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

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

#121

Post by masklinn »

lukego wrote: post #117
freddie_mercury wrote: post #95

Unsurprisingly lots of people have been in similar situations, so there is a Wiki article on one of the Internet's best personal finance and investing websites: "Managing a windfall" https://www.bogleheads.org/wiki/Managing_a_windfall "Do nothing rash. Set aside one year's living expenses[note 2] and place the rest of the windfall into low risk investments (FDIC insured accounts, money market funds, treasury bills) f…

You should also be able to find plenty of discussion threads in the Bogleheads forum started by other people who have found themselves in this position over the years.

IIRC Reddit also has a bunch such threads, I want to say in /r/personalfinance

https://np.reddit.com/r/AskReddit/comments/24vo34/whats_the_... is a pretty famous series of comments.

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

#122

Post by mr_spothawk »

jeremyjh wrote: post #109
flarco wrote: post #93

Earlier quoted context omitted.

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)?

Most of them are simply salesmen, selling high-load products. Incentives are not aligned, but if you can find one is who independent of any particular set of funds and who only earns from a percentage of your earnings, and not from brokerage fees or commissions, then it might be worthwhile but you should still learn about this stuff yourself.

^^ seconded. I've lost a windfall to an investment manager.

my business partner is all about liability insurance, and has had to use it.

to the OP, re: "should I donate it?"

yes, but not all of it. buy potting soil & sow some seeds somewhere.

also, to the point about investing generally... seems like maybe we're at a top, so pick something stable

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

#123

Post by masklinn »

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)?

https://www.reddit.com/r/AskReddit/comments/24vo34/whats_the...

> You will be encouraged to hire an investment manager. Considerable pressure will be applied. Don't.

> Investment managers charge fees, usually a percentage of assets. Consider this: If they charge 1% (which is low, I doubt you could find this deal, actually) they have to beat the market by 1% every year just to break even with a general market index fund. It is not worth it, and you don't need the extra return or the extra risk. Go for the index fund instead if you must invest in stocks. This is a hard rule to follow. They will come recommended by friends. They will come recommended by family. They will be your second cousin on your mother's side. Investment managers will sound smart. They will have lots of cool acronyms. They will have nice PowerPoint presentations. They might (MIGHT) pay for your shrimp cocktail lunch at TGI Friday's while reminding you how poor their side of the family is. They live for this stuff.

> You should smile, thank them for their time, and then tell them you will get back to them next week. Don't sign ANYTHING. Don't write it on a cocktail napkin (lottery lawsuit cases have been won and lost over drunkenly scrawled cocktail napkin addition and subtraction figures with lots of zeros on them). Never call them back. Trust me. You will thank me later. This tactic, smiling, thanking people for their time, and promising to get back to people, is going to have to become familiar. You will have to learn to say no gently, without saying the word "no." It sounds underhanded. Sneaky. It is. And its part of your new survival strategy. I mean the word "survival" quite literally.

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

#125

Post by scarejunba »

fsloth wrote: post #107
ryanmercer wrote: post #85

Earlier quoted context omitted.

>There are lots of ways to spend 8M fairly quickly. There's a lot of ways to spend 8 billion fairly quickly. That doesn't mean that either isn't an obscene amount of money to many people (it's 250x~ my gross income). Sure, he could go buy a jet and a manse and be broke in a week, but I could legitimately burn through 8 billion dollars fairly sensibly in several months throwing it at serious projects. Hell, I could bu…

This is getting very off topic, but.. Um... what would you actually spend 2 trillion a year on for four years on to implement a change in society? I mean sure, it's roughly the size of the oil market so theoretically you could buy all the oil in the world for 4 years and just not use it, thus forcing everyone on a massive pace to post-oil economy. But there's a huge hysteresis in how the society works, at such a mass…

8 trillion is nothing on the scale of the Earth, right? I don’t know if I could fix Sierra Leone with 8 trillion but I could try. I imagine setting up a new safe free land in Africa that can take advantage of all its natural resources and people so they can be successful. Replicate it to the rest of the continent.

Maybe a moon base but that’s not cash-limited above a few hundred billion, I think. I might run out of rocket scientists and habitat specialists before running out of money.

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

#126

Post by niklasd »

lesss365 wrote: post #113

To go against the current a little bit, hold off on investing in the stock market as of now. The market is likely to turn downwards within the next year or two. There are too many indicators pointing to this. Hold off and wait for the major indexes to lose ~40%-50% in value, then invest. During the 2008 crash, the main indexes and stocks lost ~40%-60%, and treasury bonds ~8%-10%. Save your money now and invest when m…

I'm not sure this is good advise. If there is one thing that I've heard from experienced people, it is that you can't time the market, and you should attempt to. Never invest a bulk of money at once, invest it in small chunks on a regular basis, so you will get an average of the market, which is the best you can hope for.

By the way, there have been inidcators and reasons for a downwards turn for years, and I know people who stoppend investing years ago, losing out on gains. It's never a good idea to time the market.

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

#127

Post by sulam »

$8M is fairly close to the number that I use for calculating "retirement ready" in the SF Bay Area. Assuming you live somewhere cheaper, the number is lower. Also my calculation involves some very large annual expenses that most people don't have, so your number is probably lower regardless.

So, you could probably retire.

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

#128

Post by owaty »

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…

> My advice is do nothing with it, and start reading books about finance, investing, and money management.

I see where you are coming from, but if you step back for a second, this just sounds bizarre.

OP now has more money than they need or ever have had, and instead of relaxing and finally caring about something other than money, you suggest they actually start caring more about money.

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

#129

Post by rsiqueira »

There are problems that money can not solve, but Artificial General Intelligence would solve. Think about an artificial intelligence that could learn about health, chemestry, microbiology, develop and apply medical knowledge much faster than humans do, with no limits. So I would work on Artificial General Intelligence, with a team of neural network programmers and computational neuroscientists to develop the required evolutionary algorithms and neuron simulators to implement biologically inspired memory circuits and some brain process simulations that could lead to a new form of computing and artificial intelligence. (But unfortunately most who could do this are buried in mundane client related problems.)

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

#130

Post by thehnguy »

freddie_mercury wrote: post #95

Unsurprisingly lots of people have been in similar situations, so there is a Wiki article on one of the Internet's best personal finance and investing websites: "Managing a windfall" https://www.bogleheads.org/wiki/Managing_a_windfall "Do nothing rash. Set aside one year's living expenses[note 2] and place the rest of the windfall into low risk investments (FDIC insured accounts, money market funds, treasury bills) f…

Agreed with the bogleheads suggestion. I’m a lawyer who does some consulting to people in similar situations, and the mistake that everyone makes is thinking that because it’s a lot of money somehow it has to be treated differently. This is just plain wrong.

Resist the urge to hire a fancy money manager or do anything different beyond a celebratory dinner with your family.

Don’t tell anyone beyond your wife and very trustworthy family about this. Otherwise,you will quickly have lots of “friends” and family members who “love” you.

Going forward with work is a personal decision. Obviously, you don’t need to. A tried-and-true conservative investment approach will pay you sufficient income for the rest of your life (and our kids through college, and everything else). But it’s tough to stop working. Anecdotally, I’m about half retired (on a lot less money) and it’s a big challenge.

I’m getting long winded. For now, resist the urge to do anything special, anything too different.

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