financial independence – Jimmy Chattin

Money Matters: Multiples and Millions

I am so miffed at all the financial reports and advice that states how many millions-of-dollars a person needs to be comfortable, to retire, et. al. Giving actual dollar amounts is pretty dumb. Every life is different, every account has a different spend.

Instead, multiples matter more than millions. That is already the common factor when it comes to advice of emergency funds (1 month, 3 months, 6 months, 12). I would have you make it a common factor of your financial planning!

Using actual dollars makes the rule-of-thumb calculations much harder than they need to be too. The commonly touted safe withdrawal rate of 4% for retirement (a term I will interchangeably use with financial independence)? Well, that 4% is the spend of one (1) year of living. And to figure out the wealth to support that withdrawal, we are told to take what we aim to spend per year in retirement, and divide by .04 – ick!

Rather, consider this: 4% is also one-twenty-fifth (4/100 = 1/25) of the total amount of expenses expected to keep in net wealth; flip that around (100/4) and that means 25x a year of expenses today suffices the 4% Rule!

And don’t get me started on how actual dollar figures change and decay (i.e. inflate) over time. Subjective and average numbers are not consistent, are not applicable to you nor I! The thief of joy is any figure that is not yours; get your own figures and your own confidence of how you are doing by standards lived by your reality.

So let’s talk more on multiples. We saw the common financial independence “4% Rule” is 25x a year’s cost; 5% (discussed as a more reasonable withdrawal, especially if looking to die with $0) is 20x (100/5); 6% Fat FIRE (live like a rockstar after work) is ~17x; etc.

Example: A person has spent about $60,000 in the last few years – they have a stable lifestyle they are content with and find enjoyment in. Cool. They feel safe with a tad more risk or vacation allowance than the 4% Rule, so opt to start enjoying financial freedom early with a 5% instead. That means, they will need 20x their spending in net wealth to secure their financial freedom.

$60,000 x (100/5) = $60,000 x 20 = $1,200,000 needed after debt

Or maybe they want to wait to retire for 10 more years. With a stable lifestyle, they might expect a 3% inflation to catch up after 10 years, so:

($60,000 x 1.03^10years) x (100/5) = ($60,000 x ~1.3439) x 20 = $1,612,680 needed after debt in 10 years to retire as planned

An easy formula too for figuring out bare-minimum wealth needs and more-than-enough hoarded (e.g. 17x [might make it work] to 33x expenses [any more is wasteful]). So long as we know a year’s typical expenses by having lived an authentic lifestyle, the rest is cake.*

Multiples offer more consistency, apply to a person’s unique situation, and are simpler napkin math that applies to 99% of people out there (I am being hyperbolic).

* How do we figure out expenses? The nitty gritty is for another post. I would suggest here to go through bank and credit card statements from the last few years for the full year (since things like insurance or car maintenance can jack-up by-month expenses). Getting these numbers in hand, I myself throw out plain averages – outlier years (lots of one-time costs or a long hiatus in the no-money-mountains) skew these pretty badly. Instead, either median (most common costs) or my preference of weighted averages (more recent years get counted more)** gives a clearer picture of what life spending has been like.

** E.g. You have 5 years of data. 5 years ago multiplies by 1, 4 years by 2, … last year by 5. Add all the multiplied results up, then divide by adding all the multiples up.

($ResultYear5 + $ResultYear4 + …) / (1 + 2 + 3 + 4 + 5) = $Results / 15 = Weighted Average Spend

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A shorty and hopefully a goodie.

I started my financial literacy when asking the Q from Tim Ferriss, “which of these, if done, would make all the rest easier or irrelevant?” That answer was and has been and might forever be money. It adheres to the principle of Ockham’s Razor, taking the simpler sufficing path. We have taken today the simpler path that will suffice for most general lifestyle targeting and financial independence freedom.

You don’t need millions, you need multiples. I do not think this misses the mark, so comment now or forever hold your peace 😁

Cheers to your freedom ~

Live Enough to Die With Zero

Die With Zero by Bill Perkins is one if not the top book of mine read in 2024. As a guy who has spent years coming to grips with finance, retirement, et. al, this one book changed my views of money fundamentally.

I hope Die With Zero will change your views too.

Will You Die With Zero?

The principles of the book are keen, yet they lack a tool to apply them to.

I made one to check if I would or could die with $0 left over in the bank. Cleaning that sheet up, here is a generic copy for you and your friends to check where you are now (money in, money out, net worth), where you are going (interest, growth), and how you too might live a life full enough to die with zero (life expectancy, retirement).

Make a copy to check it out yourself: Die With Zero Example

Remember, the goal is to live a full life so you can die with as close to $0 as possible – you can’t take it with you. Read the book for more excellent insight as regards to inheritance, lifestyles, and health!

