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No, You can't retire rich at 30 if you sell your startup

tonywright.com

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Re: No, You can't retire rich at 30 if you sell your startup

#31

Post by jacquesm »

StavrosK wrote: post #26
mechanical_fish wrote: post #10

Earlier quoted context omitted.

Looks like it's time to recommend The Millionaire Next Door : http://www.amazon.com/Millionaire-Next-Door-Thomas-Stanley/d... Don't bother to buy it: Get it out of the library and skim it. It's not a difficult read and it belabors its own point a bit. My own summary: The secret to retaining a high net worth is the same as the secret to accumulating it: Control spending. Don't waste money. Most of the people you know…

So you'll either be a poor-ish young playboy or a rich old guy? Why does the first option sound more attractive? Of course, fast cars and country clubs are all superficial, but being a miser just so you can die with millions isn't that much better...

Saving a buck is a lot easier than making a buck.

That's one very good reason why plenty of rich people are seen as 'misers', if they let it roll then they'd stop being rich pretty quickly.

The secret to that is to not make it plain what your financial situation is and to live well within your means.

Re: No, You can't retire rich at 30 if you sell your startup

#32

Post by mechanical_fish »

StavrosK wrote: post #26
mechanical_fish wrote: post #10

Earlier quoted context omitted.

Looks like it's time to recommend The Millionaire Next Door : http://www.amazon.com/Millionaire-Next-Door-Thomas-Stanley/d... Don't bother to buy it: Get it out of the library and skim it. It's not a difficult read and it belabors its own point a bit. My own summary: The secret to retaining a high net worth is the same as the secret to accumulating it: Control spending. Don't waste money. Most of the people you know…

So you'll either be a poor-ish young playboy or a rich old guy? Why does the first option sound more attractive? Of course, fast cars and country clubs are all superficial, but being a miser just so you can die with millions isn't that much better...

You've got the dichotomy disease. There is no need to go to either extreme.

You can belong to a country club and still live within your means.

You can certainly drive a fast car and live within your means. Fast cars can be bought for well under $10k, especially in California where a fast car can last for thirty years and more without rusting. Most of the stuff on more expensive cars is just bling, or comfort features that have nothing to do with high performance.

What you have to do is pay attention. Don't spend more money than you have. Don't spend at an unsustainable rate. That doesn't mean "spend no money at all". There's a happy medium there.

And you don't have to be a miser. Though, in fact, you probably do have to die with millions, or at least several tens of thousands, unless you plan your own suicide and stick to that plan. To ensure that you're living as comfortably on your last day as your first, you need a bunch of money in the bank. And you don't know which day will be your last. So, die with a million in the bank and endow an amusing trust fund in your will.

Re: No, You can't retire rich at 30 if you sell your startup

#33

Post by maxawaytoolong »

mechanical_fish wrote: post #10
jdc wrote: post #2

...where retiring rich is defined as spending $300,000 annually. I'd personally move somewhere cheaper once my income no longer depended on my location.

Looks like it's time to recommend The Millionaire Next Door : http://www.amazon.com/Millionaire-Next-Door-Thomas-Stanley/d... Don't bother to buy it: Get it out of the library and skim it. It's not a difficult read and it belabors its own point a bit. My own summary: The secret to retaining a high net worth is the same as the secret to accumulating it: Control spending. Don't waste money. Most of the people you know…

The millionaire next door makes too much of a deal about stuff like clothing and cars. You have to control your bleed, sure. I've found that if you have half a brain and live somewhere with a lot of money flowing around like NYC you can buy fancy shirts, go out to dinner, AND save 6-10 grand a month, which is the best of all worlds.

Millionaire next door is more for people running a landscaping business in the suburbs, and saving every extra dollar instead of blowing it on a new home theatre system or an expensive vacation to somewhere that isn't as boring.

I.e. it's more for lower middle class people trying to get a leg up. In my experience it's better to become a "millionaire next door" ... next door to multimillionaires or billionaires. It's way easier if you're around a bunch of people with a lot of extra dough.

Re: No, You can't retire rich at 30 if you sell your startup

#34

Post by jsolson »

wallflower wrote: post #6

I think I could get by on $30,000 a year and working on my own ISV in a nice Latin American country. Is anyone doing that here?

