Is Starting a Company the Least Risky Option to Get Rich?

For many people, getting a million or two is enough. In that case, it may not be the least risky option to get “rich” if that is all an individual needs. Once we start putting more parameters or restrictions around what qualifies as rich, you’ll start to get to some startling conclusions. Specifically, we’ll draw the line at 38 years old (to make the math easy and assume 18 years of effort). That is when you should be rich (approximately 20 full years after entering college… if you choose to go to college).

Two Surprising Paths We Don’t Recommend

Doctor or Lawyer Path: We’ve said it several times, however it needs to be said again. Becoming a Doctor or a Lawyer is not a good way to become rich. You’ll live a well off life and if you truly believe a couple of million is enough, then this path is for you. Lets go ahead and look at the numbers.

Doctor: In this case you’re going to spend approximately 4 years in an undergraduate program. Then you’ll spend four more years in medical school (assume $50K cost per year for tuition/room/board) combined with residency for 3 years. All in you’re going to be in school or doing residency for a total of ~11 years. The good news is that we’ll assume you will receive $100,000 per year during residency and we will create an enormous savings rate for the doctor at 50% of total gross income (note this is extremely high as it assumes you’ll pay practically no taxes at all). Once work begins, the Doctor will start out earning $400,000 a year and see 10% wage increases up to $857,000 (close to a million). To cap it all off, we will assume that all of the savings will be reinvested at a 7% annual rate of return. What does this get you to? $2.82 million at the age of 38 (Click to Enlarge).

doctor

To put the nail in the coffin check out a comment from a dentist (Dentaljax) who chimed in on an earlier post: “Wish I could do it over, but I’m a dentist making 500k, however just started making good salary in my mid 30’s and have 250k student loans still. Younger guys…do not go into healthcare! I’m over a decade behind bankers…  even saving only 100k a year, they’d already be near a million, if their savings went up over those years…2 mm easily. You can live off that. Instead, my financial nut is less than 100k, my 500k salary is only half after taxes, take away another 36k a year for my student loans, and you can see I’m forced to work my ass off to rapidly build up investments or I won’t have enough principal to live off down the road. Worse yet, there is no stealth wealth, everyone assumes you’re rich because of the degree and you feel the resentment. I have the lowest net worth of practically anyone I know! Sure I can live comfortably (now closer to 40 than 30), but I AM FORCED TO WORK FULL TIME, and will have to for decades. Since I’m really clueless about the whole internet space, I’m going to have my second income stream be real estate, but living in an expensive coastal town even this will take many years of rent inflation to pay any dividends. Moral of the story…when you’re young, work hard to make money. I worked hard to get into more school where I had to keep working hard and taking on more debt, and did not make any money for a decade. You’ve been warned!”

Lawyer Path: Ahh… So the masses were wrong (as usual) about being a doctor being a good way to get rich. So instead they go down the law path, surely that’s the way to build wealth! Not so fast. While you’ll be out of school faster, the numbers are typically a tad lower making the path similar. You’ll obtain an undergraduate degree, follow with three years of Law school followed by a $180K base salary job (smart readers will notice we call law a job not a career). Why? You’re trading time for money. So now lets look at the quick math. $180K for year one (base) and a $15K bonus. After that you’ll increase as follows with base followed by bonus in brackets: 1st year $180,000 ($20,000); 2nd year $190,000 ($20,000); 3rd year $210,000 ($25,000); 4th year $235,000 ($50,000); 5th year $260,000 ($65,000); 6th year  $280,000 ($80,000); 7th year $300,000 ($90,000); 8th year $315,000 ($100,000). In addition we assume you’ll be promoted to a Partner role where you’ll go from making $550K up to a cool million by 39 years old. Note: none of our writers have worked in law and we were directed to a large blog that covers numbers in that sector (high end firms) you can find the numbers here.

To keep things fair, we’ll assume the same aggressive savings rates. 50% of gross income and 7% returns. Again. We do not believe these are achievable numbers, however it allows us to create an “ideal situation” so there is limited room to make the assumptions seem low. Life is rarely “smooth sailing” from start to finish, so the fact that someone will be earning a smooth increase every year for 13 years straight is astonishing in its own right. The result? $3.29 million at the age of 38 (Click to Enlarge).

