My 1st Million At 33 – yes, you can do it too

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  • Archive for the 'Career/Salary' Category

    A big raise for this year

    Posted by Frugal on 28th March 2008

    This year’s raise is less than previous year, but my raise is still about the double of the average engineers in my group. It’s fairly good by any measure.

    One of the best ways to make more money is to invest yourself in your job and career. Whether it’s spending more time, volunteering, attending seminar and conferences, or picking up some broader knowledge. In the long run, it will pay off.

    I was blessed to be recognized for my contribution, after pulling off a mission impossible, delivering a complex design in less than 4 months, which would have been normally completed for 8 to 10 months. I was working about 100 hours a week for about the last two months during that crazy schedule. It was a mis-management on the product map, but engineering came in and saved the day.

    My working group has all the best people, so I probably won’t rise up to become a manager for another 10 years, even though I’m very experienced already. It’s very weird to have a (or multiple) former regional manager from a big company to work at the same (lowest) level as you are. But that’s just how good the quality of my working group is.

    Unfortunately, by the time when I could possibly rise up to the next level, I think my industry would have been either outsourced to Asia, or being taken over by Asian companies. High-tech industry in the US is getting less competitive as China rises up. Therefore, before my retiring age is reached, I will probably need to find another career.

    But I don’t think it would be such a big deal. I respect every profession as the necessary component of the entire society, and I’m sure I won’t have a problem doing something else.

    Posted in Career/Salary | 8 Comments »

    Getting Rich by Generating Wealth

    Posted by Frugal on 22nd February 2008

    I came across an excellent article while web surfing on How to Make Wealth. The article is extremely long, but the author is very impressive and had such a good understanding of the money matter.

    Here are some key excerpts from his article:
    1. Why is joining a start-up or starting up a company a good way to get rich? In a big company, you can’t get paid 10 times more if you work 10 times harder. Start-up is a place where you can work extremely hard and have an impact and possibly get rewarded.

    Here is a brief sketch of the economic proposition. If you’re a good hacker in your mid twenties, you can get a job paying about $80,000 per year. So on average such a hacker must be able to do at least $80,000 worth of work per year for the company just to break even. You could probably work twice as many hours as a corporate employee, and if you focus you can probably get three times as much done in an hour. You should get another multiple of two, at least, by eliminating the drag of the pointy-haired middle manager who would be your boss in a big company. Then there is one more multiple: how much smarter are you than your job description expects you to be? Suppose another multiple of three. Combine all these multipliers, and I’m claiming you could be 36 times more productive than you’re expected to be in a random corporate job. If a fairly good hacker is worth $80,000 a year at a big company, then a smart hacker working very hard without any corporate bullshit to slow him down should be able to do work worth about $3 million a year.

    2. Money is not Wealth: According to the author’s explanation, wealth is the stuff we want. Money is only a medium for exchange. The amount of money may be fixed (theoretically), but one can create new wealth (stuffs that people want) that is not already there.
    3. Measurement and Leverage:

    To get rich you need to get yourself in a situation with two things, measurement and leverage. You need to be in a position where your performance can be measured, or there is no way to get paid more by doing more. And you have to have leverage, in the sense that the decisions you make have a big effect.

    The jobs that can be easily measured for the performance and have an impact are CEOs, movie stars, hedge fund managers, professional athletes. A good hint to the presence of leverage is the possibility of failure. Upside must be balanced by downside, so if there is big potential for gain there must also be a terrifying possibility of loss. CEOs, stars, fund managers, and athletes all live with the sword hanging over their heads; the moment they start to suck, they’re out. If you’re in a job that feels safe, you are not going to get rich, because if there is no danger there is almost certainly no leverage.

    I’m going to stop quoting directly. This article is extremely powerful in its messages. And it really makes me want to do my own start-up company. I’m one of those workalcolics who can work 48 hours straight if necessary, and produce at least 3 times in quality output per hour. I once coded so many lines of codes in a couple of months, such that my small baby finger was hurting because of skin abrasion from too much typing.

