Slashdot Mirror
Survey: 56 Percent of US Developers Expect To Become Millionaires
msmoriarty writes: "According to a recent survey of 1,000 U.S.-based software developers, 56 percent expect to become millionaires in their lifetime. 66 percent also said they expect to get raises in the next year, despite the current state of the economy. Note that some of the other findings of the study (scroll to bulleted list) seem overly positive: 84 percent said they believe they are paid what they're worth, 95 percent report they feel they are 'one of the most valued employees at their organization,' and 80 percent said that 'outsourcing has been a positive factor in the quality of work at their organization.'"
80 percent think outsourcing has been positive? They must not be working with the resources we do... They lie, lie and lie some more. Shirk responsibility and ignore questions.
I just enjoy fixing broken code, and making something better. I guess I'm doing it wrong.
And how could one become one of those 1000? Even if just 56% of them become rich that's good enough a chance for me.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
I want the drugs those developers are on.
I think I have a good shot at becoming a millionaire in my lifetime - not from hitting it big, just from saving more than I spend (especially into my 401k, with company matching).
And what *about* the current state of the economy? It seems to me that it's mostly recovered at this point. And it's not unreasonable for white-collar workers to expect *some* kind of raise at least every couple years, even if it's just a raise on par with inflation.
How is this remarkable? Becoming a millionaire during your lifetime isn't remarkable at all. To have 1 million dollars at retirement, all you need to do is save $5,000 per year into any normal savings account. If you're a college educated software developer, you should be able to manage this easily.
I'm more worried about the other 44% that don't think they can manage that.
If these developers are fairly young, expect to retire and desire to not eat cat food, they'd better become millionaires. That's the minimum savings needed to retain a decent standard of living for many people that are not immediately close to retirement currently. We live fairly long lives after what many consider retirement age, but cost of living continues to increase (alongside cost of care), and inflation is a very real thing.
http://www.forbes.com/sites/lawrencelight/2012/10/04/how-much-money-will-you-need-to-retire/
Then again, I too have been guilty of riding the startup dream.
It has an annual safe return of $40k to $50K. For younger developers who may not retire until 2050, that is not much after several decades of inflation.
It said "expect" not "can expect."
AlthoughYouShouldHaveAlreadyRealizedThat
Mod me down, my New Earth Global Warmingist friends!
Out of the 30 or so I know only one smokes and none take weeks off to go to gaming/comic conventions.
The Official Site of 1337 Pwnage
Um... acquiring a million dollars in your lifetime isn't hard these days.
I wouldn't even be surprised if the average house price is about a million dollars by the time I die. Inflation is fun.
In case y'all hadn't noticed, our community is rife with hazardously inflated egos. This is a natural extension thereof.
Obliteracy: Words with explosions
That sounds about right to me. I think the top-half-earning programmers will likely get to one or two million dollars in total net worth by retirement. A million dollars isn't a hell of a lot of money.
I've got a rather dumpy house in a nice urban neighborhood. It's paid for and worth a bit over $200,000. Looking at long term trends and the increasing popularity of urban living, it will most likely appreciate a fair amount before I retire.
That alone will get me a good chunk of the way towards being a millionaire in terms of net worth.
Now add in the gobs of money that they recommend you save for retirement and by the time you do retire... well, you've got a lot of money. This assumes of course that you can navigate yourself past the agism that's also part of being a developer and remain a well paid part of the workforce until you retire.
Being a millionaire not only means you acquire a million but also that you get to keep it. Essentially, it means you earn one million more than you need to live your life.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
In the San Francisco Bay Area the only discipline required, is pay your mortgage. In five years I will be a millionaire with the equity in my home and money in my 401k.
I make 90k a year. Not an especially large amount for a computer programmer.
I spend about 50k per year which is more than most non programmers make.
That gives me 40k a year worth of savings. 1M/40K = 25 years to be a millionaire.
Some of the 40K is money spent on my house and other assets but I would say
that's pretty common. It's hard to spend 90k a year and not accumulate some
assets.
And that's hard?
As mentioned further below, saving ~$5000/year is possible - maybe throw away that $100/mo TV subscription or something.
I am a software developer with 9+ years experience. I bought a house at the end of 2011 for $570K and zillow says it's worth $695K now. In 27 years, I think it's pretty likely I will be a millionaire due to inflation and paying off my house.
If you can't find a way to get to a million by retirement, something is wrong.
Here is a simple way to do it. Put $16,000 in your 401k and $5,000 in your IRA every year. Investing in a good S&P500 index fund which will return about 10%. In 18 years, you will be a millionaire.
Now getting to $10 million is tough.
Being a millionaire in "our lifetime" probably won't mean much. With inflation and medical costs of growing old, you'll need a few million just to retire. Unless they think they'll earn that million in the next 5 years or so, it's not going to get them what they think.
Sounds more like the interview happened in some management circles.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
This is certainly achievable for a technical professional. I've done it. I'm close to the million dollar threshold at age 40, and have done it while working solely at "competitive pay" (HR-speak), non-management, no-stock-option jobs. The secret? Save 20% or more of my income and start saving on day one out of college. My first job paid $50k but I treated it like $40k. I don't have cable. I don't drive a fancy car. I don't take out loans to buy things. Barring a major life calamity, I can now coast the rest of the way if needed.
Where did they get the 1000 responses? Did some management magazine offer free subscriptions to managers who stood over their employees as they filled in their responses to the survey? The data suggests this happened at least 98% of the time.
that they don't waste it on things like mortgages, car debt, credit cards, and other bad habits that keep people at "average" and "normal" net worth.
