This is why I choose to not work for companies that do not have extended exercise windows -- and IMO neither should you.
[1]: https://blog.samaltman.com/employee-equity#:~:text=2)%20Most....
Meanwhile growth had stalled, and competition was getting stronger. I left all my options un-purchased. 6 years later when they had a Private Equity buyout I probably would have made somewhere between a -50% and 2x return (depending on liquidation preferences, subsequent issuance, and debt). At best.. I would have had an non-liquid 12% rate of return, losing out to the S&P500 over the last 6 years.
I know the conventional wisdom here is that options never matter, but the reality is that they sometimes do, especially for companies that are experiencing solid growth. I recently made several hundred thousand dollars off my options from a liquidity event, and I hadn't been at the company for a few years.
It's a great perk, even if it doesn't end up amounting to anything.
Options is how you actually make money at startups. The salary is only enough to make sure you can afford to exercise your options regularly and not starve to death in an extremely HCOL area.
If you value options at $0 - just join FAANG and never join a startup.
That’s a lot of conditions, so IMO they don’t make all that much sense and I much prefer RSUs (maybe I’d think differently as a founder). Plus there are sharp edges like AMT. I’ve been an early employee multiple times at companies that had successful exits and never successfully had all conditions satisfied, and have ended up paying regular income tax rates but had more complicated taxes to file.
If joining a company as a non-founder I’d just take straight RSUs.
RSUs are just shares you don't own yet. When you hit your vesting dates, you don't have to DO anything, they just become yours. You don't have to pay anything to execute and often the company will sell some for you to pay the taxes on them.
I wouldn't say one is definitively better.. there are tradeoffs:
RSUs can be better because you don't have to spend money to get them and they're liquid immediately (or at least soon).
Stock options can be better because your pre-IPO price may be better than the public price but you have no guarantee they'll ever be liquid.
- Stock options are "cheaper" for a startup to give out than RSUs, so you get more shares, ie your equity is higher-leverage. So if things go well, you end up with much much more money than had you gotten RSUs (and yes obviously if things go terribly, you get nothing).
Options = salary
In other words: exercise them as SOON as they vest. I had two financial planners tell me that over 15 years (I fired the first one), and both were 100% correct in hindsight.
Over 8 years this paid off my house in a HCOL area. Sure am glad I turned them into a real asset!
What you can control though are:
1. Knowing your exercise cost in advance - sometimes you can negotiate for a bonus that can subsidize the cost
2. Getting a fair salary and equity cut based on the funding stage; even if you don't exercise all your equity, your package can at least be used in future negotiations: https://topstartups.io/startup-salary-equity-database/
3. Asking for the option to extend exercise windows if you choose, turning ISOs into NSOs
I don’t have the details to be able to say anything useful. But there might be a narrow window of tax circumstances in which 70% of the equity without AMT but with loan costs is better than 100% with AMT + marginal long-term taxes and no loan costs. (Such schemes make sense if you’re concerned about not being able to exercise your options on short notice after getting laid off. If you have the liquidity, however, set it aside, take the yield and hold form after talking to a CPA.)
I'm not 100% sure about this, but IIRC these programs are typically structured as a tax-free loan to you. If the shares end up worthless, the loan is then forgiven.
So while you may not be out the principle of the loan, or the AMT, the forgiven loan may be taxed as income at some point in the future.
Maybe it will work out better for some of you though. I feel like if you are not extremely passionate about a startup and you are not one of the original founders… great place to learn and build your career but don’t think it will make you rich
Or, much easier is to use a calculator like the one they link[3], and calculate your total taxes on your current earnings, calculate total taxes on the earnings if you were to exercise, and then subtract.
I calculate $81,599-$38,038 = $43,561 in additional taxes, rather than the $41,893 they said.