    Anyway, if you get a chance, I strongly suggest you to read over the article. There is quite a wealth of information on How to Make Wealth.

    Posted in Career/Salary | 15 Comments »

    Book-smart or Street-smart?

    Posted by Frugal on 20th August 2007

    I just went to a college reunion with a small group of my old college friends. After more than 10 years, it’s amazing how much has changed, and how much has not changed.

    I’m the youngest among all, because I’m the book-smart guy who took the same classes with them, while at a younger age. In fact, half of my friends is older than me for this very reason since high school and college days. Being younger in your friends has the advantage of seeing things farther ahead at your age, while being out-of-touch most of the time except academics.

    Among my college friends, one guy is 12 years older than me, but I always know him to be very smart. He is the street-smart type, and never paid much attention to class work. When he went to college with me, he only wanted to get a degree, but not really learn anything from it, only because he was so much older and his focus was not in academics anymore. Despite his lack of (interest in) book-smartness, I often relies on his advice (even now) for his street-smartness.

    And by the measure of his financial success, he is far and beyond on what I may be able to achieve. Before the age of 45, he already made enough money and has retired for 4 years. Now he is back in (a different) business, aiming to bring a company to IPO, with two billion dollar revenue in a couple of years. Amazing, isn’t it?

    This is not to say that book-smart is useless (at least, I’m a positive example of this category). Rather, being book-smart gets you to the basics, but it does not end there. However, if you hope to being street-smart and out-smart most people, you should stop hoping and take actions. No success can be built upon day-dreaming without doing your homeworks. One of the quality of success is that it is relatively infrequent or rare. And for obvious reasons, a rare event cannot happen without someone working hard to make it happen.

    Whichever type you are, you should work hard. But know that statistically, being booksmart gets you to above-average lifestyle more easily, while only few percentage of the people being streetsmart goes far and beyond. So if I were making the plan for my children (or myself), I would always ask them to acquire the basics first before “going for the extra bonus”.

    Posted in Career/Salary, Miscellany | 7 Comments »

    Am I a workalcoholic?

    Posted by Frugal on 9th May 2007

    It’s 1am, and I am still working for my company. I am probably a total workalcoholic by most standard.

    Why am I still working? I just want to get this project done. The “problem” is that this project is due in June, actually June 2008. I want to finish this project so that I can move on to the next project which I have volunteered. Talk about passion for work, I probably have too much (well, it depends on what kind of work).

    Yeah, I’m very glad that I’m almost done with this June 2008 project. Still haven’t figure out one single mis-placed bit out of 16384 random bits tonight. But I’m sure I can figure it out tomorrow. I’ve probably squeezed in 4 months worth of work into 1 single month. Probably another week to go and I will be all done.

    I found the following article describing the true workalcoholic. By those criteria, I’m actually not that close as one:

    1. In your cellphone directory, 80% of the numbers are business contacts. The 20% others are friends you can call sometimes to give you a hand for your job. And you feel great about it.

    2. The last time you had a real deep conversation with the person you are living with and you sometimes remember you are in love with (what’s his/her name already ?) was… in January ? February ? 1999 ? Or something like that. But you truly remember it was dealing about your new promotion.

    The last time you had a real deep conversation with your boss was yesterday.

    3. You sincerely believe that your job is the best part of your week end.

    4. For their first 3 months in your company, the newcomers think your are the night watchman. Until they really get into work being assigned to your department.

    5. You always have so many things to do, to think about or to validate that having a clone or two would be helpful. Though, your job would be boring and so far, you can handle it.

    …Click to see the other 5 criteria….

