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Been there, done that. General comments: - Most people who make a lot of money all at once blow it within seven years. Check out what happens to lottery winne

Been there, done that. General comments: - Most people who make a lot of money all at once blow it within seven years. Check out what happens to lottery winners, jocks, and rappers. As a rule of thumb, you can safely spend 4% of your net worth per year. Pay yourself some fixed amount each quarter. - You don't have to get into complex investments. Half in some bond funds, half in some diversified stock funds will work out OK. - Any investment where they call you is probably not very good. Useful reading, although dated: "The Challenges of Wealth", by Domini et. al. What to do with your life? No idea. What are you good at? - I was a visiting scholar at Stanford for a while. But it was the "AI Winter" and not much was happening. Did robotics in the 1990s. Held patents on legged running on rough terrain, ragdoll physics. Ran a DARPA Grand Challenge team. Didn't really lead anywhere. Too early. Still programming. A metaverse client I'm writing in Rust is running on another screen. - Horses have been good for me. Every day, I go out and spend time with a pushy alpha mare who keeps me in shape. "Riding is the only art which princes learn truly". Horses are not impressed by money. Neither are most riders. - I've known a few ex-CEOs. One did a lot of reasonable little stuff but never did anything with much impact again. One founded a charity. Another was really into sailboats, and he just kept on with sailboats, crossing the Atlantic and such. He's lucky in having a wife who is also very into sailboats. One guy bought a nightclub, but it loses money year after year.

ip26 2y ago
One did a lot of reasonable little stuff but never did anything with much impact again This always stymies me. If I were to make it big, I’d want to go on to do other very useful things. But so commonly that doesn’t happen. Is it because they lost the fire? Because they were really lucky exactly once? Or perhaps their talents were suited only to that one thing?
- azinman2 2y ago
  Skill, luck, timing. Few people achieve something big. Even fewer can achieve another big thing. Even less can continue achieving.
- Animats 2y ago
  That's always a good question. Were you smart, or were you lucky? This is most often a problem with traders and investors who made a good bet. Less so with something that took a lot of effort to make work. I know a married couple who blew through an amount in eight figures and had to get low level jobs. Lost their house.
  - thfuran 2y ago
    Maybe somewhat less, but effort doesn't really imply value and value doesn't imply successful extraction.
- rollo 2y ago
  Personally I get immense enjoyment out of not doing anything useful, especially not on a big scale. So if I were to accidentally "make it big", I'd most likely not do it again and keep enjoying the small inconsequential things.
psanford 2y ago
> Most people who make a lot of money all at once blow it within seven years This is a commonly recited myth about lottery winners[1]. [1]: https://www.forbes.com/sites/johnjennings/2023/08/29/debunking-the-myth-the-surprising-truth-about-lottery-winners-and-life-satisfaction/ https://www.forbes.com/sites/johnjennings/2023/08/29/debunki...
- teractiveodular 2y ago
  There's a legendary Reddit comment that lays out the many, many other ways winning the lottery (or, more importantly, letting people know you won the lottery) is bad for you. Can you debunk its claims as well? https://www.reddit.com/r/AskReddit/comments/24vo34/comment/chb4v05/ https://www.reddit.com/r/AskReddit/comments/24vo34/comment/c...
  - autarch 2y ago
    The Reddit comment is interesting, and I think the advice that starts in the reply is sound. But this person's list of lottery winner failures is a small list of people versus a very large group of winners. Surely it's not hard to cherry pick a bunch of worst case scenarios.
  - raincole 2y ago
    The reddit comment says things like "Homicide (something like 20x more likely)" without citing the source of this statistics.
  - croisillon 2y ago
    i am still willing to experiment, for science
    - fragmede 2y ago
      Unfortunately, you got put in the control group.
  - dahart 2y ago
    That comment makes untrue claims and cites no sources. The claim about multi-million dollar jackpot winners is a viral meme that keeps making the rounds despite the people with the actual stats repeatedly trying to debunk it. It is not true that a huge percentage of winners go bankrupt. https://www.nefe.org/news/2018/01/research-statistic-on-financial-windfalls-and-bankruptcy.aspx https://www.nefe.org/news/2018/01/research-statistic-on-fina... https://www.reddit.com/r/PetPeeves/comments/18xqcbw/70_of_lottery_winners_go_bankrupt_within_a_few/ https://www.reddit.com/r/PetPeeves/comments/18xqcbw/70_of_lo...
teractiveodular 2y ago
Assuming the "one guy [who] bought a nightclub" in question is jwz of Netscape fame, his blog is a trip: https://refhide.com/?https://www.jwz.org/blog/ https://refhide.com/?https://www.jwz.org/blog/ (routing through refhide because otherwise you'll get a testicle in an egg cup; jwz is a principled man of strong opinions and one of many things he loathes is HN)
__alexander 2y ago
“The Simple Path to Wealth”might be another book recommendation on the wealth and investment topic.
dcrazy 2y ago
> One guy bought a nightclub, but it loses money year after year. As far as I know, jwz was never a CEO, but he did the same thing.
- jandrese 2y ago
  If you were rich enough then having the new business lose money isn't that big of a problem, so long as it's not driving you to ruin. "Sure it costs me a few hundred every month to keep the lights on, but it makes me happy." Honestly, I wish more rich people did stuff like this instead of obsessing over making more money on the stock market or speculating on homes or whatnot. Learn to say enough is enough and switch to adding back to the world instead of leeching off of it.
Tepix 2y ago
Blue water sailing is pretty great (for some), give it a try.
dahart 2y ago
> Check out what happens to lottery winners I have looked into this and found out that lottery winners are fine, that the viral meme about two thirds of them going bankrupt is not true. https://www.nefe.org/news/2018/01/research-statistic-on-financial-windfalls-and-bankruptcy.aspx https://www.nefe.org/news/2018/01/research-statistic-on-fina... Most of the claims about lottery winners going bankrupt are uncited and unsourced. A few claims I was able to find pointed at this paper: https://eml.berkeley.edu/~cle/laborlunch/hoekstra.pdf https://eml.berkeley.edu/~cle/laborlunch/hoekstra.pdf This paper shows people winning less than $150k having bankruptcy rates drop for the first 2 years, and then return to normal 3-5 years later. Like, duh, a small amount of money will run out. This paper has been widely and wildly mis-quoted as bankruptcy rates going up after a few years, but everyone seems to leave out the part where bankruptcy rates went down first. The percent of people in this study who had declared bankruptcy after 5 years was slightly over 5%, which is the same bankruptcy rate as the study cohort had 2 years before winning money. 95% of lottery winners did not go bankrupt, and no multi-million dollar jackpot winners are involved in this study.
HeartStrings 2y ago
Why aren’t you suggesting angel investing?
- Animats 2y ago
  Because most startups fail. Venture capital is a bulk business. Look at how YC works.
- toast0 2y ago
  As a way to rid yourself of excess funds, it probably works? Likely more effective than a sailing habit, unless you get into racing. But there's no need for it in your investment portfolio. Pick a mixture between 20/80 and 80/20 stocks/bonds, buy index funds and you're good. Easy and scalable... This works for normal money too, but you probably want a meaningful amount of cash and you may want to more carefully choose your stock/bond ratio. Maybe if you've got tens of billions you might need something else, but it'll probably work for that too.
moffkalast 2y ago
They say a sailboat is a hole in the water you throw money into, so having too much of it and not knowing what to do with it does indeed sound like a match made in heaven.

