Software Engineering: Income over the Course of a Career

A Software Engineer’s Annual Gross Income (AGI) over 35 years, adjusted for inflation. AGI is a US tax measurement of an individual’s total gross income minus specific deductions.

This is a chart that displays my AGI for the years 1987 through 2022 relative to my 1987 AGI, adjusted for inflation. For example, in 1987 the number is 1.0 (my 1987 AGI is 1.0✕ my 1987 AGI). In 1998, my AGI was 2.0 (I had effectively doubled my income that year relative to 1987’s income). This data was extracted from my tax returns.

Takeaways:

• My salary-based income never broke past the 3✕ my 1987 salary. In fact, for much of the time my salary plateaued at 2✕, and that would probably be the case today if the market for San Francisco-based software engineers wasn’t so tight.
• I wasn’t a “software engineer” for much of my career: I was a project manager in ‘86–’87, developer ‘88-’90, pre-sales support ‘91–’98, contractor ’99, systems administrator ‘00-’15, but I wrote code the entire time.
• I may have mis-managed my career when viewed in terms of salary; had I a hankering for management I may have done better. Or not.
• The biggest payouts were from investments not salary.
• Investments don’t need to be sexy startup stock to be good investments. One of my best investments was buying an NYC apartment in ’93, an apartment which I sold to my brother in ’07, and which he paid off in ‘11.
• I made the graph relative; I didn’t put dollars on the graph. I have an ingrained hesitancy to discuss money, but discussing compensation in relative terms — I’m okay with that.
• The last 12 years I took a 20% pay cut in order to work four days a week, a decision I have never regretted.
• I don’t have a family. Families are expensive, and not having one allows an accumulation of capital which enables investment.
• I spent much of 2008 playing World of Warcraft. I attribute this to being lonely after moving to a new city, and to being between jobs.

This post was inspired by my father, who would say to me, “Your salary is how much? That’s a lot of money — do you know how much IBM paid me when I worked for them in 1963?” My dad never took inflation into account, so it seemed to him that I was making ungodly amounts of money. I wasn’t.

I wish he was alive to see this post, but he died in November 2019. He liked numbers.

I pulled the inflation data from https://www.thebalance.com/u-s-inflation-rate-history-by-year-and-forecast-3306093.