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Old 09-06-2009, 01:56 PM   #1
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"developers, developers, developers..."

Hello, I'm a 23 year-old software developer -

Anyone on this forum a software developer?

...from northern VA, near the government capital of the nation.

For the past year I have been systematically eliminating every student loan I've taken. Except one for about $3,500 that's at 2.480% variable interest. Only reason it's not paid is I'm scrambling to save for a down payment on a home before the first-time homebuyer tax credit expires (Nov 30). I'll try to buy a house for < $70,000 at a 30-year fixed mortgage rate. I actually discovered this forum on Google when I was investigating my mobile home options.

I drive the same beater I've owned since high school and buy my "casual" clothes from WAL-MART.

The most volatile expense I have is food. Anyone else?

My "plan" is to retire using my Roth IRA with substantially equal periodic payments (SEPP) since planning to retire on interest-only seems too optimistic. My current employer has a Roth 401(k) plan I use. It matches contributions. Currently I have 90% of this in Media and Telecom. stock.

I enjoy building useful websites in my spare time and would like to supplement my income using ad revenue. (I do wonder if anyone really makes any significant money with that).

I don't have any illusions of entering upper-level management because I couldn't imagine hating my job for 20+ years. I admire the fortitude of those on this forum who have endured that. I don't expect my salary to reach six figures in the next decade.

Next year I plan to apply the homebuyer tax credit savings to SOMETHING and that is a huge unknown to me.
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Old 09-06-2009, 05:49 PM   #2
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Hi,

I'm a 23 software developer myself too, lurking in shadows most of the time. I also like to build websites and put ads on them, I'm planning on being FI next year.

No dept, car, etc.. very frugal. Living on my parent's home

Keep it up
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Old 09-06-2009, 06:26 PM   #3
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Welcome! I'm a software developer, too (as is my DW). There seem to be a good number of software geeks developers here (some retired, some still slinging code).

A couple of questions about your post: are there really sub-$70k home in the NoVa/DC area? I thought the real estate market there was almost as crazy as it is on the West Coast. Anything I could find at that price here in SoCal wouldn't be in an area I'd want to live in. Good for you if you're able to pull it off.

My second question was why you think you won't see six figures within 10 years? Unless you're working for the government, I'd expect that in six to eight years you could double your salary, if you were willing to switch jobs to make it happen. That's what happened to me when I started working at *real* companies (instead of the slave-labor startup I cut my teeth at). That was back in '95. Especially in the DC area where there are a fair number of jobs, and relatively high salaries, it shouldn't be that difficult. Being frugal is a great place to start, but earning more money helps tremendously.

Just the fact that you're thinking about this at all at your age puts you miles ahead of most of your peers, so good on ya. Good luck!
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Old 09-06-2009, 08:31 PM   #4
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are there really sub-$70k home in the NoVa/DC area?
Yes, if you're willing to commute or buy foreclosures. Have a look for yourself. Fortunately I don't work directly within D.C., but in the outlying suburb/office parks.

Quote:
My second question was why you think you won't see six figures within 10 years?
Since I never directly ask anyone what they make, I base my judgment on the salary statistics I find i.e. bls.gov or indeed.com. From what I see there, around maybe 10% of developer jobs exceed $100k. I also base my estimates on around 1 yr. of professional experience in the industry.

Would any ex-software developers mind sharing what these $100k+ jobs are like, and how to get them?

Tom, do you think the ad revenue you get is worth your time?
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Old 09-07-2009, 12:35 AM   #5
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I don't have any illusions of entering upper-level management because I couldn't imagine hating my job for 20+ years. I admire the fortitude of those on this forum who have endured that. I don't expect my salary to reach six figures in the next decade.
Why do you think you'd hate upper management?

FWIW, I'm a retired geek. Got my first programming job in the 60's (yes, they had computers then). I spent my last 25 in mega-corp upper-management. I loved the first 23 years of it, you might too.

I have no idea about salaries in your area (I'm in Canada) but I think you are probably right not to expect 6 figures (in today's dollars) unless you hit management. When I started, good geeks were few and far between, most universities did not have were starting CS departments, few graduates. Now, U's have all kinds of IT (funny about names) grads, supply & demand rules.

A few people may make money from ads on web-sites but to get revenue you need visitors. To get visitors you need a reason to visit. It's the content and ideas, do you have them? There are lots of people who can develop nice sites, there aren't a lot who can give people a reason to visit (and keep coming back). That's where the ad money comes from.

LYBM and good luck will see you to FIRE, Enjoy.
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Old 09-07-2009, 01:55 AM   #6
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Why do you think you'd hate upper management?
.
Some of us just know.