Other Finance Heuristics

The above is a pretty plain tool, yet in an afternoon it can give insights to if a person is on the right saving and spending path.

It is certainly better than the over-simple “expenses x 25” (a 4% nest-egg withdraw rate estimate), “expenses x 33” (~3% withdraw), or “expenses x years-to-Social-Security” (an early retirement guess-timate).

That, or the “nothing is as good or bad as it seems, hedge 33%” (though this could shore up some extra security at end of life).

Let’s not forget the survival estimate using SS Social Security, which is “.7 x (years-to-SS x expenses + [end-of-life-age – age-to-start-SS] x SS-estimate)” – kinda icky.

If you really want to get into the weeds, spend a day with Finance Mentor or Projection Lab (I have no affiliation with either – I just like the apps). These go through details and life possibilities with much more advanced simulations, but they will not matter unless you are closer to or just had a major life event (e.g. divorce, lottery win, settlement, child, vast cost-of-living change, etc.).

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Comment what you think about the tool. Do all or most of these calculations show you have secured your future? Great! Count yourself freed from need – these tools exist to work for you, not you to exist to work.

Cheers to you making it through the finish line while making a grand time of it ~

Ready to Put Out the FIRE

FIRE: Financial Independence, Retire Early (or whenever)

I have been on the FIRE path for years. It has defined major decisions in my life and a plethora of choices ranging from jobs to travel to relationships. (Checkout the blog for all I have said on the matter.)

The times be a-changin’, my passions cooled… I may be ready to put out the FIRE.

Where FIRE Got Us

FIRE has fit me for how it answered the life question “what makes all else easier or unnecessary?” Financial Independence – breaking the shackles of debt from living – is the key, is the ’42’, for me. Looking around, it is the key for so many in the world.

Cutting costs has led me to an objectively better life of freedom, flexibility, and self-knowledge of what materials and activities are actually important:

Through a life of minimalism I can move all I own in a single personal vehicle.
I know the foods that both fuel and bring me joy day in and out.
Without little things to distract me, I have more time for friends, physical health, learning, and creating.
To optimize my net worth, I understand how to manage my psyche along with the “game” of society and finance as a whole.
Discipline is a lifelong practice, yet I can take a sense of pride in how far I have come in regards to my impulses and expectations and growth.
I fear virtually no ill or ailment – the bed I have made for myself can take very severe falls.

Being on fire for FIRE, I look towards hitting the milestones of FI *soon*.

Dowsing the Flames

But that “Retire Early” piece… One of the best suggestions on the FIRE scene is to take mini-retirements – from a month to a year or so – to try out that life. Find something to retire towards rather than retire from corporate work life.

See, I have tried that. In a way. A few ways.

Whether over times of unemployment or taking long vacations, I find myself hitting the same patterns:

Start projects again: Writing, roleplaying games, game mods, reconnect with friends, hike, travel, get involved in extracurriculars, playing a video game or two (the least likely activity to happen), and a few other things.
Rebalance finances and calculate how long a hiatus I can take in.
Experiment with alt income sources; these ultimately fizzle as I realize it is more optimal to either work “for the Man” or to take the time off.
Make great strides in the projects, but stop before crossing the finish line. (I suck in bringing things to market – I clearly am no entrepreneur.)
Experience encroaching loneliness as no-one else seems to be at the “leisure” time of their life.
Chastise myself for working even longer hours for myself rather than learn how to rest.
Begin to go stir-crazy as I repeat the patterns above, battling with a sense of FOMO as salaried income would further cut chunks out from under the ol’ FIRE milestone dates.

This can last up to six months.

Then the applications begin, the entertaining of inquisitive software recruiters, the prioritizing of coding and refreshing social-manipulation skills (i.e. interview performances).

And the cycle continues.

It makes me feel I will not retire anytime soon. That I am not ready for it without some serious self-work. In the meantime, it would be unfair to claim I am on FIRE.

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FIRE has been a useful guide. A maker of the person typing this out now. Yet just as a useful hiking stick no longer matches the terrain ahead – has not for a while – I can let to down with the sincerest of “thank yous” for getting me this far. I may find something else that sparks joy.

As I have grown over the years to come to better understand the world and myself, I can only expect that spark will return.

As I am ready to put out the FIRE of my life, how about you? Where have you pivoted in life, either from experience or necessity? Any learnings for the guy who is looking to replace his rudder?

Lemme know. Wherever your path goes, take care. Cheers to our journeys crossing in fair weather ~

#PaidMe2023

Restarting the tradition that began as a hashtag in the summer of 2020, I am back to share with you my data once again!

All the below are estimates using free online resources. Your mileage may vary.