I agree with the author's take on ISOs:
> It’s a bit complicated – and dry – so if you have ISOs you should probably talk to your tax person
My opinion on ISOs is essentially that for some middle ground between "few enough ISOs that you don't trigger AMT" and "so many ISOs that the potential tax savings are more than big enough to pay for a financial professional", it's not worth it to try and exercise ISOs early.
AMT on ISOs will complicate your taxes for years to come: in some circumstances, you can recover some of the money you paid as AMT on the ISOs in future years -- essentially, ISO bargain element is a specific category of AMT-taxable income which gives you an AMT credit for future years, which you can recover with form 8801 [4]. For several years after my ISO exercise, I was able to eat away that credit by paying the AMT tax amount when it was _lower_ than my standard income tax.
1. https://taxfoundation.org/2022-tax-brackets/
2. https://www.nerdwallet.com/article/taxes/california-state-tax
3. https://smartasset.com/taxes/income-taxes#H3aXczXUcM
4. https://www.irs.gov/forms-pubs/about-form-8801I actually tried to enumerate the scenarios. When I hit five variables I realized the advice would be mostly worthless. That's 32 separate outcomes, some of which are pretty subjective, e.g. do I think this is a viable company?
Nevertheless, I've been down this road a few times. I have some wins and losses. I think this article misses an important point: Exercising is not an all or nothing proposition.
For example: If I join a startup and leave after a year, the difference between my strike price and the 409a price might be non-zero. I can still exercise a percentage of my options to avoid AMT. Maybe I can't exercise all of them without triggering AMT, but chances are I can exercise a fair amount.
If I'm offered an early exercise, I don't have to do 100%. I can do a number that fits my budget. I just have to make sure I file my 83b election form.
edit for a bit of context: Western Europe, renting, unlikely to be able to buy/invest into a house/flat, looking at gold ingots, not the nerve for crypto.
My current employer has (and uses) the right to repurchase any shares I hold at the current "fair market value" if I leave the business. That's also fairly standard for privately-held companies, it seems.
We help tech employees manage their finances and specialize in equity compensation.
Our essay on equity and taxes may also be useful to those looking to better understand stock options: https://manual.withcompound.com/equity-guide-for-employees-a...
That said, the common adage of 'winning the startup lottery' is very true. The likelihood of actually (i) joining early enough, (ii) getting a reasonable grant, (iii) having market conditions work in your favour, (iv) the company growing exponentially for years, (v) you actually being able to stay the 3-4 years to vest enough options, and (vi) a liquidation event happening .... is quite low. Most, if not all, of these factors need to happen together.
Other stats: $60M ARR, 120% NRR last year, almost 100% YoY growth during 2021, raised $110M at 40x revenue last year, high NPS, company still has over $110M in the bank, TAM is in the tens of billions, current market penetration is <5%, planning to go public at $200M ARR. So the potential upside is huge.
Work environment is great, I have a great boss and a decently challenging/significant role. I'm a senior engineer making around $170k/year.
I'm curious what you all think - is it worth the risk of staying until I vest? The alternative would be to join a public software company and increase my salary significantly (which would help so much right now - we need a larger house for our kids).
Vesting 2,875 shares per year
2,875 @ $(14-1.50)= $36k/yr
Assuming IPO @ $200MM ARR, public cloud SaaS benchmark rev multiple was roughly 20x last year before the crash.
That’s a $4B valuation, ignoring dilution from here to there:
$4B/70M shares = $57/share
2,875 @ $(57-1.5) = $160k/yr
That’s assuming the market recovers to a similar level, ignoring further dilution, assuming the company continues executing and doesn’t hit unforeseen difficulties, etc.
Can you make that much with less risk by changing jobs?
- Another consideration might be diversification if your vested options represent a large % of your portfolio.
- Another consideration, “work environment is great” isn’t something that everybody can say and this might be worth more than the raise.
If you truly believe they're valuable, then invest when they ipo.
