 3:1 odds I would be worse off than I am now.

*FWIW, I know those salaries are out there, but I know no-one personally who has got them right out of college. The youngest guy I know in my limited circle was HS valedictorian and near top of class at Stanford. Google didn't hire him until his 2nd interview at 25.

I agree with JTFH. I say spend your free time to develop the prototype and then quit when you guys get funding.

you stated that you would be having an attorney review the partnership agreement. please consider what happens to the "idea" and "partnership" should you have a disagreement or a falling out with your partners. who would own the idea? who could take it to market?

From things that I've read and speakers I heard on staring up a company, they recommend that one party should have a 51% interest (it might be a CORP) to break a tie on decision making. Otherwise you can get stuck. I've also had friends tell me they were doing all the work and their partners were not pulling their weight. eventually the partners got a regular job and were still pulling benefits out of the start up leaving the remaining partners resentful. do some research on your own.

Best of luck to you!

Curious how you got $75k in retirement accounts after working only two years? I guess if you maxed the Roth since you were 18, that would be $28k, but even that plus maxing the 401k for two years ($16.5k x 2) gets you to $61k. Throw on some kind of employer match and you're probably still under $70k. You must have some pretty impressive gains to get to $75k during this crazy market. I started investing before you were 18 and at this moment I have less than the sum of all my contributions to Roth IRA and 401k maxed every year.

I'd also like to echo the advice of not quitting your current job. There is no reason you can't work on this startup idea while working, unless there is a direct conflict of interest. If you worked the entire time you were in school you should be used to juggling priorities. FWIW, I have a good friend that worked for Google, quit his job to work on a startup with some friends for a year, and eventually decided to give up and go get another job. He is the smartest guy I know, perfect GPA from MIT, etc. Starting a business is far from easy. His opportunity cost of not working during that year was huge.

Also I'll second the cell phone bill thing. There is no reason your parents should be paying for anything for you anymore. Heck, the fact that you had a $60k net worth coming out of college means they shouldn't have even paid for as much as they did while you were in school, in my opinion.

Best of luck no matter what you decide to do, but I would think long and hard about giving up what you already have to take that much risk when you could probably do both together.

mchas said:   Curious how you got $75k in retirement accounts after working only two years? I guess if you maxed the Roth since you were 18, that would be $28k, but even that plus maxing the 401k for two years ($16.5k x 2) gets you to $61k. Throw on some kind of employer match and you're probably still under $70k. You must have some pretty impressive gains to get to $75k during this crazy market. I started investing before you were 18 and at this moment I have less than the sum of all my contributions to Roth IRA and 401k maxed every year.

I took a look at the numbers again and it breaks down to $37.5k in Roth 401(k) and $26.5k in Roth IRA. Total is $64k. Turns out I counted *everything* in my Fidelity account as 401(k) when I really had a regular individual account as well my 401(k).

JTFH said:   Alright, I suppose it is theoretically possible, congrats if you actually pulled it off. But my answer remains the same, 175k is not enough to walk away from employment (yet)... Your week breaks down like this; 40 hr/wk for work, 56 hr/wk sleep, which leaves 72 hours to do with what you please... Do your startup in that time.

If you can make it just a few more years, you'll be set for life (assuming non-moronic spending)... That is known. It is unknown if the startup will payoff... In my mind, the risk/reward clearly points to keeping the job and working on the startup in your spare time. Or hell, even at your 9-5 job if you can get away with it.

Numerous times I was in your position and was tempted to quit my job and go all in... I'm so glad I stuck with employment, because most likely I would have burned through my nest egg and ended up back at square one, or with my back against a wall... I retired before 30, if I had taken the gambles I'd give min 3:1 odds I would be worse off than I am now.

*FWIW, I know those salaries are out there, but I know no-one personally who has got them right out of college. The youngest guy I know in my limited circle was HS valedictorian and near top of class at Stanford. Google didn't hire him until his 2nd interview at 25.


