36 with current NW of $1.5M (10 cash, 30 market, 60 retirement). Reside in a HCOL with a tech job that will eventually go away. I’m wondering if I had to severely downgrade my pay, would I ever be able to really get wealthy. I’m quite frugal and don’t spend much and although my NW sounds a lot, living in HCOL (by choice) makes me nervous. I’m thinking of switching to a non-tech job.

  • Make hay while the sun shines, worry about the rest later.

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  • I have the same situation and same fear. Here is how I look at it:

    People switch careers all the time. Maybe tech jobs become obsolete. You’ll transition to some other career (e.g., fed gov, healthcare, law enforcement).

    That job will probably pay $65k-$150k which will be a downgrade. You’ll have to live at or within your means.

    BUT with a $1.5m nest egg, you can coast and be fine. Even if you live paycheck to paycheck on a lower income, as long as you don’t spend the $1.5m, you’ll retire very comfortably with $3-6m in the bank plus social security plus a potential pension from your second career.

    You’re setup for success. Don’t let the anxiety sink in too deep.

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  • You need to run the numbers and settle down, and maybe live a little. You're going to have over $10MM before age 60 even if you never contribute again.

    Being nervous in your situation is, while understandable psychologically, completely irrational.

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  • 1) Why are you so confident your tech job will eventually go away? 

    2) Even if it will, why would you make it go away early by deliberately leaving for a presumably lower-paid role? 

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  • You have a buck and a half by 36. Our jobs aren’t going away any time soon and you’re in a better place than most, even in tech.

    I’m 10 years younger than you with a much lower net worth, if I have half why you have now in 10 years, I’ll be stress free

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    I mean this only to be helpful - I would be wary of the thought process “If I had X, I would feel Y”. Loads of people in the fire community can’t update their priors when they hit their numbers because that’s just not how the brain works.

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    What’s also funny X typically is 2 times what you have now.

    We basically move the goalposts and that general thought is 2x

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    100% - when your a frugal saver, there’s never enough.  

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    Yep. People are always like ‘set a saving goal’ and I’m always like ‘ok, all of it, always’ and then revenge spend when I feel like I’m going nowhere 😅

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    Fair point. But my NW is barely above 0 lmao

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  • Hoard as much as you can while you can. Sadly it's the name of the game.

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  • Don’t live in fear

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  • Being in tech I am presuming you are concerned with AI taking your job? It sure feels terrible right now though it's worth considering this. Tech is one of the best payng jobs around still. AI is junior engineer at best and a lot of senior and up are using it while generating code that isn't always performing well and is often not well architected. Maybe at the FAANG level they are building better stuff though from what I've seen in the startup-mid market range and heard from previous coworkers it is not replacing anyone at this point. A good number I've talked to are of the opinion those with actual deep skill sets will get work easier and higher pay in a few years with the amount of AI slop being generated.

    If you had to cut your income by half I highly suspect you'd be okay and still on track for retirement at 60. You have breathing room. Worth noting if you are in the valley in tech and tech crashes out it may not be a HCOL area for long.

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  • Dont let these clowns tell you thats not much. at 36 it is a lot. I would aggressively start putting whatever you can into after tax brokerage and beef that up so you have a bridge fund thats liquid. You can get retirement funds out earlier than 59.5 - Roth IRA ladder or 72t periodic payments. You will just want some after tax money to tide you over if you want to step back (or are forced) from your high income job. Keep expenses low like you are doing and save. Also look into adding some assets in your after tax that are recession friendly. gold, long term bonds, commodities. These will be small tilts but if you are in all stocks they can make a big difference when shit goes south. Google "risk parity asset allocation" to understand this.

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  • Depends when you want to retire and how much you spend.

    IMHO 10% cash is way too much. What are you holding onto 150K for? Inflation burns away your value every year.

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    Hard to say when we don’t know what their annual expenses look like. Could be a beefy emergency fund.

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    He’s being conservative. Why take risk when you don’t have to. Market could plunge at any moment which having cash would be great for in addition to extra safety net.

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    Why take risk when you don't have to

    So you're 100% in cash then?

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    Hold cash if you are trying to make a large purchase in the next three months.

    Otherwise total waste.

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  • > 36 with current NW of $1.5M 
    > would I ever be able to really get wealthy

    You are already wealthy. Let that compound over 30 years and you'll be well above what most people can conveivably have. You're already winning.

    You could actually just stop paying into your retirement fund at 40 and you'd be great, allowing you to get paid less, still retire well, and keep same quality of life.

    It sounds like at the stage you're at, you need to define what wealth means to you. Does it mean taking a year off work? Does it mean owning a yackt, does it mean ski holidays every year. Or does it mean freedom to take a lower paid job with better work life balance?

    You're at a stage where money can shift from being a thing to acquire, to how do you want to use it?

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    1.5 million ain't wealthy

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    By what measure?

    What % of 36 year olds have a NW of 1.5M? OP is likely in the top 5-10% of people at that age. If they let that compound till retirement, they'll have a NW close to 10M.

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    I don't think your age matters to determine if you're wealthy or not and what your current investments might be worth in 30 years certainly doesn't matter.

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    So, by what measure then?

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    It's obviously arbitrary but 1.5 million is definitely not there. The definition I liked the most is that "rich" is about cash flow and/or income and "wealthy" is being able to create that level of cash flow without working. So basically, having enough assets earning you money/value that you can sustainably replace a high earners salary. I'd say wealthy is at least 5 mill if not more

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    Thanks for sharing. Seems we have quite different definitions for the term 'wealthy' which is where the difference comes from. Would agree OP hasn't met your criteria yet, that would be true financial independence.

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    I don't understand how you can be wealthy without financial independence

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  • Retirement funds are typically 60% of immediate value unless you’re 55+ and have it as an addition … there’s still taxes owed on it

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  • Worst case scenario, relocate from HCOL to LCOL. Rent/Mortgage alone will be 50% cheaper.

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  • $1.5M with 90% invested? You'll be just fine. That $1.35M invested will be $10M in today's dollars by the time you're 66, which is plenty fat. Now beyond covering your expenses today, you're just working to get an even fatter retirement or to retire earlier. Congrats!

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  • reality is it’s not that much 

    60% in retirement that is not easy to tap until actual retirement age without penalty and taxes owed. people will say there’s so many ways and they’re all very convoluted and inflexible 

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    Roth IRA Ladder. Google it. or 72t distributions. You can get pretax money out a lot easier than you think - you just need to plan for it and know the rules well in advance of needing the money.

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    lol exactly what i’m referring to 

    72t is a joke for early retirement. have fun with your $30k a year i guess. 

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