The Data

THP – Take Home Pay (assuming only income taxes without contributions apply)
Inf – Inflation (not used for the year of writing, ’23)
CoL – THP normalized to national Cost of Living

Senior Software Engineer, L3
Base Pay: $175,000
THP (after effective tax of 32.54%): $118,050
CoL: $71,545 (THP / location’s decimal-percentage CoL)
Aerospace Company
Westside Los Angeles Metro Area, CA

Excluding all stock, bonus, and other amenity info. Checkout Glassdoor (use an incognito browser) and levels.fyi for great value-add resources.

Takeaways

California income taxes suck. Guess that is why so many CA tech companies offer stock and options, those taxed at a different, i.e. lower, rate!

I haven’t experienced too harshly the cost of living change – housing nearly triples the national average, but Airbnb and fully-furnished month-to-month options are perhaps 100-150% vs 200% higher. Not to mention what would happen with a roommate(s)!

Regardless, take-home pushes me ever closer to financial independence FI while allowing luxuries in some lifestyle choices (e.g. no need for roomies).

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That is it for this year! Checkout 2021’s data (skipped 2022 – the company gave no raises [I should be “appreciative” that the stock went up, which then proceeded to nosedive] before summer layoffs).

Wanna talk numbers? Would =adore= getting to hear! Curious about an offer or the non-base-pay bits left out of this post? Hit me up for a call!

It is dangerous to go out into the working world alone – I am hear for you. Until needed, I send you cheers in your pay and careers ~

You Are a Slave to Your Work

No argument: You are a slave to the work you need to do. Let you and I jump into why any other mode of thought is a delusion:

Getting Terms Straight

From the Cambridge Dictionary:

Slave – “a person who is legally owned by someone else and has to work for that person […] and has no personal freedom.”

Slavery – “the condition of being legally owned by someone else and forced to work for or obey them […] the system in which some people are owned by others.”

Free – “not having something that is unwanted or unpleasant.”

Work – “to do a job, especially the job you do to earn money […] to make a person or animal do a job.”

Job – “the regular work that a person does to earn money.” And, “a crime in which money or goods are stolen, or an action or activity that is dishonest or unpleasant.”

Money – “used to buy things, or the total amount of these that someone has.”

Reasoning

Making a leap in assuming you can connect the dots here, you need money to buy the things that make life survivable: Foods, clean water, clothing, shelter, medical treatment, etc.

All the above – at least in the United States – costs more than the means of production, and is actively denied a person without money. Without food, a person starves and suffers; without water, a person becomes sick and suffers; without clothing and shelter, a person is exposed and suffers; without medical treatment, a person suffers and dies.

(All this needs to be addressed further, so we go without mention of what makes life livable, e.g. means for recreation, time for rest.)

If prevention of suffering is one of if not the only fundamental Good in the world, then a person is obliged to have these things for themselves and those who depend on them. “Enslaved,” as the physical requirements of life are non-negotiable.

What Is Required, What Is Optional

Working in some way to cover the costs of merely existing is the obligation, the enslavement a living creature must carry out for the privilege of being alive.

This is a required enslavement, or experienced as a suffering (if the work be unpleasant) to prevent and reduce a greater suffering.

To care for others who are not able to provide for their existence – regardless of cause – is what a moral and just society is. Though not a total definition of a civilization ought be, without this care, “moral and just” must be left out of the society’s description.

Care for others is optional enslavement – we only have the morals we can afford.

Yet care for oneself, let alone others, is endangered when optional enslavement is required to earn the money to buy goods to sustain life.

What is that optional enslavement, not caring for others?

That enslavement is the excess beyond the cost of initiative, time, and material used to create the good, to exchange for the service. That is the money that funnels to one entity from many individuals. That is profit.

And profit is the name of the game in the United States – and by extension from the US’s economic and cultural global dominance, the world.

Treatment for This Condition

I am no financial planner, analyst, expert. This is not advice, because I do not know beyond a reasonable doubt the validity of the following. It seems to work out on the back of an envelope, though it is uncertain how it would apply to the facts of the world at large.

It is at least a start.

First, a definition of Profit – “money that a business [or person] earns above what it costs to produce and sell goods and services.”

Second, should there be profit? Yes – Communism tried to remove that incentive, and it led to a lot of suffering for entire populations. Profit can be the incentive to have taken the risk to do something that could fail. Yet, excess profit is excess optional enslavement to a job and thereby excess optional suffering for the unpleasantry of it.

Some thoughts:

Capped Percentage of Profit per Good or Service Rendered
- No one action will be more than an X percentage of the cost to create and provide the good or service, X being greater than the profit that might be rendered through other investments – say, stock – within a standard deviation or three. This leaves room for living well while also having cushion to make prices competitive by lowering them from the profit margin.
Progressive Tax of Profit Based on Market
- The bigger a single business gets, the less profitable by-percentage it gets, though the net amount continues to increase. It slows the formation of monopolies, allowing other companies to adjust and catch up, thereby encouraging competition. Further, production-cost-cutting is encouraged, as additional profit can be gained for a larger market share, benefiting the consumers while forcing innovation from the business and its competitors. Lastly, public funds are increased that can be reapplied where needed from the taxes, as is part of the responsibility of a society’s government (I forego chatting about such ideas here).