I know couple of guys who landed a job with Google at age 22 making 200k+ with stock options (Not a CS major)
But I have to agree with you on vesting your time on the startup, outside of your employment hours. No reason to walk away from that salary, especially if you are working with few other partners.

BillRHIT said:   If you're well educated and hard working, which I assume you are, you can replace a 100K job on the west coast fairly easily. I just wanted to paint the other side from those saying how awesome your "gravy" job is now. Are you sure about that? Reading the responses in this thread is a reminder that high-paying jobs are not easily replaced on a whim during this economic time. There are plenty of well-educated and hard working Americans who would say its HARD to replace many jobs right now.

OP is better positioned financially than many Americans to consider jumping into a start-up company.

SeattleNative said:   BillRHIT said:   If you're well educated and hard working, which I assume you are, you can replace a 100K job on the west coast fairly easily. I just wanted to paint the other side from those saying how awesome your "gravy" job is now. Are you sure about that? Reading the responses in this thread is a reminder that high-paying jobs are not easily replaced on a whim during this economic time. There are plenty of well-educated and hard working Americans who would say its HARD to replace many jobs right now.

OP is better positioned financially than many Americans to consider jumping into a start-up company.

Based on my impression, OP can indeed get a job easily in the tech field in SF/LA at one of the many tech companies on the west coast. The job market is tough for middle and low tier talent. For highly technical and higher tier positions, there is a glut of supply and not enough talent to fill them.

seattlesalaries said:   TheDragonn said:   This still doesn't answer his ?, though... if you were earning 105k/year and paying literally 0 taxes, 0 housing expense, 0 food expense, etc., and saved everything, you'd have 200ish (assuming you graduated at 21 and not 18 or something). Can you please explain how you managed to save up almost 200k since I am assuming you probably *did* have to pay taxes, rent, food expenses, etc?

If you lived with your parents, by all means say so - no shame in that at all, we're just curious how you saved up so freaking much in such a short amount of time beyond what simple frugality would indicate (and I have a bit of skepticism when I see numbers like this until I hear that you lived with the folks, got a gigantic leg-up from a 50k graduation present, etc etc.).


Yes, I graduated at 21. College and living expenses were basically taken care of for me by the scholarship and parents (they were the heavy hitters here). Once you account for that, it's not very magical how I saved up so much. I graduated with about $60k net worth. $15k came from family over the years (e.g. cash gifts and inheritance). During the school year I worked various part-time jobs averaging between 10-20 hours a week. They ranged from tech support ($10/hr) to programming jobs (~$25/hr). During the summers I'd intern. Wages were between $25-30/hour. All of that money was rolled into the stock market so I've made some gains there as well.

After graduating, I moved into a cheap place ($500/month rent) and am still using the furniture I got in college. I still drive the same car I got in college. My yearly expenses are currently between $15-20k per year.

I have a friend who graduated with $0 net worth but has been 1) working a similar job as me and 2) lived with parents these past couple years and his net is ~$130k.

JTFH said:   Yeah, I have a degree in CS too, but I have never made over 100k... The average starting wage of a CS graduate is 56k, the 10 year average is 98k. And that's IF you can find a job, I know I had to take a barely paid internship out of college due to depressed hiring, and the economy is much worse now.

Just to give some perspective. I have friends graduating this year working for Google and their offers are $100k base and $60k stock vested over 4 years. Amazon is offering $100k with $25k cash bonus and $50k stock over 3 years. Microsoft has had to increase their compensation (third from last paragraph) recently to match companies like Google and Facebook. Does this represent the vast majority of CS jobs? Definitely not, but it's not BS by any means.


Green for explaining (and for admission that parents were the heavy hitters - it doesn't detract one bit from your clear sense of industriousness [e.g., getting internships paying $30/hr while many of your peers were working on their tans], but it is certainly refreshing to see someone credit their parents for their leg up).