    Why am I still working? Not for money, not for recognition. You can call this the self-motivation to be driven to success, or you can call me nuts. Either way I am determined to finish what I am doing so that I would get more “fun” to do. I guess the bottom line is that I like to do what I do at my work. The rest is secondary. But one very important distinction that I have from the above workalcoholic is that I know too well that my job is not my number one priority. Family definitely ranks higher. In fact, I have been going home earlier since my work progress has been too far along.

    Well, but then I come home, and work from home some more. Yeah, today I didn’t even have much time to blog on money/finance because of my work.

    Posted in Career/Salary | 6 Comments »

    Tips on How to Make a Million

    Posted by Frugal on 16th February 2007

    Just received March issue of Kiplinger’s Personal Finance Magazine. This is a very good magazine targeted at general public. The article of How to Make a Million gave you the eight tips (only 5 are shown to respect their copyright) and 11 examples of people reaching over a million dollar net worth:

    1. Follow your passion
    2. Seize an opportunity
    3. Exploit your talent
    4. Put in the time
    5. Learn the ropes (be employed first before becoming an employer in the same business)
    6. etc.

    After reading through the entire article, I found out that there are basically two types:

    1. The crawler: save/accumulate and invest/grow their money, given enough time.
    2. The passionate: yeah, somehow some people find their way into their niches. But ALL of them love what they are doing, whether it’s side-business, hobby, or their job.
    3. Got the message? If you are both, the chance of you making to a million will surely increase more.

      If you cannot love what you are doing on a daily basis, you cannot be successful in doing that. Success in what you are doing won’t necessarily bring you a great fortune. But without a success, it is pretty sure that you won’t get to a great fortune. And the other way is obviously taking small steps at a time, saving/accumulating wealth. Given sufficient amount of time, you will get to a big fortune.

      I can attest to you that I’m both. Definitely has helped me to reach a bigger fortune sooner.

      Posted by “Frugal” at My 1st Million At 33.com

    Posted in Career/Salary, Frugal Ways | 3 Comments »

    Ask for More Money When You Get a Job Offer

    Posted by Frugal on 25th September 2006

    This week’s Digg is at Free Money Finance which is one of the best personal finance sites. The thing that I like the best about his site is that he provides invaluable career advice that you should certainly check them out. Your career is probably one of the most important assets that you have. I’m digging his article “Ask for More Money When You Get a Job Offer” this week.

    Other articles that I think will be useful to many of you are:

    1. Nine Steps to a Perfect Career Fit
    2. Get a Degree and Manage Your Career
    3. Your Career is Your Most Important Asset

    Posted in Announcement, Career/Salary | 2 Comments »

    The right way to quit your job and what to do after

    Posted by Frugal on 11th September 2006

    My digg of this week is the article The Right Way To Quit Your Job And What To Do After at Financial FreeDumb. Quitting a job is a big step. Make sure you make a smooth transition between the two jobs. Financial FreeDumb has provided some of his thoughts on how to plan your ways out of a job.

    Here are some other articles from Financial FreeDumb that may be worth a read:

    Posted in Announcement, Career/Salary | 6 Comments »

    Engineering Salaries from MIT, Stanford, and Berkeley

    Posted by Frugal on 5th August 2006

    Ever wonder how much is the salary of the graduates from the top 3 engineering schools according to US News? I just came across the exact pages. Here is the 2004 salary survey for MIT(2005 data seems to be a little messed up), and here is the 2006 salary survey for Stanford. I couldn’t find the corresponding page for UC Berkeley, but from PayScale, I was able to find some salary information for UC Berkeley graduates. The PayScale data for MIT is here, and for Stanford is here.

    A couple of observations:

    1. The payscale data from MIT seems to be higher than the others probably because the percentage of highly paid engineers is bigger.
    2. From both MIT and Stanford data, it appears that the highest paid graduates are the computer science, or software engineers. This is consistent with the data in my post of Engineer Salaries in Silicon Valley.
    3. Comparing the data to the post of engineer salaries in silicon valley, both the new graduates from MIT and Stanford tend to be quite high. Graduating from a top school does help.