Compelled to Industry

Compel – “to force someone to do something.”

Industry – “the quality of regularly working hard […] in the production of goods for sale […] and makes a lot of money.”

You are compelled to industry, and therefor not free.

You are only as free by that which you can do without. Everyone is enslaved in some degree by the fact of being alive. Beyond those costs, and the costs of reasonable enjoyment in life, everything else is optional enslavement.

Yet the option is not yours.

By either or both through the means of your work or the profit for required goods and services, you are a slave to your work. This is the way of things, though it does not need to be so.

10 Posts 2021

Like in 2020, there have been dozens of posts in 2021.

So many posts cover everything from rewriting the famous Halo video game franchise, my understanding of Truth in our lives and the universe, book reviews, game conversions, game making, new game systems, work, finances, the pandemic, and so, so much more.

I share with you my impressions of the most viewed posts of 2021:

10. Truths About Relationships

Just in time for Valentine’s Day, this post struck a number of cords. Loudly.

I have had the opportunity and honor to experience many kinds of relationships from many different folks. I have also the privilege of being highly insightful of patterns. These are the things I have found that hold True for whoever, whenever, wherever, forever and ever.

Give this tenth-most-popular post a read – it will improve your current and future relationships (not to mention perhaps blunt a certain amount of pain).

9. Devaluing Your Worth

There are so many ways to screw up goals, self-worth, life… Devaluing the benefit of your own labor to others is certainly an all too common thing to do 😦

Read to understand your greatest obstacles to attaining what you are worth: Ignorance of your value, anchoring low, not shutting up, and you.

8. A Taste of Digital Nomadism

After two years of the COVID pandemic, I have a large amount of that flying under the social radar to experience life as a digital nomad.

My impressions, my insights, and more. Between the good and the bad of this kind of lifestyle, it might just be the one for you 😉

7. #PaidMe2021

A breakdown and normalization of my salary in 2021 (sans the flexible nitty-gritty of stocks, benefits, etc.). Since I am a Senior Software Engineer working for mobile games in Las Vegas, Nevada, this post helps normalize industry and position and cost-of-living to be the same (or at least relatable).

Knowledge is Power. Empower yourself with this post.

6. Pandemic America – Daily Bread

Not sure why this was so popular.

I talk about what was eaten since the Pandemic, its effects. A bit of slice of life ~

5. Truth: Attractiveness

Being attractive is universal in all things. From aesthetics to gravity, reality demands attractiveness.

This is a more complex topic than for this short blurb – arguably for the blog post too – though it should get you asking questions of yourself. And if you act on your responsibility to be attractive? All the better 🙂

4. The Importance of Putting Things in Order

Inspired by a “Death Walk” I take periodically, this post outlines the process.

Time required, subjects to think about, actions to take… Death Walks have defined my life since I started taking them three years ago.

While the Walks often (and likely ought) to bring tears and intense feelings, for me they have been some of the best pieces of clarity of my life. I hope you will find the same ❤

3. The 6-Point Story Structure of Halo

With the massive backlash against Halo 5 and Halo Infinite releasing late 2021, I gave my shot at fixing a series in trouble.

This post was the start, studying the fundamentals of the most successful Halo stories. Found a pattern, wrote about it 🙂

Now it is up to me to experience how Halo Infinite did!

2. The Value of Being a Professional

Tools and rationale I have been using for years. Part of a toolbox that has gained others and I hundreds-of-thousands of dollars over the years. How much more to come?

1. Lasers + Shields = Boom in Dune

Guess what movie came out this year? 😂

This post from May 2019 blew up like Dune did. As the most grounded real-life analysis of a sci-fi staple, the eyes on this post are well deserved.

Bonus: Most Viewed

With the Dune 2021 movie released this year, one of my first and one of my most nerdy posts takes the cake for most views this year. Lasers + Shields = Boom in Dune was written in 2019, but oh boy, did it turn my stats on their head 😅

Check it out! There’s some cool math there. (Spoiler: Dune explosions ought be huge.)

Also check out 2022’s most impressionable posts.

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Check the tags, check other posts – I make ’em weekly.

Give me your favorites from this last year. Preferably, something other than mine so I can learn something too 😉 Cheers!

#PaidMe2021

Remember the #PaidMe threads in the summer 2020?

It is fine if you don’t – they seem to have died out as fast as they blazed on to the Twitter scene.

