Big Tech Paychecks, Broke Engineers, and the Money Black Holes

Hello world—and welcome to the uncomfortable side of tech.I’m a recently laid-off ex–Big Tech software engineer with 25 years in the industry. In the middle of what feels like an endless wave of tech layoffs, I keep hearing the same question from people outside the industry and from junior engineers just starting out:“With those salaries, shouldn’t senior software engineers all be rich and financially independent?”On paper, it’s a perfectly reasonable assumption. Tech compensation, especially in Big Tech, looks outrageous to most people. Six-figure salaries, stock grants, bonuses, numbers that feel almost cartoonish compared to the median income.And yet… reality tells a very different story.Over decades in tech, I’ve watched many experienced, intelligent engineers accumulate shockingly little savings. Some are so financially exposed that a single layoff pushes them instantly into crisis mode. I’ve even seen stories of engineers laid off from companies like Meta who, after months of unemployment, ended up homeless.So how does this happen?After a lot of reflection, I’ve come to think of the answer as a series of money vacuums, individually rational choices that quietly drain even enormous incomes when stacked together.Money Vacuum #1: High Cost-of-Living Gravity WellsTech workers cluster in a handful of metropolitan areas, places like the Bay Area, Seattle, New York. These cities routinely cost two to three times more than rural or mid-sized regions. And this is true even if you live modestly, even if you “live like a monk.”I grew up in rural Pennsylvania. The cost difference is staggering.No matter how frugal you think you are, geography alone can quietly eat your paycheck.Money Vacuum #2: The House That Ate Your SalaryHousing is where things really get dangerous.Surrounded by peers buying large homes in prestigious neighborhoods, many engineers follow suit. These houses often sit in top-tier school districts, come with expensive renovations, and carry truly massive mortgages.Between mortgage payments, property taxes, insurance, maintenance, and utilities, it’s not unusual for housing costs to reach $5,000, $10,000, or even $15,000 per month.Worse, housing is illiquid. When layoffs hit, you can’t easily access that equity, so the very thing meant to represent “success” becomes a financial trap.Money Vacuum #3: Luxury Cars and Status SpendingTech workers, especially consultants, are prime targets for luxury car marketing. Cars become symbols of success, innovation, arrival.But behind the feelings are tens or hundreds of thousands of dollars in depreciating assets. In many urban centers, public transportation would do just fine, yet monthly car payments often rival a typical family’s mortgage.That’s not freedom. That’s drag.Money Vacuum #4: Food as Convenience (and Therapy)Tech is stressful. Food becomes a coping mechanism.Takeout at work. Restaurants as family time. High-end grocery stores where basic items cost multiples of normal supermarkets.The result? Monthly food spending that can quietly rival a mortgage payment, again.Money Vacuum #5: The Education Arms RaceMany engineers come from cultures that deeply value education. The instinct is understandable but the spending can spiral.Tutoring, cram schools, extracurriculars, private schools, college funds, it all adds up. For families with multiple children, education spending can easily match housing costs.The hard truths:* Spending 10x more doesn’t make your child 10x more successful.* Excessive pressure can damage mental health and create resentment toward learning itself.Money Vacuum #6: Consumption as a Band-Aid for BurnoutTech work consumes lives.Endless calls. Launches. Hypercare. Travel. There’s little time left to actually live.That emptiness often gets patched with consumption:* Burned out? Buy a new gadget.* Marriage struggling? Buy designer goods instead of time.* Kids need help? Buy educational toys instead of attention.Thousands disappear every month without ever addressing the real problem.Money Vacuum #7: Tech Bro FOMO InvestmentsRSUs vest. Six figures land in your account.Suddenly, an entire ecosystem appears, pitching world-changing investments you must get into right now.NFTs. Exotic hardware startups. Energy mirrors. Plant-based 3D-printed meat.Sometimes, someone wins big. Most of the time, money quietly evaporates. Domain expertise doesn’t magically transfer, but confidence often does.FOMO plus overconfidence is a devastating combination.Money Vacuum #8: When Life Just HappensIllness. Accidents. Divorce. Family emergencies.These hit everyone, but when high earners fall, they fall harder. More money at risk means more damage.The Brutal Stack EffectEach of these choices seems reasonable in isolation. Together, they can devastate even the highest compensation packages in tech, leaving engineers frighteningly exposed when layoffs arrive.That’s why so many “rich” engineers aren’t actually secure.My Own Layoff: A Different OutcomeMy recent layoff looked very different.After years of saving and investing, I wasn’t thrown into survival mode. I landed somewhere closer to semi–early retirement.It feels a bit like being kicked off the Hindenburg right before it explodes, standing just outside the blast radius, watching the slow-motion catastrophe unfold across the tech industry.It’s horrifying. And, admittedly, impossible not to watch.Final ThoughtsThis isn’t about shaming. It’s about awareness, empathy, and hard-earned perspective.If you work in tech (or hope to) you deserve to understand the invisible forces pulling at your finances. High income doesn’t guarantee safety. Intentional choices do.If you’re morbidly curious about my ongoing journey through tech, layoffs, and financial independence, feel free to stick around.Thanks for reading.Talk soon. Get full access to AsianDadEnergy's Newsletter at asiandadenergy.substack.com/subscribe