4 ms·

Er. I recommend not immediately pissing away $200K, but that's just me. If you're in your early 20's, a $200K investment could easily be $1M by your thirties.

by jadams 20y ago

Er. I recommend not immediately pissing away $200K, but that's just me. If you're in your early 20's, a $200K investment could easily be $1M by your thirties. Taking a $1M lump-sum means never having to work again. That's not to say you won't work again, or won't be productive again. But I'd feel really stupid if at some later date I had to take a job, just because I pissed away my capital.

sethjohn 20y ago
That comment was intended to be read somewhat tongue in cheek, but for the sake of argument: 1) What's the point of having money if you aren't going to spend it and have fun? I suppose you could throw a smaller party and write a big check to the Google Philanthropy...but either way money is meant to be used. 2) If you actually had the skills and personality to turn $20K from YC into $3M in three months...you've clearly got entrepeneurism in the blood and shouldn't ever have trouble finding a lucrative job that you enjoy.
- jadams 20y ago
  Okay, I missed the humour. Regarding (2), though. I think making $3M in 3 months has a lot more to do with luck and hype than any inherent skill. So, obviously those numbers were pulled out of thin air. The likelihood of that happening is extremely low. Also, having a job you enjoy is no panacea. Whenever you're working for someone else (even the customer), there are things you won't enjoy. The discipline that allows you to do these things is the same discipline that makes it possible to work at a job you don't really enjoy. Having said that, I agree with the approach of sacrificing quality-of-life for, say 5 years in order to never have to work again. Doing this for something you mostly enjoy will allow you to put in the effort without killing yourself. Unfortunately, this can become self-perpetuating. There's no inherent good in working.
herdrick 20y ago
"Taking a $1M lump-sum means never having to work again." Sorry, no.
- jadams 20y ago
  Well, obviously, this is for some reasonable definition of have. The numbers work for me. I'm married, and have a mortgage. I guess I was blurring the line between being retired and semi-retired. Were I to earn such a lump sum, my daily activities would probably look the same. I just wouldn't be working for anyone else, and wouldn't have that mental burn-rate / countdown timer going. Controlling expenses is a very powerful tool. For every after-tax dollar you save, you're saving like 2 pre-tax dollars. So, it's much more effective to save $1 than to earn an extra $1. Here's my mental hierarchy of wealth. Each one represents a drastic change in quality of life, and options. It's somewhat logarithmic. 1) Stop living month-to-month. I.e. at the end of the month, you have enough to pay another month's expenses in the bank. 2) Pay of all debt, except mortgage. 3) Stop living year-to-year. I.e. at the end of the year, you have enough money to not work next year, possibly having to reduce your quality of life, but not to poverty. 4) Semi-retirement. If you didn't work for the next five years, you'd still have enough money to start a business at the end of the period. 5) Retirement. You can maintain your current lifestyle, or a slightly scaled-back one indefinitely. Mortgage is paid off. 6) Rich. Your kids could do (5), if you decided to fund the lazy brats. 7) FU money.
  - ralph 20y ago
    Good points, but I'd urge paying off the mortgage before (4). Paying it off twenty years early saves a wad in the long run. And not having mortgage payments as a recurring monthly drain makes (4) easier.
    - davy 20y ago
      Actually, you are wrong. Why pay off debt that is only costing you 6-odd percent a year (or less if you managed to refinance a few years ago) when you could invest that money and average 8-10 percent a year (or better). If you have enough money to pay off your mortgage, shove it all into the stock market. You'll come out ahead over the 30 years you're paying your mortgage.
- pg 20y ago
  It probably means never having to work again on something you don't like. Esp. if you're young when you get it.
whacked_new 20y ago
A 4-fold increase is no small thing to pull off! You'd be betting on some real shrewd money management and investments.

by jadams 20y ago

sethjohn 20y ago

That comment was intended to be read somewhat tongue in cheek, but for the sake of argument: 1) What's the point of having money if you aren't going to spend it and have fun? I suppose you could throw a smaller party and write a big check to the Google Philanthropy...but either way money is meant to be used. 2) If you actually had the skills and personality to turn $20K from YC into $3M in three months...you've clearly got entrepeneurism in the blood and shouldn't ever have trouble finding a lucrative job that you enjoy.

jadams 20y ago
Okay, I missed the humour. Regarding (2), though. I think making $3M in 3 months has a lot more to do with luck and hype than any inherent skill. So, obviously those numbers were pulled out of thin air. The likelihood of that happening is extremely low. Also, having a job you enjoy is no panacea. Whenever you're working for someone else (even the customer), there are things you won't enjoy. The discipline that allows you to do these things is the same discipline that makes it possible to work at a job you don't really enjoy. Having said that, I agree with the approach of sacrificing quality-of-life for, say 5 years in order to never have to work again. Doing this for something you mostly enjoy will allow you to put in the effort without killing yourself. Unfortunately, this can become self-perpetuating. There's no inherent good in working.

herdrick 20y ago

"Taking a $1M lump-sum means never having to work again." Sorry, no.

jadams 20y ago
Well, obviously, this is for some reasonable definition of have. The numbers work for me. I'm married, and have a mortgage. I guess I was blurring the line between being retired and semi-retired. Were I to earn such a lump sum, my daily activities would probably look the same. I just wouldn't be working for anyone else, and wouldn't have that mental burn-rate / countdown timer going. Controlling expenses is a very powerful tool. For every after-tax dollar you save, you're saving like 2 pre-tax dollars. So, it's much more effective to save $1 than to earn an extra $1. Here's my mental hierarchy of wealth. Each one represents a drastic change in quality of life, and options. It's somewhat logarithmic. 1) Stop living month-to-month. I.e. at the end of the month, you have enough to pay another month's expenses in the bank. 2) Pay of all debt, except mortgage. 3) Stop living year-to-year. I.e. at the end of the year, you have enough money to not work next year, possibly having to reduce your quality of life, but not to poverty. 4) Semi-retirement. If you didn't work for the next five years, you'd still have enough money to start a business at the end of the period. 5) Retirement. You can maintain your current lifestyle, or a slightly scaled-back one indefinitely. Mortgage is paid off. 6) Rich. Your kids could do (5), if you decided to fund the lazy brats. 7) FU money.
- ralph 20y ago
  Good points, but I'd urge paying off the mortgage before (4). Paying it off twenty years early saves a wad in the long run. And not having mortgage payments as a recurring monthly drain makes (4) easier.
  - davy 20y ago
    Actually, you are wrong. Why pay off debt that is only costing you 6-odd percent a year (or less if you managed to refinance a few years ago) when you could invest that money and average 8-10 percent a year (or better). If you have enough money to pay off your mortgage, shove it all into the stock market. You'll come out ahead over the 30 years you're paying your mortgage.
pg 20y ago
It probably means never having to work again on something you don't like. Esp. if you're young when you get it.

whacked_new 20y ago

A 4-fold increase is no small thing to pull off! You'd be betting on some real shrewd money management and investments.