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Ask HN: What to do after $8M (all cash, post tax) exit?

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Re: Ask HN: What to do after $8M (all cash, post tax) exit?

#181
$8M is a big chunk of money, but most retirement advise being followed by the upper-middle-class still applies to you. If you follow the recommended investment advice given to retirees, you can afford to withdraw ~4% of your principal every year in perpetuity. This comes out to ~$320k (inflation adjusted) per year. Find a financial adviser with fiduciary duty, and he can help you get set up with this.

If your wife is working, I'm guessing $320k/year is a little higher than your existing household income. What that means is that both your wife and yourself can now quit your jobs and still maintain the same quality of life you currently have.

Note that quitting your job doesn't mean doing nothing. It just means that you can be intentional about what you want to do. If you want to spend time with your kids, read books and travel the world, you have the option of doing that. If you want to work as a teacher or non-profit volunteer or even start your own non-profit, you have the option of doing that. If you want to go back to work as a tech manager, you have the option of doing that too.

It may take you a while to figure out what you really want to do with your time... but don't try to rush it. Once you've quit your job and have time to think and experiment, you'll eventually figure it out.

The most important thing you can do in the short-term is to not burn your principal on something stupid like a private concert with a celebrity. The $320k/year I mentioned earlier is assuming that you have the entire $8M invested. If you splurged half your $8M upfront, your investment income will drop to ~$160k/year. Still a nice amount of money, but you'll find yourself in a situation where you have to continue working to maintain your desired lifestyle.

Re: Ask HN: What to do after $8M (all cash, post tax) exit?

#182
post #107

Earlier quoted context omitted.

>There are lots of ways to spend 8M fairly quickly. There's a lot of ways to spend 8 billion fairly quickly. That doesn't mean that either isn't an obscene amount of money to many people (it's 250x~ my gross income). Sure, he could go buy a jet and a manse and be broke in a week, but I could legitimately burn through 8 billion dollars fairly sensibly in several months throwing it at serious projects. Hell, I could bu…

This is getting very off topic, but.. Um... what would you actually spend 2 trillion a year on for four years on to implement a change in society? I mean sure, it's roughly the size of the oil market so theoretically you could buy all the oil in the world for 4 years and just not use it, thus forcing everyone on a massive pace to post-oil economy. But there's a huge hysteresis in how the society works, at such a mass…

>but.. Um... what would you actually spend 2 trillion a year on for four years on to implement a change in society?

First I'd set some milestones for private rocket companies to hit that had funding payouts, think x-prize but considerably more money and tiered. I want to see something like BFR operational ASAP. In this scenario I'd actually try and 40% or so of SpaceX which would chew up 10 billion or more at their most recent valuation, this would allow for hiring more employees and getting more production capacity online. I absolutely one all of our eggs out of one basket, to do this we need to start having humans on other bodies to start seeing if living at reduced gravity is viable long term without genetic modification.

I'd do similar for the current companies that have expressed interesting in asteroid mining, on a smaller scale to encourage them to develop spacecraft initially testing ideas for tackling the problem. While mining asteroids isn't going to be economically viable for export to earth (although I think if we could drastically reduce the cost of rare earths and precious metals, we may spawn new technologies. Rare earths and precious metals may also be important for grid storage and renewable energy at greater quantities than are easily accessible on earth) but would allow for cheap construction in space as well as cheap fuel in space. Once we could figure out how to pull stuff off of asteroids, we could work on manufacturing technologies for microgravity.

I'd assemble several missions to Venus, the Moon and Mars. I'd send several identical communication relays to Mars and place some around the Moon for relaying data for both current and future missions to both bodies, I'd send several identical orbital reconnaissance satellites to all three bodies.

I would work with local governemnts to re-establish kelp and seaweed in coastal regions. This helsp reduce ocean acidification, provides safety for various marine species, helps to sequester some carbon dioxide and is a farmable crop.

I would work on deploying PV panels on roofs of public buildings. Think schools, government buildings, libraries distributed across the US to show people that PV doesn't need to be ugly and to considerably help distribute some power generation across the grid.

There's also a few people working on carbon sequestration I'd like to throw money at, but the amounts would be insignificant compared to a trillion plus.

This would easily chew up 1 trillion plus in 1-3 years just buying materials and paying wages.

I've ideas for many other sectors and avenues too but this gives you some idea that I could legitimately spend that amount of money. Some of it would be funding crazy research, some would be helping companies to expand current production capacity, a lot of it would be x-prize style stuff "hit a notable milestone, get more money".