So the worst outcome is that your strike is $1.28 you exercise at $3.13 (costing you $80k + $40k in taxes or whatever -- it gets worse the better the stock is doing, which is one of many reasons why early exercise of options is risky but good) but you're stuck in a holding period while you go public, then when you exit that period you're at $0.50 or something like that, and you've passed over into a new tax year, and you have no cap gains to offset the losses on the stock.
This happened to a lot of employees at dot com companies in the 2001 collapse.
Pick one man, they're not the same.
Does anyone actually work at a company because they do interesting stuff, rather than option terms?
Not quite really—I do enjoy my work and my time at my job, and I would sacrifice some compensation to work at a more interesting/meaningful/fun company. I don't price the enjoyment of 50% of my waking hours at zero, of course. But my primary purpose in working a job is making money, and I don't think that's anything to be ashamed about. I want to buy a house one day.
Very rarely. 99% it's all implement this API route or implement this react component.
Waste of time, but pays well and will let you retire early.
dvs: please convince me otherwise
We were in an ipo just recently with same-but-different setup:
- sold some immediately at the pop to recuperate the principal
- ... Note this may count as a short-term capital gain (< 1yr, ...) with higher taxes, so factor in. That makes a floor.
- In retrospect, I should have examined the P/E ratio and sanity checked revenue growth against growing into a reasonable P/E multiple, and raised the floor based on that difficult road, but was lazy :) There are other ways to quickly handle risk for the private/public transition: something is better than nothing.
- we kept the rest bc we liked the company long-term, incl.desired risk, vs wanting to pay taxes to diversify it. It of course went way down below the pop, and markets now stink, but everything at this point is 'free money' that we are ok with. We view it as a long-term holding so are ok with that
- If it fails to go an upswing over the next couple of years, we'll sell at a more forgiving long-term capital gains tax rate. Likewise forced to bail sooner if tanks below market.
Everything happening now is basically profit, and we are ok with most outcomes. The real risk was pre-IPO, and the rest is about profit handling. If we had held even earlier-stage shares, as in the early employee or VC case, we would have sold more.
The question is to sell them and invest the cash somewhere better(??) or HODL.
As counterintuitive as it seems, the book actually recommends buying stocks in a bear market since they are priced reasonably. Warren Buffet's famous quote comes to mind: “Be fearful when others are greedy, and greedy when others are fearful.” The book also talks about the importance of long-term investing and discipline.
Look at how far behind the Fed has gotten: https://www.longtermtrends.net/real-interest-rate/
It implies increasing demand for alternative assets like art and collectables, and maybe small land purchases. If there's something you know about or enjoy, it may be worth just getting into buying something, like antique motorcycles, painting and sculpture, photography, classical instruments of the non-piano variety, fancy watches, wine auctions, and other niche high end collectables. Even the top level hi-fi systems from niche makers (McIntosh, Luxman, Audio Research) with limited supply look like they could still be in demand in a decade, just like a good 1970s amp or speakers still costs more than an iPod.
If these sound extravagent, the alternative at that level of investment is to buy a small crypto mining rig. Personally I would rather just take the hi-fi system or the instruments. :)
s/decimated/devastated/
Decimated means 10% death rate (usually as an brutal lesson). Did stocks lose 10% or did 10% of stocks just get liquidated?
During the dot com crash in 2000-2001, investors sold all the way down to the bottom (and lots of them sold at the very bottom), and then they eventually sold all the way up to the peak, when instead they could have just held onto their shares.
Rebalancing doesn't really work. That's another thing Bogle showed us.
Of course, if you need the cash, that's another matter. But then you arguably shouldn't have invested it in the stock market to begin with. If you have a time horizon less than 5 years, the market is just too volatile.
holding stocks as they go down in price does not necessarily matter. It only matters at time of sale. Selling an index (or a particular stock or set of stocks) as they go down only to buy them again later is not the right strategy... you're incurring transaction costs at the very least and the fact that you cannot time the market means you'll probably lose out even further.
Hold the index, unless you need the cash flow or forecast that you need more buffer for flexibility and don't want, in the short term, to be penalized for volatile stock prices (e.g. in case you need to sell to service some cash needs).