To say that a lot happened in 2020 would be to understate and understatement. Now the situation in the US is beginning to stabilize (go get your sticks, folks 💉💉) with an accompanying boom in hiring.

But if people are getting hired again, are they getting paid enough?

With wages required to “live comfortably” rising, it is as important as ever to openly discuss compensation and DO YOUR RESEARCH.

I follow off of my own #PaidMe post from last year here in the possibly vain hope you won’t devalue your own worth (but who knows – this post may be showing me caught with my pants down).

Just as Adam Ruins Everything, without further to do,

The Data 2021

THP – Take Home Pay (assuming only income taxes without contributions apply)
Inf – Inflation (not used for this year, ’21)
CoL – normalized to national Cost of Living (compare this)

#TechPaidMe #GameDevPaidMe
Senior Software Engineer
Base: $123,000
THP: $92,967
CoL: $90,259.22
MZ, owned by AppLovin
Las Vegas, NV

Let’s talk about this.

Takeaways

I believe these are high numbers (if interviews with Las Vegas-based businesses are to be believed). This does not include bonuses, stock options, WFH, or other benefits (rough estimate would increase base pay 130% for that value).

The term “Golden Handcuffs” comes to mind, but that’s another post.

What also comes to mind is that companies can afford to pay you much, much more than they currently are.

And why aren’t they?

I’ve written on negotiating your compensation before and have linked articles all throughout this post. The resources are out there to both evaluate what you ought to be earning and how to muster the courage to politely demand more.

Use ’em.

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You ever want to discuss numbers? Let’s talk – 20 minutes is all we’ll need.

In the meantime, go earn your freedom! Don’t work too hard getting that bread. Drink water, take rest. Cheers ~

The Value of Being a Professional

Hey there! Before going on, know that I’m hardly a professional. Knowing what a professional’s value is, however, is invaluable.

This post is for you that need to double-check if you are being valued; for you looking for work so you know what’s acceptable to ask for and what an employer ought to be offering. For simplicity, I’ll be using my own profession of software development as the example to be used.

I’ve participated in the #PaidMe movement and laid out the tools I use to put together what my work is worth before. Now, to help you not devalue yourself or others, here are those tools applied!

Note: Having a pen-and-paper handy along with a calculator to figure out the value of your own work while you read may save your time.

Inflation

From 2019 to 2021 (now), inflation has been 2.88%. (This will be important as we’ll be getting some salaries from 2019.)

Because some of the following numbers will be multiplied by hundredths-of-a-percent, there is going to be some inevitable rounding. If the values are off by a few dollars, no sweat – you should be rounding up anyway 😉

Bureau of Labor Statistics

In the Spring of 2021, BLS has data from 2019 for the United States as it comes to compensation. In 2019, software folks (QA and dev) were most often paid $107,510 a year.

With a trusty map of 2019 pay for techies, we can take the national value and inflate it, leaving us an estimated $110,606.29 per year median.

The hypothetical $111K is contradicted by Salary.com’s reported $115,430 per year average. Since this is private company is only a statistically insignificant ~4% different, we’ll ignore Salary.com for now in favor of the official numbers (inflation and BLS).

Cost of Living

How much money one needs in different parts of the country changes drastically, even from suburb to suburb. Where your zip code is has a heavy factor in what you should be earning.

A few example metros / locales follow. I received two different CoL calculations in my recent research – Best Places in general had higher values while PayScale was more conservative. Naturally, I went with the former (what a shame to be underpaid):

Where	CoL vs National	Est. Min. Salary	Est. +10% Salary
Las Vegas	111.6%	$123,436.62	$135,780.28
Redmond	185.1%	$204,732.24	$225,205.46
Seattle	172.3%	$190,574.63	$209,632.10
Austin	119.3%	$131,953.30	$145,148.63
Washington	152.1%	$168,232.16	$185,055.38
Boston	162.4%	$179,624.61	$197,587.07
New York City	187.2%	$207,054.97	$227,760.47
San Francisco	269.3%	$297,862.73	$327,649.01
San Jose	214.5%	$237,250.49	$260,975.54

CoL Applied to BLS Median Pay

You, sharp reader, will have noticed that the numbers estimated above do not match up quite with the BLS values previously. That is because BLS does not always include bonuses, stock options, the size of the company a person is employed at, or what has been the best few years for software companies ever.

Expected Salary Range

Not every company has or likes to have the cash on hand to pay huge base salaries. Though cold, hard cash is almost always preferred, you can leave it up to a company to make up the difference in your value.

Base salary is usually less than the CoL and BLS calculations above, yet this does not take away from your value. You can accept this lower pay by expecting the company to exchange cash bonuses, equity, PTO, or other subjective boons.

A cash bonus usually is a lump-sum payment delivered every six-months or a year. Usually about 10% of your base salary, you can negotiate this percentage higher to make up the total value difference. If the bonus is variable, say, based on performance, only calculate for the “you did no more and no less than your job” value.

