I would prefer to save more and retire earlier. That would increase my chances to enjoy the retirement and make the person enjoying the retirement more similar to the person who saves the money. Also, the sooner I retire, the more chance I have to make money while retired—so I could just make a plan to retire as soon as possible after I have enough money to survive; and then optionally make some more money and add them to the retirement.
As a programmer, these days I make more money than I need, but I find it hard to imagine doing this job at 60. Not because I wouldn’t have valuable skills, but in my experience during job interviews most employers only care about familiarity with the few most recent frameworks—there is not much competitive advantage I could have against someone who just learned that at university; and in addition the young competitor will probably be willing to do a lot of cheap overtime.
Unfortunately, I don’t know how to do that. In my country, the rules for retirement change after almost every election. The money in the retirement funds is taken to repair some other part of economy, or is simply stolen. The state is willing to support old people with some small amount of money after a given age (which is gradually increasing), but beyond that, the rule of thumb is that the state will punish those who try to help themselves (e.g. have savings, have other income, etc.). The money paid “for retirement” is effectively redistributed, only a very small part or my “retirement saving” would actually influence how much money I get when I retire. (I am not even going to calculate how small part that is, because in five years the rules are going to change again, anyway.)
Okay, my point is… if I lived in a country with transparent retirement laws, and if I could put some money into a retirement fund and expect with high probability to get that money back, protected from inflation… I would invest as much as possible. And retire as soon as possible. And then, use the additional 8 hours a day to do something awesome (which could—but wouldn’t have to—bring some more money).
I need money to survive, but I need time to enjoy life. The dilemma is not just between “having money while young” and “having money while old”. It is also between “having no free time while middle-aged” and “having free time while middle-aged”. Sure, as a young person you will get more enjoyment of your new helicopter, than as an old person. But if your expensive helicopter remains locked in your expensive garage, while you spend your daylight at work, you are not enjoying it anyway.
Have you looked into opening an investment account in the US as a non-resident (so your government won’t be able to easily appropriate your money)? I’m not familiar with it myself, but a cursory Google search seems to indicate that it’s possible and not too difficult. Or if the US doesn’t work for some reason, some other country...
I concur with your sediment. I posted this on the munckin thread, but it bears repeating MMM Simple Math of Early Retirement. Going purely on your investments and saving(i.e. no government programs) you should be able to retire in 51 years if you save 10% of your income annually. However, if you save 20% of your income, it drops to 37 years.
MMM and Early Retirement Extreme advocate investing 50-75% of your income, if not more. This will let you retire between 7 and 17 years, leaving plenty of time to enjoy your retirement.
I fully agree with the last paragraph. When it comes to valuing my time, the less free time I have, the more valuable it is, and the less reluctant I am to spend it (the value of an hour of my time isn’t constant).
If I’m busy at a given time, it might not take much for me to go out of my way to help a friend; but if I’m really busy and they ask, there had better be some kind of incentive.
...upon reflection, that would be why people get paid time and a half for overtime.
What career paths are open to programmers? Do a lot of programmers go into management (head of a programming team), or specialize in something harder to learn? You seem to be saying that a programmer with 20 years of experience wouldn’t have that much of an edge over someone with only 2 or 3 years experience.
As an engineer, two of the popular paths are going into project management or similar, or gaining a high amount of technical proficiency in certain domains. Either way, these types of positions really do require the extra experience.
I am aware of four paths, but maybe I am missing something. 1) Get into management. 2) Become an independent contractor, or start your own company. 3) Stay many years in one company and become an internal specialist on their software. 4) Work for a software company that sells to other software companies (e.g. Oracle), and become a specialist on their software. These paths are ordered by a number of people I know who took them, which is probably not a representative sample.
1) Getting into management brings somewhat higher salary, but also more overtime and having to deal with bullshit on daily basis. Which means that your actual salary is almost the same or even lower, but you are supposed to get a big bonus when the project is successfully finished on time. Depending on the company, you may need to talk with your customers daily, telling them a lot of buzzwords and assuring them that the things you actually have little control about will all end well and on time; also if the customer wants to yell at someone, you are the person. If your company works for government, you will have to read a lot of paperwork, and cooperate with people who would prefer if everything failed and they were just left alone. It is a great choice if you don’t care about the content of your work, or if you don’t really have good programming skills, but you enjoy feeling “important”. On the other hand, if you are in IT because you love programming; well, that’s exactly what you will not do.
2) This seems to be the best choice. It requires some skills I don’t feel sure I have, such as networking and making deals with customers.
3) I could actually enjoy this, but there is a lot of risk. You have to spend many years in the same company, and there are some things that could go wrong and then a decade later you would start from zero again, because the skill is non-transferable. For example the company could get bankrupt, or someone else could get your place because of e.g. nepotism.
4) I never worked for a company like that, so I don’t know about the advantages and disadvantages. Could be actually a good choice.
Well, reading what I wrote… seems to me I should seriously put more time into networking and similar things. (But if I had an option 5 -- a safe way to protect my savings from inflation and use them for early retirement, I would certainly prefer that. And possibly combine it with some of the other options.)
But that may be an irrational decision. Where by “irrational” I don’t mean “emotional”, but “failing to calculate the costs and benefits of each option properly” (impacts of moving vs impacts of early retirement).