My annual spending in Atlanta, GA is about 30k/year. I honestly consider that to be a bit high. I've been eating too many meals at restaurants, and my monthly coffee budget (which isn't all coffee -- my preferred coffee shop also has great beer on tap) is creeping up over $200.

Re: No, You can't retire rich at 30 if you sell your startup

#35

Post by jacquesm »

GFischer wrote: post #28
wallflower wrote: post #6

I think I could get by on $30,000 a year and working on my own ISV in a nice Latin American country. Is anyone doing that here?

I live on U$ 12,000 a year* in a Latin American country (Uruguay), but it isn't a good enough amount to retire on. U$ 30,000 is doable, but not millionaire-ish. You could live quite comfortably and with housemaids and eating out often, but forget about a (good) car or high-end electronic toys (unless you bring them with you from abroad). There are some nice places to retire, but I'm not sure if you wouldn't find it b…

How is living in Uruguay, apart from the money angle?

I've heard lots of good stuff about it but never from someone that actually lived there.

Most curious!

Re: No, You can't retire rich at 30 if you sell your startup

#36

Post by yummyfajitas »

muhfuhkuh wrote: post #11

Can we conclude that this is the wistful daydream equivalent of the "Maserati Problem"[1]? I can definitely say that if 30 years we're looking at half a million dollars as a "cost of living adjustment", that world will for the people who don't make that kind of money be Thunderdome. I mean wages have barely kept up with inflation. In the last 40 years (between 1967 and 2007), median wages have only gone up US$10000 (…

How the hell are all of our parents going to fare when you need 500,000 to maintain an upper-middle class lifestyle?

If the past 40 years are a guide to the future, then the lifestyle we currently define as "upper-middle class" will be redefined as "poverty" and will be available to virtually everyone, including people who can't even be bothered to find a job.

People will continue to complain about the declining middle class, how the median family can barely afford to live in a 4000 sq ft house with a robotic kitchen/laundry/bathroom and about how unaffordable their stem cell therapy and cloned organs are [1]. They'll watch TV news reports lamenting the bad economy on their 108,000p 10' 3d full immersion TV's, while the uber rich (income inequality will go up as well) do much the same thing, but in a 100,000sq ft house and a 50' TV. Also, the quality of stem cell therapy and robotic surgery available to the rich will be slightly greater.

[1] They will of course lump all medical goods and services together under the catch-all term "health care".

[edit: clarified that I'm thinking about 40 years here.]

Re: No, You can't retire rich at 30 if you sell your startup

#37

Post by myoung8 »

muhfuhkuh wrote: post #11

Can we conclude that this is the wistful daydream equivalent of the "Maserati Problem"[1]? I can definitely say that if 30 years we're looking at half a million dollars as a "cost of living adjustment", that world will for the people who don't make that kind of money be Thunderdome. I mean wages have barely kept up with inflation. In the last 40 years (between 1967 and 2007), median wages have only gone up US$10000 (…

Tony's calculations are wrong because he assumed constant inflation.

There will be periods of deflation, and many think that one is starting now. It also won't be the last.

Re: No, You can't retire rich at 30 if you sell your startup

#39

Post by maxawaytoolong »

charlesju wrote: post #8

I don't think stock options have "zero" value. For a lot of people working on a salary it's hard to save money, so when a startup sells and an employee gets a sizable chunk of money from the sale, it's huge relative to their cash-flow perspective.

Except a liquidity event rarely happens. When they do, it's often a shell game for the investors to mask losses. The early stage employee's options are from the common pool; the investors get preferred options which are paid out first. Generally it's quite easy for the board to zero out employee options if things aren't going as well as hoped.

Re: No, You can't retire rich at 30 if you sell your startup

#40

Post by jacquesm »

steveklabnik wrote: post #22
wallflower wrote: post #6

I think I could get by on $30,000 a year and working on my own ISV in a nice Latin American country. Is anyone doing that here?

s/a nice Latin American country/Japan/; if($user == 'patio11') { print "yes"; } # http://www.bingocardcreator.com/expenses/profitability-pie-chart

In case anybody wonders if that's for real, yes, Patrick has made all his expenses/profits/turnover figures public.
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