I'm curious about the numbers — you saved $275k (annually, on average) after taxes and living expenses as a regular engineer? That implies a pre-tax salary of $420k if you ignore living expenses, which add at least another $30k in pre-tax earnings. I'm sure there are engineers who make $450k in SV, but you imply that this is possible/easy for folks who are 21. Maybe I'm wrong, but that seems pretty high for someone straight out of college.
Note: I'm not including interest/investment income from annual savings, and perhaps that's part of how you made money. Certainly it has been easy to make money buying tech stocks in the last 10 years. But that's not always the case, and even including investment gains I'm having a hard time seeing $2.2M being a typical or easy amount to save from age 21 to 29.
That said, I worked as a lawyer for 7 years, saved a decent amount, paid off my loans, and then started a startup. It was a good path for me, but man I never had $2.2M in the bank, even having worked at a well-known international firm and being on the partner track.
They are exaggerating at best, or highlighting an extreme outlier. Non-FAANG jobs are going to have between 50% and 70% if the total compensation of FAANG most of the time. Good example: a SWE 1/2 60th percentile base salary is around $120k in the Bay Area. Taxes and living expenses for a single individual will eat 40% of that, at least, unless the person is living in a slum with roommates. Lead/principle engineer (L5) salaries are about $175k at the 60th percentile. Again, taxes and living expenses for a single person will consume 35%-40% of that. RSU grants and bonuses at these places are good for maybe another 30% on top of the base, typically, in extreme cases.
A person saving 100% of their net of taxes and living expenses would have to see a return of well into double digits every year to accumulate $2.2M over 8 years or so, because their base savings rate over that period will be (probably far) less than $1M under optimal circumstances.
It isn’t at all common enough to obviate the need for things like YC.
You are very right. To be blunt, the OP needs to be called out on his BS. I personally, lived in the SV area for over a decade (single and very frugal) made good salary (non FAANG companies) but my savings though substantial, were nowhere near what the OP is claiming. It is simply not possible.
I am not sure why people on HN state/claim all sorts of outrageous salaries in the Bay area. It gives a very distorted view of reality and frankly harmful to both employers and employees.
Sure, but that presupposes stocks, other investments, equity etc etc. You need those and a big dose of luck too. The way the OP's post was written it seemed to imply that he made it on his take-home salary by itself which is impossible. The only thing i agree with the OP, is to NOT go for VC money in the beginning (as far as possible).
1) Hold down a regular job for a decent period of time and earn as much as you can.
2) Save, Save, Save i.e. no risky investments on a large portion of your income. This is your safety net.
3) Simultaneously, get started working on your ideas/company by yourself or with a close-knit group. Spend no money; only your effort and time.
4) Once you have the whole picture/Prototype/MVP figured out estimate how much it is going to cost you to move ahead. All information is available on the net and hence do your proper research i.e. don't pay any "consultant" for advice. You can also shoot an email and seek advice from people like Paul Graham/Joel Spolsky etc. Remember, "Fortune favours the Brave".
5) As long as it is bearable, spend your or group's money to move ahead. It is important to cut any and all unnecessary expenses at this stage. Spend only what is needed and not a penny more.
6) Once the above is stable, you can now decide on whether you want to quit your day job and spend your whole time on your "New" company. This will be a function of your safety net savings mentioned above.
7) In order to not blow everything on a idea/company which may not pan out, set a threshold on your expenditure dropping below which you will approach others for money (i.e. VC/Angel etc.) or abandon the idea/company and return to being a regular salary man. This is to ensure that you don't end up on the streets.
8) Your are now at the stage where you are proceeding with your own company or have gone back to salaried employment and hopefully working on taking a second crack at entrepreneurship.
It also entirely ignores the core point of YC, which is not (and never was) the modest sum of money. It's the network, the other entrepreneurs, the advice / mentoring, the reputation sharing that it provides when dealing with investors in the future, and so on. Going through YC is a form of validation, other investors will take you more seriously by default afterward (the reputation sharing).
You can get $150k from a lot of sources these days. The value of the YC network is far beyond that.
The author of the article here. Agreed. I wrote about this just 2 weeks ago! https://www.growthclub.online/post/what-to-do-after-an-accel...
Sam Altman: "We at Y Combinator always say we want to get a lot bigger because this is a network effect, this is a network that matters. Most venture capital firms will say out of one side of their mouth, “Oh no, smaller is better,” because they don’t want to work more. Then they’ll tell all their businesses, “The network effect is the only thing that matters.”
The full amount wouldn't be savings. There would also be return on investment. And the stock market has had a crazy decade after the great recession. From June 2008 to June 2016, stock market had an 84% return on investment with dividend reinvested. Someone starting saving this decade may not get the same chance.
I would not be shocked to learn that decent share of those 2.2 million was earned by either mining or speculating with crypto currency. There definitely was some money to be made there in the past 10 years.
I made an average of $220k including salaries, bonuses and 401k matches. I lived on 30k and invested the rest, mostly in QQQ after maxing my retirement contributions for tax advantages. I had about 40k saved when I started working after graduate school. Yes I benefited from a booming tech market, both in my investments and my career. But that boom is ongoing, and really it only majorly picked up 5 years ago. I quit working 2 years ago to focus on my own projects, so someone starting today would likely have an easier path than my own. I saw someone on reddit fatfire yesterday who has $75k at age 20 just from FANG internships. He could have 200k by the time he starts his first real job, and there are entry-level offers higher than my average salary at top companies right now.
Note: I'm not including interest/investment income from annual savings, and perhaps that's part of how you made money. Certainly it has been easy to make money buying tech stocks in the last 10 years. But that's not always the case, and even including investment gains I'm having a hard time seeing $2.2M being a typical or easy amount to save from age 21 to 29.
That said, I worked as a lawyer for 7 years, saved a decent amount, paid off my loans, and then started a startup. It was a good path for me, but man I never had $2.2M in the bank, even having worked at a well-known international firm and being on the partner track.