You cut your teeth as an engineer, developing everything from simple applications to complex distributed systems used by millions of users. Maybe you work for one of the FANG companies (Facebook, Amazon, Netflix, Google), and make six figures.
You’ve been thinking about investing in real estate for some time, but you’ve held off because you believe there’s a high barrier to entry. Software is your world. You don’t have extensive knowledge of real estate.
What’s more, you work 60+ hours a week, and because of the amount of work, you don’t have time to study all the various ways of achieving financial freedom. So, you end up investing in stocks or crypto – and here lies a waste of capital allocation for software engineers.
Let’s face it: You didn’t land where you are today because you’re incapable of learning something new and complex. In fact, your expertise, attention to detail, and higher-than-average income make you the perfect candidate for real estate investing.
I decided to write this article to help techies like myself achieve financial freedom through real estate investing. And not only techies. This article is definitely one to read if you’re an engineer, product manager, designer, investment banker, sales manager, or another high-income earner.
Are you playing baseball in golden handcuffs?
What do baseball and golden handcuffs have to do with software engineers getting into real estate? You may not realize it, but most high-income earners like you are in a very sticky situation.
Employees stay with the same company for a variety of reasons. Exciting work. Thrilling challenges. Industry prestige. But of course, the main reasons they stay are the benefits: excellent base salary, stock, health insurance, and matching retirement plans.
All these exceptional benefits are “golden handcuffs.” They’re the juicy perks that encourage high-income employees to stay right where they are instead of seeking new opportunities.
Here’s where software engineers, golden handcuffs, and baseball players collide…
In large tech companies, software engineers can count on multiplying their total compensation by 1.3 every time they’re promoted to the next level. Let’s say you work for one of the FANG companies where compensation is pretty high:
- A junior engineer (SDE 1, E3, fresh grad) makes a $125K base salary + $100K in stock for total compensation of $225K per year.
- A mid-level engineer with 3-4 years experience (SDE II, E4), makes about $165K+ base salary + 130K or more in stock.
- A senior-level engineer (SDE, E5, 5+ years of experience) can easily reach $420K, $200K from base salary.
- Then there are E6s, who constitute approximately 10% of the engineers at FANG companies. E6s earn up to $550K in total compensation. About 5% of E6 Facebook engineers make $700K-$1MM+.
Their salary increases…