Equity is some investment in the company. My personal rule aside is to only accept equity at a 2:3 rate, where for every $2 of base pay being forgone, $3 comes in equity. Why? Equity is variable with the market and often delayed in being granted to you. There is no timely guarantee for your work to be properly compensated, nor is the opportunity cost for not having cash-in-pocket slight, so as equity literally costs the company nothing to give you, asking for more is always a safe bet.

PTO (paid time off) is a common benefit working at most companies. PTO comes as paid vacation, sick time (if separate from vacation), and holidays. Each PTO day is 8 hours but the value of the whole day is your daily salary rate, i.e. base salary divided by 250 days. Daily rate multiplied by the number of days is PTO’s value.

Finally, there are other boons that the company can give. Maybe it’s better healthcare, a shorter commute, a better title, work-life separation, etc. Tangible (physical, material) or intangible (time, feeling), only you know what’s more important than cash-in-the-bank. Always keep in mind that any boon you accept in replacement of direct pay is doing the other party a favor.

Glassdoor Et Al.

Every company changes in what they may offer potential new-hires. Glassdoor, Levels.fyi, and other websites have oodles of employee-reported data on pay, among other things.

If you are looking at a company that has a presence on one of these sites, use the site. Compare the ranges of base salary and other payment options to your BLS and CoL numbers. This gives you not only an idea of what other compensation to negotiate for with the company, but also a second set of values that may be higher than BLS + CoL (needless to say, increase any site-found value by at least 10% since site values do not account for CoL increases or inflation).

Tip: I always salary search using a Google Chrome Incognito window to do my browsing. Sites like Glassdoor track your usage, preventing further use if you navigate to a different page. Incognito gets around this:

1. 1. Arrive at a blocked page.
  2. Copy the website URL.
  3. Close all of the Incognito tabs / windows.
  4. Open a new Incognito window.
  5. Paste the copied URL.
  6. Tada! Unblocked. Continue researching your value.

Putting It All Together

You now know what you should be compensated based off of your research into the company, role, BLS, and CoL.

When the talk of money comes up, here is the handy equation to keep on hand:

Total Compensation = Base + Bonus + Equity + PTO

If you have other boons you are looking for, convey to the other party that you are taking these for granted, increasing your base or bonus or equity if the other party wants to take these boons away. Never Split the Difference is an astounding book (read it at least four-to-six times so far) that goes into more depth in how to handle leveraging boons that may not have an impressive dollar value.

Now, that total compensation ought to be a range, something like the fair value you found through research of median or average pay (whichever is higher), and at least 10% more than that. Propose the larger numbers and have the other party justify why they ought to be offering you less, giving a sense of disbelief the entire time (much more in Never Split the Difference).

Barring the most dire circumstances of survival, never, ever accept below the median or average pay for the role in the place you are bidding for. It is anti-social and masochistic and despicably weak. Don’t do it.

On the plus-side, if the other party counters above your expected compensation range, smile! Then let them know that’s a good base-pay starting point. “Now let’s talk about bonuses and equity.” Using the simple trick of adding 10% more to acceptable figures, you enable yourself to maximize your worth to the other party and to yourself.

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Having gotten through this article, how are you doing? Are you making out like Robin Hood, maximizing your value above par? Are you being taken for granted, paid pennies on the dollar?

If you need to be valued more, talk with those that pay you about increasing your compensation 10% if you are being underpaid by 10% or less. However, should the compensation be undervalued by more than 10%, you can still have a conversation with the payor, but it is also time to look at other companies since you have been clearly disrespected and taken for a ride 😐

Enough talk! Check your numbers, go get your value, and be confident that you are in the right (heck, you at least have the United States government backing you up). All the best to your endeavors going forward – cheers!

Investment Unicorns

Why, hello, there!

Jimmy here, with a short one (or at least, I’ll think it to be short) since I’ve more to figure out on this topic…

But! Maybe you’ll get some answers to investment questions on your mind or be able to answer some of the following 🙂

Definitions

When I say “investment”, I mean a stock or similar I’m going to hold for at least 5-to-10 years at least (my retirement horizon).

When I say “unicorn”, I mean what Warren Buffet does: Buy low when the business is quite expected to last long-term (ie decades). That ‘should’ be a rarity in this Bull Market.

What’s a “Bull Market”? It’s a time of elation and high emotion and high prices before a lot of sadness when the prices eventually go back down 😢 Simply, it’s a period of time in the stock market where prices for businesses go through the roof, whether or not the business is good at making money or has the capital to back up the asked-for price. In that, the price-per-earnings (P/E) ratio is typically high.