How is a mortgage a waste? You even listed it first as if to denote it's importance of being avoided. Owning your own home is advantageous for a lot of reasons, but the most important of which is people base their rent prices on what their mortgage costs. If you're renting - you're paying off someone else's mortgage for them. Unless you want to be single your whole life and rent a flat with a bunch of other guys I fail to see how renting would ever be worthwhile over purchasing.
And as the knowledge economy shifts to the point where non-local geeks are just as good as local, the value of that house will go back down to something sensible. You are in a bubble. It's not out of the question that it will continue for the rest of your life, but I'd suggest a wee bit of diversification, just to be sure.
I remember doing a project where if someone put in 3,000/year from age 21 till retirement could have a million in savings (on compounded growth of 10%). It is doable, though 10% growth is not going to be the norm in the near future.
The infrastructure guys always get fucked over, always! Without infrastructure, what will your whiz bang application run on? Software Engineers, developers, you guys have it made whereas the lowly systems and network admins only get recognition when something takes a shit.
How many (%) excpect to go to heaven (or equivalent, based on believe-system)?
Much higher than those puny 56 %, and millenia older as well...
Developers are white collar workers, who can do math. If you ask any white collar worker in america "Do you expect to become a millionaire?" If they answer no, they are either bad at math or bad at retirement planning, or both.
Now I am not saying "everyone will be a millionaire" but I am saying that if you asked the same thing of a Nurse, pharmacist, professor, regional manager at Jack-in-the-Box, or a School Administrator... they should have the same answer, as they have similar salary levels to a "Developer."
Any young-ish person in the $75k+ salary level should answer yes to that question... or should seriously downsize their spending.
>> 56 percent expect to become millionaires in their lifetime.
yeah and 99% of software engineers also seriously believe their initial time estimate to have that feature implemented by was actually realistic.
Just publish an app. And monetize it. Problem solved.[1]
[1] Note that for many programmers who try this technique, the universe may opt to substitute an equivalent product, such as gained knowledge about how the world works and reduction of personal naivete.
but a million bucks doesn't go as far as it used to
Becoming a millionaire in a person's lifetime is very simple and most people can do it. Contribute 10% of your income to your retirement accounts over the course of your lifetime into a diversified portfolio, and you will become a millionaire. Time and discipline are the keys, not generating a large income. Unfortunately, most people are missing one of those two attributes.
What's sound money? Fiat money is okay, gold standard money has deflationary problems, fractional reserve systems appear to establish money by loaning it into existence. Our current fractional reserve system appears to preclude economic growth: any "growth" is a growth of debt, a growth in economic sickness.
Support my political activism on Patreon.
I think most people think of 'millionaire' as having over a million in potentially liquid assets at any given time. So neither 'cumulative pay' nor '401k' would count.
From wikipedia:
A millionaire (originally and sometimes still millionnaire) is an individual whose net worth or wealth is equal to or exceeds one million units of currency.
Assuming no major medical issues, no layoffs, no major accidents, etc. Your estimates may not work out.
putting the 'B' in LGBTQ+
Seriously, did they pay slashdot to run this garbage? "IT consulting company produces colourful but unattributed info-graphic saying developers are important but IT is to slow." would be a better summary.
1. Buy a million dollar house
2. Spend the next 30 years paying off the mortgage
3. Poof. Instant millionaire.
I think you misunderstood what I said. I'm saying don't get a mortgage, purchase the home outright. :)
--fatboy
I don't know a single developer that's dumb enough to still be a tobacco smoker.
I'm thinking the respondents were all fresh out of school, and haven't had their absurd expectations ground down by the real world yet...
A thousand pounds of wood moving at 300 feet per minute. Don't get in the way.
yeah, wait til you're married, have kids, etc. Money flies out the door
After retirement age, you also receive social security payments (in addition to your retirement income).
You hope.
(T>t && O(n)--) == sqrt(666)
1 million dollars invested in a conservative bond fund will yield $40,000 a year, with no hit to principle. Most of America lives (comfortably) on that (or less) today. In addition to that, you will have social security.
And if you are of retirement age today, 1Million is enough. Now project that forward 30 or 40 years.
To put it into perspective, if you had 500k in 1980, that gave you the same purchasing power as 1 million does today.
So if you think 1 million today is enough to retire, and you plan to retire in 25 years, you actually need to aim for 2 million.
If you are just entering the work force (18 to 20), you are looking at working 40-50 years, and will need even more. close to 3 million.
After retirement age, you also receive social security payments
Only a fool would count on it being there in another 25-30 years. Its already seeing the force of the boomer generation hit it. If you've got a million+ in capital at retirement I wouldn't be surprised that your social security will be stripped to zilch. I can hear the politicians bleating now... "we're paying middle class millionaires social security...is that worth a tax increase?"
Exactly. I know people who rent in the same neighbourhood I live in, in exactly the same model of house. Their rent is actually higher than my mortgage payments. The only difference is that I had to save up for a down payment. Not only that, but rent payments keep increasing, while mortgage payments (assuming constant interest rate) actually stay the same, so they go down relative to inflation.
Anthropic principle: We see the universe the way it is because if it were different we would not be here to see it.
Work hard, save as much as you can, invest wisely. Should be easy to accumulate $1M.
Unfortunately that's not really all that much money these days...
G.
I remember when I was younger and management would send out employee opinion surveys. I'd answer them, be truthful and feel like my opinion actually mattered. I felt it was proper to express exactly how happy or unhappy I was and that the survey was some mechanism for improving things.
Then I became part of management and I realized how completely wrong I was.
