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What I would really like to know is how much money it takes to get to that point. $5 million isn't enough according to a very interesting New York Times articl

What I would really like to know is how much money it takes to get to that point. $5 million isn't enough according to a very interesting New York Times article: http://www.nytimes.com/2007/08/05/technology/05rich.html http://www.nytimes.com/2007/08/05/technology/05rich.html So how much does it typically take for someone in Silicon Valley to "solve the money problem"?

ryanwaggoner 18y ago
$5m invested invested fairly conservatively can throw off 8%, or $400k / year. I'm sorry, but if you can't live on $33k / month, even in the Bay Area, you've got problems. A couple of those people in the article have homes worth over $1m that they own free and clear while they work 70 hours a week to make ends meet. Not smart. Mortgage the house to 70-80% (rates are dirt cheap right now) and invest the cash at the aforementioned 8%, which adds $100k / year to your bottom line, plus the tax benefits.
- newsycaccount 18y ago
  Please link to a single "conservative" investment with an 8% yield.
  - gaius 18y ago
    Right now you can get 6% in the UK on a no-frills deposit account at Tesco (hmm, thought they were a supermarket) but that'll be taxed so it's more like 4% real. Which is barely keeping pace with (real, not official) inflation.
    - weavejester 18y ago
      The base interest rate in the UK is at a 57 year low at the moment, so UK banks might not be the best place to store $5 million ;)
      - gaius 18y ago
        True, but banks lend to each other at LIBOR which has remained stubbornly high. Only a few weeks ago some were offering 8% 1-year deposit accounts to get any cash they could get their hands on.
  - josefresco 18y ago
    Until this latest hiccup, my simple IRA was making 10-11% a year without me even thinking about it. Also with 5 mil, or 22 mil the types of investments available to you are not 'regular' or something you average hacker has access to.
evdawg 18y ago
If you had followed Derek's link you would have found out he sold CD Baby for $22 million :)
josefresco 18y ago
BTW that NYTimes article you cite is boom-town trash. Published in 2007, just before things started going in the shitter. The mentality of the past 5 years was "more, more more" and it's almost sickening to read this account of how greedy these millionaires are/were. They all chose to live in Silicon Valley and continued to aspire to be hundred-millionares instead of enjoying what they have. Some people don't deserve their wealth.
- pg 18y ago
  They all chose to live in Silicon Valley and continued to aspire to be hundred-millionares instead of enjoying what they have. Some people don't deserve their wealth. So you're saying it's bad if rich people continue to build things instead of switching to being mere consumers?
  - ivankirigin 18y ago
    More importantly, I disagree that building great companies is not enjoying what they have.
  - ryanwaggoner 18y ago
    I completely understand what you're saying, and I hope to always pursue my passions and the things that I care about, but I agree with the sentiment of the person you're responding to. The people in the article do not sound like they're happy and building things because they love to or because they want to make a difference. They all sound stressed and miserable because they're continually comparing their standard of living to the next guy, who is a little bit higher. Perhaps it's just the tone of the article, but they all sounded out of touch and ungrateful.

ryanwaggoner 18y ago

$5m invested invested fairly conservatively can throw off 8%, or $400k / year. I'm sorry, but if you can't live on $33k / month, even in the Bay Area, you've got problems. A couple of those people in the article have homes worth over $1m that they own free and clear while they work 70 hours a week to make ends meet. Not smart. Mortgage the house to 70-80% (rates are dirt cheap right now) and invest the cash at the aforementioned 8%, which adds $100k / year to your bottom line, plus the tax benefits.

newsycaccount 18y ago
Please link to a single "conservative" investment with an 8% yield.
- gaius 18y ago
  Right now you can get 6% in the UK on a no-frills deposit account at Tesco (hmm, thought they were a supermarket) but that'll be taxed so it's more like 4% real. Which is barely keeping pace with (real, not official) inflation.
  - weavejester 18y ago
    The base interest rate in the UK is at a 57 year low at the moment, so UK banks might not be the best place to store $5 million ;)
    - gaius 18y ago
      True, but banks lend to each other at LIBOR which has remained stubbornly high. Only a few weeks ago some were offering 8% 1-year deposit accounts to get any cash they could get their hands on.
- josefresco 18y ago
  Until this latest hiccup, my simple IRA was making 10-11% a year without me even thinking about it. Also with 5 mil, or 22 mil the types of investments available to you are not 'regular' or something you average hacker has access to.

evdawg 18y ago

If you had followed Derek's link you would have found out he sold CD Baby for $22 million :)

josefresco 18y ago

BTW that NYTimes article you cite is boom-town trash. Published in 2007, just before things started going in the shitter. The mentality of the past 5 years was "more, more more" and it's almost sickening to read this account of how greedy these millionaires are/were. They all chose to live in Silicon Valley and continued to aspire to be hundred-millionares instead of enjoying what they have. Some people don't deserve their wealth.

pg 18y ago
They all chose to live in Silicon Valley and continued to aspire to be hundred-millionares instead of enjoying what they have. Some people don't deserve their wealth. So you're saying it's bad if rich people continue to build things instead of switching to being mere consumers?
- ivankirigin 18y ago
  More importantly, I disagree that building great companies is not enjoying what they have.
- ryanwaggoner 18y ago
  I completely understand what you're saying, and I hope to always pursue my passions and the things that I care about, but I agree with the sentiment of the person you're responding to. The people in the article do not sound like they're happy and building things because they love to or because they want to make a difference. They all sound stressed and miserable because they're continually comparing their standard of living to the next guy, who is a little bit higher. Perhaps it's just the tone of the article, but they all sounded out of touch and ungrateful.