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Ask HN: Where to invest 200k / year

3 points by oliverrenner 9y ago

I own a software company and it profits about 200k a year, after all expenses, including my salary and tax. Its not a big business but it works great and i love what i do... I dont want to remove the money from the company (as a dividend to me), as i would pay a lot of tax again and i dont need it personally. Its also hard to re-invest that money in the software company, because i just do client projects, have some contractors and a most depends on me doing it myself. All i could do is invest in marketing and hope for bigger projects which can be done by employees, but that seems like a shot into the blue... Also i have no clue where to start on this. So the question is what to do with it... I dont like traditional investments like stocks or index, and i am not sure about real estate... I used a part and started a mining farm at a local water power plant... its fun and works quite well... but i dont want to put too much into crypto =) I also plan to put some into peer-to-peer lending.. but also, no significant amounts. I would like to invest in some semi-automated businesses... like lending cars, renewable energy plants... something which requires some amount of time, money and maybe technical expertise (like setting up a website or some required software stuff), but it should be able to run either mostly on itself or by employees on the long term. Maybe i would also be happy to do small angel-invests (40-70k) into companies which need some technical expertise as well.. I dont really care for the risk of the investment as i am not hurt if the money is gone, but for sure i will verify if the potential payoff is in relation to the risk. any ideas ?

cornholio 9y ago
200K is not a large profit margin, you are a few employees' paychecks away from going under. While I'm sure you yourself would survive any technology shift and specialize in other related fields, the business might suffer. And these shocks are more and more frequent, it's essential to dig your heels in when you have a growth opportunity or expect to be amazoned out of your margin in a few years. Ok, you say you don't know how to grow the business - how about taking that money and hiring somebody who does know, and move to a CTO / proprietor role. 200K a year should satisfy the immediate cash needs of a proven business man if you couple it with a good stock options plan. And if someone who could find work in a corporation for 500K accepts 200K and stock options, you know he's serious about growing your startup. If you are looking for startups to angel, your own starup is the no-brainer choice because you get to the exponential returns on the rest of your assets. The only reason not to do that is when you diversify or you sense impending failure.
- oliverrenner 9y ago
  thanks for the feedback. I only work with two freelancers, so there are no paychecks to consider beside of my own.. these freelancers are on payroll as long as money flows. Additionally i must say that i live in central europe, so salaries are not as they are in the valley.. a good dev costs 65k, a "manager" (replace with whatever exec role you think of) is 80-100k. The person i need to hire would have to bring me new projects, larger and more independent than the ones i have... I dont know if such a job-description exists ?? The company, including myself, (as right now) can survive 2 years without any income.

3 points by oliverrenner 9y ago

cornholio 9y ago

200K is not a large profit margin, you are a few employees' paychecks away from going under. While I'm sure you yourself would survive any technology shift and specialize in other related fields, the business might suffer. And these shocks are more and more frequent, it's essential to dig your heels in when you have a growth opportunity or expect to be amazoned out of your margin in a few years. Ok, you say you don't know how to grow the business - how about taking that money and hiring somebody who does know, and move to a CTO / proprietor role. 200K a year should satisfy the immediate cash needs of a proven business man if you couple it with a good stock options plan. And if someone who could find work in a corporation for 500K accepts 200K and stock options, you know he's serious about growing your startup. If you are looking for startups to angel, your own starup is the no-brainer choice because you get to the exponential returns on the rest of your assets. The only reason not to do that is when you diversify or you sense impending failure.

oliverrenner 9y ago
thanks for the feedback. I only work with two freelancers, so there are no paychecks to consider beside of my own.. these freelancers are on payroll as long as money flows. Additionally i must say that i live in central europe, so salaries are not as they are in the valley.. a good dev costs 65k, a "manager" (replace with whatever exec role you think of) is 80-100k. The person i need to hire would have to bring me new projects, larger and more independent than the ones i have... I dont know if such a job-description exists ?? The company, including myself, (as right now) can survive 2 years without any income.