The employee opinion survey mostly serves as a crutch for manager's to pat themselves on the back and the do a very good job curve fitting the results to their preconceived notions of how things are. It also serves to weed out people with bad attitudes - I've overheard more than one discussion of trying to locate an employee based on the comment they made on the survey.
So, if you say you're happy with the wage you're getting, you won't be getting a raise. In fact, it's even seen as a sign that pay cuts should be happening. Likewise, if you feel like you're a valued employee, good luck getting any more benefits. It's more likely management will use that as an excuse to strip away that one little perk, like free soda or something, just because they'll decrease the amount of HR budget dedicated to keeping employees happy. Don't ever be happy on paper.
Unfortunately, it's not enough for just you to express your desire for a raise. If 40% of your colleagues think they get paid enough, that's probably enough for management to little to no wage increase. You really want less than 5 - 10% say they're happy - in other words, 90% of the employees in your department need to express displeasure with their wages in order for the survey to have any meaningful effect on wages. (There's plenty of other ways to get a raise though - an employee survey is probably one of the least likely ways for it to happen.)
PS. If you think your company is one of those awesome companies that cares, you're probably wrong. If you sat in the room with the CEO, COO, and HR Director and heard that private conversation about the survey, you'd be horrified.
----- obSig
And that's hard?
As mentioned further below, saving ~$5000/year is possible - maybe throw away that $100/mo TV subscription or something.
Hell, my wife is in her mid 20's and I'm in my early 30's and we manage to squirrel away $28,000 every year on our two salaries (I'm a server admin, she's an engineer). If you're in the right industry and have a modicum of self-restraint it isn't too difficult to save.
"Never let your sense of morals prevent you from doing what is right" - Salvor Hardin
I hate to break the bad news to them. The only people that will be making a million developing s/w will be making a million rupees.
Have gnu, will travel.
Being out of work for a couple of years, while still paying mortgage and COBRA and kids expenses, really takes a chunk out of your savings. That's not even counting what could happen when (not if) the banks or S&Ls or whatever other financial institution does a number on the economy and your stocks tank. (And like a few folks I know, I have a drawerful of stock options in companies which no longer exist.)
If you're an older software developer prepare to be out of work for a long time if the economy turns sour. (I was out for 18 months when things went south in 2001/2002. I came back into the industry as a sys admin. Doesn't matter how good you are -- I still routinely learn new languages/packages/frameworks since I'm now in devops -- there's definitely an age bias especially in start-ups. The exceptions are those managers who are smart enough to recognize that the real skill in development is knowing what to do with a tool, not just how to use it. Any monkey can learn to code in a new language. Too many places don't want to pay you what you're worth, and don't want to hire you for what you're willing to take because "you'll just leave when something else comes along".)
Being a millionaire is nothing.
Lets assume the average age of a developer is young 30's. by the time they retire, a million won't buy much at all.
Given inflation if someone currently aged 30 starts a mortgage on an average house now, they will probably be a millionaire in property assets alone by the time they retire.
Really? I think most people would accept "net worth" as the proper metric.
Now there's probably some who don't think about that much and assume millionaires have tons of cash on hand and spend wildly, but generally you don't get to be (or stay) a millionaire doing that.
The Quirkz Handbook of Self-Improvement for People Who Are Already Pretty Okay
Well, that is a stupid and bad plan.
Prove anything by multiplying Huge Number times Tiny Number
One could say the same thing about high school athletes expecting to go pro.
On the Internet nobody knows that you're unemployed.
----- In Your Cubicle No One Can Hear You Scream...
He also neglected to include any sort of interest/growth in that calculation. You could easily get there in much less time at $25k/year with even 5% interest. Or some problems come up and it takes you 30 years instead of 25 - that's still shorter than most people work. Or get a few raises and work your way up to contributing $50k/year in a decade.
In other words, there are obstacles, but there's plenty of wiggle room in both directions. If you're paying even a little attention, it's not a hard goal to hit with a developer's salary, which is generally considerably above median income.
The Quirkz Handbook of Self-Improvement for People Who Are Already Pretty Okay
... that developers are no less short-sighted, ignorant, or stupid than the rest of the US population.
Mudge
In theory, theory and practice are the same.
In practice, they're not.
You will have to be a millionaire in order to have anything close to a decent retirement. Even today, In order to retire on $60K a year right now and live another 40 years, you would need in the $1.6M range. People talk about teachers, soldiers and other public servants having low pay, but if you were to value their retirements as annuities you would see that they largely become millionaires when they retire. Being a millionaire isn't what it used to be. Upper middle class will in the near future translate to millionaire.
I expect by the time I die, McDonald's workers in the US will be able to become millionaires pretty quickly. Zimbabwe is full of millionaires, if you're talking Zim dollars. Of course, they burn their currency in the street to stay warm because it's cheaper than newspaper.
A developer can make $100k easy and have a career that lasts for more than 4 decades.
I'm a good cook. I'm a fantastic eater. - Steven Brust
Start working at 25. Work until you're 60. Put $800/month, every month, into an account that earns 4% nominal interest (i.e. counting inflation) annually. Buy a home worth about $300,000 and pay it off over 30 years. Assume the value of your home increases at about the same rate as inflation, so 1.5% annually. This is probably a low estimate. When you retire your savings account should have about $550,000. Your home should be worth about $450,000. Voila, millionaire.
I expect to be a millionaire at some point in my life....but 1) I expect it to be because I've saved over the years and 2) by the time I have $1M or more, it won't be the same as having $1M today. I don't necessarily expect it to be my salary or that I've sold "the next big thing" to Facebook.
forgot about divorce
The IRS max annual contribution to a 401(k) is $17,500. So unless you are getting a really tremendous return on your investments it may take a little longer than you think. Of course you can save in other retirement vehicles...
