I've more or less followed this advice, and it's worked out for me. For the most part, I used my salary to pay for expenses and stock compensation to build up wealth.
The tricky part is that a lot of this advice is situation-dependent. Should you switch to a riskier company that offers a higher compensation? Sometimes yes, sometimes no. Should you work late to accomplish goals hoping to get a promotion? It depends.
So how are we supposed to know what to do?
The answer, in my opinion, is people. You have to trust people who are trustworthy and avoid people who are not. As an employee, your success depends on the people who hired you--they are the ones who can promote you or cheat you. The best leaders are the ones who realize that helping you advance is going to help them advance. Help your boss accomplish their corporate goals and they will promote you--not as a reward, but as a bet that you will help them on the next goal.
Bad leaders are either too selfish (fail to promote you) or too incompetent (unable to rise, even with your help). You need to learn to avoid them.
Therefore, my advice is this: Look at the leaders in your company--people who could plausibly hire you. Which ones are the best bets? Which ones have both the talent and the integrity to succeed? If you're lucky there's more than one and you can work to get on their team. If you're unlucky, there are none and you need to find a different company.
I put half in a basket of tech stock (QQQ, etc.) the other half in buying a house. I am not an expert, so don't take my investment advice--do your own research.
One thing - your expenses will ALWAYS somewhow expand to your income. We see our current income as somehow the steady state long term norm. I would do your absolute best to hide extra income from your day to day self and invisibly invest it in a way you don’t even think about
And when you get a windfall (stock grants, acquisitions, etc) unless it’s truly life changing money where you never have to work again, find a good investor (CFP) to manage so you’re not even thinking about it. Or invest it in some future liability like college expenses, home down payment, retirement, etc.
I'd add or emphasize being strategic about which roles within an organization are rewarded. These are usually roles with very clearly attributable impact to top-line or bottom-line metrics.
Much enablement, unblocking, capability-based, or risk reduction work is very difficult to interpret for the business decision-makers.
Damn, brutally true. If you've seen it, you've seen it, it plays out exactly as written here. Taking it as advice doesn't put you on their level though, their gift is incredible instinct hence why they do everything here without it.
I know two engineers who worked their way to becoming centi-millionaires. One worked for the same company his entire life. Another looked at every job as feeding a 'system' of a) co-workers; b) clients; c) the economy.
Probably the single best take-away from the article is to never stop learning. I also like the tip about keep networking and building relationships.
It requires relatively no effort just discipline for anyone to save money and live within their means. yet, most don’t most always have an excuse. Within the design and engineering department that I worked in more than half of the people did not save always had an excuse even before they were married and had kids.
Just setting aside 25% over time adds up to a sizable amount.
Most people don't have that discipline. If you asked the average person to "just" save 25% of their earnings, they'd look at you like you had two heads.
I've got to admit, the most difficult part of saving money is that first you need to be able to comfortably afford your basic expenses, in particular, housing.
but I think there is a crowd that rejects too many of the basics at their own detriment. yes, getting work, highly valued work, still helps and helps waaay more reliably for a broader population than other methods, but its just a step. So you still need to do that, You also need to parlay earnings into wealth producing assets, assets that also have their own independent value that is intended to grow.
This is all good advice... but just browsing X, the salaries folks are pulling down give me incredible FOMO.. early 20s already achieving generational wealth just spending 1-2 years in the right startup or frontier lab.
..and this doesn't include hustlers in Dubai or some other tax haven earning six figures a month doing various schemes.
> There is a popular idea that substantial wealth belongs mainly to entrepreneurs.
This is probably because 24yo college dropouts are achieving billion dollar valuations after 12 months of work. Their secondary sales are worth more than following all the advice in this article will be for your entire life.
(To say nothing of NVDA, SpaceX, or other big tech acquiring them and making their billions liquid, despite no moat or profitability, just because they have so much money and need to spend it on something.)
No matter how much “grit” you have, you’re still at the mercy of such people, as e.g. the engineers at Windsurf were, who worked super hard but their founders sold to Google, walked away with hundreds of millions, and gave the employees nothing.
Of course, it depends on your meaning of “substantial”. Successful engineers have great wealth too, enough that they can be very happy and buy anything they want. But pretending the two levels are comparable is silly.
I've more or less followed this advice, and it's worked out for me. For the most part, I used my salary to pay for expenses and stock compensation to build up wealth.
The tricky part is that a lot of this advice is situation-dependent. Should you switch to a riskier company that offers a higher compensation? Sometimes yes, sometimes no. Should you work late to accomplish goals hoping to get a promotion? It depends.
So how are we supposed to know what to do?
The answer, in my opinion, is people. You have to trust people who are trustworthy and avoid people who are not. As an employee, your success depends on the people who hired you--they are the ones who can promote you or cheat you. The best leaders are the ones who realize that helping you advance is going to help them advance. Help your boss accomplish their corporate goals and they will promote you--not as a reward, but as a bet that you will help them on the next goal.
