6 ms·

25 K/month x 2 years x(1/2 partners) = 150k 150k * 0.66 (extremely optimistic gross to net-income factor) = 100K You and me have different notions of "set for

25 K/month x 2 years x(1/2 partners) = 150k 150k * 0.66 (extremely optimistic gross to net-income factor) = 100K You and me have different notions of "set for life" EDIT: I fudged a factor of 2 in the math, the final number is 200k, my point still stands.

Drdrdrq 6y ago
200k actually, I think you made a mistake? Anyway, in some parts of the world, yes, that is "set for life".
- cambalache 6y ago
  200k for 2 partners, 100k each. Tell me this magical place where I am set for life with 100k, i will fly as soon as travel is available. 100k assuming a 4% annual retirement rate, gives you 333 USD/month. Assuming a family of 2 and you need to pay rent, insurance,food,car or transportation, etc I dont see this feasible at all, at the very very least you need 5X times that.
  - deleted 6y ago
    [deleted]
  - badideaprojects 6y ago
    Lots of parts of the world where people with families live for less than 1.5k USD a month.
    - cambalache 6y ago
      Yes! But even for 1500 USD/month you need 500k on your portfolio. And another thing , just because you live in a developing nation does not mean you dont aspire to nice things. You still need a laptop, a modern car, a cell phone, etc etc.
  - kvetching 6y ago
    Wow you're head is so far in the sand it's insane. You literally have no idea how far USD can go in third world countries.
    - cambalache 6y ago
      I live in a "third world" country, I have lived all my life in third world countries (6 of them), in how many have you lived?
  - chrisfosterelli 6y ago
    > I dont see this feasible at all, at the very very least you need 5X times that. I agree with you that $333USD/mo is not a ton but 5X that is more than lots of people live on in north america.
    - cambalache 6y ago
      And how are they living. For 1500 bucks a month for a family of 3, no other income, unless you depend heavily on external assistance you are going to suffer a lot. Will you stop working if I guarantee you 1500 USD/month. No other income, no house, no car, no stocks,no college fund, no health insurance, all of this will have to come from the 1500 USD. Remember the original point of this discussion for which I have been downvoted to hell here: You need a non-trivial amount of money (in my estimation at least 1MM) to be "set for life".1 MM will give you 3k/month with moderate risk assuming historical returns. You can live with it surely but nothing crazy.
kohtatsu 6y ago
25k * 24 / 2 * .66 = 198k My friend lives on ~$2,000/year in Southeast Asia, but just provides for himself.
- cambalache 6y ago
  Yes my mistake with the math. You can live with that if you live with your parents and dont pay rent.
encoderer 6y ago
You are looking at this all wrong. First, your assumptions on net income are too pessimistic. Small founder-operated SaaS can be extremely profitable. Second, and more importantly, you are ignoring concepts of LTV and NPV of future cash flows. Assuming 80% SDI and a churn-rate that is < 5% (ideally < 3%) you are looking at a business worth $700-950k right now. Why? An income stream from a growing high margin SaaS business is a coveted and valuable thing. Finally, when you have a business with 300k ARR you begin to unlock more options for yourself -- small acquisitions (traffic/content/funnel), ads, product improvements. The likely path here is that their income will continue to grow and they will either be taking $200k a year in income or sell for > $2 million in a couple years, or both. Having built a small SaaS business to this size myself for many years, i can totally recommend this path for independence and financial freedom.
- is0tope 6y ago
  Do you have any reccomended reading for others investigating this option?
- cambalache 6y ago
  > First, your assumptions on net income are too pessimistic. Small founder-operated SaaS can be extremely profitable. Are they? On the contrary. You are telling me that out of 100k of gross sales, after discounting: Operational costs, insurance, income taxes assuming at the end if you get 67K is pessimistic? I didt not even budget money for sales and marketing. > Second, and more importantly, you are ignoring concepts of LTV and NPV of future cash flows. I am not, that was not even a question on my initial answer. My original answer was to deny this: Operating a 2-person 25k MRR company during 2 years will set you for life. My answer is no. You are assuming a lot of other stuff that was never in the original discussion. > Assuming 80% SDI and a churn-rate that is < 5% (ideally < 3%) you are looking at a business worth $700-950k right now. Why? An income stream from a growing high margin SaaS business is a coveted and valuable thing. Yes, but that is trivially true. If you assume the company will grow the valuation will reflect that. Everybody knows that. That was not in the original discussion. This also depends on the business model of the company, a SaaS company critically depending on a 3rd part ecosystem is significantly riskier than an independent one. > Having built a small SaaS business to this size myself for many years, i can totally recommend this path for independence and financial freedom. I agree. But you need more than 200k USD to be set for life.

