I'm not sure how you get to the $3-4M net worth at 20 year retirement unless you hit it big on some high risk stocks. Total compensation for an O-5 retiring at 20 is about $2.5M, which means you made 50% ROI and invested 100% of your pay and allowances.Financial counterpoint: I think the money is plenty good. It's not FU money, but I don't think I live like a pauper but invest regularly and consistently, have kids, am married with a spouse who works enough to earn a few hundred per week but nothing to write home about, and I expect at my 20 year mark to have a combined net worth of about $3-4 million with a 40-50k pension that's adjusted for inflation with one kid's college covered by the GI Bill. I am plenty fine and content with the financial decisions I've made. I also suspect that while $400k annually is a lot of money, it may not be quite as high as you're thinking in the VHCOL places you'll probably be working, I assume: NYC or the Bay Area.
I'm not sure how you get to the $3-4M net worth at 20 year retirement unless you hit it big on some high risk stocks. Total compensation for an O-5 retiring at 20 is about $2.5M, which means you made 50% ROI and invested 100% of your pay and allowances.
The pay and benefits are pretty damn good, but the biggest financial hit is that the majority of officers are perpetually renting / moving. The ability to purchase a home and build equity in property is one of the biggest paths to building wealth for the middle class, and the process gets infinitely more painful if you have school age children.
To the OP: Pretty hard not to notice that you've been silent on all the comments/recommendations you've received from people who had similar (maybe) opportunities and made a choice that altered their lives.Greetings,
To the OP: Pretty hard not to notice that you've been silent on all the comments/recommendations you've received from people who had similar (maybe) opportunities and made a choice that altered their lives.
Over to you. Make YOUR choice, and then LIVE with it, whichever way you go.
"What we do in life echoes in eternity!" ~Maximus Decimus Meridius (Commander of the Armies of the North, General of the Felix Legions and loyal servant to the TRUE emperor, Marcus Aurelius)
I'll also add this part is wrong unless I'm misunderstanding you. You're suggesting that I would have had to invested that all at once to get a 50% ROI. In reality, the power of compounding is truly phenomenal - again - I don't have access to my investment accounts right now, but at last check they were near 14%. Over 12 years, when I made my first investment, that is now up 481% from the initial value!I'm not sure how you get to the $3-4M net worth at 20 year retirement unless you hit it big on some high risk stocks. Total compensation for an O-5 retiring at 20 is about $2.5M, which means you made 50% ROI and invested 100% of your pay and allowances.
The pay and benefits are pretty damn good, but the biggest financial hit is that the majority of officers are perpetually renting / moving. The ability to purchase a home and build equity in property is one of the biggest paths to building wealth for the middle class, and the process gets infinitely more painful if you have school age children.
$275k (living on $125k as a single guy…) invested yearly for 10 years, at 8% (historic is 10.5% from S&P 500 inception) would leave just shy of $4 million. Realistic, and wouldn’t even require a lot of financial discipline. My younger sister has a counseling degree, completed a 6 month computer developer course, and is now making around $240k after 2 years in that industry. I wouldn’t believe it if she wasn’t my sister TBH. She’s investing more than I make, and she’s significantly younger than I am, and her job isn’t as demanding. OP’s $400k is a lot more than $240k, but it’s possible.Anyone else calling bullshit on this?
Making 400k at 25 is extremely abnormal in ANY field. More so for someone who thinks $400k/year x 10 years = $4 million in a bank account (or $3 million after taxes)
I feel like the OP is genuine, but younger than what he claims and being really liberal with the jump to conclusions mat.
Yep. If you're in the tech industry, you're probably living in and around San Francisco -- you know, with its rents up in the stratosphere and not to mention it's in California with its infamous tax code -- so you're not taking home anywhere close to 400k per year. And, to JoeBob's point, I'm not sure how you live on 125k in Palo Alto unless you plan on being the newest member of one of their chic homeless encampments.Anyone else calling bullshit on this?
Making 400k at 25 is extremely abnormal in ANY field. More so for someone who thinks $400k/year x 10 years = $4 million in a bank account (or $3 million after taxes)
I have no experience with $400k jobs, but my sister works entirely remotely. She lived on a Mexican beach for 3 months paying basically nothing while making bank. The amount of remote tech jobs since the pandemic is unbelievable.Yep. If you're in the tech industry, you're probably living in and around San Francisco -- you know, with its rents up in the stratosphere and not to mention it's in California with its infamous tax code -- so you're not taking home anywhere close to 400k per year. And, to JoeBob's point, I'm not sure how you live on 125k in Palo Alto unless you plan on being the newest member of one of their chic homeless encampments.
I work at a big tech company in SF and 400k starting for a software engineer is extremely high but not unbelievable if he has some kind of majorly in-demand talent.Yep. If you're in the tech industry, you're probably living in and around San Francisco -- you know, with its rents up in the stratosphere and not to mention it's in California with its infamous tax code -- so you're not taking home anywhere close to 400k per year. And, to JoeBob's point, I'm not sure how you live on 125k in Palo Alto unless you plan on being the newest member of one of their chic homeless encampments.
So your sister found the chic homeless encampments in Mexico, huh!? See they're everywhere. Surely OP can find one in SF and make that bank coding numbers to his heart's content.She lived on a Mexican beach for 3 months paying basically nothing while making bank.
In some cases it is just luck to get with a company with the nice big paycheck, I know a few recruiting managers that have a team about 8-10 who are making 200K a year plus bonuses. The thing I have noticed is they moved to nicer places, bought nicer cars and went on nicer vacations, make more money spend more money.I work at a big tech company in SF and 400k starting for a software engineer is extremely high but not unbelievable if he has some kind of majorly in-demand talent.
In my case O-1 pay would be a paycut but I'd probably still be saving more per month due to reduced cost-of-living.