Lawyer

This wouldn’t be complete with yet another reader comment this time from a Lawyer (Nathan): “Lawyer here. Law is worse. Even the areas of law that are performance-based (personal injury, class actions…anything contingency-fee based) take too long to get really rolling to make law worthwhile. Any other practice areas you’re straight up trading time for (not great) money.

Law is a “copper handcuff” job: The money starting out is not that great and the work required makes it a Yuuuuge time suck and difficult (but by no means impossible) to build biz on the side. If you could get a job as a lawyer (emphasis on “job” and not “career”), means that you: (i) are reasonably intelligent; (ii) have solid work endurance; and (iii) are not socially retarded. = you could be successful and far better off financially doing something else (sales, engineering, etc)

Law is still prestigious, yes… …but as WSPs say: F*ck prestige. Get money.”

Three Paths We Do Recommend

Wall Street, Silicon Valley, Sales: These three paths are the cleanest if you’re interested in building a Career and believe it is less risky (you’ll see later that risk is essentially the same). No matter, all three offer the potential to get to around ~$4-5M by the time you’re 38 or so.  This is a pretty big step above the two examples above… Why? Remember we assumed no interest rate payments on school debt and made excruciatingly conservative assumptions on all the costs the Doctor and Lawyer will undertake.

Wall Street:  Since we’ve already given out investment banking compensation numbers several times in the past you’ll see the numbers work pretty quickly here. If we make the same assumptions about savings rates and investment returns you get to approximately $4 million dollars ($3.999 million to be exact!). To get to $5 million you’ll need to survive another two years and you’ll be there at age 40 (Click to Enlarge).

Banker

Silicon Valley: The real downside to Silicon Valley is that you’re in a bit of a higher risk situation depending on the Company you work for. This means you have to either accumulate ownership of the company (stock) or join a high end company with solid base pay and bonuses with minimal stock upside. Either way… The numbers go up well if you’re savvy and can make the jump from being a pure technology person to being a manager as well. Since we’ve made solid rosy scenario assumptions for everyone else we’ll keep the same for this example as well. The result? $7.7 million at age 38 (Click to Enlarge)

Technology

Wow what happened here? Well if we assume you’re going to add more value over time and can make the transition into management roles, the income does not slow down. The top firms also offer outrageously attractive benefits such as food, laundry and other miscellaneous goodies making the numbers slightly more achievable.

Sales: Ah yes. The “terrible career” everyone says not to go into. Why? Talking to people is uncomfortable. Sales is uncomfortable. Trying to show value is uncomfortable. Being 100% tied to “eating what you kill” is uncomfortable. Then they all wonder why the salesman lives a comfortable life… Because he’s willing to take on uncomfortable situations. They never see the light. Good for you though because once you build your book of business it becomes smooth sailing. The one “strange benefit  that will shock you” is that you typically go up the learning curve quickly then stabilize into a niche. The result? Close to $4 million as well at $3.91M (Click to Enlarge).

Sales

Since we’ve covered Wall Street and Technology enough on here, here is an enterprise sales quote from a commenter with the unsurprising name of “TechSales”: “Get good at sales. I am selling software and there are so many jobs that will take you if you are good at sales. Heaven forbid you are unemployed you can find a job within the week if you have proven numbers. Month at the latest. (meanwhile you walked down to the BMW lot and showed a picture of your W2 last year at 300k and get hired to sell high-end cars until you’re re-employed at a tech company).

If you did everything right you should have a rolodex of sales managers and VPs of sales that you can get back onto with 1 call.

Start as an sdr and grind. That’s all there really is. You don’t have to have a degree but it helps get in. Competitive to get in but nothing compared to banking. I got in after applying to a fair amount of jobs online cold and working with sales recruiters. Eventually, I got a job within a few days off an online reply.

I had slightly less than 1 yr b2b when I got my job and I believe that helped. It’s not rocket science. I have a LOT of smart friends (sons of oil execs, son of a Harvard doctor, physics engineering etc), but they are all too chicken to deal with rejection all day and being hung up on.

If you can get over getting rejected, hustle like a mad-man, and are semi-socially coherent you should do well.”

