Here’s a piece of investment and career advice: If your job doesn’t give you a piece of equity in the company you’re working for, it’s time to move on.
May 22, 2013 – Andy Rachleff – Wealthfront
The other day we were modeling our typical client’s spending when we realized something disturbing – an average Bay Area-based young couple has to own equity in a business if they hope to send their kids to a good university and be able to retire well.
Investing well alone can’t get you there.
Our analysis found you need to work for at least one company where your equity stake can generate at least a few hundred thousand dollars after tax to make your economics work in the Bay Area.
The problem is the hole that opens up in a typical couple’s budget when they are in their late 30s. Three big pressures converge then: the mortgage on your expensive Bay Area home, and the dueling needs to fund your retirement and your kids’ college early so that you take advantage of compounding.
That’s why we say: You need equity to live in Silicon Valley.
And we say, you need even more equity to live in The Real Silicon Valley. Then again, you could always rent AND send your kids to Community College and Cal State AND move to Arkansas for your Golden Years.
Basically this is another one of those “We make $250,000 a year and we feel sooooooo poooooor” pieces. Please all join in this First World Problems Pity Party because in lieu of another crap house for your disapproval.