I am a retired programmer (1979-2006). I knew from the start that I would hate managing people, that all of my skills were technical and not social. I was able to retire still programming with no-one below me.. Adjusted for inflation, I hit six figures in 1986 (54K, CPI has doubled since then) with 7 years experience, and most of my friends (engineers and CS) made about the same (we freely shared salary data). I had a very smooth salary curve over the years, plus some occasional overtime and bonuses.
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Old 09-07-2009, 05:02 AM   #7
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I don't have any illusions of entering upper-level management because I couldn't imagine hating my job for 20+ years.

Ahh, wise beyond his years.
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Old 09-07-2009, 05:08 AM   #8
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SDII - I would also say that you should expect to make 6 figures as a developer at some point, especially in the DC area. (my BIL is a programmer there and probably makes ~130-150)

My next point is about the allocation - 90% in media and telecom seems like a bad idea. Consider more diversification. You have time to work out a good asset allocation strategy, first step is educating yourself.
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Old 09-07-2009, 11:25 AM   #9
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Welcome to the board SoftwareDeveloperII. I've been a contract software developer / tester for close to 20 years, after seeing how companies treat employees. Many years ago I use to do the beltway tango with the beltway bandits, as an employee, to get experience. Now I get contracted for submittals around the beltway in the 55-70 / hr range, which I turn down because I'm in S.CA. So it should be easy for you to make 100K+ / year. Just be a contractor.
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Old 09-07-2009, 11:28 AM   #10
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I have developed software for ages, but also moved into upper management while continuing to write code. In company photos, I am usually standing next to the CEO. There are great rewards in manipulating people and getting them to do what you want. People really need suggestions on how to be productive otherwise they would sit on their butts all day watching YouTube videos or posting to EarlyRetirement forums on the Internet. There is quite a lot of money to be made in helping these people.

Also it is rewarding to see people who were students of yours become the CEO or win the Nobel Prize. I semi-retired and have since shed my managing responsibilities and gone back to the skunk works where I continue to develop software that will be used daily around the world. Want to make more money? Then, manage a team of software developers.
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Old 09-07-2009, 04:55 PM   #11
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Why do you think you'd hate upper management?
I may change my mind, but here is why. I'm more confident my skills are in front of a machine than in the boardroom or small-talking with other upper-management types. Moving up to lead developer is fine, but past that and I'll probably be sitting in meetings all day, talking up to personalities I like less than the ones I manage. My perception of supply & demand is that those who want to manage outnumber the positions available.

Yeah the asset allocation is pretty naive. I was just throwing money at where I saw the most recent growth since I don't have lots to lose.

Quote:
People really need suggestions on how to be productive otherwise they would sit on their butts all day watching YouTube videos or posting to EarlyRetirement forums on the Internet.
You mean videos like ? Now time to go do productive stuff...
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Old 09-09-2009, 07:56 AM   #12
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Private indusrty: Former scientific programmer in FORTRAN on IBM systems (yes, I've done punch cards) and system manager for VAX systems before shrink wrap software was the norm. I was eventually a technical PM for very small groups (< 5) and enjoyed that. No personnel tasks, just techie stuff.

Fed civil service: I migrated back to physics and eventually to engineering as years went by. Then I landed myself back in the experimental lab environment, by "brute force" against management's wishes.
When I was enslaved to manage contracts half time, that was exactly when I lost interest in the j*b.

Every person I saw in charge of larger groups of people was not happy. So I avoided that like the plague. It was definitely the right decision for me, as I have no patience for personnel issues.

You have to figure out what makes you excited, not bored, and where your best productivity niche is.
Beware the siren call of more money in management if you are a dyed-in-the-wool hands-on techie.
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Old 09-13-2009, 08:57 AM   #13
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I'm a software developer. I've managed to avoid management, save for a brief stint until a new Director was brought in.

I think it's a career where one of the big lures of management (money) isn't as strong, since experienced software developers often make almost as much as those that manage them. It's not like working at factory or being an administrative clerk where the bigger bucks won't start rolling in until you climb the ladder in the organization, so to me it's a fair tradeoff to do what I enjoy doing and miss out on the relatively small additional financial rewards of management.

Plus these days I'm slinging pure Python, so work is kinda fun.
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Old 09-15-2009, 08:30 AM   #14
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Usually the better money is in contracting. 10 years at age 25 I got lucky and got a consulting gig at $50/hr (as a W2 contractor). I had been programming for 3 years. But my timing was good, since it was in the late 90's before the dot com bubble burst.

Today I'm still at that same place, but my rate is $79/hr. That isn't exactly comparable to that $50/hr, since now I'm a 1099 contractor. So I have a corporation that gets paid, then I draw a salary from there -- but that means I have to file taxes, and pay both sides of Social Security, and there are some corp/accounting fees as well. On the up side, I'll be contributing $34,500 to my 401k this year.

