When I was younger I used to not be so concerned with setting financial goals or even paying attention to what it would take to be where I wanted to be. In my first undergrad I really didn’t pay much attention to what my career would likely pay and how much it would cost to live the life I wanted to live. I think in our society today we put a lot of emphasis on working on what you like and not paying a ton of attention to what kind of financial means it takes to live the life you have in mind. Further more I think at best a lot of people will think about paying for the now, but don’t really do a ton of work on the future.

I wish I had started paying attention earlier as the longer you have for your money to grow, the more it can be, but I am 32 now and have really started to try and pay attention. The first thing I have really started to pay attention to is how much it costs to actually be an adult. In my 20’s I was able to pay for myself and where I was renting and my honda civic, but now that I am in my 30’s the costs for the “Family life” of having a house, kid, 2 functioning cars, saving for college, daycare are so much more than just being able to afford rent and pay for a POS car. I think a lot of younger people do not realize how much costs go up when you start to look at family life. I also live in Seattle which is one of the most expensive places to live, so things like day care and the mortgage are particularly high. Day care costs us 2,300 a month for one kid… That is far more than I used to pay for my rental in my 20’s.

Lastly and really one of the biggest things I think I did not pay attention to when I was younger was how much it is really going to retire. Standard rule of thumb for a conservative portfolio is ~3.5% withdrawal rate when you are retired. So for every million you have saved, you can take 35k a year. So for a family to be able to spend 150K a year they would need ~4.3 million in invested assets. That is in todays dollars, so if you assumed 3% inflation and I retire at 62 (30 years from now), that 4.3 million will need to be 10.4 million. That is a lot of money!! Because I have started running the numbers on this stuff I have really started to try and get us to save more! If you assume 7% growth and have no savings at 32 you would need to save ~100k a year to hit ~10 million. If you get 10% gains you could save about 65k a year to hit the 10 million. Running these numbers is what got me so focused on saving. Right now my wife and I save/invest a little more than 30% of our salary. Hopefully things go well and that will be plenty, but this type of thing is why I really think a lot of young people should learn to save/invest while they are young. If you started investing at 22 instead of 32 you would only have to invest 55k a year with a 7% gain to hit the 10 million which is only half the savings rate that the 32 year old has to do. This type of thing was big motivation for me to go into CS for the higher salaries. It is also a big driver in why I put in so much effort to get to Microsoft when I was only 3 quarters into the degree. It also pushes me towards wanting to keep seeing what kind of other offers I can get.

I am not someone who really needs to be rich just so I can have nice things, it’s just life costs a lot. I like to ski, mountain bike, eat out, have a house (not even a nice house, but in Seattle my 1900 sqft house built in 1977 with little updates is worth 1.2 mill, so life really just costs a lot). I don’t need a Tesla or some mansion, but I would like to be able to both live now and have money for retirement and pay for kids college so he isn’t F’d. All this costs a lot and that has been a big driver in me shooting for high paying jobs.