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Ask HN: How have you achieved financial independence?

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Re: Ask HN: How have you achieved financial independence?

#61
post #10

Just turned 30. Invested most of my savings (20k€) into Bitcoin several years ago, and then converted everything to Ethereum in the pre-sale. Those 20k€ are worth roughly 1M€ pre-tax at the current rates. Started a fintech startup three years ago and we are close to a liquidation event that would net ~1.5M€ pre-tax. Right now, though, I have less than 10k€ in my bank account. Would be also really curious to hear how…

> Invested most of my savings (20k€) into Bitcoin several years ago, and then converted everything to Ethereum in the pre-sale

Haha. I did the same except with only 30€ worth of BTC, now worth ~15K€ in ETH. If only I had had slightly more balls at the time…

Re: Ask HN: How have you achieved financial independence?

#62

Related, I am wondering if any of you have any tips on securing financial independence / passive income that will hopefully be Tech recession proof. I.e, best way to see yourself through a Tech downturn without taking a severe hit to your wealth. I say this because I've had recent experience with people losing huge amounts of their wealth, and almost going bankrupt during the Oil price crash. For instance I know Oil…

Things like utility stocks tend to hold up. In the 99 crash Berkshire Hathaway was countercyclical and hit a low on the day tech stocks peaked. Also oil stocks were roughly negatively correlated with tech in 99 and may be today. Reasonably priced property not in the bay area?

Re: Ask HN: How have you achieved financial independence?

#63
post #60
post #10

Just turned 30. Invested most of my savings (20k€) into Bitcoin several years ago, and then converted everything to Ethereum in the pre-sale. Those 20k€ are worth roughly 1M€ pre-tax at the current rates. Started a fintech startup three years ago and we are close to a liquidation event that would net ~1.5M€ pre-tax. Right now, though, I have less than 10k€ in my bank account. Would be also really curious to hear how…

Typically the best / simplest way for sustainable mostly passive income is rental property. Lots of how to guides out there. Mortgage rates are really low at the mo if you want to leverage.

This depends on the country. Property isn't exactly passive income, when compared to other types of investments.

For example, in Belgium, stamp duty (a transfer tax) upon acquisition of a property is 10%. It takes a long while before you generate that back in rental yields.

Re: Ask HN: How have you achieved financial independence?

#64
post #10

Just turned 30. Invested most of my savings (20k€) into Bitcoin several years ago, and then converted everything to Ethereum in the pre-sale. Those 20k€ are worth roughly 1M€ pre-tax at the current rates. Started a fintech startup three years ago and we are close to a liquidation event that would net ~1.5M€ pre-tax. Right now, though, I have less than 10k€ in my bank account. Would be also really curious to hear how…

Is capital gains tax payable on those coins? If I were in your place, I would probably attempt to find a way to realise that gain (i.e. by relocating to a tax friendly country for a while) without having to pay capital gains tax. Make sure to not throw away your windfall.

Re: Ask HN: How have you achieved financial independence?

#65
post #35

Earlier quoted context omitted.

Is there a specific reason you're keeping so much of your wealth tied up in Ethereum? (Not that clued up on it, perhaps there isn't a big enough market there to sell it yet?) It seems to me like having all of your eggs in one basket. Wouldn't it be better to convert a decent portion of it to cash and invest that in a nice mixture of stock and bonds?

Ethereum seems to have great potential to multiply its value in the next 12-24 months. I think the probability of ETH going from 1B$ -> 2-5B$ market cap is far greater than BTC going from 10B$ to 20-50B$ due to several factors. My line of thinking has been that in order for the 4% to be meaningful, you need to start with at least a million. Saving a portion from the salary and getting 4% annualized growth just wouldn…

You do realise you're gambling, right? There's nothing wrong with that, but be honest with yourself about the risks of having nearly all your money in one instrument (ETH) which could easily wildly fluctuate up or down. If you honestly think it's a bet worth making, go look up the kelly criterion.

Re: Ask HN: How have you achieved financial independence?

#66

Not me, but the last time I talked to the CTO of my last company, he was making ~$120k/year passively via LendingClub with ~$1M invested (which he acquired via our exit).

There was a UK equivalent of that but it got pretty rubbish. The rates dropped very low as too many people with cash were chasing too many borrowers. It got to the point that, even with a 10% loan portfolio, you might not make money as the borrowers were so bad.

Re: Ask HN: How have you achieved financial independence?

