5 ms·

Love the term “ramen rich”. Sums it up well, happened to me.

by com 7y ago

askafriend 7y ago
How is the experience of being "ramen rich"? Care to expand how it changes your day to day work or relationship with work?
- deanmoriarty 7y ago
  I would identify myself as “ramen rich“. Specifically, my post-tax living expenses (rent, food, gas, entertainment, ...) are ~30X my liquid portfolio, all invested in a bunch of diversified index funds that throw dividends/interest income, as well as increasing their NAV. It improved my life in the sense that I don’t feel the pressure of having to keep a job I don’t like: I can quit and not work for several months and nothing will happen. Even if I don’t actually quit, just the thought of me being able to do it gives me a lot of comfort. I suffered significantly from this in the past, where I was stuck in non-ideal work situations for financial/immigration reasons. But it’s far from being truly liberating: I constantly think that a significant drop in the market could jeopardize my position (and I can’t move more than 30% to fixed income investments, since I am young enough that inflation is otherwise going to eat all my capital away), or a crazy medical emergency force me to go bankrupt (and I say this as I have a pretty good health insurance plan covered by my employer). And, I think it would be nice to have more money for discretionary (e.g. more traveling) or unforeseen expenses.
  - sokoloff 7y ago
    The source of the 3.5-4% “safe withdrawal rate” theory suggests that that is designed with historical market declines in mind, so you might be better immunized against that than you think. Side note: You have the ratio inverted and probably should be thinking of the portfolio income as pre-tax.
    - deanmoriarty 7y ago
      I am familiar with the Trinity study. Even if that is going to be true going forward (which I am very skeptical, as I think global warming is going to have a major impact on market returns over the next few decades), I am young enough (32) that I really can’t trust these level of frugal expenses to be maintained for the rest of my life.
- com 7y ago
  I was an early employee (<100) in a scale up. Late in my first year I “took one for the team” after some typical startup personnel drama, and was offered equity for keeping the ship steady. Fast forward past an IPO lockup: Love my job. Team is great. Get on fine with the board, work pretty closely at times with almost all of them. What I’m surprised at was/is the difficulty of choosing how to invest the lucky windfall capital (I diversified out as soon as I could, heard enough horror stories about not doing it), I think that it’s harder than if I’d been independently wealthy - far less room for error, fewer options and far less support from private bankers and the broader financial industry which helps people with an excess of capital. It’s going fairly well now after some time, but there was a lot more cognitive load than expected. For me, I am facing a rebalancing of personal goals - they’ve come second to my work, and the health costs of that have been more clear over time. At work this means I want to achieve more impact in less hours (why didn’t I think of that before?), delegate more effectively (see above), and do things with more strategic impact (which also happen to be more fun). All of these things were in my power to do before. I’m not even sure it was the “ramen rich” thing that made the difference than having external validation during discussions with bankers and investors during the pre-IPO phase. It’s also become clear how much the business values my work, as I’ve been navigating these changes (from “not much” all the way to “a lot” ha ha). With a lot of social capital it’s working out. I guess that some colleagues were big shareholders. Some left fairly early on to fulfil dreams, some hung on until irritations built up enough to force a departure. Two years later, I miss nearly all of them a lot, they were my “seniors” and direct peers, replaced by talented but less battle-hardened individuals who - mostly - only have the successful pre-IPO phase as reference. Newer, driven, engaged, staff do ask relevant questions about reward for their level of commitment which cannot be answered except in platitudes. There are more smart, enthusiastic 9-5 types who want to be part of a success rather than build a success. These people are my challenge - motivations and communication styles (meetings! goddamn meetings!) have to be different, and leadership tactics that worked need serious adjustments in the years to come.

Love the term “ramen rich”. Sums it up well, happened to me.

by com 7y ago

Love the term “ramen rich”. Sums it up well, happened to me.

How is the experience of being "ramen rich"? Care to expand how it changes your day to day work or relationship with work?

deanmoriarty 7y ago
I would identify myself as “ramen rich“. Specifically, my post-tax living expenses (rent, food, gas, entertainment, ...) are ~30X my liquid portfolio, all invested in a bunch of diversified index funds that throw dividends/interest income, as well as increasing their NAV. It improved my life in the sense that I don’t feel the pressure of having to keep a job I don’t like: I can quit and not work for several months and nothing will happen. Even if I don’t actually quit, just the thought of me being able to do it gives me a lot of comfort. I suffered significantly from this in the past, where I was stuck in non-ideal work situations for financial/immigration reasons. But it’s far from being truly liberating: I constantly think that a significant drop in the market could jeopardize my position (and I can’t move more than 30% to fixed income investments, since I am young enough that inflation is otherwise going to eat all my capital away), or a crazy medical emergency force me to go bankrupt (and I say this as I have a pretty good health insurance plan covered by my employer). And, I think it would be nice to have more money for discretionary (e.g. more traveling) or unforeseen expenses.
- sokoloff 7y ago
  The source of the 3.5-4% “safe withdrawal rate” theory suggests that that is designed with historical market declines in mind, so you might be better immunized against that than you think. Side note: You have the ratio inverted and probably should be thinking of the portfolio income as pre-tax.
  - deanmoriarty 7y ago
    I am familiar with the Trinity study. Even if that is going to be true going forward (which I am very skeptical, as I think global warming is going to have a major impact on market returns over the next few decades), I am young enough (32) that I really can’t trust these level of frugal expenses to be maintained for the rest of my life.
com 7y ago
I was an early employee (<100) in a scale up. Late in my first year I “took one for the team” after some typical startup personnel drama, and was offered equity for keeping the ship steady. Fast forward past an IPO lockup: Love my job. Team is great. Get on fine with the board, work pretty closely at times with almost all of them. What I’m surprised at was/is the difficulty of choosing how to invest the lucky windfall capital (I diversified out as soon as I could, heard enough horror stories about not doing it), I think that it’s harder than if I’d been independently wealthy - far less room for error, fewer options and far less support from private bankers and the broader financial industry which helps people with an excess of capital. It’s going fairly well now after some time, but there was a lot more cognitive load than expected. For me, I am facing a rebalancing of personal goals - they’ve come second to my work, and the health costs of that have been more clear over time. At work this means I want to achieve more impact in less hours (why didn’t I think of that before?), delegate more effectively (see above), and do things with more strategic impact (which also happen to be more fun). All of these things were in my power to do before. I’m not even sure it was the “ramen rich” thing that made the difference than having external validation during discussions with bankers and investors during the pre-IPO phase. It’s also become clear how much the business values my work, as I’ve been navigating these changes (from “not much” all the way to “a lot” ha ha). With a lot of social capital it’s working out. I guess that some colleagues were big shareholders. Some left fairly early on to fulfil dreams, some hung on until irritations built up enough to force a departure. Two years later, I miss nearly all of them a lot, they were my “seniors” and direct peers, replaced by talented but less battle-hardened individuals who - mostly - only have the successful pre-IPO phase as reference. Newer, driven, engaged, staff do ask relevant questions about reward for their level of commitment which cannot be answered except in platitudes. There are more smart, enthusiastic 9-5 types who want to be part of a success rather than build a success. These people are my challenge - motivations and communication styles (meetings! goddamn meetings!) have to be different, and leadership tactics that worked need serious adjustments in the years to come.