I'd like to throw money at:

- understanding memory/the brain with the ultimate goal of backing up a brain

- exploring some fringe science for anything remotely valid

- find a use for our nuclear waste, so throw some money at companies like Oklo

- energy efficiency

- permaculture

- greenhouse growing to reduce all this importing and exporting of food all over the world. The US imports 40% of it's fruit, exports 40% of it's corn and similar percentages of other grain etc. Purely from a fuel standpoint this is baaaaad for the environment.

- encourage local manufacturing, I currently work in international freight and from publicly published numbers about our aviation jet fuel use it's mind-blowing how much carbon just my company produces each year.

- encourage more sustainable technology, socketed/modular upgrades for phones and computers

Etc

Re: Ask HN: What to do after $8M (all cash, post tax) exit?

#183
Not been in your position, but what truly spoke to me was the book by Elizabeth Dunn and Michael Norton, titled:

Happy Money: The Science of Smarter Spending

In short: The key lies in adhering to five key principles: Buy Experiences (research shows that material purchases are less satisfying than vacations or concerts); Make it a Treat (limiting access to our favorite things will make us keep appreciating them); Buy Time (focusing on time over money yields wiser purchases); Pay Now, Consume Later (delayed consumption leads to increased enjoyment); and Invest in Others (spending money on other people makes us happier than spending it on ourselves).

Re: Ask HN: What to do after $8M (all cash, post tax) exit?

#185
post #31

First, I would put my money somewhere safe, with close to zero risk until you figure out what to do. Depending on your living cost around 1% guaranteed return should be enough to not work again for quita a while, possibly for ever (that means you do not have any pressure on your finances ever again if you don't change you lifestyle). Put some money aside for your kids (education, base capital for a house one day,...)…

> Depending on your living cost around 1% guaranteed return should be enough to not work again for quita a while, possibly for ever Just a nitpick but even the "official" inflation rate is somewhere around 2%, is it not? The real one is probably 3% or higher.

I think there also should be a concept of 'personal inflation'. For example, if you consume a lot of electronics and only use little petrol or whatever is becoming more expensive that time, your personal exposure to inflation is lower than the official number.

Re: Ask HN: What to do after $8M (all cash, post tax) exit?

#186
Was watching an ESPN doc about professional athletes that had earned a lot of money and suddenly became rich. These people usually came from low income (broken) families and had no idea how to manage this sudden financial change.

One of these ex-athletes now tries to educate the younger generation about this. He tells them:'Better to live like a prince for your whole life, then to live like a King for 5 years'.

Re: Ask HN: What to do after $8M (all cash, post tax) exit?

#187
post #73

I'm like you, without the $8M and have an additional kid. I'm also a financial advisor with a tech startup. It's just money. Money doesn't do anything, so don't love it. However, your responsibilities with it just rose far beyond what you were prepared to handle. Take your time and find a professional. If you want to learn to do it yourself, find a professional who will teach you. The job produced the money, but ther…

I think this is good advice for a lot of people, maybe including the OP. Sadly, some people will never be prepared to "unplug from the Matrix". They wouldn't be able to handle the unlimited freedom and time without turning to vices. Especially if they've had their soul crushed by 20 years of a career and responsibilities, and they've forgotten all of their hobbies and interests. I'm not being sarcastic, I think this might actually be true for most people.

This advice doesn't really apply if you are any of the following: young, creative, already self-employed, an entrepreneur, or you don't care if people say that you're "not a man".

I've been freelancing for many years, so I feel like I already have one foot in the door. I'd much rather have a lot of free time to work on my own projects and hobbies, especially the ones that will never make any money. Even 5-10 hours per week on freelance work is really annoying (because of context switching), and I'd much rather be doing my own thing.

Re: Ask HN: What to do after $8M (all cash, post tax) exit?

#188

Amazing how many people think $8M is enough to retire, or even that you'd want to. Go travel the world with the family for a while. Clear your head and have a good think about the future.

what kind of lifestyle you going for where 8M isn't enough?

Re: Ask HN: What to do after $8M (all cash, post tax) exit?

#190

Earlier quoted context omitted.

8 trillion is nothing on the scale of the Earth, right? I don’t know if I could fix Sierra Leone with 8 trillion but I could try. I imagine setting up a new safe free land in Africa that can take advantage of all its natural resources and people so they can be successful. Replicate it to the rest of the continent. Maybe a moon base but that’s not cash-limited above a few hundred billion, I think. I might run out of r…

That’s about enough to fund Sierra Leone’s foreign aid for a couple of millennia.

But that keeps them at where they are now. Imagine making them a Japan. What would that take?
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