    Of course, both MIT and Stanford are private universities, and very expensive. The graduate program tuition at MIT is $32300, and the graduate program tuition at Stanford is $35184=$11728*3 quaters. Both figures don’t include any living expenses in the high-cost cities of Boston and Silicon Valley area. You are looking at an investment of close to $50,000 per year. Is it worth it? If you just invest in the shorter Master’s graduate degree (1 to 2 years max), probably it is worth the money. Comparing to UC Berkeley which is a public school in California, the tuition is only $4500 for CA residents, and $12,000 for non-residents. It’s so much more economical.

    Probably a more invisible benefit of attending these three schools is the school reputation. The reputation of these three engineering schools are very high. I have never seen them dropping out of top 3 spots, any of the years that I have checked. The reputation by itself can land you multiple offers a lot easier, and in a down cycle of employment, that could be the only factor that matters.

    Posted in Career/Salary, College | 16 Comments »

    Engineer Salaries in Silicon Valley

    Posted by Frugal on 29th May 2006

    The following 2006 salary numbers are from http://www.salary.com.  (Took me a long time to pull all these numbers out).  The salary is defined as total cash compensation (cash + bonuses). From my personal contacts & experiences, the numbers seem to be fairly accurate. All the experience levels are defined as follows:

    1. Level I: 0 to 2 years experience after Bachelor’s degree.
    2. Level II: 2 to 4 years experience
    3. Level III: 4 to 6 years experience
    4. Level IV: 6 to 8 years experience
    5. Level V: 8 to 10 years experience

    A master’s degree I believe counts as 1 or 2 years of work experience, and a Ph.D degree counts as 2 more years of experience beyond the master’s degree.

    I have used San Jose metropolitan area, and only looked up job titles related to IT, software, and hardware because they’re the more commonly held positions. Other good sources of salary surveys include http://www.engineersalary.com/, and IEEE salary survey which you need to sign up. Somehow http://www.engineersalary.com/ was giving a smaller salary number.

    Job Title

    25% percentile

    50% (median)

    75% percentile

    Software Engineer I

    57054

    64261

    71759

    Software Engineer II

    69680

    78013

    87687

    Software Engineer III

    82257

    91992

    102755

    Software Engineer IV

    99007

    109277

    121146

    Software Engineer V

    108396

    118815

    129968

    Software Engr Manager

    107251

    144540

    168786

    Programmer I

    54352

    61471

    69101

    Programmer II

    63227

    71120

    80328

    Programmer III

    79794

    90449

    101798

    Programmer IV

    93145

    104937

    118120

    Programmer V

    101645

    113366

    125687

    Network Engineer I

    61185

    70121

    81522

    Network Engineer II

    72530

    84018

    96087

    Network Engineer III

    88818

    102424

    115711

    Unix Administrator

    86539

    101505

    117370

    Webmaster

    68356

    81674

    98782

    Electrical Engineer I

    59568

    65512

    71383

    Electrical Engineer II

    70396

    78463

    86313

    Electrical Engineer III

    82583

    94489

    107386

    Electrical Engineer IV

    99243

    106999

    114990

    Electrical Engineer V

    115228

    124574

    134377

    Hardware Engineer I

    53110

    58237

    65744

    Hardware Engineer II

    62075

    70848

    78601

    Hardware Engineer III

    74289

    85399

    94336

    Hardware Engineer IV

    84128

    91916

    102182

    Hardware Engineer V

    94660

    103215

    118742

    Design Engineer I

    60769

    67821

    77379

    Design Engineer II

    74834

    82994

    96126

    Design Engineer III

    95297

    108677

    127039

    Design Engineer IV

    113352

    124909

    148304

    Engineering Manager

    110482

    128783

    152304

    Engineering Director

    163910

    178921

    203392

    If there are any missing entries, such as Design Engineer V, it is because it is not available. The last two entries, Engineering Manager and Director didn’t seem to be specific enough. I expect that the data may be mixed with all kinds of engineering.

