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By Dr. Harry Tennant

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Wednesday, March 9, 2011

STEM professionals and their careers: Wealth

I have known a number of tech colleagues who have become wealthy. The ones who have become the wealthiest are those who started their own technology businesses which experienced fast growth and then either went public (sold stock) or were bought by an existing big business. This often results in a big payout for the founders, in the millions or tens of millions of dollars, even up to the hundreds of millions of dollars.

The founders and their early investors make the most money when a fast growth company goes public. However, other key tech people can also make a lot of money this way. I have known many programmers who were able to retire quite comfortably after working just a few years for a fast growth company that "cashed out". So, the financial benefits to a STEM career are not limited to the ease of getting a job fresh out of college. In high tech companies, the tech folks are critical to creating the new product, so are essential to the success of the startup company. As a result, they are often offered stock options to sign on with the startup and stay with it through the early years. While the stock options are worthless when the startup is formed, if the company does experience fast growth, those once-worthless stock options can become worth millions.

Fast growth startup companies are risky endeavors. The majority of attempts to build fast growth tech companies fail. One friend, for example, was a software developer who believed in the prospects for the startup. He chose to get paid nearly entirely in stock instead of salary. He lived very frugally in hope of getting a bigger payout later. It worked. When the startup went public, his stock was worth about $50 million. I've had other friends who went with startups which went out of business. They were left with no big payout, but typically they were able to go back to the kind of tech jobs they had before the startup. I have known colleages on both sides of that approach: some who were lucky and became very wealthy and some who spent years and have nothing to show for it.

So, is a STEM career a path to wealth? It can be. But if it's wealth you're after, you need to be ready to take some risks and be aware that in most cases, you will not become wealthy.

Posted at 12:00 AM Keywords: STEM 0 Comments

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