#67
In the USA the surest and safest way to do this is to follow the American Dream... ie: buy a house. Specifically, buy a multi-family in a constantly in-demand area / big city. The devil is in the details on the economics of all this... how much you put down vs how much you borrow, etc.. etc... But within 30 years (assuming you get a 30-year mortgage) you will certainly be financially independent. The key is to manage this wisely and ensure you are in a location where you can get near 0% vacancy. Why am I so sure this will work? Because the US economy is designed for this... it's designed to massively leverage yourself up against the collateral of the home. The tax code is designed to basically writeoff your expenses - and even more so if it is your primary residence.

Re: Ask HN: How have you achieved financial independence?

#68

I'm only responding because nobody else has replied to your thread. Feel free to ignore me if you think it is irrelevant. My favourite Dr. Who quote: "Work for? I don't work for anyone. I'm just having fun." Describes me, even though I receive money every month. My expenditures are considerably less than the money I receive every month by having fun. If I didn't receive money, then I would be in trouble, so I don't r…

10K is indeed unreasonably low. Could you describe where in Japan you live, what kind of work you do now, and the transformation you possibly experienced when you decided to work for curiosity / interest rather than money? I have had a reverse path - I spent my early career working for a research lab, where the the work was immensely intellectually satisfying and fun for the most part. However, the pay was so ridicul…

It's hard to answer this without writing my life story :-) I live in Shizuoka prefecture, right on Suruga bay. We live in what I think is the most expensive apartment in town -- it costs $600 a month. It's a concession to my wife who put up with the $120 a month shack that I loved to death (but that she called a haunted house -- they tore it down after we moved out ;-) ).

I work as a software developer on contract to an English company. We spent 2 years in London, before moving back to Japan. Before that I worked as an English teacher in the high school in this city. Before that I was a software developers for 20 years or so.

I actually started in research labs too. I worked my way through school (or rather, I got free tuition because my father was a prof, and I paid for my other living expenses by working for various departments while I was in school). I didn't always have this idea of living cheaply... I had a house, a car, 2 dogs, the works...

I've had a few times in my career where I absolutely hated my job. One day I just quit. I had no prospects and no idea what to do. I was just done with the place I was working at. The next day, not knowing what to do, I started fixing some bugs on free software projects. I just kept doing that every single day, 12 hours a day, 7 days a week for 8 months. It was at that point that I realised that I liked programming ;-)

I've been very, very poor a couple of times in my life. Once in my early twenties I spent a few months in London. I had enough money for either meat or beer, so I became vegetarian (which lasted... until I got married ;-) ). I remember being happy every day despite being unbelievably poor. There were a couple of times that I ran out of money on a Thursday and was unable to eat until I got paid on a Monday. That taught me the importance of budgeting ;-)

Other times have been like I described above. I got paid a good salary as a programmer, but was often unhappy. I decided to quit my job (or the companies I worked for decided to run out of money) and I took a sabbatical to write free software.

One day I met a guy who suggested I go teach English in Japan. I only meant to go for a year in order to learn Japanese and improve my presentation skills. I stayed for 5 years.

At that point, I asked my wife, "What should we do? Do you want me to make a lot of money? I'm sure I could as a programmer. Or we could open a brewery. Or I could become a tour guide. Or I could..." And then it dawned on me. I could do anything because we had learned over the years to live on tiny amounts of money.

It's freedom more than anything else. These days we spend quite a bit more than we used to. My wife even has a car (bleh...). Getting the balance right is tricky ;-)

Re: Ask HN: How have you achieved financial independence?

#69
post #23

Earlier quoted context omitted.

> Spending 3k€ per month for the next 30 years would be about 1M€ That is only withdrawing the principal without taking into account the real interest/yield rate you can make off the investment. That money would probably last longer or yield more for the same time period. In fact, as you point out it can last indefinitely with an after inflation and tax ROI(real yield) of 4% which converts to ~3k/mo. You would have t…

The real interest rate is usually negative in today's environment; I'd love to know where you're getting a risk-free 4% after inflation and tax.

Nothing is risk free.

Re: Ask HN: How have you achieved financial independence?

#70

I'm only responding because nobody else has replied to your thread. Feel free to ignore me if you think it is irrelevant. My favourite Dr. Who quote: "Work for? I don't work for anyone. I'm just having fun." Describes me, even though I receive money every month. My expenditures are considerably less than the money I receive every month by having fun. If I didn't receive money, then I would be in trouble, so I don't r…

For anybody interested, http://www.mrmoneymustache.com is very much aligned with OP's testimony and also contains a lot of practical advice.
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