Anyhow, I'm making more than the lower level managers, and probably mid-level ones, too. No desire ever to go into management. The money will come if you're good at what you do.
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Old 09-15-2009, 08:47 AM   #15
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I'm also a software engineer (started in 1980). It took a while but I got into the 6 figure number about 10 years ago, but it has not grown much since then. I believe that outsourcing has put a lid on better salary growth. I was in management for about a year, but went back (by choice) to straight development when I changed jobs. I currently have a great job, but I no longer have any desire to do software development, so I'm hoping to retire in the next couple of years, certainly by 55.

Good luck - but don't spend too much time on early retirement forums when you're only 23, you've got a long way to go, so enjoy life now !
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Old 09-15-2009, 09:09 PM   #16
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The most volatile expense I have is food. Anyone else?
DH and I control it a bit by taking out a weekly cash allowance and paying for our meals with it. If we spend too much on the weekend - we pack lunches all week.

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I don't expect my salary to reach six figures in the next decade.
DH is a software developer, I'd also echo that it's quite possible that you'll be able to do 6 figures in 10 years. A lot depends on who you work for, and how often you change jobs. DH changes jobs every 3 years or so, and averaged 10% raises for the first 7 years he was out of college. Some was during the dot com bubble, but a lot of it was after. Every year of experience you have with software development makes you much more valuable to an employer.

It does look like you should start diversifying, I'd start with your 401k. I keep a pretty balanced portfolio in my 401k, I'm riskier with my Roth, then I have some stock in tech that I consider my "lottery". I don't expect much from it, but if it ever runs up again, It'll be like I've hit the lottery and can cash out.
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Old 09-15-2009, 09:37 PM   #17
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Yes, if you're willing to commute or buy foreclosures. Have a look for yourself. Fortunately I don't work directly within D.C., but in the outlying suburb/office parks.
I know some of those cheapo areas in Manassas, and unless you are planning to stay single for your entire life and are a highly rated martial artist and gunslinger, I wouldn't plan on spending a lot of time there. JMO.

Also, you mentioned in the OP that you have 90% of your portfolio in media and telecom stocks. It's a gamble that might pay off, but I worked in telecom for a looooong time, and my stock options are still underwater. You might want to diversify some.

Then, to echo some others on here, don't focus too much on retirement at your age. LBYM, yes, stay out of debt, yes, and the rest will follow. There's no way to tell what life will be like by the time you are ready to escape, so pay attention and be flexible. But mostly, enjoy your life now. You never know when you'll get hit by that bus or shot by a Manassas Park gangbanger.
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Old 09-15-2009, 11:03 PM   #18
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I know some of those cheapo areas in Manassas, and unless you are planning to stay single for your entire life and are a highly rated martial artist and gunslinger, I wouldn't plan on spending a lot of time there.
harley I know of the crime in Manassas as well and know a rough scene when I see one. It happens to be one of the few affordable communities near work, however, so I'm still going to look. A home still looks to me like a sound investment at this time since it's a buyers' market, the rates are low, and there's the $8000/10% tax credit for the home.

I have two questions I'll probably ask in the forum designated for questions, but I'll try asking here:
Assuming no prepayment penalty, would it be an overall better use of money to take a 5 yr ARM at a low interest rate and pay it off within 5 yrs, or take a 30 yr. fixed and apply 5 yrs' worth of dollars toward another investment?

Also, I'd like to save for the down payment + closing costs in a high-liquid, high-yielding account. I'm thinking of going with one of Vanguard's money market accounts because of the low ($3K) requirements to opening an account. Does anyone here have any experience with Vanguard or any suggestions?
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Old 09-16-2009, 08:40 AM   #19
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Vanguard is great. I'd say over half the members here have experience with Vanguard. Their money market interest rates are very low right now. I understand you might do better with Penfed.

As for the mortgage, personally I wouldn't touch an ARM with a 10 foot pole, and never have. The reason for that is that you never know what life will bring. You might end up in a financial pinch and unable to pay it off. You'll pay more with the 30 year fixed, but what you are buying is the flexibility of being able to revert to taking 30 years to pay it off. You can still pay it off in five if you want to. Make sure there is no pre-payment penalty.

Mathematically an investment will pay you more over the long run than paying off the mortgage will, but there are greater risks so your risk tolerance should guide you.
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Old 09-27-2009, 03:31 PM   #20
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Tom, do you think the ad revenue you get is worth your time?
I currently make 60% of my regular month salary on my websites, most made from scratch, they are part of my portfolio and will help me to get a regular job again if FI won't be a possibility. Actually I was recruited because of them, starting building them since second year of college. I don't rely on ads only but special features only to premium accounts. I love web development, in my daily job I build stuff around a popular HRMS

But yes the hourly rate can be very poor in the beginning.
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