The Reality. Ownership & Equity Value.

“Better to be laying the first brick of your own pyramid… than being paid to lay the last one for someone else” – @WallStPlayboys… While it sounds like a cool comment really think about the numbers behind it. It was said for a reason. That last brick being laid is essentially the 1% of all positions (Careers). How many people will be an elite investment banker? How many an elite coder? How many an elite sales person? Well the numbers don’t lie… 1% or less. So how is that relative to your option of building ownership and creating your own company with *equity value*? Pretty similar.

Notice. We’re not saying any of the recommended paths are easy. They are not easy. Luck, skill, effort and emotions made of Kevlar are all necessary for any path… This is the same for starting a Company. The question is… where do you want to draw your line at being rich? The doctor? He’ll benefit by starting his own practice. The Lawyer? The same. The Banker? If a real killer… the same… So on and so forth. No matter what without the amazing power of ownership (equity) you’ll unlikely go north of ~$5 million. If you do? Well that means you likely got there due to added time – such as company management positions.

Building Equity Value: The misunderstanding is that we’ve all been taught to think about money in annual income. That is not smart. When you’re building annual income you can never sell it. Let that sink in. If you’re a managing director at an investment bank you cannot “sell” your career to a director and collect 5x earnings or $5M on the sale (there is no sale!). This is 100% false for an actual company. In fact as it grows the multiple typically expands! Why? It means it’s more likely stable and less likely to fall off a cliff depending on the sector.

As an example, if Joe decides to start a company in college he likely earns less than he would as an employee at any of the three careers. Long-term? He can win by a large margin. If he were to start earning just $50K in year one but end year 18 with a business that generates $5-10M a year? Forget about it… He won even if he saved $0 the previous 17 years. The reason? He can sell that Company for a multiple and immediately become a deca-millionaire.

That Thing Called Risk: Time and Time again we get the same twitter rant. “Other people have different risk profiles” and we can’t help but laugh. We would like to see how many people enter any of the above careers that actually make it to $4-5 million (you’ll see that number fall off a cliff, otherwise the number of High Net Worth Individuals would be better than 1%!). Do the quick calculation.

Step 1) The number of people earning $465K+ is 1%… remember this includes people above the age of 38

Step 2) The number of people who save 50% is going to be significantly lower than this (less than ½ of the people earning $500K will save 50% of gross income)

Step 3) The number of people who have a smooth sailing path as outlined above is less than 10% of those entering the high paying positions… likely closer to 5%.

Step 4) The number of people with a chance at even following the career map is therefore 0.025%

Wait a Second… So even if we make more aggressive assumptions… Less than 5% of the people in the top 1% of net worth work in careers? That is correct. Take another look at the math and you’ll see that is how it works. Take all the numbers and re-calculate them. Take all the assumptions and make them more aggressive (quite difficult) and you’ll see at bare minimum… 90% of people who really make it (top 1% net worth) did so through good old fashioned ownership (equity value)

What is more risky now?

Comments

  1. Dangerman says

    “we’ll assume you will receive $100,000 per year during residency”

    Whoa, that’s double the median medical resident’s salary of $51,000. And the better specialities don’t pay any more during residency. So it’s twice as bad as your projection.

      • says

        Yes your numbers are far too rosy for doctors and dentists. Only surgeons and subspecialize in medicine and dentistry will come close to those numbers nowadays, and they will require at least 5, but usually 6 or 7 years of residency, not 3. I know of exactly zero docs or dentists with 2 mil in the bank at 38

      • Wall Street Playboys says

        Agree we put a “perfect scenario” up there.

        Doesn’t even include potential life events like having a family, health issue, any one time events that hurt the 50% gross income savings ratio (practically no one will save that amount)!

      • RetiredAdvisor says

        Observations from a former financial adviser who’s book of biz was around 40% medical professionals:

        I never saw a doc or dentist in their 30’s with over a mil net worth (this includes factoring in the spouse’s net worth when it came to married couples). Many had a negative net worth due to crushing student debt.

        In line with what this article says, the only medical professionals I knew with any $ were those who had (and sold) their own practice. Even then, these guys would be in their 50s and 60s and they weren’t staggeringly rich, 3-7 mil net worth seemed to be pretty standard.

