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

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

#481

Post by ansy » Thu, Dec 06, 2018, 1:39 AM UTC

pmart123 wrote: post #469

b_tterc_p wrote: post #463

Earlier quoted context omitted.

It’s not really about owning anything. It’s thieving friends of family who will hold it against you if the wealth is not shared on account of your apparently deep social bond, if not trying to wrings it out of your wallet outright.

I think in practice though, if you act that you "earned it", it is much harder for people to assume they can ask you for it. You here a lot about lottery winners going broke, but you don't hear as much as startup employees on exit eventually going broke. This may be just a result of education and income levels, but I also believe that people don't mind asking you for money if it seems like it came to you through luck…

The justification isn't that OP came by the money unfairly, it's that because he has so much he doesn't need it as much as his friends and family need it. "Oh, can I get $20,000 for my business idea? Will you help send your niece to private school instead of state school? I'm paying 25% interest on this credit card debt, can you give me the money to pay it off?" etc etc. Everyone from his parents to that one guy he knew in college will want to solve their "small" money problems with OP's windfall, because to them he'll still be a millionaire and never have to work again. What eventually happens is OP will have to start saying NO to people then they will resent him and it will change the dynamic of their relationship. Or he could just keep his finances to himself and not bring this on himself. I'm not saying he shouldn't be able to help anyone who really needs it. It's just in his best interest to not advertise how much he really has to other people.

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

#482

Post by qwertyqazol » Thu, Dec 06, 2018, 1:54 AM UTC

Dude, first off, congrats! Secondly, regarding this: "I do not THINK I have any real hobbies." FIND SOME HOBBIES!!! You've got all the time in world to what you love, or what you used to love. As a kid, what did you want to be when you grew up? What makes you tick now? What are you interested in or think you could be interested in? Do you have academic interests? If so, cold email some professors in your area and join their labs. Or go back to school in a fascinating subject. Go traveling and do cool things like parasailing, eat good food, listen to good music. Learn how to cook, PLAY some music. Learn an instrument with some adults that are also newbies to music. Learn to dance! Go clubbing with your wife, even though it's not your scene. Get a couple's massage! Have some kinky sex!

And, most importantly, do some cannabis with your closest friends. Take 5mg of an edible if you don't like to smoke.

Then sleep in the next morning. The day after, get up at 600 and get after it :)

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

#483

Post by samstave » Thu, Dec 06, 2018, 3:06 AM UTC

Consultant32452 wrote: post #439

zaccus wrote: post #432

Earlier quoted context omitted.

Nah, once you've got 8MM in the bank there's no point worrying about maximizing returns. You've already won. Keep it simple, pay off the house, enjoy life.

This is exactly right. Mortgage/debt represents risk. Many people do the math on potential returns, but calculate risk as $0, which it definitely is not. I think it helps to consider this transaction in reverse. If you had a paid for house would you mortgage it so you could put that money into an investment account at Schwab? Almost certainly not.

If you pay off your house, shouldnt you also set aside ~10 years of annual property tax + X%/year for upgrades/fix/whatever - such that you literally do not have to think of a house expense for a decade.

Add in a lump sum for the monthly utilities for a decade and make a house account. Have the house account pay all these other incidentals from that account which you otherwise ignore.

Then, anytime you look at your bank account, the future costs of living in that home are never reflected in the balance you see in your daily account(s)

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

#484

Post by zarkov99 » Thu, Dec 06, 2018, 3:20 AM UTC

Read the last few chapters of "the simple path to wealth". In a nutshell, invest most of it in a broad index fund and if you can live with 4% of the 8 million, you will not need to work again and you will leave your children more than enough.

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

#485

Post by paulcole » Thu, Dec 06, 2018, 3:43 AM UTC

icedchai wrote: post #479

paulcole wrote: post #472

Earlier quoted context omitted.

I did have ~40x my monthly expenses saved. I just spent them over the course of about 40 months! I had no illusions about not working again, but I did do what retired people do: whatever the heck I wanted!

Sorry, I meant yearly expenses!!!!

I knew what you meant.

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

#486

Post by paulcole » Thu, Dec 06, 2018, 3:44 AM UTC

djloche wrote: post #477

paulcole wrote: post #472

Earlier quoted context omitted.

I did have ~40x my monthly expenses saved. I just spent them over the course of about 40 months! I had no illusions about not working again, but I did do what retired people do: whatever the heck I wanted!

x is usually years, not months. I think that 3-4 years is closer to a long sabbatical.

I don’t think that changes my original point that if you find freedom to do whatever you want “dull” then you are the problem.

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

#487

Post by ascar » Thu, Dec 06, 2018, 4:18 AM UTC

charliecat wrote: post #141

i invested close to the ETH ICO. just $10k or so, but that gave me a windfall of $3.5m (I sold in early to mid-December). im not super conservative with my money (i.e., i don't do t-bills, and other "super safe" investments). i am just dollar cost averaging into index funds, like ive always done. I anticipate that I'll get anywhere from 5% to 15% per year, compounding. i also have pre-tax income of roughly $500k. i s…

Isn't index funds risky for living off year-to-year returns given they have up to 50% drops occasionally? Especially if you assume up to 15% return which sounds super optimistic too me.

E.g. You would have made 0% return off the S&P500 between March 2000 and March 2013. That's 13 years! That would burn through 5,2 million off your capital at your expense rate of 400k

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

#488

Post by __derek__ » Thu, Dec 06, 2018, 5:10 AM UTC

WalterBright wrote: post #45

It may feel like infinite money, but can be burned through at terrifying speed. This happens to a lot of people who suddenly get money. My advice is do nothing with it, and start reading books about finance, investing, and money management. Then start gradually investing it as you learn the ropes. Hire a good CPA to help you with taxes. Buy liability insurance, because you're now a target for jackpot lawsuits. Don't…

> Don't listen to advice from the internet

Strongly disagree. Don't listen to the wrong advice from the internet. Do listen to wise, earnest, un-conflicted advice from the internet (e.g., Bogleheads).

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

#489

Post by ascar » Thu, Dec 06, 2018, 5:11 AM UTC

leetcrew wrote: post #470

gizmo wrote: post #363

Earlier quoted context omitted.

Honestly this is mostly bad advice. The guy should just sit on his hands for a year or two while he processes the idea of having money. Telling somebody who has never made a big financial decisions to start buying millions of dollars worth of financial assets is terrible advice. Unless by "start small" you mean invest a non-material amount, which still leaves the question: what to do with the remaining 99% of the mon…

when you have $8mm, sitting on your hands for a year costs you ~$250,000.

If you make rash decisions based on your perception of opportunity costs at that kind of sum, it's a good first step for losing it all. I'm also surprised by the attitude of 5% gain is easy and guaranteed. It's not. Neither treasurey funds nor real estate yield anywhere near 5% and we are many years in a bull market. Expecting 5% yearly ROI in the market over the next decade is optimistic.

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

#490

Post by __derek__ » Thu, Dec 06, 2018, 5:12 AM UTC

flarco wrote: post #93

WalterBright wrote: post #45

It may feel like infinite money, but can be burned through at terrifying speed. This happens to a lot of people who suddenly get money. My advice is do nothing with it, and start reading books about finance, investing, and money management. Then start gradually investing it as you learn the ropes. Hire a good CPA to help you with taxes. Buy liability insurance, because you're now a target for jackpot lawsuits. Don't…

Can you elaborate on why you think he should not listen to a personal wealth manager (assuming that's the same as a financial advisor)?

This is not nearly enough money to justify a wealth manager. People always think they're special when they aren't, and salespeople are always willing to encourage their delusions.