Because when you lose your job for a year and can't make the payments and get foreclosed on, all of that money you paid on it that you swore was "worthwhile" is now gone, and now you still have a debt with the bank.
"When life gives you lemons, don't make lemonade. Make life take the lemons back!" -- Cave Johnson
and it wont be worth what it is today in the future..
look at that gold price... someone mentioned the price of gold should be looked at less as a "price of gold" as much as a measure of the devaluation of the dollar over time...
As a renter, if your apartment burns down, you don't still have to mail in a monthly check for a smoldering hole in the ground. Yes, this is what homeowner's insurance is for, but the disaster that destroyed your house may not have been covered. Other reasons not to own:
-They may build a sewage treatment plant down the block and you want out. Of course your property value has plummeted for the same reason you want to leave.
-Your town jacks up the property taxes.
-You may meet the love of your life in another city.
-As the sibling AC said, you may need to chase a job somewhere.
-You're not mechanically inclined and don't want to have to do your own maintenance.
-You'd rather not worry about security.
On a personal level, if I had a full time telecommuting job, I would want to travel the world by living in a different city every month. Being able to divert 100% of my stationary living expenses into travel expenses would make that financially feasable.
At least, won't everyone who's paid a middle to upper middle class wage, buys a house and saves for retirement eventually be a millionaire?
If you want to retire at 65 and have enough money to live a decent life for 30 years after that, you need pretty close to a million dollars plus a paid-off house. And, frankly, it's not that hard to accumulate a million dollars of net worth over a ~40-year career, assuming reasonable returns on your retirement account and modest appreciation on your home. I'm actually targeting net assets of two million for retirement, given that it's still 20 years away and I expect that inflation will roughly halve the value of the dollar between now and then.
Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
During the housing boom, a friends father was surprised when we reasoned that he was a millionaire. All it took was his house, which was almost paid off (and probably worth north of $600k at the time) and a decent 401k since he was at or near retirement. Easy millionaire. I'd go so far as to say that if you don't expect to become a millionaire, it simply means you've landed on the wrong side of our increasingly bifurcated economy.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
Yeah, he has a AlthoughYouShouldHaveAlreadyRealizedThatExceptionFactory
http://rareformnewmedia.com/
I've solved that a while ago. My referring currency is now cents and I was a millionnaire even before being out of school! :)
Shortly after starting my first job I calculated I would need 4 Million to retire, and pretty much the day I got there I could retire regardless of how old I was (conversely, I really can't retire till I get there). A dozen years later I re-ran numbers with new assumptions (having forgotten my old ones), and came up with 3.5 Million. At the pace I am at I might be able to retire in my early 60's at best. Sadly, even if I crank up my contributions I make little change in that date, thanks to compounding interest.
My goal now needs to be to start saving more into things that can be cashed out before 59.5 without penalties to hedge my bet.
YMMV.
And that's hard?
As mentioned further below, saving ~$5000/year is possible - maybe throw away that $100/mo TV subscription or something.
Hell, my wife is in her mid 20's and I'm in my early 30's and we manage to squirrel away $28,000 every year on our two salaries (I'm a server admin, she's an engineer). If you're in the right industry and have a modicum of self-restraint it isn't too difficult to save.
The key is being in the right industry. The median income in the US is around $27,000/year. It is VERY difficult to save $28k if you are only making $27k. It seems to you like you have "self-restraint" because you still have money left over after paying for your necessities. Half the people in the country that make income make less per year than just a portion of your disposable income.
(and to the GP, you threw away that 100/mo TV subscription, that is only $1200 - where does the 5k come from?)
Enigma
Only a fool would count on their saving being there in 25-30 years. The US is a ponzi scheme of welfare benefits and government debt.
That's why you'd use international diversification. And if that doesn't work, odds are you are going to have bigger problems than your savings being wiped out at retirement.
I looked it up the other day. Answer is 8x final salary is the suggested number.
Only if you only intend on living 8 years after retiring (or even less considering inflation).
Enigma
Depends on the part of the country. Seattle it's very, very rare to see a developer smoking. Raleigh, more common.
Having +$10,000 while in school (i.e. rather than debt) is actually pretty good.
If you are 25, earn a decent wage (+60k $ a year) and are able to save 20% of your income, which you invest in stocks that pay dividends of 3% on average, which you reinvest, and assuming that you get a moderate wage increases of 3% a year, being a millionaire at 65 is doable.
At least that's what my financial planning Excel sheet says.
Yeah, if you continue to make 50k for 18 years straight, especially as a developer, you've done something very wrong. Living off of 29k pre-tax isn't difficult. Just difficult if you try and live like you have 50k to spend and only really have 29k. Getting ahead isn't easy if you have no self control, but it's really easy if you plan ahead and stick to it.
If we're talking "has a net worth of over US$1M", that's not too crazy, especially given how inflation will affect salaries in the coming years. Heck, even though they called Thurston Howell III a "millionaire", he was probably a multi-millionaire, since $1M in 1964 would be just about $7.5M today*.
But if we're using millionaire figuratively, as in, "will be in the top 1%", well... not likely. You'd have to have a net income of around $1M to make it into the top 1%, and a net worth of about $16M. A net worth of $1M (and a net income of $250K) barely gets you into the top 20% ( http://www2.ucsc.edu/whorulesa... )
* Yes, "Gilligan's Island" is 50 years old come this September. Half a century. I have just made some of you feel incredibly old.
