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What To Do With Your Millions
- timcederman 16y agoI'm surprised, given this is from Paul, that angel investing is not mentioned.
- niallsmart 16y agoTim - he says "avoid long-term or illiquid investments, though it's fine to put a few percent into random things such as starups, but understand that you'll probably lose that money, so consider it an educational expense."
- gaborcselle 16y agoEven though Paul has been pretty successful with his angel investments ... but on average, that seems to be true.
- timcederman 16y agoI probably should've been more clear with what I meant -- I might've also avoided getting downvoted below 0 if I had. I am surprised that someone discussing what to do with your money (in the context of selling your company and being posted on Hacker News) and discussing what to do with your life did not mention the possibilities angel investing offers beyond trying to make more money.
- andreyf 16y agoI thought this was a clear, albeit indirect, hint at angel investing: It's ungrateful to not make the most out of it (and also help others become a little more lucky).
- blantonl 16y agoTo me, this pandered to a lot of purposes and ideals all in the same blog post
- sown 16y agoThis is all reasonable. The day before google went IPO and created new millionares, they brought in John Bogle to advise them to stay away from mutual funds or whatever and at the riskiest, stick to index funds if they were comfortable with risk and then just put the rest into stable investments if they weren't.
- takrupp 16y agoAn interesting piece of advice I got from my finance professor way back when: Put your money into either index funds (or the more liquid, cheap to get out of Index Future) or treasuries. If you are risk adverse, do more treasuries, if you are more risk taking do more funds (or if you really want to take on risk, lever up). But always stick with these assets, as they are much more reliable than mutual funds or the ilk. Not sure what he'd say now. US treasuries arent the sure bet they were 5 years ago and who wants to put any money into the movement of the S&P? There is something attractive to me in having a few gold bars in a Swiss lock box, though.
- brlewis 16y agoIt's good to see Paul getting recognized for his expertise in this area. He was ignored and downvoted earlier: http://news.ycombinator.com/item?id=1245906 http://news.ycombinator.com/item?id=1245906
- pwhelan 16y agoI've been pretty disappointed that I haven't heard people mention charitable donations as something to do once you've hit it big. That we have talents and opportunities makes us pretty damn lucky and helping out the unfortunate -- not just the less fortunate -- shouldn't be ignored.
- JMiao 16y agobeing charitable is admirable and all, but i'd be pretty disappointed to see someone turn this type of article into an opportunity to impose their personal beliefs on others.
- deleted 16y ago[deleted]
- pwhelan 16y agoI fail to see how saying that I am disappointed that something hasn't been mentioned is saying "most of the adivce in the HN comments is crap" or is imposing my beliefs on others. Saying people should think about something does neither and makes strong assumptions about what I think without evidence. And btw -- I have found the advice across the recent threads to be high quality, particularly that relating to the Graham/Buffet value investing.
- duck 16y agoYeah, that didn't come out like I wanted it to and I didn't really mean to say anything about your article, but rather the comment... I was going to edit it, but I guess I just deleted it, so either way never mind.
- MikeCapone 16y agoEspecially if it's in high-impact/low-probability causes that are starved for money. Small amounts there could make big differences if they pay off. Eliezer Yudkowsky wrote a lot about this on LessWrong.com, about how dog shelters get a lot more money than existential risk prevention (singinst.org or Lifeboat.com), Friendly AI research (singinst.org again) or finding cures to the diseases of aging (sens.org). Of course, puppies deserve our help. But do they deserve more resources than the kinds of things I mentioned above? Or is this just the way our cognitive biases steer us, pulling at our heart strings against our best interest? A couple of wealthy people could easily double the amount of research in those fields (in fact, Peter Thiel, formely of Paypal did pledge a few millions, but more are needed).
- JMiao 16y ago"RAID for money" and i was like, "go on..."
- cperciva 16y agoThe analogy doesn't quite hold. The key idea behind a Redundant Array of Independent Disks is that under the assumption that disk failures occur independently with known probability, you can compute the probability of the array remaining intact. In contrast, with a Redundant Array of Insolvent Banks, there is a very high correlation between bank failures -- but you're saved by the FDIC per-bank insurance limit. You're not modelling your risk based on known probability distributions; you're eliminating your risk entirely (at least as long as you trust the FDIC).
- tkhoven 16y agoYou're not modelling your risk based on known probability distributions; you're eliminating your risk entirely (at least as long as you trust the FDIC). To (over?)extend the analogy further, there's always the possibility of a controller failure.
- sethg 16y ago...and each bank, ideally, guards against insolvency by distributing your deposits among a Redundant Array of Independent Debtors.
