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Comment by GordonS | Hacker News Reader

As a European, I would say the US is very different from Europe. Yes, they are similar in economic terms, but the social attitudes, economic attitudes and worldview feel starkly different. Of course the US is big place, and this varies among states, but still.

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That may be the case, but as a software dev in the US, you're actually the beneficiary (via your very high salary) of the dog-eat-dog market economics that dominate the US. Whereas in Europe, as a developer you're just expected to be content with a mediocre salary, like everybody else. The only escape out of it (in Europe) seems to be the contracting market for senior people, where the rates are on par with US non-FAANG salaries.

I'm not sure if you take work/life balance into respect.

You can have all the money of the world, but if you're only enjoying it at >60 years it's too late.

[ deleted my original reply - sorry I thought you were replying to another one of my posts ]

True, you probably work harder and are more stressed in the US, but at least you have an option to retire early there on your savings. In the EU, I suspect most developers have very little savings and plan to just work until old age and state pension kicks in.

Where I live, we are record savers ( Belgium). Everyone can go on pension at 56 ( much lower pension though) and can have a break for multiple years if they want, during their active career, that's not possible in the US.

I have 1 year to go for being debt free ( included buying a house) at 32 age.

I also thought it was US citizens that didn't save money?

https://www.google.com/url?sa=t&source=web&rct=j&url=https:/...

Even then, Europe catched up with productivity and some even doubled it vs. the US ( quoting : https://www.euractiv.com/section/innovation-industry/intervi... )

> Hours worked does not mean more productive.

I once got a contract offer from Belgium and checked your taxes. They are something like 55% for anything over 60k EUR per year? It means that, even if you get a high paying job, literally most of the money gets taken away. Seem rather hard to save significant amounts in such conditions.

Cost of living is lower?

600€/ month was enough to pay off my house loan. Leaves plenty of room to save money.

I literally save like 3-4/5ths, i do think that's more than average though.

Renting a place here would be 300-900€/month. I know someone who rents at 250€/month in the city with a decent house ( that's an edge case though)

Note: I'm paying off my loan early.

And there are places in the US where modest homes in good areas are $90-100k and will get you a similar payment even with less than 20% down. I'm not sure what your point is?

> In the EU, I suspect most developers have very little savings and plan to just work until old age and state pension kicks in.

This is also true of developers in the US. The number of lucky ones who can retire significantly early is a tiny fraction of the market — but companies have very successfully used those dreams to get lots of free overtime from people who didn’t notice where most of the money ends up. FAANG developers do well but even there early retirement is not a reliable plan.

That must be due to lifestyle inflation? If you don't save anything on a $100k+ salary, you have only yourself to blame (assuming the savings weren't wiped by medical bills or some other calamity). I suspect these people prioritize their McMansion, changing family cars every 3-5 years or funding fancy out-of-state schools for their children over freedom from work.

Have you looked at the cost if living in the Bay Area since 1990? $100k is not exactly buying you a high-end lifestyle involving private schools in a city where under something like $120k qualifies a family as low-income. Both parents in high-income jobs gets closer but then you’re talking about additional expenses like housecleaning, nannies, dining out, and probably multiple cars.

SF is an extreme but most of the high paying tech jobs cluster in areas which are closer to that cost of living - doing well, sure, but far from rich and definitely not able to count on being set for life since one illness, untimely layoff, etc. can easily derail a career.

That’s not to say that there aren’t ways to economize but there’s a long history of lazy editorializing about how kids these days are spending too much on avocado toast while studiously ignoring the data showing that the big problems are healthcare, housing, student loans, etc.

The Bay Area is an outlier as one of the most expensive locals in the world to live in. The median developer salary in the US is somewhere around $100-110k, and the vast majority of those people live outside of SF/NYC and work for boring companies doing boring forms-over-data work.

You can save a shitload of money in Iowa making $95k/yr.

I completely agree but how many jobs are there in Iowa paying that much? I'm sure there are some but it's hard to fault people for going where the jobs are.

