Comment by WalterBright 3 days ago
If you can buy a house for $300k, you can invest the money instead. If you choose "house", you're going to have a much harder time accumulating wealth.
I wish I hadn't bought a house instead of investing it all in MSFT. I know people at the time who borrowed every dollar they could and plowed it into MSFT. They became very, very wealthy. I was too chicken. Bwaaack, cluck cluck!
If you don't want to take the risk, then don't do it. But criticizing others who do take the risk, and succeeded, isn't fair.
A general rule is the more risk you're willing to take, the more potential for gain.
I am criticizing the idea that all it takes is “grit” and if you work really hard you will succeed.
Thought experiment: 10 people out of college take “huge risks and work really hard”. A second set of 10 people just get boring enterprise Dev jobs and the third set all work in BigTech for 10 years. Rank the three groups in the order of expected median total income over the decade?
> I am criticizing the idea that all it takes is “grit” and if you work really hard you will succeed.
Ok, but I did not suggest that.
Working hard is not good enough. It's necessary to work at the right things - and it is hardly obvious which are the right things. Taking risks is also necessary. The bigger the risks, the bigger the potential gains.
But nothing is guaranteed.
Spending one's youth playing video games diminishes your chances of financial success to around zero.
Someone working in BigTech making over a quarter million a year less than 3 years out of college has a much better chance of success and playing video games after working 8 hours a day 5 days a week than a “founding engineer” or even a founder of yet another YC backed AI company doing “996”.
> It reminds me of people in BigTech that don’t sell their RSUs as soon as they vest and diversify. I make just as much now in cash as I did in BigTech with the difference being 40% was in RSUs. Why would I keep 40% of my income in AMZN any more than I would take 40% of my cash income and put in AMZN?
I mean, I didn't sell my RSUs as soon as they vested, because I worked for a BigTech company that I believed was on the upswing, and I was willing to take that risk of not selling.
Sure, it is an equivalent of buying those shares on your own, but again, it still felt way safer (and way more flexible/liquid, as I could sell my shares at any moment) to me than working at a startup with extremely illiquid equity. And I was already pretty much broke with no safety net (my internship over the summer back then made me more than my entire family combined earned in ~6 months; this is not an internship flex, there were plenty that paid more, this is just to illustrate the gap between some bigtech internship salaries and what my family was making), so I was willing to take the risk.
The risk ended up paying off, and that BigTech company went from ~$60/share to $300+/share in barely 5 years, turning my initial stock grant into a lifechanging amount for someone in my position. No, it isn't even close to being enough to buy a house outright or retire, but it is my (and my family's) safety net now. I can afford to help my sister pay rent with zero "can i actually afford it" thought in my mind.
TLDR: yes, not diversifying is risky. However, you cannot make lifechanging money without taking risks, whether it is through joining a promising startup or not diversifying your investments or anything else. I am not advocating anyone to do what I did, as I agree with you that selling RSUs on vest is the most safe option. There are no totally safe options for making lifechanging (whatever that means for you) amounts of money, so you gotta pick your poison, if that's something you want. For me personally, making bigtech salary at a company that I believed was on the upswing (and saving a good amount of it), while keeping all vested RSUs in my account (and selling no more than 5% of it each year), was an acceptable level of risk (that I wouldn't regret doing, even if the price of those shares ended up dying significantly).
Why wouldn’t you at least cash it all out and diversify into all of the Big 5 then or Mag 7 now?
Or you could have invested in every YC company that went public.
https://medium.com/@Arakunrin/the-post-ipo-performance-of-y-...
You never hear about the people who made bad investments.
Or everyone who invested their life savings, refinanced their house, withdrew everything from their 401K and still failed.
If you have a paid off house you have some place to live, the alternative is to be paying rent that goes up every year.
My rent in 2016 before I had my house built was $1800. My mortgage was $2300. By 2024, rent had gone up at the same place to $2400. My mortgage besides property taxes and insurance won’t go up nearly as much[1]
It reminds me of people in BigTech that don’t sell their RSUs as soon as they vest and diversify. I make just as much now in cash as I did in BigTech with the difference being 40% was in RSUs. Why would I keep 40% of my income in AMZN any more than I would take 40% of my cash income and put in AMZN?
[1] Anecdotely I sold in 2024 at exactly twice the price I had a built for in northern Atlanta and bought a condo in state tax free central Florida for half the price.