- riffraff 16y agoor, he was just talking about RAID0
- nreece 16y agoGo for a walk in the park. Appreciate the trees. I knew this was coming. You can, and should, do that regardless of whether you have millions or not.
- Evgeny 16y agoMaybe this becomes more important in the case when you have millions.
- nreece 16y agoIt does. But I think it's even more important on your way to making that first million. It keeps you sane.
- robrenaud 16y agoHas anyone else failed to parse or understand the logical structure of this thread? This is what I see. Your parent poster: x > y You: Yes, but y > x
- reitzensteinm 16y agoAlmost, but I think nreece was separating out people who are on their way to their first million, and people who are not. Which makes sense really - it's stressful building something big.
- deleted 16y ago[deleted]
- hubb 16y agowhy would it be more or less important to be happy when you're rich? the simple things that you enjoy in a "regular" life can be just as important to your happiness as in a "rich" life.
- mdg 16y agoAppreciate the trees. One step ahead of you
- njl 16y agoThe letter from Buffet where he outlines how Wall Street has just turned into a source of friction slowing down "real" industry is gold. http://money.cnn.com/2006/03/05/news/newsmakers/buffett_fortune/index.htm http://money.cnn.com/2006/03/05/news/newsmakers/buffett_fort...
- jl 16y agoMore words of wisdom from PB! Especially the bit about people still needing a sense of purpose even though they might not have to work anymore.
- dcurtis 16y agoWith limitless resources, how do you determine what is truly worth your time? When do you think, "okay, this project is worth a chunk of my life," and then stick with it? And then, once you do finally stick with something, something better will come along eventually. What do you do then? You're not tied to your job like a normal person, so you can't say, "if only I had the freedom, I would do that better thing..." I had never realized how much meaning the "institution" gives to life.
- paul 16y agoWe rely on the machines as much as they rely on us.
- nostrademons 16y agoThat applies to anyone with enough savings to sustain a reasonable period of unemployment and enough skills that a variety of organizations would want to have you. In the computer field, that should be most decent programmers that have been out of college for more than 18 months or so. I don't really understand this idea of being tied to a job. I'm not wealthy, I'm not financially independent. But if something better comes along, I do have the freedom to go do that instead. It doesn't really take all that much - a few years living expenses and a few marketable skills give you all the cushion you need. And then, of course, you're faced with the "what do I do with my life" question. But I thought all 20-somethings (well, all middle-class 20-somethings in developed nations) faced that.
- alexyim 16y agoI wouldn't call it limitless.. Having a few million in the bank just allows you to better utilize the 60-70 years you have on the planet.
- fierarul 16y agoYour question resembles what Alan Watts said in a talk about Buddism which was somewhat like: "if you could have everything you want, all the money, all the women -- what would you do then" ?
- adrianwaj 16y agoThe original Ask HN post he speaks about is probably a lie anyway. But that doesn't make it a good conversation starter. "I'm a 20 year old guy who sold his company last month for $5m in cash. I really don't know what to do with the money or how to manage it. I never gave it a thought and now suddenly I have $5m." You'd think he'd be smart enough, given he's just made $5m at 20. No further comments left by radicaltype either.
- deleted 16y ago[deleted]
- fleaflicker 16y agoI doubt it's a lie. what would be the motivation? There's very little trolling on HN. I see no reason to doubt its authenticity.
- crystalis 16y agoDo you have showdead on? Do you scroll to the bottom of every post? It seems like every third post has garnered a squadron of useless flip replies that sit at -4 or dead. A troll post of this variety is almost on the level of effort of the one word "yes" and "no" posts that show up when the headline is a question.
- adrianwaj 16y agolulz. For argument's sake, what single founder (male, 20) sold their company (assuming it was a website) for $5m last month? Shouldn't that be publicized? Even if it's not, the guy is likely full of it.
- tmsh 16y agoi suggest people in a similar circumstance watch LE NOTTI DI CABIRIA. it doesn't seem like it's on topic, but it may be (incidentally, i just saw the film and thought it was pretty good). anyway, money is such a hard thing for so many people in the world. my biggest advice, if you don't have a lot of ideas for research projects yourself, is probably to put yourself on a path where you can find people who truly need help that you can partly provide. it has to interest you or else it won't be sustainable. but if you can, with patience, find that path, you'll have locally maximized the use of the money just as you've largely maximized making money.
