Every time I hear someone say there is no opportunity, things are bad, unfair, I cringe. Opportunity in the 21st century looks different than when I was growing up, but it’s there and plenty of it.
What appears to be different is attitude, and self-discipline when it comes to spending and saving. The ability to go without something desired, to distinguish between wants and needs has waned.
Pratima Gulati | January 27, 2021
WE MOVED FROM INDIA to the U.S. in 2014 when my husband got a job with a Silicon Valley tech company—and we found ourselves living in one of the world’s most expensive places. On top of that, when our daughter was born, I left the workforce for a few years to look after her, which meant we had a period when we lived on just one paycheck. Still, within five years of arriving in the U.S., our net worth had climbed from zero to more than $1 million.
Here’s how we did it:
1. Pick the right employer. This makes sense anywhere, but it’s especially critical in the San Francisco Bay Area, where you need an income that matches the high cost of living. My husband and I decided he should ignore the charms of hot startups and instead stick with a big tech company with a staggering growth rate.
As a former Google chief executive said, “If you’re offered a seat on a rocket ship, don’t ask what seat. Just get on.”The top tech companies offer generous stock grants when you first sign on and they often award similar amounts of shares each year thereafter. Half of our net worth came from those stock grants. When the stock would vest, we’d sell it, putting the proceeds toward a house down payment and investing the rest in Vanguard Total Stock Market ETF.
2. Fund the 401(k). From the very first year, my husband maxed out his 401(k), earning a 6% match. This meant we were adding some $30,000 total each year to our net worth. Funding a 401(k) might sound like commonsense. But from what I’ve heard, a lot of new immigrants don’t contribute to their 401(k) for the first few years, because they don’t understand the benefits.
3. Live small. In Silicon Valley, we’re surrounded by people who are doing well financially. There’s constant pressure to “keep up with the Joneses.” But for our first three years in the Bay Area, we lived in a small one-bedroom apartment that we sublet from a friend.When it came time to buy, we skipped the big expensive house and opted for an older 988-square-foot condo. That meant the mortgage payments were affordable, allowing us to invest every month in the stock market. It also gave us the financial breathing room so I could take time away from work when the baby was born. The condo is now worth 15% more than what we paid.
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