And if you have the cash, continue to buy the index on the way down. If your view is that the market, over the long term, is the best generator of wealth, then continuing to buy into it is the more rational strategy.
Inaction is sometimes the best action. There are more ways to be dead than being alive.
as consumer prices are surging this no longer may be true
my bet is on physical assets: guitars, gold, watches
Otherwise, Either a targetdate fund, I use VFIFX which should give most benefits of a bull market while giving some cushion due to its diversification.
Or, just a nice total market index fund should be a good option. It may drop a bit but it's as diversified as it gets. I use FZROX, but there are many others.
Some good FTSE options paying nice dividends:
https://uk.finance.yahoo.com/quote/EGL.L https://uk.finance.yahoo.com/quote/TRIG.L https://uk.finance.yahoo.com/quote/UKW.L
Uranium spot price should also be stable/grow depending on many factors:
https://uk.finance.yahoo.com/quote/YCA.L
Disclaimer: far from an expert.
That said; during times of uncertainty cash is king so my advise is to keep it in a time deposit for 6-8 months and wait for the markets to stabilise.
Based on yesterday's fed FOMC guideline they believe there's still a long way to go before they tame the inflation and they are likely to raise interest rates as high as 4%. I don't know if markets have priced 4% in yet or not. All this is to say next 8-10 months are going to be extremely choppy/volatile.
Once you see signs of stability and recovery you can enter equity markets through DCA.
The problem of course is we often don't know either of these things, and having better cashflow, or a pile of savings, now might help you weather the coming storm.
As a companion to the sibling comment recommending the Intelligent Investor (realize that index funds didn't exist when Graham wrote that), I'd keep in mind the mantra, "price is what you pay, value is what you get".
If the holding-period is decades, there are good arguments in favor of stocks/index funds. Shorter-term than that, it may be difficult to provide guidance with any real certainty.
Alternatively keep cash.
- Several hundred dollars each of tuna, prosciutto, a wheel of Parmesan, jerky, rice, flour.
- If you have an oil/wood heater fill up the tank. If gas buy plenty of wool sweaters.
- If you have to drive to work, get a scooter.
- If you live in Czechia, or Finland, (you're not Swiss I gather) a rifle, shotgun and/or pistol. Otherwise upgrade your locks
- Any left over money (if any) buy an assortment of gold, silver and what not.
This might all seem doom gloom, and it is. But inflation is the least of our concerns. We're headed straight to an early 90s Soviet style collapse of our economies.
Why shouldn’t I spend like an Italian small-town bachelor in 1975, if the world is ending anyway.
If this whole societal house of cards comes tumbling down, though, I think most of the people posting on HackerNews are going to be screwed (relevant: https://ext.penny-arcade.com/comic/2019/03/15/deer-diary )
Same with flour, really
Source: Me w/options in two startups that were acquired by public companies.
10 mil * .001% = 100 shares
- Sure, some long island hedge fund genius is probably smarter at finance than some bay area VC for reasoning about most public companies
- But the professional VCs who have been in a specific company for 4-10 years, watching the team+category outperform 90% of the rest of their portfolio & their many competitors, and fighting for them round after round & pivot after pivot, have a much better sense of hold/sell vs some quant who doesn't know all that. That's a lot of insider knowledge for a finance professional.
https://en.m.wikipedia.org/wiki/Etymological_fallacy
The word "decimate" is explicitly mentioned in the article above.
12% is the high end, but what are the probabilities of smaller results? 12% might be the outlier and the expected value might be hovering around zero or less.
Is this generally true? I’m not sure it applies for the typical engineer joining a larger company (a Databricks or Stripe, say) where you’re not really affecting the cap table all that much. Do companies really give out more options than RSUs?
My one personal piece of anecdata here is when considering an offer from a startup (that I didn’t take), they offered during negotiations to change the mix of RSU+options into just all RSUs (same total number).
