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Today at lunch my coworkers and I discussed the frugal and interesting people at my company and came to the conclusion that I am definitely not the most thrifty person here. This is an article featuring some of my rich and frugal coworkers without giving names. These people profiled here are all brilliant and I think of some of them as rolemodels. If you’re my coworker and you recognize yourself below please don’t be offended! I respect all of you very much!

  • This coworker is an extremely intelligent Harvard grad who has been with the company for more than seven years. He is getting paid more than six figures and has racked up a stock compensation package worth at least few hundred thousand dollars in the past few years. He doesn’t own a car because he rollerblades to work, and he rents a very reasonably priced apartment near downtown San Mateo. One funny frugal story about him is that he went to McDonalds downstairs and bought a hamburger, and then added cheese that he brought with him to make it a cheeseburger! Despite his frugality, he really seems like a truly nice and generous man.
  • I work with this particular coworker a lot and he’s usually very reserved and quiet. He carpools with two other people to work because in his words, “everytime I hear the FastTrak beep my heart sinks a little”. For those who don’t know, FastTrak is the electronic toll collecting system in California and every beep is four dollars now. His own car is a Toyota from the early ’80s and his carpool buddy helps him shop for cheap things when he needs them. He’s also very into saving money and like me, he is a housing bubble fence sitter. This person also makes more than six figures but lives on a lot less. The funniest story I remember about him was when he looked very depressed and our supervisor asked him what’s up. He then revealed that his new wife is demanding diamonds. Then our supervisor pointed him to some sales, and he pretty much gagged at the prices and frowned. I don’t think the wife got the diamonds.
  • We’re not too sure about the motivations of this particular coworker. We theorized that he is always at the office to save energy at his own abode. He is always there and one of our other coworkers actually found a picture of this guy on Google’s streetview near our office. Once I left my keys at the office and went back to retrieve it at 2 am, and this guy was still there. We know he’s not working all the time, so he is probably trying to save on internet and energy costs. He also buys groceries and brings them to the office to consume. This guy is in the same league as the first guy in terms of wealth, but he lives like a true office bum.

I don’t think I am ready to go to the extremes of living at the office or packing my own cheese, but my coworkers are truly inspirational. I am nowhere near them in income yet, but I will try my best to continue to be frugal when my income does rise.

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A new carnival is up at ! My submission is , which was also linked by The Silicon Valley Blogger in . Here are some of my favorite articles from this carnival:

  • — Just yesterday I talked with about having kids again. This is a great informative article.
  • — Great article about putting marriage before money.
  • – Learned quite a few things here.

I am looking forward to the next carnival!

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This week central banks around the world to ease the credit crunch. Stories like this really makes me feel like I am living in a virtual world. In any MMORPG, the administrators have the power to create as much money as they want and “inject” the assets into the world. They can also create items and put them into the world. The items then get traded by players. This is practically what happened here in the real world. Many homes were created on the basis of non-existent money, and then the non-existent returns got sold all around the world. When the world realized that all of these assets are essentially virtual, the powers that be created more fictitious currency and lent it out to its minions to balance out the economy. Since our currency system is decoupled from the gold standard, there is no real world item that ties to our money. Essentially our money is as digital and virtual as the money in a game. In games there are designers and QA engineers that work on the balance of the economy and sometimes they do catastrophic things to the worlds to make the gameplay more interesting. There are also times when the original design is flawed, and balance needs to be brought to the world through patches. So what are the central banks doing exactly in our world by lending out more money? I think they’re trying to restore balance, but are they ultimately fixing the bugs in the system or just applying a workaround? Real life is the ultimate MMORPG with 6 billion players world wide, but who are the ones pulling the strings?

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Recently and both wrote about employee stock options and when should options be cashed out. Here are my experiences and knowledge on the subject after receiving stock options as part of my compensation package at a couple companies.

  • Options are a contract between you and your company. There is no cash value to your options.
  • Options usually expire within a few months of your leaving a company so the best time to think about exercising it is probably when you leave.
  • You can’t sell the shares you buy through options if the company is still private. There are clauses in the options agreement that the stocks would be a non liquid investment and you can’t transfer the shares.
  • If you exercise incentive stock options, the difference between the current price and the exercise price add to your AMT income which could trigger an AMT tax.
  • If you exercise the options and then sell the stocks within a year, the short term capital gain taxes is the same as your ordinary income, which could be 40% or more. If you wait until it becomes a long term capital gain it might be a much bigger chunk of change that you keep. So this might be an argument for exercising the options early.
  • Don’t expect to become fabulously rich from options unless you are granted a significant share of the company. Think of it more like a bonus if you’re able to make money. I have had ex-coworkers who really thought that they would become millionaires from 0.000001% of a company worth less than 3 million. Basically, don’t let it go to your head and spend your money like you’ve already gotten the after tax gain of your options exercise. I’ve always told my parents, I’d be lucky if I get a couple cars out of exercising my options.

As for me, I did exercise some options a little over a year ago when I left my last company. It was only a $600 investment and now it’s a pretty stock certificate in a drawer somewhere. The company isn’t doing badly so my stocks have quadrupled in price on paper. In my current company I asked for more pay during salary negotiations, and they gave me 50% more options than the original options number instead. It turned out to be a good move. In the Valley it’s conceivable to work for a collection of small companies that give a fairly good amount of options and build up a stock portfolio of your employers, and maybe one of them will make it big.

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It’s tough to hire good people these days in the Silicon Valley mostly due to the world renowned event known as the “dot-com bubble”. A lot of people my age decided not to pursue software engineering, or switched jobs so the talent pool is pretty small. Additionally, there seems to be a “Bubble 2.0″ brewing in the Valley as a new battallion of small “Web 2.0″ companies are sprouting up like mushrooms after a rainy day. It’s especially difficult to find mid level people with 3 to 6 years of experience because those are the classes that graduated during the great technology depression. In the past few years of working in the Valley I conducted many interviews, and here are some stories and lessons learned.