Bad leaders are either too selfish (fail to promote you) or too incompetent (unable to rise, even with your help). You need to learn to avoid them.
Therefore, my advice is this: Look at the leaders in your company--people who could plausibly hire you. Which ones are the best bets? Which ones have both the talent and the integrity to succeed? If you're lucky there's more than one and you can work to get on their team. If you're unlucky, there are none and you need to find a different company.
Do you sell your stocks immediately and reinvest in SPY?
I put half in a basket of tech stock (QQQ, etc.) the other half in buying a house. I am not an expert, so don't take my investment advice--do your own research.
One thing - your expenses will ALWAYS somewhow expand to your income. We see our current income as somehow the steady state long term norm. I would do your absolute best to hide extra income from your day to day self and invisibly invest it in a way you don’t even think about
And when you get a windfall (stock grants, acquisitions, etc) unless it’s truly life changing money where you never have to work again, find a good investor (CFP) to manage so you’re not even thinking about it. Or invest it in some future liability like college expenses, home down payment, retirement, etc.
Be sure to talk about your achievements. As important as making things work is making sure the right people know you did that.
I've come across co-workers who make +$250K in salary who live paycheck-to-paycheck...
1. Alimony
2. Child support
Alimony alimony paying your bills.. when your conscience hits you knock it back with pills
I'd add or emphasize being strategic about which roles within an organization are rewarded. These are usually roles with very clearly attributable impact to top-line or bottom-line metrics.
Much enablement, unblocking, capability-based, or risk reduction work is very difficult to interpret for the business decision-makers.
Step 1 - don't buy a boat.
I’m going to go against most of the comments here (negative) and say that there are a ton of wise nuggets in this article.
Specifically pieces about how to be valuable in a pragmatic and honest way.
Damn, brutally true. If you've seen it, you've seen it, it plays out exactly as written here. Taking it as advice doesn't put you on their level though, their gift is incredible instinct hence why they do everything here without it.
I know two engineers who worked their way to becoming centi-millionaires. One worked for the same company his entire life. Another looked at every job as feeding a 'system' of a) co-workers; b) clients; c) the economy.
Probably the single best take-away from the article is to never stop learning. I also like the tip about keep networking and building relationships.
> centi-millionaires
Don’t you mean hecto-millionaires? Otherwise it’s not so impressive. ;)
That's more of a "build a career", than "build wealth".
Yeah right.
A lot of words to say “save money”. Remove the wealth aspect from this and it’s a good article for people early in their career though
80%+ of the article is not 'save money'. It's nuanced.
Woah, you can't do that. It only requires only no effort to save money when you have tech salaries.
It requires relatively no effort just discipline for anyone to save money and live within their means. yet, most don’t most always have an excuse. Within the design and engineering department that I worked in more than half of the people did not save always had an excuse even before they were married and had kids.
Just setting aside 25% over time adds up to a sizable amount.
Most people don't have that discipline. If you asked the average person to "just" save 25% of their earnings, they'd look at you like you had two heads.
I've got to admit, the most difficult part of saving money is that first you need to be able to comfortably afford your basic expenses, in particular, housing.
It's not that difficult.
If you live anywhere in the developed world, and you are reasonably able bodied, you can certainly save sufficient money for your long term needs.
there is maybe 1% of the population who can't do it, for everyone else it's a choice.
psyop, nobody is falling for it
but I think there is a crowd that rejects too many of the basics at their own detriment. yes, getting work, highly valued work, still helps and helps waaay more reliably for a broader population than other methods, but its just a step. So you still need to do that, You also need to parlay earnings into wealth producing assets, assets that also have their own independent value that is intended to grow.
This is all good advice... but just browsing X, the salaries folks are pulling down give me incredible FOMO.. early 20s already achieving generational wealth just spending 1-2 years in the right startup or frontier lab.
..and this doesn't include hustlers in Dubai or some other tax haven earning six figures a month doing various schemes.
Why am I wasting my life?
They represent the ~99%+ of income. X is large enough that extremes are represented. Don't be fooled by the extremes.
Go after the achievable P75-P90 that's within your power.
Why do you think your life is wasted if some computer has a smaller number next to your name?
What an insulting article.
> There is a popular idea that substantial wealth belongs mainly to entrepreneurs.
This is probably because 24yo college dropouts are achieving billion dollar valuations after 12 months of work. Their secondary sales are worth more than following all the advice in this article will be for your entire life.
(To say nothing of NVDA, SpaceX, or other big tech acquiring them and making their billions liquid, despite no moat or profitability, just because they have so much money and need to spend it on something.)
No matter how much “grit” you have, you’re still at the mercy of such people, as e.g. the engineers at Windsurf were, who worked super hard but their founders sold to Google, walked away with hundreds of millions, and gave the employees nothing.
Of course, it depends on your meaning of “substantial”. Successful engineers have great wealth too, enough that they can be very happy and buy anything they want. But pretending the two levels are comparable is silly.
Does this perspective come from a founder or a rank and file engineer?