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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?

#401

Post by ngngngng »

paulcole wrote: post #329
tim333 wrote: post #299

Earlier quoted context omitted.

Retiring is pretty dull at age 43. Maybe work on something you're into but which doesn't necessarily bring in much money. Personally, also having some money, I'm working on startup idea to fix the world etc which currently brings in zero money but is fun. Maybe it'll turn in to something real later, who knows. By the way re investing I recommend mainstream stuff like blue chip stocks, income producing real estate etc…

I "retired" in my mid-20s for about 3 years. I only went back to work when I ran out of money. Describing complete freedom as "dull" is an insane concept to me. You can work out, read, watch TV, go to coffee shops, cook, or even just sit around all day with no commitments.

Not everyone is like us. I'm a relatively successful software engineer currently and I still think back with fond memories to when I was tech support sitting there answering 30 minutes of calls per 8 hour shift. For some people that's torture.

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

#402

Post by iooi »

Not to be a downer, but you might want to look into getting a post nuptial agreement and parking a good chunk of that money in trusts for your kids that you'll have access to for the next 10 or so years. This kind of money can change people, depending a lot on their background and upbringing.

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

#404

Post by hangonhn »

Now that you're sort of free from the constraints of a normal 9 to 5, perhaps it's a good time to consider doing jobs that you might have not considered before. A lot of very skilled friends who've retired from industry ended up doing non-profit work and found it very satisfying. From my own experience, as an engineer still working, my time spent as a volunteer are among the things that gives me the most satisfaction. I'm about as satisfied at having run marathons, been part of an IPO, done some good engineering work, and literally put 200+ roofs over people's heads as a roofer for Habitat for Humanity. Mentoring high school students from East Palo Alto and seeing them graduate and becoming the first college students in their family are among the works I've found most worthwhile. Non-profits often need the type of specialized skills people like you can bring but can't afford.

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

#405

Post by hangonhn »

sokoloff wrote: post #261
sethammons wrote: post #237

Earlier quoted context omitted.

Re the 1% thing: might be worth it. Lots of people chase returns and pick risky investments. Instead of picking a diversified portfolio of index and/or blue chip stocks and sticking with it, they "play" the market, and almost never beat it. The 1% to a wealth advisor saves you from yourself. Of course, milage will vary

I think most everyone in the sub-$25M bracket is better served paying a broad-based index fund 0 to 4 basis points for VTSAX or similar and using fee-only planner/advisers for tax, estate, and investment advice. Completely agree that if OP wasn't previously a skilled investor with a track record of beating the market (extremely unlikely), that they shouldn't now try to become one. With this amount of money, they've "…

Having worked at a hedge fund, most "skilled" investors aren't. I would just do what you've suggested and park it in a diversified portfolio of index funds even if I had all that money. I've seen some atrocious usage of investor money at hedge funds. It mostly goes toward stoking the ego of the partners.

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

#407

Post by ziont »

freddie_mercury wrote: post #95

Unsurprisingly lots of people have been in similar situations, so there is a Wiki article on one of the Internet's best personal finance and investing websites: "Managing a windfall" https://www.bogleheads.org/wiki/Managing_a_windfall "Do nothing rash. Set aside one year's living expenses[note 2] and place the rest of the windfall into low risk investments (FDIC insured accounts, money market funds, treasury bills) f…

seems like a great problem to have

a source of depression for some.

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

#408

Post by aswanson »

dont_burn_it_up wrote: post #219

This is a great thread. Throwaway also. Gonna write some stream-of-consciousness here, because I have to start my work day, but I personally made approx. this amount from an exit, and it has gone very well for me and my family (wife + 3 kids). Some additional fine-tuned advice of what worked for me: (1) don't be afraid to spend money - high hourly rates - for a good accountant and good tax attorney. (2) if I were you…

That kobe quote is poignant and experience on a much smaller scale than kobe was on, has taught me the same. Also, your advice re: single private investment is spot on. If you read any story about a formerly rich athlete, etc going broke, it invariably involves a large investment in a dubious, high risk scheme (restaurants, companies, real estate, etc).

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

#409

Post by defen »

dont_burn_it_up wrote: post #219

This is a great thread. Throwaway also. Gonna write some stream-of-consciousness here, because I have to start my work day, but I personally made approx. this amount from an exit, and it has gone very well for me and my family (wife + 3 kids). Some additional fine-tuned advice of what worked for me: (1) don't be afraid to spend money - high hourly rates - for a good accountant and good tax attorney. (2) if I were you…

> Seriously, AVOID PRIVATE INVESTMENTS.

Good advice. My understanding is that private investments are the #1 way professional athletes with even more money than OP go broke (excludig straight-up fraud by their investment managers).

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

#410

Post by cmuguythrow »

Mental trick I recommend: You don’t have $8M - you own a business that lends money to people. Your business gives money to various companies through financial vehicles called ‘index funds’, which ensure that your loans are distributed across many different companies. The businesses use this money to fund their ventures, and are happy to pay you some money for the access to this capital. Your business is quite successful, earning you (.03 * 8M) = $240,000 per year. If someone else saw your balance sheet, they may be willing to pay you $8M for access to such a lucrative and easy-to-run business! Thinking this way allows you to spend the money however you want. Want to buy a Lamborghini? Go ahead! Use your $240k salary to finance your new car, just like any other normal person. But NEVER mortgage or sell any part of your amazing business just to buy a toy.
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