My whole point is most jobs aren't in SF or NYC, and most software devs make six figures. Even if the high six-figure jobs are concentrated in those two locations (I'm sure they are, especially if you expand it to Austin, Chicago, and D.C.), there are going to be plenty of people making six figures in low COL areas. FAANG only accounts for a small percentage of dev jobs (a few tens of thousands at most, out of nearly 4 million devs in the US). Let's call it 100k to be super generous, and that they all make above the median. With 3.8 million devs, 1.9 make six figures. 1.8 non-FAANG. NY State has 220k developers so let's remove all of them for the sake of argument, even though that's going to include the guys in upstate in low COL, and double-count a bunch of FAANG folks. We're down to about 1.58 million non-FAANG, non-astronomical-COL living folks at least who are making six figures.

The BLS stats might be a good place to test those estimates:

https://www.bls.gov/oes/current/oes151251.htm#st

Again, note that I’m not saying you can’t make a good living elsewhere - having spent the first 15 years of my career doing that, it’d be odd - but that it’s not a simple ticket to being rich or even especially upper middle class. The pay scales definitely drag down, there are fewer jobs (and thus promotion opportunities), and they’re concentrated in the higher cost areas of low cost states.

Still solid, no question, but not a gold ticket. Note that many of the things the person I originally responded to are expenses which don’t scale down: if you live in a rural area your house is cheap but the two cars your family needs cost the same, computers and other consumer goods are only slightly less, etc. Those private schools are cheaper but not dramatically so, etc.

State pension won't be nearly enough to cover your living standards. You'd still pay insurance (less than before retirement though) and taxes off your pension. You still have to save on your own or go with an additional private pension scheme in Germany to somewhat be able to keep same living standards.

This is true, state pension is enough to survive, but not enough to live. You should absolutely put money into work/personal pensions while you are young.

Working for tech in the Bay Area you have a pretty reasonable and predictable path to financial independence in maybe a decade or so of work (so, early 30s if you start right after school). After which you can have any wlb you want for the rest of your life. You don't even have to work at absolute top companies like FAANG to achieve that, although it helps (FAANG & hitting L6+ you have a decent shot even at FatFIRE)

This is nearly impossible in Europe except by extreme luck. Enjoy your 40+ years of sub 40h/w work ahead of you with slightly longer vacations. While I can have a life long vacation after my 30s. Perhaps even spending it in Europe.

The difference here is that if you lose your job in European countries with great social security, you still have a salary you get by fine on.

And hospital stays do not bankrupt you, or even make a dent.

Even with «great» insurance in the US, there are all these edge cases and loopholes, stuff they will not cover.

Where I live I never have to worry about these things, I do not even have to put aside money for rainy days (though I do, just because I make more than I spend).

In Europe you get security + enough money to life comfortably, but not really enough to accumulate any capital and gain financial freedom. The system is constructed so that you give your whole life to it in return for the security and comfort. Whereas in US, you can save enough to escape the system before you're old. From what I'm reading, even just regular engineers (not software) in the US often retire at 55 or 58, as they have saved enough by then. Compare that to the retirement age of 65-69 through most of Western Europe.

While that is true to an extent, I think you have to factor in (as far as quality of life goes) the amount of living people do in Europe before they retire. Many work only 37,5 hour weeks, and they have yearly five weeks paid holiday.

And statistics like millionaires per capita show that it is definitely possible to achieve financial freedom in Europe, too. Though US is ahead, except for Switzerland, of course.

> In Europe you get security + enough money to life comfortably, but not really enough to accumulate any capital and gain financial freedom

That's not true. I'm almost 40, and excluding pensions and capital tied up in my home, I currently have around £500,000 in savings. This wasn't particularly difficult to achieve on a software engineer salary in Scotland; we've travelled the globe for several years, have a nice house, 2 cars etc. We absolutely plan on retiring at around 50 at latest. Now with 20 years' experience I make €65k/y from my day job as a software architect/tech lead/lead dev (working 30h in a 4-day week). My wife and I also run a B2B micro-ISV that's made around €100k/y for the past few years (it was a slow climb to that figure over 10 years).

So, we have a household income of around €165k (~$200k) - certainly more than most in the UK, yet nowhere near what I could make in SV on my own - and still certainly enough money that we hardly need to think about it, and with considered financial planning we can easily retire early.

