Wall street programmer :)
Super high burn rate. 200k is a slave wage in Manhattan, or in SFO bay for that matter.
Ask HN: How have you achieved financial independence?
101–110 of 184 posts
Re: Ask HN: How have you achieved financial independence?
#102Just 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.
In Finland, the capital gains on cryptos are realised once you sell them for floating currencies (ie. USD or EUR). We pay 34% tax on the profit.
For example, I'd pay (1M€ - 20k€) x 34% = 333k€ of taxes on capital gains. I'm not sure how the taxation works if you try to dodge it by relocating to a more tax friendly zone. I've heard some horror stories about Finnish companies moving to Estonia for tax benefits only to be taxed with fines for the gains that the company made while it located in Finland. Would the same rationale apply for personal capital gains?
You can freely trade between cryptos, for example between BTC and ETH, without triggering the capital gains. The moment you leave cryptoland, I believe they use the first-in-first-out (FIFO) principle to calculate the profits.
Re: Ask HN: How have you achieved financial independence?
#103Earlier quoted context omitted.
Why does it have to be risk free? Did you make your money not taking risks? Taking calculated (not stupid) risks helps you get decent returns above 5% quite easily. Put half of it in a low fee index fund, and half in stocks you believe in. Those stocks are higher risk, but can have a much higher (or lower) return than the index, i.e. risk 20% of your capital for a potential 50% gain. You can add bonds to the mix if y…
Half in picked stocks is a very high risk strategy. I wouldn't recommend it.
And I would. Look, it all comes down to what you're comfortable with and how you've made your money. Some people are terrified of losing even a penny. Others don't care if a stock goes down 20%, if long term the business is solid / healthy and the price makes sense.
If you're looking for stock tips on the internet, then yes, half in picked stocks is quite risky. If you're willing to put in the work to do the research by plowing through SEC filings, reading annual reports, trying out the product the business is selling, in sectors you know and understand (i.e. tech for us) and you have common sense, then it's quite reasonable. You won't always get it right, but you can at least do better than others who haven't done their homework. That also means saying no to 90% of the stocks you could invest in.
Re: Ask HN: How have you achieved financial independence?
#104Earlier quoted context omitted.
Not sure why this was flagged except maybe the link to MMM (which is generally garbage advice for 80% of the population).
Isn't the core idea behind MMM just spend less, save more? Not sure how that's garbage advice. The particulars of some of the things he advocates aren't possible for everyone, sure. But reducing debt and increasing your savings is a goal that probably everyone who hopes to live another 10+ years should strive for.
Like most finance blogs, the core idea behind MMM (spend less, save more, retire early) is fine. It's the specifics that are either completely ineffectual (don't use AC because you'll get used to the heat anyway), or unrealistic for most people (walk or bike to work; spend $1k on a 20 year old Corolla and be your own mechanic).
Edit: And (3) a lot of the advice is the same old thing rehashed in a different way (never lease a car! index funds!); (4) A large part of his income is from shilling credit cards and other financial services
Re: Ask HN: How have you achieved financial independence?
#105Just 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…
So easy to say in hindsight, right? I try not to be too hard on myself about past decisions. I bet you did the best decision you were capable of doing with the information you had at the time.
Similar opportunities will come in the future.
Re: Ask HN: How have you achieved financial independence?
#106I consider myself as financially independent. I worked for a number of years in London as IT contractor (£400-500pd). Then I moved back to my home country and my hometown in Poland (reasonably affordable, not a capital). I don't have a car and I try to keep my spending to minimum (no fancy holidays, which I don't need. I cook, etc). I try to ensure my spending doesn't exceed equivalent of €500 a month.
I still spend most of the day in front of the computer. The only difference is that I wake up and finish when I want. I work on my personal projects (without aim to make money), which I find more interesting than doing commercial CRUD apps.
My decision was largely influenced by a Danish guy living in the USA, who wrote this blog: www.earlyretirementextreme.com
Re: Ask HN: How have you achieved financial independence?
#107Earlier quoted context omitted.
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.
In Finland, the capital gains on cryptos are realised once you sell them for floating currencies (ie. USD or EUR). We pay 34% tax on the profit. For example, I'd pay (1M€ - 20k€) x 34% = 333k€ of taxes on capital gains. I'm not sure how the taxation works if you try to dodge it by relocating to a more tax friendly zone. I've heard some horror stories about Finnish companies moving to Estonia for tax benefits only to…
In Belgium (where I live), these gains are tax free. So that is one country you could potentially move to to avoid the tax. The same applies for the UK, Malta, Cyprus (non dom regime) and Monaco. If I were you, I'd consider doing the perpetual traveler thing for a while (i.e. while having a base in Malta, which is cheap) and cash out + reinvest in stocks. After a few years, move back, and then pay capital gains tax on those future gains.
You can leave most countries without realising the capital gain, even if you've built it up within a country. This is why certain people move to a country without capital gains tax to sell their company. Obviously I don't know Finnish tax law, but within the EU it's generally the case (for now). Have it checked by a _GOOD_ tax lawyer, if that's what you want to do.
Building up capital is important - once you have it there's a lot you can do.
Re: Ask HN: How have you achieved financial independence?
#108Earlier quoted context omitted.
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.
In Finland, the capital gains on cryptos are realised once you sell them for floating currencies (ie. USD or EUR). We pay 34% tax on the profit. For example, I'd pay (1M€ - 20k€) x 34% = 333k€ of taxes on capital gains. I'm not sure how the taxation works if you try to dodge it by relocating to a more tax friendly zone. I've heard some horror stories about Finnish companies moving to Estonia for tax benefits only to…
[deleted]
Re: Ask HN: How have you achieved financial independence?
#109Just 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…
If you only have 10k€ in the bank and not a second "survival" account with around 10k€ then this should be your backup fund. Make the money as easily assessible as possible. It should be at least 3 months of expenses, and I personally spend less than 10k in 3 months but still have that goal.
Great advice, thank you. I'll prioritise increasing this amount in the near future.
Re: Ask HN: How have you achieved financial independence?
#110Earlier quoted context omitted.
Just buy index funds. They have low fees, and beat most (if not all) managed funds long term anyway. Find a fond tracking S&P 500, one global and maybe some other markets, and you should be set.
Keep in mind that index funds will probably decline by about 3-4x over the next 10 years on the demographic cycle.
What do you mean?