[laurieg]

A lot of commenters seem to be bemoaning this poster as missing out on endless riches. Why? we already know that being super rich doesn't really make you all that much happier compared to being rich (and if you are a programmer in work in then you are pretty rich).

I feel that they missed out more on the rocketship journey of being on a startup. And even then that's not everyone's cup of tea.

[astura]

There's a gigantic difference between $200,000 a year and "I don't need to work again."

The "money doesn't make you happy" camp compares $70,000/year and $200,000/year; not $200,000/year and "I have enough money to never work again if I don't feel like it."

[SeanAppleby]

Those two goals are only separated by about a decade of normal work, which is not even much more time than it takes to bring a startup to an exit.

If you can put 1-2.5M dollars into investments you can pull safe returns of enough to live on indefinitely and never need to work again.

Making >$200k a year and being frugal it is not that hard to put together 1-2.5 million dollars in capital.

At 10 years of 250k with a 40% tax rate and 30k in annual expenses with 7% average returns, you pull down about 70k in capital gains at 5% returns in year 10 (so you can keep 2% extra nominal in to keep up with the fed's inflation target and maintain that purchasing power forever). $70k is less than you made, but is more than enough to live on without working for the rest of your life.

[astura]

You're completely missing the point.

> being frugal ... 30k in annual expenses

Requires budgeting and is a bit of a standard of living lower than most people would prefer. Especially if they got kids.

Plus how you going to live in SV on $30,000 a year when rent alone is that much?

> 7% average returns

So requiring those 10 years are during a bull market.

There's a big difference between "work at a startup for a good salary living an average life for 10 years" and "live in a shoebox with 10 other guys, eat nothing but lentils and beans, and own no possessions for 10 years"

[sobani]

> > 7% average returns

> So requiring those 10 years are during a bull market.

If your bull market includes the 2008 crash, then yes.

"The last decade provided an average return of 6.88% in the stock market. The lower return takes into account the tremendous loss the market took in 2008." https://www.creditdonkey.com/average-stock-market-return.htm... (question 2)

[monort]

Anecdotally, when you don't need to work it makes you happier (though you can still work, but only when you want to). High wage vs passive income is a big difference and the research you are thinking about only captured the former.

[mockingbirdy]

I have a passive income of €1.5k/month without being a millionaire. Some of my friends are millionaires and we are basically equal. We all can choose to work and are free, this makes all the difference.

The main differentiator between rich people and others is the fact that rich people don't have to work. This is the biggest freedom. I figured out that I don't need to be rich to do that. I still work, but I mainly do this because I want to. I say no to things that I don't like and I've never been employed (I'm an employer myself).

I wouldn't trade this freedom for 10-20k/month (which I could achieve, but I would have to work my a* off). Deciding what to do with your time is the ultimate freedom.

edit: I worked like this in the past (making good money and having lots of stress), but nowadays I don't see the point anymore. Even if you like your work, wouldn't you prefer to work on your own visions and on your own terms?

[Rinzler89]

May I ask what kind of business are you running for your passive income and how you got there?

Background of this question: Also form Europe (Austria), an EE engineer but modestly paid and overworked. I figure I should pivot to a passive income source as even switching jobs won't imporve my quality of life since companies are overly stingy on paying competitive salaries and most try ot burn you out in the long run as they try to be more competitive and government will tax the hell out of you the more you earn so I figure why bother, my healh is worth more than that.

[mockingbirdy]

Ok, I will give some instructions. Unfortunately, it's not an easy way. It's mainly websites.

1. Know your numbers: How much do you need to live? How much do you spend each month? How much money can you save up in your job every year?

2. Save up. Live extremely cheap and save every penny. You need enough money to live for ~9-12 months without any income, e.g. if you need 1200€ you need to save minimum €14k - no holidays and expensive stuff until you've reached your number. This is your lifeline money.

3. Save a little more: You need to invest money to make money. You need about €5-10k minimum for investments (buying domain names, themes, content, designs, ...)

4. You have saved up €20-30k? Continue the plan. Otherwise continue to live extremely frugal and increase your income.

5. There are many ways now: build websites, AirBnB, flipping stuff, writing books ... - first, you have to build something. After you've found something that works, you continue to increase the profit margin and automate the process (also utilizing manual labour). You can only do this if you already have some money, this is the reasoning behind step 1 and 2.

- - -

In my calculations, you need to invest roughly €30-40k to make €1-3k/month in completely passive income (I achieved it with 5-10k, but I was lucky). It's definitely achievable in 3-4 years to save this amount of money if you commit to a frugal lifestyle, save up and invest it correctly (I achieved it in some months, but as I said, I was lucky).

I think it's not fair to sell you the idea that it's easy - although my journey was extremely straightforward, I know that most people struggle to even make a dollar online. But I can assure you that you will find a way if you're committed to leave your day job behind.

But please make sure that you have enough savings, I know many people who left their job and after 6 months they ran out of money. You don't want to be the defeated one who wasn't well prepared for this type of lifestyle.

[fsloth]

"and if you are a programmer in work in then you are pretty rich"

Incidentally, I'm not sure if this statement has any validity outside US. I wonder why that is.

[giancarlostoro]

It's still valid in a couple of other countries though. I'm sure I don't make more than my friends in England for example, and I know some in Brazil that make really good money (compared to those around them who are not programmers) and I'm sure there's other countries who pay their software engineers well enough. But yeah I'm aware that there are countries where being a software developer is not that profitable sadly. I always hear of outsourcing software development overseas for simple things like having a website done.

[MrEfficiency]

DELETED For asking a question but getting too many downvotes

[verelo]

In many cases it’s because that’s what we demand of them. The “you get what you pay for” line works well here, we demand low cost so they have low time to build anything right. Long term impact is that they never fully developed into seasoned and deeply skilled staff. Then we complain about quality, its kind of funny in a sad way...

[StavrosK]

As a programmer in "other countries", you're very much wrong. You just get what you pay for, and when you're going for "cheap outsource" you get bottom of the barrel. Pay senior salaries, you get senior people.

[fsloth]

Uh, what. I'm quite undercompensated compared to US programmers but that does not mean I don't program well. It just means I don't live in the US.

[joering2]

Why did you assume he is missing out on being rich? Nowhere in his post he even mentions money. It felt more he missed out on being a part of a great success that every startup wants to live through similar to that of Instagram.