Koans and fables for the software engineer
Yes, your home will be worth that much quite easily, I bet. But, the "new-age" definition of a "millionaire" is having $1M investible... *NOT INCLUDING* your home. But these days, being a millionaire at retirement is just middle-class - nothing exceptional, but you should be comfortable. It's a great aim-point.
20 years at $50k is pretty reasonable. Now just quit charging things and you might actually have some money in 20 years.
Dear Slashdot: next time you want to mess with the site, add a rich-text editor for comments.
Really? I think most people would accept "net worth" as the proper metric.
Well, he said "potentially liquid" not "liquid", like if you decided to become a Buddhist monk and give away everything you own selling your house, car and so on could you liquidate your 401(k)? From what it looks like you must pay a 10% early withdrawal fee and income tax, so it's a lot less worth to have $1 in a 401(k) than in a regular bank account. On the other hand should you include things like sales commission on the house? I don't know, but in an informal sense I'd say that you're only a millionaire if you could literally gather a million dollars in cash if you wanted to.
Live today, because you never know what tomorrow brings
Programming is the new factory work, and software patents have ruined the industry so badly that anything that is slightly innovative is murdered by assholes with patents.
Do not look at laser with remaining good eye.
We had a decade of high inflation in the 1970s that contribute almost half of the dollar depreciation since my birth. I think my 'birth million" would feel like a real million, i.e. a decent retirement at any age. A millionaire in all those silly 1960s sitcoms was a real millionaire! conversely my fathers coworkers felt OK if they retired with a $100K or two.
Whoever mentioned that was an idiot.
Gold prices are driven by 1. Speculation and fearmongering about the state of the economy (I.e. preppers, pump and dump scammers, etc). 2. By how low interest rates are(if they can't gamble on the stock market or in loans, they gamble in gold). So, gold is a gamble against the economy (and therefore, the dollar), but that has nothing to do with inflation.
And that can be extended to the world economies as well.
If you want to see real inflation, you have to look at low profit margin commodities on a broad scale.
while(1) attack(People.Sandy);
I really don't even hear people use the term millionaire anymore. Plus I could just sell my home and I would have $1 million not including my home. Do I really need a million dollar home AND a $1 million in a bank account for this weird new age definition? Why not just require $2 million net worth? Or better yet how about a relative term like "the 1%". I assume that the richest 1% of people will always be considered rich.
Thank you! My experience is in central Ohio, Austin and DC.
Money invested grows. First, the money you put in grows, then the growth grows.
Then that "free" money you got from growth itself grows some more money.
This is the magic of compounding. With average returns, $500 per month for 32 years will grow to $1 million.
Let me use my trust worthy excel (oh no) to calculate the future value of savings of $5K per year for 50 years at 5% interest rate, guess what, it is +$1M.
> (and to the GP, you threw away that 100/mo TV subscription, that is only $1200 - where does the 5k come from?)
Starbucks. Making a pot of coffee at home instead of buying Starbucks is another $1,200 / year. The point is ditch the stuff, LIKE THE $100 / MONTH TV, that is less important than a comfortable retirement.
Just be sure to hide the money you're saving by giving up the deluxe cable package and the Starbucks. In a few years, you'll have enough money to pay your bills for 25 years of retirement. At that point, there will be millions of people who spent their money on crap screaming "he's a greedy millionaire! Tax that away from him and give it to me, because I don't have squat!"
Gold is a good measure of inflation if you take the 10-year-average, or maybe the 20-year, of gold prices. While gold is hopelessly volatile in the short term, it seems to keep reasonably equivalent purchasing power century-by-century.
Home prices work out about the same, BTW. While real estate markets can be just as volatile, long term house prices are flat with inflation, which makes a lot of sense (the % of income people are willing/able to spend on housing won't change unless human nature changes, so you expect the average house to represent a given amount of purchasing power).
Socialism: a lie told by totalitarians and believed by fools.
56 Percent of US Developers Expect To Become Millionaires
I downloaded the study by Chef (which amounted to a 3-page PDF), and there was no breakdown of the sample population by age, race/ethnic make-up, gender, marital status, location, degree and primary/secondary software skills. So, one has to wonder how much of a self-selection bias took place in this so-called study.
For instance, I cannot see a way by which a sample population of single men in their late 20s working as developers (or founders) at start-ups in Silicon Valley will respond the questionnaire in a manner comparable to, say, a mixed gender sample population of developers in their mid-30s or 40s working at established companies out of, say, Austin.
Also, regarding age, someone starting up today should not find it impossible to become, literally, a millionaire as in "having earned a million" by the time of retirement. To effectively be a millionaire - meaning having net assets worth a million or more (at current purchasing power) counting inflation, that is another thing.
The thing that made me scratch my head the most is that 2/3 of the sampled population believed their profession to be recession-proof. That strikes me as naivete (or stupidity) of youth/inexperience/arrogance.
The software industry is not recession-proof. It is recession-resilient for those who actively cultivate their professional network.
But recession-proof? Not. A. Chance.
Either this study is seriously affected by the Dunning-Krugger Effect, or it is an exercise in intellectual self-pleasure, or somehow Chef managed to sample a population composed by truly elite multi-discipline engineers, owners of very hard-to-get skills (like building software for radar systems or something.)
Use the Somalian Shilling as reference and it gets even ten times easier to become a millionaire.
Btw, is it me or is it funny that the Somalian Shilling is abbreviated SOS?
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Most employers match that at least a little. Long term tax-free growth of "double every 10 years" is reasonable to expect from stocks. After 30 years, having 70 years of savings is a reasonable goal. Of course, your pay's going up and inflation is too and so on, but still, becoming a millionaire from 30 years of 401K savings is quite practical. Doing the same for "millionaire in today's dollars", a far more interesting goal, is quite practical given 40 years of 401K savings.