        I also noticed that once they land their first real job and decent paycheck the lifestyle inflation is extreme (more than many other careers it seemed). Big house, new car etc. I think this is primarily from feeling like they’ve finally “arrived” after so many years of work with little reward prior to their current position. Also, as a group the docs seem to place a lot of value with “keeping up with the Joneses” regarding their coworkers. I’d say this is true in a lot of the high comped careers.

        Though their income may be similar The guy who owns a paving company generally has a group of friends who grill and drink Budweiser on the weekends. The hotshot young lawyer hangs out with people who wear Brioni suits when they head to the club. Who you associate with can greatly impact your expenditures.

      • Wall Street Playboys says

        “has a group of friends who grill and drink Budweiser on the weekends”

        Dangerously close to recommending regular person activities the spam hammer is watching! (Joke)

        Overall great info!

      • RE Guy says

        Another point: The guy who goes to law school is already bought into following a socially acceptable path to success so he will seek social validation from those around him.

        The guy who starts his own company, keeps his own company; mentally.

        The described sounds like he may be a stealth wealth millionaire.

        One in particular that I know does the same (rarely) and never tires of telling everyone else how smart they are while being an extraordinarily perceptive stone cold hustler.

  2. says

    So you’re saying that $10 million dollars is enough to consider yourself rich? I guess I will aim for becoming a deca-millionaire.

  3. Scott says

    What do you think of moving into private equity? This offers the opportunity to buy and sell many businesses and potentially make even more than a mere business owner. Furthermore, owning your own private equity firm would give someone the opportunity to make a great deal of money. (For context, I attend one of Harvard / Yale / Princeton / Stanford and plan to progress my career from consulting –> private equity –> my own pe firm)

    • Wall Street Playboys says

      For a time frame to 38 generally same for buyside and sell side so no change really.

      Buyside does have more upside long term with more risk of course.

      If you’re really lucky/talented your numbers will be closer to the net number in the tech example

      • Anonymous-23 says

        I am trying to do this exact route, but consulting was a two year mistake. Probably better going hard for a finance role immediately unless it’s too late AND you’re at MBB.

  4. AC says

    And all of this assuming (if you are 30 y/o) that in the next 8 years nothing will change in the job/career sector.

    Two words: Machine Learning

    P.S. On a side note it opens new niches/sectors that are up for grabs…

  5. Mo Gotti says

    “Sales: Ah yes. The “terrible career” everyone says not to go into. Why? Talking to people is uncomfortable. Sales is uncomfortable. Trying to show value is uncomfortable. Being 100% tied to “eating what you kill” is uncomfortable. Then they all wonder why the salesman lives a comfortable life… ”

    The realest thing I have read in a minute. Been in sales for a couple of years now. You get better, smoother, faster discernment in the moment over time by getting more at bats, but the comfort level only improves marginally at some point. The uncomfort lingers. You have to be comfortable being uncomfortable. Those who cant call audibles wont play.

  6. says

    Sales – regardless of the field – is ultimately all that ever matters. It will take you from homeless to living large once you learn the curve. People are terrified of “taking the risk”. The only risk is standing still, my friends.

    Went from a techie, to unemployed, to learning to sell, and the rest is history.

    Listen to WSPS; master sales!

  7. Trent says

    “90% of people who really make it (top 1% net worth) did so through good old fashioned ownership (equity value)”

    Absolutely true. I worked at a luxury car dealer (most sales per capita in the world) and 90% is accurate for the fraction of buyers who were entrepreneurs / owners versus employees. Never saw a dentist, a doctor or a lawyer come through. One MD at a bank, one world-leading brain surgeon. A few real estate agents. They all bought used or cheaper models and all bought on finance.

    The rest all owned businesses. And they paid cash.

    Bottom line: work for yourself.

  8. says

    Sales is a great way to prepare yourself for having your own business at a later date. As long as you can control your emotions it’s easy money. But it’s hard for anyone who can’t handle rejection, disappointment, uncertainty and sales target stress. Once you can handle those uncomfortable feelings you’re all set to work for yourself!

