4 ms·

Yeah sadly true. 1) Australia, but we started it in Canada. 2) Again true, lots of friends opted to buy houses etc, but i felt it was going to limit me so i a

by verelo 9y ago

Yeah sadly true. 1) Australia, but we started it in Canada. 2) Again true, lots of friends opted to buy houses etc, but i felt it was going to limit me so i avoided this form of debt, and thankfully so as servicing it would have probably prevented me from starting the company. 3) Affluent co-founders in my case. 4) I was 24. Just old enough to know enough, young enough to be dumb enough to try + have the freedom to try. I'd also add a 5th) You need a solid chunk of savings (Ideally a year or two worth). I dropped my income by 76% to work on the startup and saw no increase from pre-startup income for a while thereafter. But 6 years later my salary income (forget the buyout portion of money) was up 1191% from where it was before i left my job.

charlesdm 9y ago
Buying a house in your early 20s is very common in Europe. It's also the most stupid thing one can do, in my view. You will get an infinitely higher return on reinvesting money in yourself than putting up a deposit to purchase a pile of bricks. $50k in the bank might give you 5 shots at starting a $100-200-300k a year business.
- verelo 9y ago
  Yeah, that is how I saw it too. But honestly, not everyone thinks the same or wants to start a company...for some people not buying right away could just cost them more in the long run i suppose. Personally I feel even in that case the life experience of renting and moving around is probably healthy, but each to their own!
  - charlesdm 9y ago
    Add to that: once you've had one "hit" (even if it's a small one off $100k exit) then you're basically hooked for life. You'll realise it's almost always easier to make money from a successful business (no potential constraint on earnings if you solve a large enough problem) than it is working a job (time limited, limited opportunities for promotion based on age or company, etc) But I agree, not everyone is made to be an entrepreneur.
    - pm90 9y ago
      A lot of startups seem to be started by groups of people tired with the bullshit bureaucracy at large firms who want to make real projects and sell that. I wonder if feeling frustrated like that is an important motivation as well.
      - nojvek 9y ago
        I’ve worked at companies of different sizes. I think the important realization is seeing how much people are paying for something you’ve built, and that you’re getting very little of it. AAMGF tech behemoths make almost a million per employee, yet the median salary is 15% of that. Going it along, you could probably build a better product in another niche market and take a bigger cut. It’s a risk/reward bet.
    - deleted 9y ago
      [deleted]
- sharemywin 9y ago
  In the Us, if you have the income FHA is 3.5% down and you could buy a double so most if not all of your mortgage could be paid for. Not saying there wouldn't be hassles/distractions but its an option for some.
- raverbashing 9y ago
  > Buying a house in your early 20s is very common in Europe "Citation needed", also, it varies a lot between places.
- tigershark 9y ago
  Throwing money away in rental is far, far, far dumber. In my case I would have had to pay more money for the rental than what I’m paying now with a mortgage. The difference is that in a couple of years I don’t have to pay anymore and I will own an house that already doubled in price, while if I was renting my rent would have skyrocketed. And with 50k$ in the bank I probably could have survived for 1 year here.
  - moz23 9y ago
    That's only true if you live in a place with an unsustainable market, i.e. permanently growing rents and house prices. There are places with stable house and rental prices, and in those - buying tends to be a worse choice financially. And many would argue that places with skyrocketing property prices are going to run into significant issues in the future (if they aren't already at breaking point, hi bay area).
    - tigershark 9y ago
      The comment I answered to was expressing a very narrow minded opinion on how everyone that buys an house instead of renting is doing the most stupid thing in the world. I proved to everyone that is not true and that most likely he is not as smart as he reckons if this is what he believes.
- haihaibye 9y ago
  The tax man takes a cut of money you get from creating things, but money from living in a pile of bricks is tax free.
  - charlesdm 9y ago
    The tax man also (depending on the country) levies stamp duties upon purchase and annual property taxes. Owning a house also generally means low liquidity (should you want to sell), money going to repairs that you could otherwise just forward to the landlord and the requisite of putting up a deposit (money that can't be invested in say the stock market -- meaning you lose out on yield).
nojvek 9y ago
2) Buying a house is not necessarily a bad decision. I bought a place an year ago. My mortgage + housing related expenses are less than renting. Rent went up from $1600-$2500 in a couple of years. My mortgage remains almost fixed except for property taxes. So I think it’s a decent risk. My plan is to moonlight to a minimum delightful product. Once I have validation, and my feet touch the floor, I can quit my job and go Entrepreneurship I agree is all about managing risk/reward.