Of course, best to save more elsewhere, and try to retire earlier than 40 years.
Socialism: a lie told by totalitarians and believed by fools.
Ok, so after X amount of years of renting or paying a mortgage you've spent $400K. In one of those situation you have an investment that is VERY likely to be worth a lot more than the original $200K purchase price, and in the other you have nothing. How is wasting some of the money on mortgage interest better than wasting ALL of the money on rent?
None of your reasons show that owning a home is a bad financial decision, which is all my point was meant to convey. If owning a home is bad a decision for you logistically, then you shouldn't own. But all things being equal, buying a home within your means makes far more financial sense in the long run than renting.
My dad was a small-town banker and my father-in-law was a box factory floor manager.
Both managed to save over half a million before they retired through no particular brilliance, just hard work and saving.
If you're a developer younger than 35 and don't save a million before you retire, there's a good chance that you're either not going to retire or you're going to be poor when you do.
Retiring at 65 and living to 85 gets you 50k per year with a million dollars of savings. Investment and interest could extend that another 5 to 10 years. On the other hand, medical technology advancing gives you a pretty good chance of living that long. Save now. Spend later.
If you earn $80k+ a year, you need to be a double millionaire just in retirement savings to maintain your income when you retire. I guess this means 44% of developers don't expect to retire at age 65?
We are the 198 proof..
Becoming a millionaire over the course of a working lifetime isn't too challenging. Stay employed and put 15-20% of your income into broad-market index funds every year without fail. Don't throw it away on booze, drugs, or houses in a housing bubble. That said, a million bucks isn't a lot of money - it is maybe just barely retirement money at the same standard of living you had while employed.
Becoming a multimillionaire over the course of a few years is pretty challenging, and if that's what the survey really means, those people are mostly going to be disappointed.
Only 56% expect to become millionaires?
What is wrong with the other 44%?
10% growth won't be the norm in the near future because it's never been the norm, just a weird exception in some periods of intense growth. The average ROI over centuries is very very stable at 4%. This corresponds roughly to the price of houses.
I read an article today that explained that since 4% is higher than the average growthrate of economies, people having assets will tend to collect a larger and larger share from the GDP as opposed to just working for it. Hence the growing divide in society between people having money gathering more and more of it, and the rest gaining less and less.
Replace assets with capital and working for it with labour, and I think we're back at where Marx once started his analysis.
Therefore, by the (faulty) logic you're using, you're just a cow with a keyboard - osu-neko (2604)
No, but you can start by eliminating that $100/mo TV subscription, and then find some other ways to save money too
I'm constantly amazed at what people spend per month on things they think are "necessary".
I've come to realize that many people will spend every dime they make rather than save it - and then complain about it later when they have nothing saved and are still living paycheck to paycheck. I've witnessed several times people spend their "raise" after they get it, buying a new car, etc. It's pitiful.
So, no different to the peculiarly American trait of considering poor people "temporarily embarrassed millionaires". No thanks to the self-serving ideology peddled by the rich, that we'd all be better off if we all worked harder, never mind the fact that the rich get rich by capturing the surplus value of your labour.
There's a degree of this everywhere (e.g. the hundreds of millions of retards out there who consider themselves "middle class", despite needing a paycheck each week/month to survive), but nowhere is this stronger, than in the US.
Admirable. Prudence is a virtue that's underappreciated these days by society at large, and especially by our irresponsible, feckless leaders.
And we've been egged on by our wasteful, idiotic consumer-driven society to piss all our savings up the wall rather than save it; and have policymakers deliberately engineering the economy to strip the people of their savings (how else can we interpret ZIRP?). Besides the financial costs, there are the moral costs of breeding generations of feckless, impoverished spendthrifts who blow all their money on overpriced tat and live paycheque to paycheque.
The Fed and friends get a lot of hate (in places like Zero Hedge especially), but it's justified.
The article is about developers - I would guess not many developers make less than $50K and the average is probably significantly higher than that. If you are in a career that starts at $50K and goes up from there and DON'T expect to save a million dollars in your lifetime, then exactly how are you expecting to retire?
And the GP specifically started with $100 TV subscription and find other ways to save - the point being there are lots of things we spend a lot of money on, that we could eliminate to save more, while still having a pretty good standard of life now.
I did this while I was married with 3 kids. I still do it now that I'm single with 3 kids.
50k is solidly middle class where I live. Most of my friends who work at the local
university, etc... with bachelor degrees and sometimes masters degrees make less
than 50k as do most of my relatives. I could upgrade to a higher lifestyle but I have
no desire. My kids and I have everything we need and then some. We also have
more disposable income than most of our peers which would make it easy to keep
up with the Jones but I have no desire to keep up with anyone.
The USA is strange in that our spending on housing and cars goes up almost
linearly with income. This doesn't make sense to me. Why should I buy a
house or car twice as expensive just because I make more money?
From what it looks like you must pay a 10% early withdrawal fee and income tax, so it's a lot less worth to have $1 in a 401(k) than in a regular bank account.
Yes - and that is how official net worth calculations are generally done.
Really?
http://financeandinvestments.b...
25 year average return numbers say 10% (+/- 2%) is probably a good a number as any.
If only there was some sort of product available that would, if you house burned down, reimburse you for the lost value.
Ooooh - come invest your money with me - I'll pay you the zero interest you are expecting and we'll both be happy.
I know 0 developers who smoke tobacco. I know many who go to multi-day conventions.