I'd far prefer to live in Europe than the US - I work way less hours, I get way more vacation days, our healthcare system won't bankrupt us (unfortunately I know firsthand it's far from perfect, but it's definitely still a boon for society), losing my job at any point in my career wouldn't have me out on the street, I don't need to especially fear the police, and (in general) people have a progressive attitude that serves to benefit all of society.

Your B2B makes most twice as much as your daily salary. Would it make sense to quit your day job and invest your time in the B2B?

It's not quite as easy a decision as it looks, as the job has a great pension (they put in 2x what I do), and the B2B is very reliant on a very small number of customers. But, still, yes - 2021 is finally going to be the year where I quit to focus on the business!

By your own statements isn't this an outlier? You're only in the position you're in because you own a business and have a pension where your employer is contributing 2/3 of the value. How much of that 500k EUR savings is from the business revenue?

Wouldn't it be a more appropriate comparison to look at someone with an "average" pension (whatever that may be for Scotland) and no business revenue?

> Wouldn't it be a more appropriate comparison to look at someone with an "average" pension

We're discussing salary of software engineers, firstly because this is HN, and secondly because software engineer salaries in the US are an outlier. Also as I mentioned in my original comment, the figures I gave don't include our pensions at all (as an aside, 55 is the earliest you can currently take anything from private penions in the UK), so I think the comparison is valid enough.

If my wife also had a job as a salaried software engineer, instead of working on our business, our combined income would likely be around €105k, which is still more than enough to be able to live very well and save a lot of money at the same time, as long as you are financially savvy.

Yes but your plans to retire at 50 are certainly taking your pension into account, no? Or could someone survive in Scotland on $500k? I'm not sure what the investment landscape is there but in the US $500k will only get you about $20k/yr on conservative withdrawal schedules.

Yes, the plan is to use that cash until we take pensions from 55 (or probably later if the gov moves the age forward); I meant the pensions weren't included in the €500k I quoted, which is a mix of cash, stocks, bonds and P2P lending.

I'm pushing 40, so there's another 10 years to build up the cash/stocks/bonds/lending pot further, and another 15 to build up the pensions further (well, hopefully of course). Might even choose to retire before 50, since I'll have enough that I'll have the option of trading off yearly withdrawals vs working longer.

I think my point still stands: software engineers in Europe earn less than those in SV (and it's important to remember than SV is an outlier even on the US), but you can still live a very comfortable life, save a lot, and retire early (even if not quite as early as 50), all while working far fewer hours and living in a society that provides free healthcare, education (including higher education in Scotland) and unemployment safety nets, and where society looks out for everyone, not just "number 1".

Edit: forgot to also say that the company pension has not always been as great it is now, and to also mention that 2/3 of our pension pot is actually in person pensions (SIPPs).

First, the issue is that you'd need to compare free healthcare in "Europe" (it varies quite a bit both in how free to how good, but ok), to what you can get on a $500k salary in the US. You don't compare the situation described, but something different.

Second, most developers don't run an independent ISV with their spouse ... If you did this in the US you'd have to further compare: $200k in .eu with healthcare with, say, $500k plus double that in business income, or $1.5m per year.

I think healthcare is going to be FAR better for you in the US. This won't be true for everyone, maybe won't even be true for most, but for you there can be little doubt.

I don't understand your 2nd paragraph - the business wouldn't magically make more money if it was based in the US (we sell globally, including the US).

Healthcare here in the UK is totally free. I know only too well (to my detriment) that it's far from perfect, but I still believe it's a wonderful thing for all of society. Plus nobody needs to worry about whether they can afford to call an ambulance, and nobody is going to be bankrupted if they have a hospital stay.

I wouldn't say healthcare in the UK is free, but rather it has a good balance.

If you have an accident or chronic illness, the system won't leave you alone. But they cover zero cost of prevention. E.g. regular check-ups, blood tests, therapies, unless you have noticeable symptoms are not covered, which is often too late to catch cancer, diabetes or cardiological illness at an early stage. My wife and I spend between £2000-3000 a year on these in various countries (to make it affordable). This number is not terrible, but far from free.

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