Ask HN: I made $24k over the last month. Now what? • Hacker News Board

Re: Ask HN: I made $24k over the last month. Now what?

#91

Post by portman » Mon, Jan 18, 2010, 5:12 PM UTC

"What I know how to do best is the app store"

Set yourself up as an _angel investor for iPhone apps_. Like a mini-mini-mini YCombinator.

Based on your experience, you should be very good at evaluating an individual's chances of creating a successful app. Solicit pitches (HN would be a great source) and make 5 small investments of $5k each.

If you make another $25k next month, do another 5 investments. Rinse and repeat.

You probably can't produce 5 apps per month on your own. But you can use those same skills to invest in 5 apps per month. There is greater risk (you could lose all 5 investments) but also greater reward (each investment could in turn become its own $25k-mo company).

Good luck!

Re: Ask HN: I made $24k over the last month. Now what?

#92

Post by portman » Mon, Jan 18, 2010, 5:14 PM UTC

wmeredith wrote: post #85

jpcx01 wrote: post #59

Pay your taxes. After that, it wont seem like all that much money.

Incorporate to soften this blow.

If the OP is a sole proprietor in the United States, then incorporation won't alter the tax burden.

Incorporation is still a good idea, for other reasons (simplified banking, limited liability, etc).

Re: Ask HN: I made $24k over the last month. Now what?

#93

Post by Psyonic » Mon, Jan 18, 2010, 5:16 PM UTC

petewailes wrote: post #24

Build a business using it. Pithy version: 1. Look for a niche that hang around online, but don't know much about web stuff. Mumsy things, crafts... anything that's a tightly knit niche 2. Find their forums/blogs etc, and ask them what would make their lives easier? What would be the one thing that would be awesome that they want. 3. Build it. Possibly hire people to help you 4. Have a free, lightly crippled version (…

As bioweek said, I've wanted to try this for some time. If I could get past step 1 and 2, I'd be happy to do this. Also, could you give us more detail on your ongoing analysis process? I'm very interested.

Re: Ask HN: I made $24k over the last month. Now what?

#94

Post by jeromec » Mon, Jan 18, 2010, 5:16 PM UTC

maxklein wrote: post #60

jeromec wrote: post #50

I think the answer heavily depends on how confident you are in yourself. Do you feel your success was a fluke, or could you mimic it with something else? Having 24K in capital is great, but if you know anything about the tech startup space you'll know it's no sure ticket to riches. You need to board a train that can take you higher, and that either means something you do yourself or tagging along with someone else. B…

I'm pretty smart, but you still need a confluence of certain things at a certain time, which was clearly the case with the app store about 8 months ago, and which I took advantage of. One can never know if everything will fall perfectly in place the next time.

Something I'd actually seriously consider in your place is YC companies. They get around 20K which is just enough to create a prototype/beta to solicit a larger round. This is not very much and I imagine many don't raise money right away after their Demo Day. Having another 15-20K could be highly desired in these earliest days. YC has already placed their bets that these companies will become great, and I think their portfolio could have a 40% or better success rate (provided timely variables fit together). If you could add your money and app expertise to make a YC (or another) company stronger, that might be the best risk to reward ratio you can have.

Re: Ask HN: I made $24k over the last month. Now what?

#95

Post by chrisduesing » Mon, Jan 18, 2010, 5:17 PM UTC

Nassrat wrote: post #48

I think what you are looking for is to incubate startups

From what he said this is his first real financial success, which means that he does not qualify as an 'accredited investor'. He needs to continue to make that kind of money for 2 years before he falls under more investment friendly SEC regulations. Until then he would be placing a large burden on a startup by trying to invest in it with additional legal work, filings and fees.

Re: Ask HN: I made $24k over the last month. Now what?

#96

Post by anigbrowl » Mon, Jan 18, 2010, 5:18 PM UTC

Good work. If this is solo, then I add my voice to others saying hire a few people with half and save the other half.

You say you don't want to invest, but since California is in the first stages of being hit by an epic storm system that will play out over the next 2 weeks, civil engineering businesses on the west coast are about to be handed as much work as they can handle.

Or talk to pg about putting some into ycombinator. With the relatively small investment to each selectee, you don't need massive amounts of capital. You could even stage your own little competition on HN and offer $500 or $1000 plus your (probably more valuable) management guidance to three worthy candidates whose apps impress you in exchange for a share of their revenue.

Re: Ask HN: I made $24k over the last month. Now what?

#97

Post by ticktock » Mon, Jan 18, 2010, 5:18 PM UTC

lrm242 wrote: post #29

Hrm, I think you're forgetting about the most important money making tool available: compound growth. Let's assume the following: You invest your current 24,000 and each month you add 20,000 to your investment. Let's further assume that you can achieve an annual return of 3.5% and that return is evenly distributed over the year. In this scenario you'd end up with $520k after two years. You're half way to being a mill…

Ah yes, sounds of the old Bernie Madoff LLC slogan. No risk, all reward. Bear in mind - any one of the 24 months you're investment could loose 50%. Buy a tow-truck and become a repo-man. Business is good.

Re: Ask HN: I made $24k over the last month. Now what?

#98

Post by maxklein » Mon, Jan 18, 2010, 5:18 PM UTC

hedgehog wrote: post #79

Market yourself. Write a book & give talks about your process for making winners. Lots of people want to know how to make money in the App Store. There might be a higher-priced corporate training market for how to make popular apps for marketing purposes (think packaged food or sports apparel industry). On reading your blog it looks like you're already going down this road?

Ehh, anyone who bothered to email me has gotten the stuff I know for free. I don't want to give any talks or write a book. It's easier and less stressful to just make the apps.

Re: Ask HN: I made $24k over the last month. Now what?

#99

Post by bOR_ » Mon, Jan 18, 2010, 5:19 PM UTC

maxklein wrote: post #63

swombat wrote: post #32

I don't know what to do with the money, how to use this very large monthly income to actually make myself rich What would you do if you had already made yourself rich? What would you spend your time on? Why not start doing that right now? Why do you need to "make yourself rich" before you can do it?

I'd look for ways to make myself even richer. It's a game without an end, and it's fun to play.

The end is when you die :). Money doesn't travel over that well.

But as long as you're having fun finding ways to make more money, there's really not that much wrong with playing the money game. Just don't care too much about money :).

Re: Ask HN: I made $24k over the last month. Now what?

#100

Post by kordless » Mon, Jan 18, 2010, 5:20 PM UTC

Lots of people saying 'invest in yourself'. I'd take that a step further and say 'invest in your company'. If you haven't already, set a company up and hire someone to do stuff like customer support, basic marketing, etc. Do your books yourself, with a CPA's help (and with his financial planning), or have a relative do it. My wife does all our bookkeeping for our startups. Don't trust a stranger to do your books!

Get a basic plan together on how you are going to grow the business, then take it out and talk to a) companies in the same space, and b) VCs. Get feedback and adjust accordingly to what feels right. If growing the business takes outside capital, raise it. If it doesn't, then start down the path of growing the business (according to your new plan).

I think investing in other startups is bad advice. You aren't making that much net right now - maybe on the order of $14K net a month past taxes. It's a good living, but if your sales are dependent on continued development/advertising/luck/whim of Apple, I'd be REALLY careful about expanding spend to fill the income.

Out of curiosity, which apps did you do?