Conversation

Andy Matuschak
@andy_matuschak
This question's gauche, but: given the prevalence of $400k++ comp packages for ~30-year-olds in Big Tech, why aren't there lots more "gentle[wo]man scholars"? i.e. people quitting to do non-remunerative creative projects I can think of some, but shouldn't there be thousands?
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stephanie vacher
@awesome
those packages are for people who work in fields that aren't typically over-saturated, usually with a guarantee that the company will continue to support their practice by providing them with an R&D team and/or the tools/infrastructure to do what makes them happy ¯\_(ツ)_/¯
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stephanie vacher
@awesome
also if you divvy up a comp package it's typically a combo of base pay, starting bonus and RSUs (which take years to vest and are taxed as a bonus). in CA the taxes are high, which i'd argue is a good thing, but should be considered when doing personal finance napkin math
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stephanie vacher
@awesome
a $400k comp package would prob. be: $200k base, $40k starting bonus, and $160k in RSUs. taxes eat 40% of the bonuses and out of base $200k in CA you're left with just shy of $130k/yr take home. yearly bills: 1 bed + den is $42k/yr, bills/food: $12k. car: $6k. student loans? eek.
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stephanie vacher
@awesome
let's assume you're 30 and are left with somewhere around $60-70k per year after bills. if you have student loans, you're paying those off first. so let's assume 4 years pass, and your RSUs vested fully- uh oh, you should still wait a few years to avoid short term cap gain taxes
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stephanie vacher
@awesome
ok now you're 36- you invested your bonus and lived like a monk, and the RSUs thankfully went up in value (you're just gambling if they tank, which they can and occasionally do). so let's say after taxes (why yes, more tax! get to know cost basis!) for simplicity, you net $160k.
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stephanie vacher
@awesome
assuming it took you 2 years to pay off your student loans, you've now saved up 4 years of the extra after-tax take-home pay. congrats, you have $160k + $40k + $240k = $440k.. which is definitely not enough to live off of if you choose to quit that *very* well-paying job.
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