    The great irony about sales is that smart people look down on salespeople. Yet the best salespeople are often extremely bright, ambitious, honest and so respected by their clients that they get referrals all the time. And they have no difficulty getting a high income job because of their reputation.

    Don’t go into sales unless you plan to excel. Any top performer will have tremendous freedom to work as he pleases. His boss won’t mess with him because he can’t afford to lose him. And those sales skills will multiply the results you get later on when you start your own business.

    • A says

      Yeah — Controlling your emotions is most of it.

      The successful ones keep going no matter what. It works for me. Even if I am on a downtime I will still make sure I have 1xx+ dials/emails before leaving that day.

      I see that in most of our office.

  9. firstyear says

    would you consider being a franchisee of a large chain (McD’s, Dunkin) as being a biz owner? I have $$ from inheritance and have been thinking about going this route. Would be curious to hear the opinion from WSPs/readers.

    • Cigar Guy says

      If you have no biz experience (especially no experience starting a true biz), franchises are for you.

      If you’ve never run a business before or started one, there’s so many things you don’t know, and even more things that you don’t know that you don’t know.

  10. Anonymous says

    I’d be interested in the income distribution of dentists who made it through dental school vs those who took the sales/IB route after 10 years.

    I suspect the mean would tightly cluster around around maybe 400-500k for a dentist vs a wider spread for sales/IB with significant asymmetry.

    Not a hater but I take a probabilistic view of life and yes I work in a sale environment and a lot of success can be attributed to luck.

    • Wall Street Playboys says

      Income distribution dentists likely win since most people don’t make it past associate level. Net worth? The bankers/enterprise sales people likely win by a mile.

      Then again this is about getting rich so the fact of the matter is 90% are self made.

      All our medical numbers are heavily inflated as many have pointed out.

      Strongly disagree on sales being luck, yes getting a good account working for someone else can be luck but then just take those skills and sell online instead. Problem solved.

      Surprising update! More front office Wall Street than dentists/doctors (about same) so Wall Street makes more. Bulge bracket banking alone is equivalent to whole dental field… so quite a high number of Wall Street slots and more importantly enterprise sales as well.

      • YM says

        “Strongly disagree on sales being luck, yes getting a good account working for someone else can be luck but then just take those skills and sell online instead.”

        Do you mean skills of getting a good account? #internetsalesjoke

      • Wall Street Playboys says

        Ha! Yes getting lucky and grandfathered into good deals is also some luck.

        Given the number of options though it is definitely just complaining if someone can’t find anything that works

      • Anonymous says

        Trying hard not to be a dick here but shouldn’t you factor in health as well? Quite sure that the hours in IB are hell compared to dentistry which is a strictly 9 to 5 gig. I know our advisory guys routinely work till 7 or 8pm (which is nothing compared to pure IB) and they don’t look happy or in good physical state. If it takes you 3-4 years longer to reach the same point in wealth in dentistry over IB but you have your health intact isn’t this the superior option in the end for some people. I’ve read your posts regarding prioritizing health over everything else and it is definitely the right thing to pursue.

      • Wall Street Playboys says

        Yeah the “health and banking” scare is beyond hilarious.

        Your life is only really hell for 2-3 years (essentially like being in the military). Not that big of a deal.

        Anyone still getting killed after that just isn’t good at their work.

        Also you should be out building a biz as we’ve stated 400x here on the blog.

        Lol still cracks us up when people believe “banking = death to health!”. Completely overblown but see how some people believe that tripe given immense exaggeration from the dudes who were never good at it (got kicked out then say they just wanted a new lifestyle, classic excuse).

  11. says

    This doesn’t even includes the extreme lifestyle inflation. Having your head in books, without any substancial ROI for 10 years screws with your dopamine levels. When you see the 6 digits right around christmas, you will buy a car before half of the sum is collected for college debt.

    And all of this assuming you live in USA and **maybe** Germany/Britain.

  12. TechSales says

    Sales numbers are similar. 1st year might be under 100k at some companies — otherwise completely realistic.

    But assuming elite status you’re probably at Oracle/SAP and overachieving so that’s that.

    Funny, I just got my buddy a job in tech sales who was an engineer. His dad is a director level software engineer at a F500 and encouraged him to take the software sales route over engineering (not software).