That still doesn't change my answer, though I'd say stick it out a few more years and once you have 500k saved up well before you're 30 (!!), then you can take a "what if..." swing for the fences. Doesn't hurt to fall back on half a mil, y'hear?

Good luck with whatever you decide!

TheDragonn said:   seattlesalaries said:   TheDragonn said:   This still doesn't answer his ?, though... if you were earning 105k/year and paying literally 0 taxes, 0 housing expense, 0 food expense, etc., and saved everything, you'd have 200ish (assuming you graduated at 21 and not 18 or something). Can you please explain how you managed to save up almost 200k since I am assuming you probably *did* have to pay taxes, rent, food expenses, etc?

If you lived with your parents, by all means say so - no shame in that at all, we're just curious how you saved up so freaking much in such a short amount of time beyond what simple frugality would indicate (and I have a bit of skepticism when I see numbers like this until I hear that you lived with the folks, got a gigantic leg-up from a 50k graduation present, etc etc.).


Yes, I graduated at 21. College and living expenses were basically taken care of for me by the scholarship and parents (they were the heavy hitters here). Once you account for that, it's not very magical how I saved up so much. I graduated with about $60k net worth. $15k came from family over the years (e.g. cash gifts and inheritance). During the school year I worked various part-time jobs averaging between 10-20 hours a week. They ranged from tech support ($10/hr) to programming jobs (~$25/hr). During the summers I'd intern. Wages were between $25-30/hour. All of that money was rolled into the stock market so I've made some gains there as well.

After graduating, I moved into a cheap place ($500/month rent) and am still using the furniture I got in college. I still drive the same car I got in college. My yearly expenses are currently between $15-20k per year.

I have a friend who graduated with $0 net worth but has been 1) working a similar job as me and 2) lived with parents these past couple years and his net is ~$130k.

JTFH said:   Yeah, I have a degree in CS too, but I have never made over 100k... The average starting wage of a CS graduate is 56k, the 10 year average is 98k. And that's IF you can find a job, I know I had to take a barely paid internship out of college due to depressed hiring, and the economy is much worse now.

Just to give some perspective. I have friends graduating this year working for Google and their offers are $100k base and $60k stock vested over 4 years. Amazon is offering $100k with $25k cash bonus and $50k stock over 3 years. Microsoft has had to increase their compensation (third from last paragraph) recently to match companies like Google and Facebook. Does this represent the vast majority of CS jobs? Definitely not, but it's not BS by any means.


Green for explaining (and for admission that parents were the heavy hitters - it doesn't detract one bit from your clear sense of industriousness [e.g., getting internships paying $30/hr while many of your peers were working on their tans], but it is certainly refreshing to see someone credit their parents for their leg up).

That still doesn't change my answer, though I'd say stick it out a few more years and once you have 500k saved up well before you're 30 (!!), then you can take a "what if..." swing for the fences. Doesn't hurt to fall back on half a mil, y'hear?

Good luck with whatever you decide!

When he's 30 he'll be in a higher position, making more money, maybe have a wife and kids (God forbid) and real life responsibilities. It would be much more difficult and more expensive to do it then. Now is definitely the time to "swing for the fences."

Skipping 12 Messages...
motuwallet said:   OP could you comment on your friends and family reaction to your decision to leave the 6 figure job? i'm beginning to realize having a good support system is really helpful with this ... also any recommended online forums/etc for the start up community? (eg FWF-startup? )

Initially the knee-jerk reaction from a lot of friends and family was for me to stay and ride out my corporate job for the a few more years. However, as it became apparent that I was serious about this they were all very supportive. In the best scenario my upside is tremendous and in the worst case I'd just end up going back to my corporate job. There are worse things to do than take a risk like this at 23 with no debt, wife and kids

As for good communities for start-ups, I'd recommend news.ycombinator.com. It's *the* pulse on start-ups in the Valley.

JTFH said:   Update?

Will be creating a new update thread shortly



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