Comment by bradlys
3 years ago
I mean - this is YMMV. Typical SV FAANG engineer is from an Ivy League or adjacent competitive school. Often with a masters.
So, yes, you might not have to do the full specialty training and residency but it can still be quite competitive and expensive.
You’re only earning surgeon money when you’ve made staff level at FAANG. Which usually means you’re near the same age as surgeons and there was a lot of risk and grind getting there. If anyone thinks getting to staff at FAANG is trivial - I’d suggest they’ve been very lucky in life and aren’t a representative person of how hard it is.
People who could do either often go into software because of the nearly unlimited earnings cap. Theoretically you could start your own company and be ultra rich. That’s what I see often as the source. Less common with doctors afaict.
This is kind of a meme. I'm not sure what you consider to be "surgeon money", but senior engineers at FAANG nowdays net ~450k/year (annualized). As a single person you can retire at 40 with ~5m in the bank by starting at FAANG at 22 and plateauing at senior (not staff) after 5-6 years. So you're hitting that 450k/year level at, like... 27? Earlier if you're working at a company like Facebook, which promotes aggressively (many people make it to senior in 3-4 years), maybe later if you're at Google (where it's non-trivial getting to Senior in 5 years; many take up to 8, some don't break through at all). At 27 you're just starting your residency, working 100-hour weeks for less than six figures. Lol.
FAANG hires way too many people to hire exclusively (or even primarily) from Ivy League schools. Jointly they employ probably 5% of the software engineers in the country! Master's degrees are likewise totally unnecessary; I almost never see anyone who isn't here on a visa getting a Master's. (PhDs are a different story, but I know people without even undergrad degrees working at FAANG too.)
$450k/yr at FAANG for senior is definitely the very top of the band and to get there after 5 years is extremely optimistic. Again - if you're comparing Stanford graduates then maybe it's more common but for your average FAANG eng isn't making that in 5 years out of college especially with just 40-hr work weeks. Very few engineers are making that money even after transferring to another company. Maybe if you have some stock appreciation or stacked refreshers working in your favor you're at $450k/yr. Levels backs this up...
Surgeon money is generally $500-700k/yr (this might be my sampling bias - looking at stats online, it varies a lot - this is like tech incomes, there's a wide distribution). The nice thing about surgeon money is that you can make that in a lot of places - not just in SV. The same cannot be said of FAANG. You're gonna have a hard time getting remotely hired in BFE making $400k+/yr. Yet, the local hospital always needs a surgeon and most surgeons don't want to live in BFE... So, you're gonna be fine.
Even then if you assume you're making $450k/yr at 27 - you're not gonna have $5m by 40 unless you somehow are beating the market or save every penny and live like scrooge. (Which - again - why bother saving $5m if you're gonna live like a peasant?)
If you assume you're gonna live like you would on a safe withdrawal rate (let's say the more optimistic 4% - $200k/yr at $5m) then you're gonna only have $250k/yr gross income to save - which turns out to be ~$150k/yr net. (You can play with the numbers however you see fit but the point will come around) If you decide to save $12.5k every month for 13 years at 6% return rate (just a simple return - we assume same value dollars) then after those 13 years you have $2.9m. It would take 19 years until you crossed $5m. So, you'd be 45-46 assuming you saved every penny, never went above a $200k/yr income lifestyle (LOL at that in the bay area - you're a renter for life!), and you somehow made $450k/yr starting at 27. Which - is again - uncommon. It has happened due to wild stock appreciation but it isn't the norm offer people receive for senior level - levels backs this up.
It sounds nice until you do the math and realize $200k/yr is shit to live on here. God forbid you marry someone who isn't in tech/law/finance/$400k+ income.
A few points:
- 450k is not, actually, top-of-band for senior engineers right now. There are some companies where that's approximately true (i.e. Google) and some where the number is much higher (Netflix goes without saying, Amazon routinely breaks 500k, Uber is hitting 480-500k, Cruise breaks 500k, Snapchat hits 550-600k at L5, etc).
- Well, since I'm looking at annualized compensation, I am considering stacked refreshers. I don't think job-hopping ~3 times is an enormous ask.
- I certainly wasn't assuming market-beating returns, or living on ramen. But I certainly wasn't running the numbers such that one would be spending the equivalent of one's safe withdrawal rate pre-FIRE. I live unconstrained by budget concerns and don't even come close to spending half that. At 450k pre-tax I was assuming one would be saving ~200k/year, with 7% returns.
- I was also not assuming that one was starting from 0 at 27, since it's not like pre-senior one would be making barely enough to live on. Having something in the neighborhood of 500-600k saved up by then is something like the default outcome, given a typical single person's lifestyle (absent extravagantly expensive hobbies).
- Ok, sure, this gets you to 4m, adjusted for inflation (oops). Guess you gotta hit that third decade (barely).
- You aren't limited to SV; many companies in that tier support remote work and those that don't have a bunch of hubs across the US.
I'm genuinely not sure why you think that 450k is an outlier level of compensation for senior FAANG/adjacent engineers. One possible source of confusion - if you're just looking at the "Average Total Compensation" levels lists for those companies, those numbers are very low. Filter by "New Offers Only", and then remember that those offers don't include refreshers (which, over the course of the first 4 years at a company, will add something like 360k = 90k/year, assuming totally average performance and no multipliers). It might be in the top 50th percentile, though even that may be pessimistic.
As for 200k/year being shit to live on... I assume you're talking about living in Silicon Valley, which, shrug? I don't live in Silicon Valley and before I decided to substantially change my career direction, I was on-track (and that despite not even hitting 6-figure comp until a few years into my career).