ip26 2y ago

One did a lot of reasonable little stuff but never did anything with much impact again This always stymies me. If I were to make it big, I’d want to go on to do other very useful things. But so commonly that doesn’t happen. Is it because they lost the fire? Because they were really lucky exactly once? Or perhaps their talents were suited only to that one thing?

azinman2 2y ago
Skill, luck, timing. Few people achieve something big. Even fewer can achieve another big thing. Even less can continue achieving.
Animats 2y ago
That's always a good question. Were you smart, or were you lucky? This is most often a problem with traders and investors who made a good bet. Less so with something that took a lot of effort to make work. I know a married couple who blew through an amount in eight figures and had to get low level jobs. Lost their house.
- thfuran 2y ago
  Maybe somewhat less, but effort doesn't really imply value and value doesn't imply successful extraction.
rollo 2y ago
Personally I get immense enjoyment out of not doing anything useful, especially not on a big scale. So if I were to accidentally "make it big", I'd most likely not do it again and keep enjoying the small inconsequential things.

psanford 2y ago

> Most people who make a lot of money all at once blow it within seven years This is a commonly recited myth about lottery winners[1]. [1]: https://www.forbes.com/sites/johnjennings/2023/08/29/debunking-the-myth-the-surprising-truth-about-lottery-winners-and-life-satisfaction/ https://www.forbes.com/sites/johnjennings/2023/08/29/debunki...