    Also, the top number might be a little low — you might have a blow-out year and make 1-2M.

  13. DDSinTX says

    I think this is bit short sighted, and I read the last posts by the dentist, and I think he sounds like a whiner. I’m ten years out of dental school, 36, and am at over a million net worth, not including the equity in my practices (currently somewhere around another $1 million, but will grow over the next few years). We’re forgetting that at these incomes, the savings rate can be huge at this age, and I can catch up in another couple of years. Ok, so it’ll take me to 40 instead of 38, big deal. Oh yea, most dentists at this point in their careers are only working like 36 hours a week on top of that. $2.8 given another two years, $300k savings for two years per your assumptions, and 7% return gets you to $4 million at 40…plus you now have a practice valued at somewhere around a million. Now you can cut back to 3 days a week, still make your $500k, and invest your time and resources into other projects if you desire. It’s not all doom and gloom. And to the other poster, I know LOTS of dentists in their 30’s that are way ahead of me. I also spent 3 years in the service after school, so I was even further behind (but didn’t pay for school)

  14. Anonymous says

    I am an undergrad doing CS at a flagship state school and almost all the top tech companies recruit at my school. I know a bunch of people in tech working for each of GOOG/FB/MSFT/AMZN and none of them have ever told me of such rapid rise in income, one of the people I know happens to be on the search team at Google(one of their flagships, obviously) and the numbers he mentioned were also a whole lot lower than these. These are all people from top-tier Ivy League schools or similar flagship state schools. I think these numbers are inflated a lot. If I’m wrong, please correct me.

    • Wall Street Playboys says

      $200+ in USA is standard at many of those you mentioned (straight outta undergrad). Does assume you go into the right segment, working at google in HR is definitely not the same.

      Tricky part is vast majority never make it to managerial roles (poor social skills) that’s the kicker

      • Anonymous says

        Yeah, I agree that 200k+ is quite doable but such frequent and quick raises are what I thought were off.

        Huge fan of the blog, btw! Can’t wait for your book to be out!

        A bunch of my friends also read this blog and we’d all really appreciate if you could do a piece on starting side businesses online! 😀

    • . says

      Total compensation at big tech companies for new hires is roughly 170-210k. This includes bonuses and rsus

    • C Nicholas says

      Incoming SWE at top tech firm (my first year comp is almost 200). Would strongly recommend focusing on quant lhedge funds and top prop firms as that’s where the real money is. Top NYC firms pay 250-300 out of undergrad, 500-600 five years in, and in low 7 figures 10-15 years in. Keep in mind this is for SWE roles which have basic enough risk aside from firm risk. Imo, the highest risk adjusted return you can get from a career. The hard part of course is getting in….

  15. OP says

    Good article. I started in banking at GS, quit when around 31 to start biz. Am now 38 with one internet biz and small asset mgmt firm. My brother is head of commodities trading at another bank in London, so I have a benchmark. The main difference between own biz vs career is that thinking goes from linear analyst – associate – … – MD to non-linear. My asset mgmt firm went from 3m to 18 last year. 6x revenues, marginal increase in costs. My MD brother will not have a 6x increase. Of course a small biz can fail, but you have transferable skills (selling, emotional capital to deal with uncertainty). Point of the post is to learn to deal with uncertainty and non-linearity.

  16. says

    Article with valuable content.

    On the professions, I see a gradual transformation – which undergo divergences according to the country – on the value of return on investment. For example, in Brazil there are 1,300 colleges / universities that offer the law course. Worldwide there are LESS than 1,300 colleges / universities offering this course. Exactly what you read. The sum of the whole world is LESS than Brazil alone.

    The basic law of supply x demand comes into play and ~ 90% of Brazilian lawyers receive a degrading salary. Converting from BRL X USD, I have conviction that the average salary of a beginning lawyer is 625 USD monthly, or USD 7,500 per year.

    The Brazilian law firm is not for the weak.

    On the other hand, a doctor in Brazil recently trained easily makes USD 115,000 per year, working in some places requested by the Government.

    I saw this scenario – not necessarily with these professions – in other countries, including developed countries.