And lastly, “P/E” is an indicator on how much a company is being sold for vs. how much money it’s actually bringing in. 20 P/E is the rule of thumb for ‘fair price’ when the underlying company is expected to last a long time. 30 P/E is definitely considered high, while 40 or more is astronomical. 10 or less might be considered a steal, especially if the company has the long-term sustainability to flex profitability in the years to come.

Signs of Unicorns 🦄

So what do I look for that is an “investment” “unicorn” in a “Bull Market” (or any market)? A few things:

A low P/E.
1. For me, I have been foolish (we’ll look at that later here), buying company stock that did not have low P/E of at least sub-20. However, they’ve continued to grow in the longest Bull Market run in the last +120 years.
A dividend.
1. Having a dividend means the company will pay me periodically for owning it regardless of the stock price. To me, that sounds like passive income 💲
Brand.
1. Is the name recognizable? Does the company do something very well? Do people talk about it in positive terms and use it on the regular?
Longevity.
1. This one’s a little tricky. Is the company earning money in a stable way for more than 5 or 10 years, is it expanded well into the market making it hard for newcomers, and does it have to reinvent product rarely?

To me, a unicorn has <10 P/E (a “-” or no P/E means the company has negative earnings), a dividend, is a popular brand, and has lasted and will last into the future. If so, I’m ready to dump 10% of my cash reserves into it pronto! (Another tip from Warren Buffet.)

Past Unicorns

I started investing in individual stocks back in November 2015, 4.5 years ago, well before I heard about Financial Independence or Paula Pant or ready up on investing vs gambling.

Buying into Activision, Sony, Microsoft, I was buying into companies that made or financed video games because that’s the world I knew 🤷‍♂️ The only other thing I kept in mind was to buy when the companies where going down more than 10%. But really, I had no idea 😶

In the last year or so, I bought into more things. More Microsoft, more Delta, more Exxon, more Google, more Tesla, etc. Some have gone up, some down. But I tended to buy willy-nilly just because the company seemed like it would be around forever (except for Tesla, which I thought was way too low a year ago when I saw Tesla cars parked in lines outside my office).

So how did all that perform?

Unicorns Jump

Let me show you how certain things have performed – we’ll forgo looking at individual stocks but at funds or markets as a whole (all from Vanguard, and investment leader [seriously, go read up on them]).

For the following references, I’ll post the 5 and 1 year gains (or losses!) as of July 15th 2020. I’ll also include the current P/E ratios if available.

My Investments
- 5 yr: +30.01%
- 1 yr: +26.87%
S&P 500
- 5 yr: +51.72%
- 1 yr: +7.41%
Vanguard S&P 500 ETF
- 5 yr: +50.40%
- 1 yr: +6.16%
- PE: 31.50
Vanguard Total Stock Market ETF
- 5 yr: +54.36%
- 1 yr: +6.94%
- PE: 26.15
Vanguard US REIT Fund
- 5 yr: +1.00%
- 1 yr: -12.26%
- PE: 38.56
Vanguard Growth ETF
- 5 yr: +94.97%
- 1 yr: +25.25%
- PE: 37.72
Vanguard International Dividend Appreciation ETF
- 5 yr: +36.29%
- 1 yr: +3.37%
- PE: 22.31
Vanguard International High Dividend
- 5 yr: +3.40%
- 1 yr: -13.18%
- PE: 11.86
Vanguard Total International Stock ETF
- 5 yr: +2.31%
- 1 yr: -2.36%
- PE: 17.66

But what does it all mean???

It means I was dumb 5 years ago. As is the common suggestion, put currency into ETFs. (Seriously, do it.) With a heavy leaning to the US, we see the S&P and Total Market Vanguard funds even outperforming the S&P 500 itself. Growth companies have been ridiculous over the last half decade. My investments compare their measly 30% gains with the 50% realized elsewhere.

However, I haven’t done too bad in the last year. While the world has entered a pandemic, I’ve maintained well-above-standard earnings.

Now, I could let this outcome go to my head. “Why yes, I am that smart and can game the system! I gambled on Microsoft and Tesla, why not do the same again?”

Yeesh – May cooler heads prevail…

Unicorns Don’t Exist

I’ve had a good run, yet I’ve proven I perform worse than the market in the long-ish-term.

Now, as P/E ratios of major stock holdings race past 30, past 40, when a rocket-launching electric-car battery company is off the S&P but more valuable than any other business on it, when we near a massive US election in November, when we’re in the middle of a pandemic with millions out of work and hundreds of thousands dead… I am getting cold feet.

“No, Jimmy! Listen to Buffet! Buy stock for life! Don’t try to time the market!”

OK, fine. That’s a good point. Buy for life if buying stock. Act as an investor, not a speculator.

Then what do I do?

Well, even Buffet and his former mentor Benjamin Graham call out gross P/E ratios. When a business is overvalued to a silly extent (30-40+), it’s fine to sell if that money can go to a better leveraged investment.