Sorry, that's a PhD-level question, I'm still at options 101. :(
That option is a certificate that gives you the ability to purchase a share of the company at a specific price (the strike price). Usually when people say "buy their options" or "exercise their options", they are referring to buying the _stock_ that their options gave them the ability to purchase.
So if I join a startup, they grant me 100 options with a strike price of $0.50, and I decide to exercise them, I would write the company a check for $50 and get 100 shares of the company in exchange.
If you think the company is going to shutdown, or sell at a lower valuation than your option's strike price, don't exercise them. Your shares will be worthless.
If you think they'll succeed and IPO or get acquired at a higher price, buy them (factoring in any potential tax implications, like AMT). It is a risk.
Then you're at parity with never exercising.
Exercise, no successful IPO: lose $x exercise cost
Exercise, successful IPO: lose $x exercise cost, gain $y share sale benefit
No exercise, no successful IPO: gain/lose nothing
No exercise, successful IPO: gain/lose nothing
Service exercise, no successful IPO: lose nothing, maybe gain some AMT credits or capital loss carryovers
Service exercise, successful IPO: lose $x exercise cost plus interest, gain 0.7*$y share sale benefit
Your best best case is exercising yourself and getting the IPO, but you have to weigh that against the likelihood of it occurring and your personal risk tolerance for the $x cost to exercise.
I would never buy a lottery ticket, but I will always accept even .01% of a free lottery ticket.
Actually trying to time the market is largely a fools game, but people do get lucky. Or more often realize they shouldn’t try and time the market.
Say there is a 20k car you need to get to work that you should purchase within a year. Then assume, in a simplified scenario, you can either take out a 6% annual loan, or just save up the money for a year and then buy the car.
Now say the car raised in cost with inflation at 10%. In one year the wait and save will mean the car new costs $22k where as if you had just taken out the loan it would have been $21.2k.
Typically the loan isn't the best thing you can do because a.) inflation isn't that high and b.) there are other ways to generate revenue with your money if you have it one hand.
I still see plenty of those wacky startups offering 0% interest for a year. I made a $10k, necessary, purchase for my home last year using one of those and going to save quite a bit by doing that.
There's also the darker truth that if shit really hits the fan, you can always default on debt, often without real risks of your stuff being repo'd. There's no equivalent if you wait to purchase something in the future.
There are lots of people with zero shares and a simple dream to own their home. This is looking hopeful for many.
Ignore the "be greedy"* part of the person you are replying to (although your hesitation is kind of proving their point a bit) but follow the advice of the Intelligent Investor.
When markets go up, everyone is happy to continue to invest. When they go down? People stop investing. That's precisely what you shouldn't be doing. Staying the course and continuing to invest regularly is key. When markets are sour that's when people get nervous and alter their behavior.
* Want to be greedy? Start buying Coinbase stock and Bitcoin. Notice how everyone is scared right now?
Bitcoin does not. There's no reason at all why Bitcoin can't go to zero in the next 10 years. The stock market (as a whole), not so much
Of course, if the system collapses green pieces of paper will be just as valuable as any stock certificate.
I'm not sure who were investing past mid-2021, to me there was nothing at all publicly investible for the long-term at that point. You were guaranteed an inflation-adjust loss just looking at how deeply negative real rates were.
Personally, I went mostly cash and TIPS last year. You should too.
if SPY dips below 250 then you'll start seeing the fear of god in some faces.
https://leetcode.com/ is a website famous for listing a repository of programming exercises that you can solve by implementing an algorithm categorized as Easy, Medium, or Hard depending on its complexity. Many technology companies, including, but not limited to, Facebook, Amazon, Apple, Netflix, and Google, (aka. FAANG) use the same type of problems during technical interviews to evaluate candidates’ problem solving skills.
This is known in the industry as leetcode because the leetcode website is entirely dedicated to practicing said problems and has entire categories dedicated to the leaked algorithms questions from these big companies.
EDIT: that's not right. please see below.