    After my recent salary raise, it appears that I am still underpaid by about 10% to 18%, which will take a 11% to 22% salary increase to adjust to the market. Obviously, it is fairly unlikely to get such a big salary raise from the boss. The fastest route of adjusting your salary to the market price is still changing jobs.

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    Posted in Career/Salary | 1 Comment »

    Cautions on “Rich Dad” Robert Kiyosaki

    Posted by Frugal on 11th May 2006

    Many thanks for one of my readers, BlueDaze, for posting this link in the comments:

    http://www.johntreed.com/Kiyosaki.html

    If I recall correctly, I visited this very same link probably three years ago, when Kiyosaki only had his very first book on “Rich Dad, Poor Dad”.  I got all the negative information on Kiyosaki, which I never thought could be possible.

    About Rich Dad’s books, I have only read his first book “Rich Dad, Poor Dad”.  The only things that I walked away from is a good, but basic summary of how everyone makes money.  I must say that he was quite good at putting these things together as four quadrants of E/S/B/I (employee/self-employed/business owner/investor), and explained the cashflow & taxes of each quadrant.  But it was nothing new to me.  The rest of the pages is simply not helpful in getting a person to become a better B/I, or even a better E/S for that sake.  A couple of my friends are so enamored by his books and him, and even lent his books to me, and talked to me about his books constantly.  My only reaction is almost puking.  The Bible says NO IDOLS.  If you have ever contemplated on that commandment, it really means no idols of ANY kinds, whether it is a wooden statue, or a singer, or a book-writer, or any persons, or any physical thing.  I think no one should ever adore another to an exceeding extent.

    Robert Kiyosaki has a lot more books after his first one.  When I am in the bookstore, I never want to lay my hands nor my eyes on those books, so that I won’t waste a second.  In fact, I did pick up the Rich Dad’s series of OPM: Other People’s Money by Lechter because I was going to write a negative article on the book.  Actually, it turned out to be so much different than Kiyosaki’s empty talk.  Tagging the book as Rich Dad’s series is really degrading Lechter’s book.

    Unfortunately for the unwitting readers, this guy, Robert Kiyosaki, pretty much speaks of anything possible that can happen, and of course, these readers will be even more enamored by his “correct” prophecy.  Any valid predictions should always be properly stamped with the predicted timeframe.  If you don’t give any timeframe, or give a wide timeframe, you will most likely eventually be correct.  Just let time approach infinity, and all kinds of things can happen.

    Kiyosaki’s negativity towards E or even S is simply not correct.  A good education and good grades in school will give you a good paying job.  With a good salary and a saving habit, you can go very very far (as I myself have demonstrated, saving $360K in 9 years).  If there is anything that I regret not doing is that I should have listened to my parents, and given more thoughts to becoming a medical doctor.  If you know how much medical doctors can make, you will not be complaining to be a S (self-employee).  The savings that can result from the high salary or self-employee as being a doctor are probably 2X to 5X of my savings.  That really makes a huge difference.

    To all the young people who are still in school, I advise: To become wealthy, you need to start with first penny, and start with solid learning in school.  Don’t think that you can study later.  Life does not give you the luxury of going back in time.  The only time that you can study in school is NOW or probably never.  Going back to schools after having a family is extraordinarily difficult and only put unnecessarily emotional and financial stress on yourself and your family.  Mathematically speaking, studying to become a medical doctor or an accountant or a lawyer, has a much higher probability of becoming a (multi-)millionaire, comparing to daydreaming of becoming a successful business owner, or winning the lottery.

    P.S. You must click on the title to be able to comment on this post.  I don’t know what happened to WordPress.  Somehow it had a problem with this post.

    Posted in Career/Salary, Miscellany | 18 Comments »