Gravity Sucks
The IRS max annual contribution to a 401(k) is $17,500. So unless you are getting a really tremendous return on your investments it may take a little longer than you think. Of course you can save in other retirement vehicles...
With a 10% annual growth, you hit a million in 20 years. That grows to $5 million in about 35 years. That becomes $2.5 million after 35 years when you count inflation, but that still shows it is pretty easy to hit a million in any professional level job.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
He meant starting at 1500, not 1900. There are people who believe that the past 200 years have been an aberration caused by free energy, and that when it ends the world will return to when growth was closer to 2% per year.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
No, but you can start by eliminating that $100/mo TV subscription, and then find some other ways to save money too
I'm constantly amazed at what people spend per month on things they think are "necessary".
Like saving up for retirement? Not sure why having a million dollars to spend in retirement is more important than having $100/month to spend on cable TV today?
And that's hard?
As mentioned further below, saving ~$5000/year is possible - maybe throw away that $100/mo TV subscription or something.
Hell, my wife is in her mid 20's and I'm in my early 30's and we manage to squirrel away $28,000 every year on our two salaries (I'm a server admin, she's an engineer). If you're in the right industry and have a modicum of self-restraint it isn't too difficult to save.
...and are married to somebody with comparable income. Swap that wife out for somebody who doesn't make much more than minimum wage, and your $28k/yr basically evaporates. You'd save more being single, but your non-discretionary expenses as a single aren't that much lower than a couple's.
Do the math here:
http://www.bloomberg.com/perso...
Saving 10% of your salary is going to give you a lot more than a million dollars over 30 years, even in constant dollars.
This part is hilarious, "95 percent report they feel they are 'one of the most valued employees at their organization" What that says to me is - those people's managers need a raise! Clearly they're making everyone feel like the unique special super outputting flower they aren't, keeping them with the organisation by feeding their ego, that's absolutely awesome - I need to learn their tricks of the trade to use on my wife!
Every day, it is becoming easier to reach that target. To 'retire' on rental income, you need to own 4 or more apartments and that is already over a million bucks.
Excuse me, but please get off my Pennisetum Clandestinum, eh!
A better measure is to pick a few specific items that you personally consume on a regular basis and track those. When we lived in Peru we watched the price of rice, tea, a specific brand of tennis shoes that Rosa liked, bus fare, and a quarter of 'pollo a la brasa' (roast chicken) to track the actual value of the Inti over time.
"Think about how stupid the average person is. Now, realise that half of them are dumber than that." - George Carlin
Apparently they are all from Lake Woebegone, where the children are all above average.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
Sorry, you are correct; it is usually a good financial decision. If nothing else, it's an excellent hedge against inflation. I was just pointing out that it isn't a sure-thing risk-free investment... I just got out of almost purchasing a home, for many of the reasons above (though the main show stoppers were 9k/yr taxes and a complete lack of public transportation).
With inflation and continued erosion of social security and other retirement income sources other than assets, my calculations say that I simply can't retire with a middle class income if I don't have quite a bit more than $1 million in 2040 when I retire. Real returns are below 5% these days, and $1million kicks off less than $50,000 per year which will likely be well below median in 2040. As others have noted, it is not all that hard to reach $1 million with regular investing and modest real returns (and assuming we don't have a market collapse which is not an entirely justified assumption). But it is a system that a large number of numerically handicapped Americans seem not to be able to plan for or cope with. I would translate the headline: "44% of US developers don't think they are going to be able to retire (or simply have never done the math)".
Assuming you work for about 35 years, invest 10% of your salary pretax and get a 6% return you will have a million in retirement. That doesn't include other assets like a house or company stock. Getting to a million is not that difficult, it just takes some time and planning.
Knowledge = Power
P= W/t
t=Money
Money = Work/Knowledge so the less you know the more you make
If you retire with 1 million in savings you can expect to spend between 60-80k a year and not tap into your principle. 60-80k a year is more then enough to live on when you consider there are no mortgage payments to be made.
Knowledge = Power
P= W/t
t=Money
Money = Work/Knowledge so the less you know the more you make
My wife says at home, I have 3 kids, 2 of them go to private school, and I still manage to squirrel away 20%. My house is smaller them my co workers, my car is one of the oldest. I just have different priorities.
Knowledge = Power
P= W/t
t=Money
Money = Work/Knowledge so the less you know the more you make
You should really factor risk into your equation. I would not leverage my house (or car) to do investments. I would never buy a new car, unless I could write the check and not notice. I would absolutely never finance depreciating asset. As far as large ticket, depreciating assets go, cars/boats/bikes/RVs are at the top of the list.
--fatboy
1) A typical well-diversified index fund delivers returns over the long-term well over the interest charged on mortgages or car loans if you took out those loans when you have decent credit. It makes utterly no sense to lose the ability to take advantage of tax-advantaged investments in order to pay off low-interest loans at a vastly accelerated pace. It's a worthy goal to have your house paid off by the time you retire, but no need to be crazy about it. (Yeah, credit cards do suck and you should pay those off ASAP after you get your max 401(k) match, if offered.)
2) You should be taking advantage of every tax-advantaged investment you have available. That means dumping the max into an IRA, and if your employer has one available, also dumping the max into their 401(k) program.
3) Even if your employer has a lousy 401(k) program, once you've maxed out your individual IRA limit (which doesn't take much if your employer offers a 401(k)) it still makes sense to dump as much money as you can into it. The next time you switch employers, you can roll over your 401(k) into your IRA. (My employer's 401(k) is quite good, with expenses of only 0.12%/yr, so there's no reason ever to take my money out.)