I would prefer to save more and retire earlier. That would increase my chances to enjoy the retirement and make the person enjoying the retirement more similar to the person who saves the money. Also, the sooner I retire, the more chance I have to make money while retired—so I could just make a plan to retire as soon as possible after I have enough money to survive; and then optionally make some more money and add them to the retirement.
As a programmer, these days I make more money than I need, but I find it hard to imagine doing this job at 60. Not because I wouldn’t have valuable skills, but in my experience during job interviews most employers only care about familiarity with the few most recent frameworks—there is not much competitive advantage I could have against someone who just learned that at university; and in addition the young competitor will probably be willing to do a lot of cheap overtime.
Unfortunately, I don’t know how to do that. In my country, the rules for retirement change after almost every election. The money in the retirement funds is taken to repair some other part of economy, or is simply stolen. The state is willing to support old people with some small amount of money after a given age (which is gradually increasing), but beyond that, the rule of thumb is that the state will punish those who try to help themselves (e.g. have savings, have other income, etc.). The money paid “for retirement” is effectively redistributed, only a very small part or my “retirement saving” would actually influence how much money I get when I retire. (I am not even going to calculate how small part that is, because in five years the rules are going to change again, anyway.)
Okay, my point is… if I lived in a country with transparent retirement laws, and if I could put some money into a retirement fund and expect with high probability to get that money back, protected from inflation… I would invest as much as possible. And retire as soon as possible. And then, use the additional 8 hours a day to do something awesome (which could—but wouldn’t have to—bring some more money).
I need money to survive, but I need time to enjoy life. The dilemma is not just between “having money while young” and “having money while old”. It is also between “having no free time while middle-aged” and “having free time while middle-aged”. Sure, as a young person you will get more enjoyment of your new helicopter, than as an old person. But if your expensive helicopter remains locked in your expensive garage, while you spend your daylight at work, you are not enjoying it anyway.
Have you looked into opening an investment account in the US as a non-resident (so your government won’t be able to easily appropriate your money)? I’m not familiar with it myself, but a cursory Google search seems to indicate that it’s possible and not too difficult. Or if the US doesn’t work for some reason, some other country...
I concur with your sediment. I posted this on the munckin thread, but it bears repeating MMM Simple Math of Early Retirement. Going purely on your investments and saving(i.e. no government programs) you should be able to retire in 51 years if you save 10% of your income annually. However, if you save 20% of your income, it drops to 37 years.
MMM and Early Retirement Extreme advocate investing 50-75% of your income, if not more. This will let you retire between 7 and 17 years, leaving plenty of time to enjoy your retirement.
I fully agree with the last paragraph. When it comes to valuing my time, the less free time I have, the more valuable it is, and the less reluctant I am to spend it (the value of an hour of my time isn’t constant).
If I’m busy at a given time, it might not take much for me to go out of my way to help a friend; but if I’m really busy and they ask, there had better be some kind of incentive.
...upon reflection, that would be why people get paid time and a half for overtime.
What career paths are open to programmers? Do a lot of programmers go into management (head of a programming team), or specialize in something harder to learn? You seem to be saying that a programmer with 20 years of experience wouldn’t have that much of an edge over someone with only 2 or 3 years experience.
As an engineer, two of the popular paths are going into project management or similar, or gaining a high amount of technical proficiency in certain domains. Either way, these types of positions really do require the extra experience.
I am aware of four paths, but maybe I am missing something. 1) Get into management. 2) Become an independent contractor, or start your own company. 3) Stay many years in one company and become an internal specialist on their software. 4) Work for a software company that sells to other software companies (e.g. Oracle), and become a specialist on their software. These paths are ordered by a number of people I know who took them, which is probably not a representative sample.
1) Getting into management brings somewhat higher salary, but also more overtime and having to deal with bullshit on daily basis. Which means that your actual salary is almost the same or even lower, but you are supposed to get a big bonus when the project is successfully finished on time. Depending on the company, you may need to talk with your customers daily, telling them a lot of buzzwords and assuring them that the things you actually have little control about will all end well and on time; also if the customer wants to yell at someone, you are the person. If your company works for government, you will have to read a lot of paperwork, and cooperate with people who would prefer if everything failed and they were just left alone. It is a great choice if you don’t care about the content of your work, or if you don’t really have good programming skills, but you enjoy feeling “important”. On the other hand, if you are in IT because you love programming; well, that’s exactly what you will not do.
2) This seems to be the best choice. It requires some skills I don’t feel sure I have, such as networking and making deals with customers.
3) I could actually enjoy this, but there is a lot of risk. You have to spend many years in the same company, and there are some things that could go wrong and then a decade later you would start from zero again, because the skill is non-transferable. For example the company could get bankrupt, or someone else could get your place because of e.g. nepotism.
4) I never worked for a company like that, so I don’t know about the advantages and disadvantages. Could be actually a good choice.
Well, reading what I wrote… seems to me I should seriously put more time into networking and similar things. (But if I had an option 5 -- a safe way to protect my savings from inflation and use them for early retirement, I would certainly prefer that. And possibly combine it with some of the other options.)
Many countries make this possible. Is moving an option?
I would prefer not to move.
But that may be an irrational decision. Where by “irrational” I don’t mean “emotional”, but “failing to calculate the costs and benefits of each option properly” (impacts of moving vs impacts of early retirement).