HACKER Q&A
📣 lowiqengineer

What are the best strategies for a new grad engineer to build wealth?


I know about a few finance blogs but most don’t address folks like me - single, no debt, but crushed by high rent and a mediocre 401k match.

I currently put in 28% of my pretax income into my 401k and have been for 4 months now (only started using it in December 2018). So far it is not much and I have a similar amount in my mutual fund portfolio, but I’m concerned I bought in at nearer to the peak of the market.

Since my net worth is already pretty mediocre, what can I do to increase it more quickly? I’ve considered switching jobs but I’m resigned to the fact that I can’t get into Google or FB, and my current total compensation is unlikely to rise even to new grad G/FB levels.

Is it hopeless for me or should I keep pressing?

  👤 arthurcolle Accepted Answer ✓
28% is huge. Good job for doing that. Not many more options here. Reduce expenses or increase income, but remember to live a little! Also noticed your username and your thinking that you "can't get into FAANG." A lot of interesting work is being done at companies that aren't Internet company superstars, and if you enjoy what you're doing, you shouldn't be so hard on yourself. Just my $0.02.
👤 hello_moto
From the tone of your responses in this thread, you are definitely comparing your financial situation with your peers of the same age but at the same time you aren't getting paid like them and you have given up pursuing similar opportunities like your peers (or you missed the boat..)

There are a few ways to increase your net worth:

Spent less, move outside bay area.

Go work at Faang, but make sure you a++ the interview to negotiate higher pay and make sure you have competing offers as well. Kinda like hoping the stars align.

You can work day job and make money after work. Consulting, babysitting, dogsitting, sell cracks, online business, mlm, sell dreams (buy my interview preps to score 6 digits job), etc.

Jokes aside, welcome to the new phase of your life. This is when nobody can tell you what to do and no one can help you to decide what's best for you. Only you can decide what's best for you.

👤 gshdg
If the 401k limit is no less than 28% of your income, that’s a fairly low salary, although not totally unreasonable for a new grad.

My suggestion would be to focus on getting to be an excellent engineer. Ask for raises at every cycle. Put in 18-24 months at your current job. Then you should be able to get significantly higher comp at the next one.

When you get a higher salary, don’t increase your expenses.

As a new grad you’re not going to become a millionaire overnight. Building wealth is a game of patience.

But you’re already saving a lot, and that puts you ahead of the curve. Especially since you’re doing it early in your career when it will have the most time for interest to compound.

Put in 10 years of career growth without spending growth and you’ll find yourself socking away a whole lot of money. Put in 20, 30 years and you’ll find that wealth has grown.