5) If your employer offers a 401(k) match (even 50 cents on the dollar), you'd have to be a complete blithering idiot to not take advantage of it.
6) Seriously? You claim your investing acumen is SO good, that you can routinely achieve 20-50% returns in a month in a practice portfolio, but you don't invest because a five-page Schedule D is your idea of too much work? (Especially since most of the "work" is nothing more than copying the data from your statements into a tax program.) I call B.S. That kind of return would make Warren Buffet look like an amateur and the finest hedge fund kingpin look like he was running a lemonade stand.
We can all be millionaires! (And spend several deciduous forests for one peanut.)
Thank you, Douglas Adams!
Seriously, why do a majority of people think each can live "the good life" and not have to do some kind of labor for a living?
All the idiot 20-somethings and 30-somethings who are *SURE* they're going to be millionaires, and so want to make sure millionaires pay lower taxes than they are now. And they'll never need to worry 'bout healthcare, and of *course* they'll retire at 40.....
Allow me to reiterate: there are two kinds of Republicans, Libertarians, and neoConfederate "Tea Partiers": millionaires, and suckers.
mark
...
With a 10% annual growth, you hit a million in 20 years. That grows to $5 million in about 35 years. That becomes $2.5 million after 35 years when you count inflation, but that still shows it is pretty easy to hit a million in any professional level job.
Heck! With 20% annual growth you can hit a million in 14 years, and with 30% annual growth you can hit a million in 11 years!
Just ask Bernie Madoff!
The real long term return on stocks is 6% or so. You only get 10% if you carefully draw the period to cover two bubbles and avoid the post-bubble malaise, collapse and ensuing low-grade depression. That's called "cheating with statistics".
And even stock market optimists (like Jeremy Siegel) feel that returns over the next few decades will be around 5%, as the long hang-over of the Bush crash persists, and the relative decline of consumer purchasing power continues.
With a more realistic return of 5%, the time to accumulate a million is 30 years.
Second class citizen of the New Gilded Age
Guess this explains the conservative / libertarian tone of so many slashdot posts & replies. Voting for tax cuts for rich and food stamp cuts for poor is OK, because they're planning on joining the rich! Incredible! How about expanding your world view outside the edges of your screen.
Most live in San Francisco, after all.
It probably also says that developers want to spend time writing documentation, creating project plans, and attending "mandatory, all hands" meetings rather than coding.
This raises red flags that it represents an effort by the owner of Slashdot, dice.com, a major recruitment firm, to spread prejudicial opinion to support its interests, and that brings into question the wisdom of posting to slashdot that the headlines are mostly plants by biased individuals working for the special interest of the parent company.
On the face of it the expectation cited by the OP doesn't square with reality. I would rather see what the real earning power of developers is, statistics, a distribution of income, rather than some pollyanna wish, some pumped up and self-serving propaganda. I expect that the percentage of developers who have made $1 million is far less than this hoped for amount. That most are not successful to that extant.
And besides, why choose that amount of money? $1 Million is not a huge amount of money, by today's standards. Maybe it is for a couple of people to live off the fat of the lamb, but really not that much. If you estimate 10X inflation of prices over 40 years, or so. $100 K in 1974 would be the same amount of money.
That's not difficult if you're earning 6-fixgures, aren't staying in a very expensive area, and are just good with money.
<Insert joke about nerds being single>
I personally expect to get a raise every-single-year. Inflation stays around 3% every year. If my company doesn't give me AT-LEAST a 3% increase in salary each year, I consider it a slap-in-the-face. A pay cut by another name. And worse, a pay cut after a sterling annual review, and a year of hard work.
Inflation/cost-of-living year-over-year was only at zero for ONE year, during the depths of the recession. It's not an ongoing excuse to withhold annual raises.
There's little that pisses me off more than hearing that "company policy" limits raises to no more than 3% (or 2%, or 1%). That's institutionalizing yearly pay-cuts for all employees, including top-performers. Even when I make a stink and get more than that, it makes me look at that company with utter disgust, as they show how much they HATE and want to be at war with their (good, long-term reliable) employees. Nothing makes a company better than the few long-timers, who have everything about the company and all the systems in their head. "Company policy" that punishes them for staying instead of job-hopping is the most utterly moronic thing I could imagine... But this rant is getting off the rails, quickly...
Well, obviously people don't stay at a company where they feel ignored and undervalued (see above). And when your work will determine whether the company hits or misses a deadline, you speak to CxOs on a regular basis, or you're responsible for many millions of dollars of equipment, it's easy to feel highly valued, even if perhaps you are not.
I know I've occasionally been the highest paid person in some medium-sized companies. With the higher contractor rates, and overhead of contracting firms, it's not too difficult to end up costing the company more than the CEO's salary, even if not all of it goes into your pocket, and some of it is government taxes/fees/programs that get stuffed into salary for contractors but not regular staff.
Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
The IRS max annual contribution to a 401(k) is $17,500. So unless you are getting a really tremendous return on your investments it may take a little longer than you think. Of course you can save in other retirement vehicles...
Um, no. The max pre-tax amount is $17,500. The max contribution from all sources (pre-tax, employer match, and post-tax) is $52,000. And if you're over 50, you can add another $5K.
Only a fool would count on it being there in another 25-30 years. Its already seeing the force of the boomer generation hit it. If you've got a million+ in capital at retirement I wouldn't be surprised that your social security will be stripped to zilch. I can hear the politicians bleating now... "we're paying middle class millionaires social security...is that worth a tax increase?"
That's what they were saying in the seventies and here it is 40 years later and still around. Seniors vote. Seriously, they vote.