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When I started out, I was not yet 22, and I had to interview a lot of people much older than me. That was a bit intimidating, and there are times when the candidates actually started telling me what I should do in my job. It was pretty annoying because it felt like they were interviewing me and giving me advice. Later on I learned to just take the reins of the conversation and stop candidates when they babble on. An interviewer really has to be in control.

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You spend most of your waking hours with your coworkers if you work at a regular office with a regular eight hour shift. So it’s really important to reject the people you don’t want. There is a problem when someone above you is bent on hiring someone you don’t like, but object as loudly as you can. I’ve already had to deal with this twice. The first time my own manager hired someone he didn’t want because a VP above him wanted to hire the candidate who happened to be the VP’s excoworker. The end result was that the new person really didn’t fit in well within our team but had the support of the VP, and I ended up leaving the company, and then my manager and two other team members also left so the only person left was the VP’s excoworker. The second time, I really thought that one candidate wouldn’t be able to learn as quickly as she needs to, and told my manager that. However, he hired her anyway, and the end result is that she felt really overwhelmed and quit in three months. It’s an incredible waste to hire someone that could destroy an entire team or produce discord in an otherwise happy team. It’s hard to assess a person in a short amount of time, but if you can’t even deal with someone for thirty minutes to an hour, it would be very hard for you to work with them for eight hours a day. If you’re not the hiring manager, it’s best to voice your objections as much as you can before a horrible hiring mistake is committed. Now I think my manager trusts my opinions more because I was the only one who really objected to the hiring of that particular candidate. If your manager isn’t open to suggestions and objections, then he/she probably isn’t a very good manager anyway. That’s why in my last company my whole team left after that particular VP took over.

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I’m not saying “don’t be nice”, but don’t talk to a candidate like you would talk to a friend. Be courteous but not too familiar. Useless smalltalk in interviews really bother me and they’re a waste of time. At the time of the interview, I really don’t care that a candidate loves cats or can cook really good vegetarian food. I also don’t like people who read the things on my shirts and ask me about them. I am also disturbed by compliments on my looks, because that’s almost like sexual harassment. I liked to get to the business of interviewing and nothing more

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I just went through two beyond painful interviews today with two candidates with 10+ years of experience. It’s almost like they write as much as they can on their resumes without actually having corresponding skills to back it up. It’s really easy to just throw a few simple questions at them and discover that they pretty much lied on their resume. That really doesn’t sit well with me. I asked a candidate once why she wrote all that stuff she clearly didn’t have any knowledge about, and she said, “well, my friend told me that I should write every technology I have heard of”. That is really not the way to go. So now when I see resumes with too many keywords I go into the interview fearing the worst. Most people are experts in a few things, and I think it’s better to highlight one’s expertise rather than writing every hot buzzword there is on the resume.The problem is, HR people can only search on resumes, and they tend to be fooled easily by these liars and we end up wasting some time.

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Basically, don’t be afraid to reject a large number of people you interview and don’t take their feelings into your consideration. They might find another job with a competitor, and possibly create an inferior product. That’s better for your company anyway. So don’t feel bad for them.

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The technologies we use change very rapidly, and it’s important to upgrade my own skills. I have interviewed a few people with more years of work experience than years I have been alive, but their skills are no longer applicable. It’s really easy to learn things these days because there are so many manuals and tutorials available on the web. Having a few horrible interviews actually motivated me to not become a dinosaur and upgrade my knowledgebase in order to be competitive.

Okay, enough of the serious stuff. Now I bring you some highlights of comical and craptacular interviews:

  • Once I was asking a candidate a question, and he said, “excuse me, may I go to the bathroom?” So of course I let him go, and then five minutes after he came back he asked again, “may I go to the bathroom?” At this point it was clear to me he had some sort of bowel problem. So we finished up the interview and I returned to my supervisor. I said to him, “I think the candidate has diarrhea”. My supervisor almost fell out of his chair and exclaimed, “WHAT?!”. I repeated, “I think he has diarrhea.” He seemed relieved and said, “oh my god, I thought you said he DIED”. We all had a pretty good laugh about it over happy hour. I guess the lesson here is to cancel interviews if you’re feeling sick.
  • Once there was a man I interviewed that I could barely understand. When I asked him what about the company interested him he answered, “when you guys go public lots of money!” I really appreciated the honesty and thought that was a better answer than the cliche answer “I like your product”, but unfortunately, he had none of the technical skills we were looking for.
  • I’ve gotten some horribly wrong answers to some of the simple technical questions I ask. One of the simplest questions I ask is “how do you get an output of all the lines in a text file that start with a certain word or letter”. This is a list of horrible answers I have gotten (a few were from today): ping A, ls -lrt, dir, find A, head, tail,some Unix command. The one that takes the cake is “ping”, because two different people gave this answer independently. Is there some demented interview guide that tells interviewees just to say “ping” to things they don’t know? In my opinion, even answering “manually copy and paste the lines that start with the word or letter” is better than throwing out random command names and hoping it’s right.
  • This one is short, and it was funny to me. I walked into the interview room and introduced myself. Then the candidate got a call and looked extremely nervous. When he got off the phone he said, “I need to go back to work” and left.

Interviews are the closest thing to blind dates. It’s hard to find that special someone, especially in this mad place. People are always switching jobs and doing new things here, and maybe one day I will be interviewed by one of my ex-interviewees (the horrors!). Anyway, if you know someone who is awesome at programming or QA please send me a note and maybe we can set up something.

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