[shmat]

Sometimes you don't make enough money to retire early from a combination of bad luck and poor financial decisions. In my career, I followed a pattern of going to a company just a bit too late to get the really low priced options. I've ended up with dozens of former co-workers who are multimillionaires. I had a family and was (in hindsight) too conservative about when I went to a company. I also was a "paper" millionaire during the dot-com boom. The start-up where I worked was bought making my options worth millions. There was a 6 month lock out and during that time the stock price went from $75 to $0.75. My options were at $2. Did that make me a bad developer? At another company I had options at $7. The stock peaked a few years later at $60. I never exercised any because I was greedy. I was going to cash out when it hit $75. When I left the company after 6 years, the stock was at $8. All in all, I was almost always one of the best developers, but I never made "FU" money. I did learn to exercise options as soon as they were worth a decent amount, but never made enough to be rich that way. I'm sure there are many old developers who were as dumb financially as I was.

[curun1r]

Also, sometimes you don't make enough for early retirement because...gasp...you don't prioritize money over everything else. Some of us have tried to use our talents to do things that are socially responsible. Whether it's doing something in the non-profit space, working on a company that targets the underprivileged, something to do with the environment or anything along those lines, not everyone is comfortable invading people's privacy to serve them ads.

So, yeah, some of us are still working because we had the naivete to want to make the world a better place.

[shmat]

Good for you. We need more people to work on these kinds of problems. I admit that I was not altruistic. In my defense, I've given a lot to charities over the decades.

[euvitudo]

One thing I learned being a band parent is that the parent's direct involvement during events (being there in person) is much more valuable and appreciated than any money given.

[mikekchar]

And sometimes (equally ...gasp..) because you just want to work on interesting problems with people you like -- and those jobs didn't pay out the big bucks.

It's amazing to me that so many people think that the point of a tech job is to walk away with a boat load of cash.

[autokad]

I got hurt from that time in a different way. the year before graduation companies was asking me if I would come work for them and not graduate. the next year everyone was out of business and I couldn't find a job as I was competing with devs with years of experience. the following year of still not being able to find work was a different problem, why hire me when they can hire a fresh grad? after 3 years I finally found an IT support position for 28,000/year. I eventually crawled my way out of the situation and making great money at a great company, but that really hurt.

when I see kids graduate now making 100k first year out of college mostly because they graduated during the right time in the right place, I am happy for them but they don't realize how lucky they are

[kamaal]

>>I am happy for them but they don't realize how lucky they are

Well, thats the part where wisdom comes in. No one gets lucky. Some people do. But even those don't get lucky all the time.

If you are making $100K straight out of college. Just understand that its an exceptional period in your life. Be grateful and lock up every single cent into some investments.

Or when reality of life comes to hit in mid-30s. Your best is behind you, you have nothing to show for what you've earned, and whats worse- There is no way of earning it back again.

[Animats]

You have to be fairly lucky. My history:

* Startup in Midwestern city. Company never grew much, pivoted several times, still in business selling storage products. If I'd stayed with them, I would have had a long, boring career. One guy I knew did stay there and had a long, boring career.

* Heavy industrial company in Detroit. Acquired by a bigger company long after I left, Detroit plant closed.

* Time-sharing startup company in greater NYC area. Went bust. Technology worked fine, sales not so much. Left 3 weeks before shutdown.

* Time-sharing startup company in Silicon Valley. More successful. Acquired by bigger company after I left. Time-sharing was clearly on the way out. Time to leave that industry.

* Big aerospace company R&D operation. That's where I got into theory. Split into several units years after I left, some acquired by other companies.

* Small startup that got big. Cashed out.

* Careful about spending, reached retirement age in good shape.

[xuki]

Don't beat yourself up, hindsight is 20/20.

[shmat]

The only one I beat myself up over is hanging on to options too long, since that was greed. The other decisions were all reasonable given what I knew at the time.

[jacquesm]

The next time you are in that situation: exercise half, keep the other half in case they go up further. Protect your downside.

[tachyonbeam]

I think it doesn't have to be all or nothing, it could also be possible to have a balanced approach to this problem. If your options start to be worth quite a bit more than your buy in price (eg: 2x), you can exercise some percentage of them but keep the rest. People more vested in investing would probably say that the ideal strategy would involve picking some thresholds ahead of time. Either way, there's always some amount of luck in this. The amount of things you don't know is a lot larger than what you do know. You may also not be in the right financial position to invest when a great opportunity shows up.

[cgh]

If it makes you feel any better, I did exactly the same thing: failed to exercise my options, lost out on six figures. Not the hugest payday but it would have been life-changing at the time. Such is life.

[mcguire]

Story of my life. Minus the options.

It would be entertaining[1] to know what proportion of "paper millionaires" in the field do hang on to the money and could retire to the Turks and Caicos. Also what proportion of valley employees become paper millionaires in the first place.

[1] And I mean entertaining because I'm in a bizarrely cynical mood this morning.

[achillesheels]

You are being too hard on yourself. Your personal history is an extremely recent phenomenon in civilization where there is no guide on what to do simply because virtually no humans have ever been in that scenario. Even today, most people are unfortunately terribly financially illiterate - especially with equity.

[a3n]

> Sometimes you don't make enough money to retire early from a combination of bad luck and poor financial decisions.

Sad that cashing out may have ejected "staying and contributing" as a measure of success and indicator of worth.

[SimonPStevens]

> Sometimes you don't make enough money to retire early from a combination of bad luck and poor financial decisions.