Drdrdrq 6y ago

200k actually, I think you made a mistake? Anyway, in some parts of the world, yes, that is "set for life".

cambalache 6y ago
200k for 2 partners, 100k each. Tell me this magical place where I am set for life with 100k, i will fly as soon as travel is available. 100k assuming a 4% annual retirement rate, gives you 333 USD/month. Assuming a family of 2 and you need to pay rent, insurance,food,car or transportation, etc I dont see this feasible at all, at the very very least you need 5X times that.
- deleted 6y ago
  [deleted]
- badideaprojects 6y ago
  Lots of parts of the world where people with families live for less than 1.5k USD a month.
  - cambalache 6y ago
    Yes! But even for 1500 USD/month you need 500k on your portfolio. And another thing , just because you live in a developing nation does not mean you dont aspire to nice things. You still need a laptop, a modern car, a cell phone, etc etc.
- kvetching 6y ago
  Wow you're head is so far in the sand it's insane. You literally have no idea how far USD can go in third world countries.
  - cambalache 6y ago
    I live in a "third world" country, I have lived all my life in third world countries (6 of them), in how many have you lived?
- chrisfosterelli 6y ago
  > I dont see this feasible at all, at the very very least you need 5X times that. I agree with you that $333USD/mo is not a ton but 5X that is more than lots of people live on in north america.
  - cambalache 6y ago
    And how are they living. For 1500 bucks a month for a family of 3, no other income, unless you depend heavily on external assistance you are going to suffer a lot. Will you stop working if I guarantee you 1500 USD/month. No other income, no house, no car, no stocks,no college fund, no health insurance, all of this will have to come from the 1500 USD. Remember the original point of this discussion for which I have been downvoted to hell here: You need a non-trivial amount of money (in my estimation at least 1MM) to be "set for life".1 MM will give you 3k/month with moderate risk assuming historical returns. You can live with it surely but nothing crazy.

kohtatsu 6y ago

25k * 24 / 2 * .66 = 198k My friend lives on ~$2,000/year in Southeast Asia, but just provides for himself.

cambalache 6y ago
Yes my mistake with the math. You can live with that if you live with your parents and dont pay rent.

encoderer 6y ago

You are looking at this all wrong. First, your assumptions on net income are too pessimistic. Small founder-operated SaaS can be extremely profitable. Second, and more importantly, you are ignoring concepts of LTV and NPV of future cash flows. Assuming 80% SDI and a churn-rate that is < 5% (ideally < 3%) you are looking at a business worth $700-950k right now. Why? An income stream from a growing high margin SaaS business is a coveted and valuable thing. Finally, when you have a business with 300k ARR you begin to unlock more options for yourself -- small acquisitions (traffic/content/funnel), ads, product improvements. The likely path here is that their income will continue to grow and they will either be taking $200k a year in income or sell for > $2 million in a couple years, or both. Having built a small SaaS business to this size myself for many years, i can totally recommend this path for independence and financial freedom.

is0tope 6y ago
Do you have any reccomended reading for others investigating this option?
cambalache 6y ago
> First, your assumptions on net income are too pessimistic. Small founder-operated SaaS can be extremely profitable. Are they? On the contrary. You are telling me that out of 100k of gross sales, after discounting: Operational costs, insurance, income taxes assuming at the end if you get 67K is pessimistic? I didt not even budget money for sales and marketing. > Second, and more importantly, you are ignoring concepts of LTV and NPV of future cash flows. I am not, that was not even a question on my initial answer. My original answer was to deny this: Operating a 2-person 25k MRR company during 2 years will set you for life. My answer is no. You are assuming a lot of other stuff that was never in the original discussion. > Assuming 80% SDI and a churn-rate that is < 5% (ideally < 3%) you are looking at a business worth $700-950k right now. Why? An income stream from a growing high margin SaaS business is a coveted and valuable thing. Yes, but that is trivially true. If you assume the company will grow the valuation will reflect that. Everybody knows that. That was not in the original discussion. This also depends on the business model of the company, a SaaS company critically depending on a 3rd part ecosystem is significantly riskier than an independent one. > Having built a small SaaS business to this size myself for many years, i can totally recommend this path for independence and financial freedom. I agree. But you need more than 200k USD to be set for life.