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He's getting 5% of $22 million each year to cover living expenses ($1.1million)? Doesn't exactly sound like "living simply" to me.
by quickpost 17y ago
He's getting 5% of $22 million each year to cover living expenses ($1.1million)?
Doesn't exactly sound like "living simply" to me.
- drp 17y agoJust having money doesn't mean he has to blow it.
- quickpost 17y agoFair point. However, if that's the case, why not leave more of it in the trust - he's automatically "blowing" 35% of that 5% (350k+) in taxes every year. EDIT: Here's the real answer - http://news.ycombinator.com/item?id=976759 http://news.ycombinator.com/item?id=976759
- ryanwaggoner 17y agoHe's required to receive at least 5% of the trust's value as his annuity each year. http://en.wikipedia.org/wiki/Charitable_remainder_unitrust http://en.wikipedia.org/wiki/Charitable_remainder_unitrust
- quickpost 17y agoAhhh, that makes a lot more sense. Thanks!
- ajju 17y agoDoes the benefactor have to pay tax on that 5%? If not, this is an amazing deal for the benefactor!
- sethg 17y agoIf I am reading the Wikipedia article correctly (and if the article itself is correct), the benefactor does pay tax on that 5%. However, if the OP had kept his startup in his own name, then at the time he sold it, he would have had to pay capital-gains tax on all of his profit, that year. (And then he would have been able to spend the remainder on whatever he wanted, that year.)
- seldo 17y agoIt's certainly very altruistic, but not entirely, since he has saved himself a whole lot in taxes and guaranteed himself an income for life.
- ryanwaggoner 17y agoThat was my first thought as well, but in reality, there's more available for whatever charity eventually gets the money. Granted, he could have donated it all outright, but there's something to be said for having some income so you can work on things you love, including giving back. I'm guessing that for someone like Derek, his time and expertise is more valuable than his money :)
- yason 17y agoIt's not about altruism or lack of it. Nor ultimately even saving money in taxes. It's about having enough, so there's no point in owning more than you need. He obviously has to live somewhere and eat, so it's only pragmatic to arrange that he will get what he needs but, I assume, not really much more.
- jws 17y ago$1.1 million/year sounds like a lot, but he is living in an apartment in New York city. edit: Oh, -4 on the mods. I'll make a note to put flashing lights around it the next time I use irony to comment on a man who thinks a $1.1m/yr income is "living simply".
- josefresco 17y agoDude, the highest mean income in the most titsy of NY neighborhoods is only about $150K/year. $1.1 mil is a shit ton of money each year.
- skorgu 17y agoNot countering your central point really but I'd note that the distribution is pretty skewed[1], i.e. the 300k+ group is a plurality in some neighborhoods. [1] http://envisioningdevelopment.net/map http://envisioningdevelopment.net/map
- josefresco 17y agoI used the same source as you. Irregardless of the data my point was that 1.1 mil in income is a lot, no matter where you live in the world.
- wlievens 17y agoUpvoted you for a reasonable point. But I want to subtract half a karma vote for the use of Irregardless. Shame!
- FreeRadical 17y ago$1.1 million a year tax free is alot - he could live lavish in Monaco with that!
- dschobel 17y agoit's not tax-free to him, check his post above.