This feels a bit wrong to me. I don't think it takes bad luck or poor decisions to not be able to retire early for most people. I think it's quite to opposite. I think it's pretty rare and you need a serious stroke of good luck to be able to retire significantly early.

Maybe it's different in the valley, (I'm not even US based at all), but where I am, very very few people are financially independent enough to retire early.

Obviously, it depends a bit on your definition of 'early'. My dad worked average jobs and never got any big lucky breaks (apart from being part of the generation that was buying property at the right time to get in cheap and be downsizing at the peak), but has saved well and is retiring something like 5 years ahead of the standard age. That's do able with just good decisions and no bad luck. But I think what's being talked about here is retiring more like 30 years early when you are in you mid 30s. That requires some serious good luck and is fairly rare.

You may lament the fact you had some options that you didn't sell at the right time. Well the average person has never had options that were worth selling at all. I've worked in tech my whole career, including some funded startups of the 40-60 people sort of size, but never had stocks or options even offered.

[shmat]

Did you read the article? It's not about most people. The article is about jobs in the Silicon Valley software/tech industry not just jobs in general. Everybody at startups and software companies gets options, and a small but not insignificant percentage of them get rich. The article is about the attitude that if you didn't get rich you must not be any good at your job.

[SimonPStevens]

I did. I was replying to the parents comment about not being able to retire early specifically because of bad luck. Not the article directly.

And even based on your comment, I still think that statement sounds wrong to me.

> a small but not insignificant percentage of them get rich.

It happening to a small percentage means it require good luck for it to happen to you, not just the absence of bad luck (which implies it happens to most people unless they have bad luck).

[nlh]

I'll write a longer post about this one day but you bring up a really good point. Identifying the very specific "greed emotion" that makes us make less-secure financial choices I think is a really valuable skill. That's not to say that you should always ignore it -- but it's important to identify it so you can recognize your motivations for making decisions.

I had a similar issue to you a few years back - I was offered a buyout in a partnership that would have put a nice chunk of $ in my pocket, but I (naively) believed that staying in would put more. It fell apart and ended up being worth much less.

I'm not sure I'd have made a _different_ decision, but I certainly have learned to recognize when these moments appear so I can more rationally understand my own decisions.

Anyway - this is all to say, don't sweat it. You've learned, you're lucky to have picked good companies, now take that wisdom and make a less-greedy decision next time.

[mixmastamyk]

Me too, I went all in on Apple stock when the iPhone was announced, on margin I was so convinced. Sounds great right? Well broker sold everything during the 2008 meltdown and lost everything.

[CydeWeys]

Sounds like the broker had to sell everything because you went below your required margin ratio. A typical margin ratio is 50%, and AAPL collapsed by more than 50% during the 2008 meltdown, so it sounds like you got margin called.

If that is indeed what happened then that's on you for buying on margin (which is inherently riskier), and no fault of the broker. If that's not what happened, and the broker executed trades without instructions from you, I hope you got them fired at minimum.

[mixmastamyk]

Yes, even when making the right (though unnecessarily risky) call an unrelated third party can still show up out of the blue and ruin everything. There are more failure modes to luck than are commonly understood.

[rak00n]

I learned something new. A broker can sell your stock without your consent?

[sowbug]

It's similar to a bank foreclosing on a house. The borrower pledges something as collateral for a loan, and if things go south, the lender can liquidate the collateral to recover some or all of the debt. It's not correct to say it's done without the borrower's consent because the original lending agreement allows it when the circumstances arise.

Tangentially related: Martingale betting system (https://en.wikipedia.org/wiki/Martingale_(betting_system)). Aside from its theoretical impossibility, this system typically fails in practice when the gambler hits a house limit and can no longer continue placing bets.

[mixmastamyk]

Yes, see sibling comment.

[rosege]

If you are ever in a similar situation you might want to look at what Mark Cuban did to manage this risk - described here: http://investmentxyz.blogspot.com/2006/05/cubans-collar-anat...

[stanfordkid]

You can only really do that if you have hundreds of millions and can negotiate with a major bank to get it done. Most companies don't trade options until after the lockup, and even if they did, you are restricted from doing so by the contract.

You also have to put up a huge amount of capital upfront to purchase the options. For Mark Cuban, this could be done on credit to the bank, but likely not possible for a single digit millionaire.

It was only during a unique period of irrational exuberance that banks were open to underwriting options for such new and untested equities.

[0x8BADF00D]

> It was only during a unique period of irrational exuberance that banks were open to underwriting options for such new and untested equities.

Keep in mind that any time a bank underwrites an option, particularly if it’s for a short position, there’s no guarantee they will honor it when shit hits the fan. Legally, they are obligated to. But in practice you may only recieve a percentage of what you were promised.

[oh_sigh]

That wouldn't have helped at all. Marks hedge would have not worked if, say, yahoo tanked for specific reasons such as discovered fraud or something along those lines - where the rest of the tech market was unaffected.

[Spooky23]

Those types of risk mitigation strategies are expensive for retail investors, and in general complexity is your enemy as you age.

We think about market risk and forget about the downside risk imposed by neglect, fraud and incompetence.

[samstave]

I have the same story - I either joined just too late, left a month too early, didnt exercise, or got robbed by the acquirers.

[leemailll]

That sounds quite unfortunate for your stock options. But why don't you sell your options, pocket it, and set up an investment portfolio to reduce risk after the first crash?

[happythought]

Op admitted to being unwise financially, so your comment kind of seems like rubbing salt in the wound.