by verelo 9y ago

charlesdm 9y ago

Buying a house in your early 20s is very common in Europe. It's also the most stupid thing one can do, in my view. You will get an infinitely higher return on reinvesting money in yourself than putting up a deposit to purchase a pile of bricks. $50k in the bank might give you 5 shots at starting a $100-200-300k a year business.

verelo 9y ago
Yeah, that is how I saw it too. But honestly, not everyone thinks the same or wants to start a company...for some people not buying right away could just cost them more in the long run i suppose. Personally I feel even in that case the life experience of renting and moving around is probably healthy, but each to their own!
- charlesdm 9y ago
  Add to that: once you've had one "hit" (even if it's a small one off $100k exit) then you're basically hooked for life. You'll realise it's almost always easier to make money from a successful business (no potential constraint on earnings if you solve a large enough problem) than it is working a job (time limited, limited opportunities for promotion based on age or company, etc) But I agree, not everyone is made to be an entrepreneur.
  - pm90 9y ago
    A lot of startups seem to be started by groups of people tired with the bullshit bureaucracy at large firms who want to make real projects and sell that. I wonder if feeling frustrated like that is an important motivation as well.
    - nojvek 9y ago
      I’ve worked at companies of different sizes. I think the important realization is seeing how much people are paying for something you’ve built, and that you’re getting very little of it. AAMGF tech behemoths make almost a million per employee, yet the median salary is 15% of that. Going it along, you could probably build a better product in another niche market and take a bigger cut. It’s a risk/reward bet.
  - deleted 9y ago
    [deleted]
sharemywin 9y ago
In the Us, if you have the income FHA is 3.5% down and you could buy a double so most if not all of your mortgage could be paid for. Not saying there wouldn't be hassles/distractions but its an option for some.
raverbashing 9y ago
> Buying a house in your early 20s is very common in Europe "Citation needed", also, it varies a lot between places.
tigershark 9y ago
Throwing money away in rental is far, far, far dumber. In my case I would have had to pay more money for the rental than what I’m paying now with a mortgage. The difference is that in a couple of years I don’t have to pay anymore and I will own an house that already doubled in price, while if I was renting my rent would have skyrocketed. And with 50k$ in the bank I probably could have survived for 1 year here.
- moz23 9y ago
  That's only true if you live in a place with an unsustainable market, i.e. permanently growing rents and house prices. There are places with stable house and rental prices, and in those - buying tends to be a worse choice financially. And many would argue that places with skyrocketing property prices are going to run into significant issues in the future (if they aren't already at breaking point, hi bay area).
  - tigershark 9y ago
    The comment I answered to was expressing a very narrow minded opinion on how everyone that buys an house instead of renting is doing the most stupid thing in the world. I proved to everyone that is not true and that most likely he is not as smart as he reckons if this is what he believes.
haihaibye 9y ago
The tax man takes a cut of money you get from creating things, but money from living in a pile of bricks is tax free.
- charlesdm 9y ago
  The tax man also (depending on the country) levies stamp duties upon purchase and annual property taxes. Owning a house also generally means low liquidity (should you want to sell), money going to repairs that you could otherwise just forward to the landlord and the requisite of putting up a deposit (money that can't be invested in say the stock market -- meaning you lose out on yield).

nojvek 9y ago

2) Buying a house is not necessarily a bad decision. I bought a place an year ago. My mortgage + housing related expenses are less than renting. Rent went up from $1600-$2500 in a couple of years. My mortgage remains almost fixed except for property taxes. So I think it’s a decent risk. My plan is to moonlight to a minimum delightful product. Once I have validation, and my feet touch the floor, I can quit my job and go Entrepreneurship I agree is all about managing risk/reward.