- arn 16y agoI know this goes against common sentiment. But I am going to disagree with the notion of going on your own and just investing in index funds. It's not as easy as it sounds to stay consistent with it over time (years, decades). I did all the research, read a bunch of books, and used up a lot of my time when I was looking into investing. I picked an asset allocation strategy, and planned to contribute regularly and rebalance annually. That just didn't happen. Rebalancing annually didn't. Contributing in a timely fashion didn't. My income goes up and down, I have to pay quarterly estimates, so I do keep some degree of excess cash. invariably, I forget to invest the difference for long periods of time. In the end I hired a financial person to just handle it and manage my money. Yes, there is a drag on returns because of it. But the alternative was being out of the market for periods of time, or off balance. Anyway, just another opinion.
- paul 16y agoI'm pretty sure that wasn't my advice though.
- faramarz 16y agoPaul, while you're on subject, please explore the 'purpose' finding journey in a blog post. If you think out loud about this, I'd like to read it.
- Sthorpe 16y agoI always wonder why more millionaires aren't building the next iphone or a new operating system. Maybe playing with AI theories. I mean, am I the only hacker who dreams of being a mad scientist, where I can have teams of people working on all the many new idea's I have. I'm frankly pissed, I want my hoverboard. :)
- rythie 16y agoBecause you need to be a billionaire to successful at those.
- orionlogic 16y agoSometimes, good fortune can also make people feel guilty Fortune, which comes from Greek goddess Fortuna might actually bring both good and bad luck. Like, always only hearing the lottery winners stories and dismissing millions of losers, we take the good luck notion of Fortuna and leave the bad luck out of her.
- c00p3r 16y agoI don't remember exactly what is the name of this bias, but people used to believe that if one is successful in some field, say, programming, he is also authoritative in completely different fields, such as philosophy or finance. =) Actually, it is exactly the opposite, just because you need to spend almost entire life (at least most of your time) to become a real pro in any field, say a medical doctor or system engineer, or philosopher. 'Start early and evolve' is an universal mantra, which is correct in sports, music, languages, communication skills, etc. So, the idea is very simple - stay near your field and do not try to compete with those, who were spent half of their life on it. Or at least do not try to teach. =) You wouldn't join the boxing championship just because you're famous computer engineer? Would you? =)
- deleted 16y ago[deleted]
- antirez 16y ago("Money can also mess with your identity in bad ways. It's important to remember that we're all made of the same shit, some people are just a little luckier than others")++;
- DanielBMarkham 16y agoFirst, it's important to understand that once you have the basics, happiness comes primarily from healthy social connections and a sense of purpose. Many people with jobs have a fantasy about all the amazing things they would do if they didn't need to work. In reality, if they had the drive and commitment to do actually do those things, they wouldn't let a job get in the way. Unfortunately, if given a lot of money, they are much more likely to end up addicted to crack, or even worse I used to watch a lot of cable TV (10-20 hours a week) and from time to time I would hit upon one of those celebrity biographies. As much as they tried to spin it, suddenly becoming rich and famous usually destroyed people's lives. Meanwhile, some family friends we know who never made a lot of money retired, joined an RV traveling community. Every year the same bunch of people take several months touring the country. It is not very expensive. They are having the time of their life. The point is this: Paul's advice is good even without the money. Social interactions (I would add travel) and a sense of purpose are foundational to happiness. Somebody said once that money is a magnifier. It takes whatever character traits you already have and exaggerates them. I'm not an expert or anything, and I'd certainly like to be better off than I am, but I'm willing to bet that giving 5 or 10 million bucks to most people would be about the same in the long run as shooting them in the head.
- kirse 16y agoHappiness, by its very nature and definition, is rooted in feeling pleasure about the happenings and circumstances of life. It's fickle and never guaranteed. Joy and peace (a positive confidence despite the sad or happy circumstances) comes from having a set of principles one adheres to and complete self acceptance. Paul's advice here is utterly incorrect and sounds ridiculous to even read: ...if you quit your job and move to a new city where you don't know anyone or have a clear purpose, there's a good chance that you'll end up depressed or even suicidal. Seriously? People should spend less time seeking happiness (a fickle emotion), and spend more time becoming at peace with themselves, because inner peace will carry you through no matter the circumstances.
- asdfghjkl1521 16y agoheya. i would like to donate some like to spend some..
- jamesseda 16y agoFinancial advisers are great for people who currently are invested 90-100% in Gold or a stock they saw on Mad Money last night. But if have enough sense to be diversified and are interested in learning about managing your money you are better managing it on your own.
- jister 16y agoIf I have Million$, I will: 1. Put it in a bank for my security (living on interest if that how you call it) 2. Quit my job 3. Go some place cheap (probably asian countries) 4. Then just enjoy every minute of my time with my family
- surlyadopter 16y agoI yearn for the day when I have this problem.