There are a few companies that fit that bill in my portfolio (*cough* Tesla *cough*). Where the money (and any more I venture to stick into the market) can go to Vanguard funds. They consistently do well, have dividends, and some aren’t too icky with their P/E ratios.

If I do want to gamble (ie individual company stock), use another rule of thumb: no more than 10% of total cash in individuals. That, and have a defined exit strategy if I start to “make it big” or realize “I’ve made a mistake”. It’s like taking a little money to the casino and serves the same purpose of having fun 🙃

Your Unicorns?

I’ve covered that I’ve gotten lucky in the short-term, but have under performed in the long-term looking for my unicorns. In conclusion, I can say for me and most others seeking to invest, unicorns are very rare and far between, much like investors Graham and Buffet.

Going forward, I’ll put the time of searching for unicorns into rebalancing my portfolio into a Vanguard diversified ETF spread 👍

Have you found a unicorn before? Do you have one now? Why do you think you’re one? 🤔 Keep me posted – I’d like to hear your investment lessons if they’ve worked out for awhile 😉

Cheers ~

#PaidMe

Hi, folks!

Guess who’s still in a strange land of finicky data? No matter! That doesn’t prevent writing a few things down 🙂

There’s been a few hashtags going around over the last few weeks. #TechPaidMe, #GameDevPaidMe, #PublishingPaidMe, #ComicsPaidMe, even just #PaidMe.

Think it’s about time I contributed to #TechPaidMe / #GameDevPaidMe. Why? Why not? Transparency in worker pay gives power to the worker. Gives power to you.

uncle-sam-29972_960_720 — Uncle Sam from Pixabay.com

My history has been thoroughly and chronically underpaid for the value brought. After reading Chris Voss’s Never Split the Difference, I’ll never do such things again. After reading this post, maybe you won’t be underpaid either. Sound good?

I’ll save you some time by crunching the numbers with 2020’s income tax for take home pay (THP), then inflation (Inf; doesn’t count Roth 401K and IRA contributions), then normalized cost of living (CoL; to a US national 100%) so you can get some decently useful.

The Data

(Skipping pre-2013 dev work as I was preoccupied with other things at the same time.)

2013
#TechPaidMe
Software Developer
Base: $45,000
THP: $37,816
Inf: $41,620.54
CoL: $54,122.93
Secure Banking Solutions
Madison, SD

That means in 2020 dollars, adjusted for cost of living nationally, I took home about $54K. Let’s continue…

2014-2015
#TechPaidMe #HealthcarePaidMe
Technical Services Problem Solver (customer support + custom dev)
Base: $69,000 (I think? I actually can’t remember. I just know it was under folks hired some 3-6 months after!)
THP: $51,757
Inf: $55,988.32
CoL: $50,079
Epic Systems
Verona, WI (Outside Madison)

2015-2016
#GameDevPaidMe
SDET II Tools Developer
Base: $66,000
THP: $48,387
Inf: $51,690.73
CoL: $40,926.94
Microsoft
Tigard, OR (Outside Portland)

2016-2018
#TechPaidMe #GameDevPaidMe
Software Tools Developer
Base: $75,000 (not including bonus up to 15%)
THP: $59,588
Inf: $60,842.61
CoL: $54,518.47
Aristocrat Technologies
Las Vegas, NV

At this time, I read Never Split the Difference among other books and Reddit posts. Continuous learning evidently pays dividends:

2018-2020
#TechPaidMe #GameDevPaidMe
Senior Software Engineer
Base: $104,500 (not including bonus; had a raise for a few months before a promotion with a final raise here)
THP: $80,179
Inf: $-
CoL: $71,844.98
Aristocrat Technologies
Las Vegas, NV

2021+
Checkout the post.

Despite all of the lower-than-expected pay, despite coming late to the FIRE Movement, I am well on my way to financial independence. No debt, minimal other expenses, and investment performance is set to CoastFIRE me in less than 10 years, FatFIRE in less than 15. If we suffer a crash in the markets, independence will happen sooner with savings on hand that were meant for buying property 2 weeks before COVID-19 locked the US down. #BulletDodged

If you feel comfortable in sharing, what have been your numbers in tech and game dev? I used to be very sensitive over letting others know what I earn, so I understand if all you get is a reference point for your future salary negotiations 😉

Before we go, checkout these resources that have been such boons to me:

Book: The Millionaire Next Door, Thomas J. Stanley
Book: Never Split the Difference, Chris Voss
Book: The Secrets of Power Negotiating for Your Dream Job, Roger Dawson
Podcast: Afford Anything, Paula Pant
Forum: /r/FinancialIndependence

It’s dangerous to go alone. Take this, and ask for what you’re worth ❤ cheers ~