Individuals can buy $10K/yr. Married couples can each buy $10K/yr, and you can buy the same amount for children.
Also, businesses can buy $10K/yr, trusts can buy $10K/yr, and you can purchase $5K/yr with a tax refund.
It would be not unusual to be able to buy $45K/yr (4-person household), and if one of the family is self-employed, $55K/yr.
....
That said, don't buy lots of I bonds without first considering the advantages of TIPS!
https://www.treasurydirect.gov/indiv/research/indepth/ibonds...
This is what a market does. Risks are taken and the result is that some will lose out. People are not guaranteed profits. Until you are a corporation with enough influence in government it seems...
This presumes that the number of people this helps is equal to the number of people this hurts. That's unlikely, given how wealth concentration tends to work in capitalist economies (that of the US included).
But yes, we need to address the root of the problem - the root of the problem (as applied to housing) being the fact that land is treated as ownable property in the first place. That's fine and dandy, but that produces rather nasty externalities that are long overdue to be internalized - specifically, via land value taxation.
This is a great reason to value options at $0 when taking an offer. It's a lottery and you shouldn't assume you'll see any money from then. If you do, it's all gravy.
>Her company went public and the stock jumped and then crashed,
Did you miss this part?
The question is to sell them and invest the cash somewhere better(??) or HODL."
Cash is a market though, just a different market. If you hold cash you're in a particular market, one that has earned significant returns measured against equities this year. (of course, depending on timespan you may want to pick _which_ market you think best)
It's been strange indeed. My highest yielding investment the past couple years was buying a new vehicle. Conventional wisdom says new vehicles are horrible investment, but in this market it's exceeded yields of every single asset in my pretty diverse basket.
It goes back to the realization that no investor can predict the peaks or troughs of the market, so getting out of the market is effectively trying to time it. One may be lucky and get out at the peak and then buy back in at the bottom, but on average you will lose money this way.
What about the last 100 years?
Dollar bill from 1922? Lose, but mostly because the fed reneged on their obligation of gold backing.
I believe If you held 100 years from 1805 to 1905 there wasn't much inflation at all.
So it really depends.
(But since you speak of a diverse basket, you probably know this already.)
Wait, what? Rebalancing has worked very well in my backtesting, assuming the fairly generous trading fees I get, at least.
What are you referring to?
His main argument was rebalancing effectively switches high-returning assets for lower-returning ones. If one part of your portfolio did better than another part, why would you get rid of it just to bring the asset allocation back to your target?
Rebalancing will also generally generate capital gains in taxable accounts. If you're aiming for 60/40, but your stocks are now up and it's 70/30, selling those stocks to bring it back to 60/40 again means you will pay capital gains on whatever you sell.
The data shows you can get better returns by rebalancing weekly, but this is really too much for most investors, unless you use something like M1 where rebalancing is a single button click.
Of course, there's more complexity to this question. The above mostly applies to the accumulation phase. To someone in, or close to, retirement, for example, having a portfolio that's drifted too far into stocks can be a risk.
Because of reversion to the mean. Rebalancing should insulate you from weird outcomes like 90% of your money being in GameStop stock then crashing to nothing a week later.
Pretty much every professional fund of fund rebalances, including those by the company Bogle founded. This is weird advice.
In other words, to the extent good historic performance says anything about future performance, that effect is already priced in. This means you shouldn't hold on to a historically good investment just for that reason -- it's just as likely to be a loser going forward.
If you determined that the amount of risk you're willing to put into equity is 60 %, the only thing that happens if you let it drift up to 70 % is that you increase your exposure to equity higher than you originally intended.
Maybe you have good reason to do that, but historic good performance is not that reason.
Edit: Bought all the way up.
The whole point is you have no clue when the bear market will end, and a lot of the recovery happens in the first few days (or sometimes even just the one day) of the new bull market.
Trying to pull in or out means you miss out on the best gain days.