teractiveodular 2y ago
There's a legendary Reddit comment that lays out the many, many other ways winning the lottery (or, more importantly, letting people know you won the lottery) is bad for you. Can you debunk its claims as well? https://www.reddit.com/r/AskReddit/comments/24vo34/comment/chb4v05/ https://www.reddit.com/r/AskReddit/comments/24vo34/comment/c...
- autarch 2y ago
  The Reddit comment is interesting, and I think the advice that starts in the reply is sound. But this person's list of lottery winner failures is a small list of people versus a very large group of winners. Surely it's not hard to cherry pick a bunch of worst case scenarios.
- raincole 2y ago
  The reddit comment says things like "Homicide (something like 20x more likely)" without citing the source of this statistics.
- croisillon 2y ago
  i am still willing to experiment, for science
  - fragmede 2y ago
    Unfortunately, you got put in the control group.
- dahart 2y ago
  That comment makes untrue claims and cites no sources. The claim about multi-million dollar jackpot winners is a viral meme that keeps making the rounds despite the people with the actual stats repeatedly trying to debunk it. It is not true that a huge percentage of winners go bankrupt. https://www.nefe.org/news/2018/01/research-statistic-on-financial-windfalls-and-bankruptcy.aspx https://www.nefe.org/news/2018/01/research-statistic-on-fina... https://www.reddit.com/r/PetPeeves/comments/18xqcbw/70_of_lottery_winners_go_bankrupt_within_a_few/ https://www.reddit.com/r/PetPeeves/comments/18xqcbw/70_of_lo...

teractiveodular 2y ago

Assuming the "one guy [who] bought a nightclub" in question is jwz of Netscape fame, his blog is a trip: https://refhide.com/?https://www.jwz.org/blog/ https://refhide.com/?https://www.jwz.org/blog/ (routing through refhide because otherwise you'll get a testicle in an egg cup; jwz is a principled man of strong opinions and one of many things he loathes is HN)

__alexander 2y ago

“The Simple Path to Wealth”might be another book recommendation on the wealth and investment topic.

dcrazy 2y ago

> One guy bought a nightclub, but it loses money year after year. As far as I know, jwz was never a CEO, but he did the same thing.

jandrese 2y ago
If you were rich enough then having the new business lose money isn't that big of a problem, so long as it's not driving you to ruin. "Sure it costs me a few hundred every month to keep the lights on, but it makes me happy." Honestly, I wish more rich people did stuff like this instead of obsessing over making more money on the stock market or speculating on homes or whatnot. Learn to say enough is enough and switch to adding back to the world instead of leeching off of it.

Tepix 2y ago

Blue water sailing is pretty great (for some), give it a try.

dahart 2y ago

> Check out what happens to lottery winners I have looked into this and found out that lottery winners are fine, that the viral meme about two thirds of them going bankrupt is not true. https://www.nefe.org/news/2018/01/research-statistic-on-financial-windfalls-and-bankruptcy.aspx https://www.nefe.org/news/2018/01/research-statistic-on-fina... Most of the claims about lottery winners going bankrupt are uncited and unsourced. A few claims I was able to find pointed at this paper: https://eml.berkeley.edu/~cle/laborlunch/hoekstra.pdf https://eml.berkeley.edu/~cle/laborlunch/hoekstra.pdf This paper shows people winning less than $150k having bankruptcy rates drop for the first 2 years, and then return to normal 3-5 years later. Like, duh, a small amount of money will run out. This paper has been widely and wildly mis-quoted as bankruptcy rates going up after a few years, but everyone seems to leave out the part where bankruptcy rates went down first. The percent of people in this study who had declared bankruptcy after 5 years was slightly over 5%, which is the same bankruptcy rate as the study cohort had 2 years before winning money. 95% of lottery winners did not go bankrupt, and no multi-million dollar jackpot winners are involved in this study.

HeartStrings 2y ago

Why aren’t you suggesting angel investing?

Animats 2y ago
Because most startups fail. Venture capital is a bulk business. Look at how YC works.
toast0 2y ago
As a way to rid yourself of excess funds, it probably works? Likely more effective than a sailing habit, unless you get into racing. But there's no need for it in your investment portfolio. Pick a mixture between 20/80 and 80/20 stocks/bonds, buy index funds and you're good. Easy and scalable... This works for normal money too, but you probably want a meaningful amount of cash and you may want to more carefully choose your stock/bond ratio. Maybe if you've got tens of billions you might need something else, but it'll probably work for that too.

moffkalast 2y ago

They say a sailboat is a hole in the water you throw money into, so having too much of it and not knowing what to do with it does indeed sound like a match made in heaven.