  17. Blackvorte says

    Reality is people have split objectives. They want to be rich, but they want prestige or want to help people. So they take the middle path (doctor/dentist) and end up (upper) middle class. Best advice is go 110%. If you want to help people, become a monk, if you want to be rich go business/sales.

      • JC.Denton says

        Depends on how you look at it and what you mean by ‘can’. Because working on your own business for all those years engenders certain traits and attitudes which usually don’t transfer well into helping others in a greater good scenario. On the other hand someone that’s been working on helping others develops different skills and is forced to learn how to achieve his goal of helping others when he has no money. In a way it’s like being good at sales vs having a big marketing budget. Clearly the business man will have more money to throw at the problem, but will that actually solve it? I don’t think the answer to that is obvious at all (or even knowable tbh). For the record, I’m a business man myself.

  18. C Nicholas says

    I work in AI and ML. Tech advances will push these ‘safe’ fields to be bimodal (it has already in many ways). Law firms are using research AI eliminating need for legal analysts below 80th percentile (only those above generate enough revenue to justify coat). Surgical robots are now viable reducing need for mid tier surgeons robots can be operated remotely by the best physicians). Low code systems make basic app dev trivial for most business needs reducing need for mid tier developers. Unless you’re above 80th percentile these careers /jobs are not viable long term. Maybe we’ll get more entrepreneurs bow….

    • Ahuevo says

      Yes, people are underestimating AI. Also sales will be affected.
      Online sales is increasingly driven by machine learning, Tesla completely cutted the middleman, every online service for bank accounts / insurance / wealth mangement that is highly automated offers way better conditions and will displace the traditional companies.

      Sales will always be, but the competition is increasing and it will only get harder.

      If you are not working in tech or an area that is hard to automate (social) I would not count on 10y+ plans.

  19. James Strikes Again says

    Orthopedic Surgeon’s are in the top 3% of their medical school class. Make $40k per year in a 5 year residency. Then $50k in a one year fellowship. Average income is $500k annually after all said in done. More physicians becoming hospital employees and working twice as much to make half. It’s a shame to see what is happening to them. Wallstreet gobbling up all the profits in healthcare. Insurance companies, hospitals, and big pharma crushing the doctors.

    Only way to make it big as a doctor is
    1)Patent everything. Hope one gets licensed or bought by a company
    2)Private practice and build it up over your career. $2-3 million in revenue annually. Bring on VC and buy out more and more practices.
    3) Do consulting work for companies
    4) Open up a surgical center and run high volume and lean

  20. Josh Weinstein says

    I’ve been meaning to write this for some time. I generally love this blog for providing simple, actionable recipes for increasing wealth. However, there’s something I don’t quite get. Once you’re in the top 2% or so by income the vast majority of purchasable things that add value to your life are affordable. Luxury apartments (even in SF/NY), great clothes, occasional bottle service, etc. And it’s not as if you couldn’t get even better things, you just prioritize having some additional savings instead. And even if you ‘only’ make it to $4 mil in net worth by age 38, I don’t see why you couldn’t just retire then and live of the $200k+ returns in investment. Even at 3 mil (which comes at around age 35) you’d have $150k+ returns, more than enough to live well in majority cities. So what’s the incentive to break into .1% when the 1% gives you so much? Financial independence sounds great, but would it not get boring after a while?

  21. Leibowitz says

    I’m glad you didn’t make the mistake of understating tech comp but the path listed is clearly management in Big 4 tech, the least used path in the industry for making 8MM+ by age 38. Unlike banking or medicine the opportunity to gain significant ownership is always present if you work at the top of tech (Google, Facebook, Snapchat at minimum)
    Just 3-5 years entitles you to VP of tech status at startups. You’re also a VC darling, as ex-Googler carries much more cache than anything outside of founder experience. Furthermore, quant hedge funds are a thing. They pay double top tech comp (think 300+ for new grads). They even allow investment in the fund/firm at senior levels, arguably a more attractive opportunity than the majority of early stage startups.

    To follow the path listed above one would have to be either talented enough as a developer to make great contributions and refuse numerous quant fund offers or talented enough at politics/management to play the people game and refuse numerous founder or VP opportunities.

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