They are lottery tickets at best. Yes, sure, someone sometimes wins big, but the odds are not in your favor.
If you really do think they're worthless THEN JOIN FAANG.
I would wish you the best of luck, but sounds like you don't need it.
For every one person who got lucky and think it was because they chose well, there are nine you never hear about.
You shouldn't value them at $0.
> If you value options at $0 - just join FAANG and never join a startup.
This assumes that people only care about money and not about job satisfaction, mission, team, more scope/control over the company's future, etc. There are many good reasons to join a startup. Making money isn't one of them.
Sure, options are how you get rich from a startup, but you dont get rich at a startup by working for one, only by being a founder or an investor.
That's why I work at a FAANG:P startups exist to screw their employees
I’ve written small (<$50k) Series A cheques into companies where employee no. 20 made more than I did. That’s fine. They invested a hell of a lot more and put much more on the line. Options shouldn’t be counted on. They’re high risk. But no need to be that cynical. Plenty of people want the ones they were in the trenches with to win big when they do.
Why not just become The Rock? Dude makes way better money than Google pays.
If I thought I could pass the tech screening, and then deal with big company bureaucracy I would tomorrow. Instead, I'm a tech generalist who also doesn't mind handling business or selling, and I have a low BS tolerance. I've done ok in small companies over the second half my career, but I certainly made less than big tech.
I got in by doing a slight pivot from software engineering. But I definitely tell a couple of younger relatives who just graduated to do the monkey dance.
Basically, yes.
Most (large majority) of startups can't pay market rate salaries. So if you value options literally at $0, then a startup is only an underpaid overworked job, so skip it.
So to even consider a startup job, you need to mentally give some expected value (probability * value) to those options. The probability is going to be very low, so the potential value needs to be high, i.e. don't join without a significant option grant.
Tons of startups and mid sized companies give you an ok salary and some serious advantages.
Even ex fangs end up there because of those advantages.
FAANG pay was ridiculous, and there are also great things to learn there as well, but I value my startup time much more in terms of my own growth.
Sorry, I meant on exit. They built up more equity over the years through employment and cashed out. This wasn’t a blockbuster exit either.
I wouldn’t want to spend years of my life on a 1 out of 10 chance.
That "carpool as a service" startup might have had a great business strategy up until a pandemic showed up. And if you're spending 8-10 years waiting for a payoff, you only get ~3 shots to pick correctly.
Your lottery ticket remains whether you are working there or not. The only reason not to leave after 4 years is if you are a founder or the company is giving you extremely generous compensation.
I sometimes feel like no one on HN actually enjoys what they do. It's strange.
I’m older (48) and fell into BigTech via the cloud consulting division - cloud application development. I never had to go through the leetcode grind. But my path was very narrow and I recommend that people go through the leetcode grind.
I’m switching to programming as a full time career now after coding on my own for a long time.
I’m now trying to pivot to getting any meh job and then grind through leetcode in spare time. Vs do the grinding and possibly find myself unable to get a decent job.
Of course I’m not necessarily going for big tech for either first career job. Just as close as possible with the leetcode and hope to be in there after the 1st.
—
Will you have to do the leetcode grind if you switch job and want to “level up” as it were to an even better job and company?
From what I understand, for more senior level software development positions, they still put you through coding, system design and behavioral.
If the company is growing so slowly that you could get a meaningful refresher grant, then you should move to another company that is growing faster.
The worst thing you can do is spend too long at a loser company when you are early in your career. And it often is hard to tell when you don’t have a lot of experience. That’s why rules like “don’t spend more than 4 years at a company” and “don’t put all your eggs in one basket” are good general roles even if you like the company/job. Because you might like the other job just as much and make 10x the compensation if the lottery ticket hits. I have many friends that hopped from jobs they liked to Airbnb circa 2017-2019 and… they are all very happy they decided to get another lottery ticket.
When you are later in your career it’s much easier to pick jobs and companies you want to work for because you know what you want and you now what questions to ask before you join.