Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

news.ycombinator.com

Post reply on HN
Print view View original

331–340 of 531 posts

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

#331

Post by logfromblammo »

Hire a fiduciary management firm at 0.5% of invested assets per year--fee, not commission--to pay you 2.5% per year. This will likely last you forever, and then your heirs will get it, so also draw up a will and keep it current. Your annual income, inflation adjusted, will be about $200k, and probably increasing more often than decreasing. That's enough for some comfort and occasional luxury, but not very significant lifestyle change. Don't trade up unless you find that you can't spend everything your fiduciary firm is dumping into your account every month.

Keep working, but know now that you have "f-you money", and don't take crap from anyone. Don't retire until you can come up with a hobby that will occupy you for at least 4 hours per day, and your kids each have bachelor's degrees (if they want them) and their own place to live.

Now you can afford a nice, new car every two years. Make sure you do it, to support the used market for the rest of us.

Treat your spouse right, to avoid divorce--or even threat of divorce--at all costs. So buy your spouse's new car first.

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

#332

Post by dh »

These links will give you everything you need to know about what to do with the money.

http://www.modernluxury.com/san-francisco/story/the-best-inv...

https://www.betterment.com/

https://www.adviceperiod.com/

http://www.amazon.com/Random-Walk-Down-Wall-Street-ebook/dp/...

http://www.transparentinvesting.com/uploads/wholestory.pdf

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

#334

Post by leetcrew »

arbol wrote: post #230
leetcrew wrote: post #195

Earlier quoted context omitted.

with a wise investment strategy, the guy can spend about $300k per year without losing money in the long term. that's a lot of money, but it's not so much that you can't easily overspend if you're not careful and/or start "seeing green". if his kids end up going to top schools for college, that'll be ~$150k per year right there.

Even if OP spends 1M on college fees ( I forgot how expensive it is in the US ), I would imagine that they'll still be very comfortable for a long time. Plus, you need to factor in their future earnings. When people speak of retirement, they really mean just doing something else they're interested in. The likelihood of these activities generating income, at some stage, is substantial. Also why would anyone need to sp…

no one needs to spend $300k in a year, but unless you are some kind of ascetic monk, you are susceptible to lifestyle creep.

the reason i bring up college expenses (which are about $70k/year at top US schools) is that parents tend to do whatever they can to give their kids the best possible chance in life. even if someone is not purchasing luxuries for themselves, it's not hard to spend tons of money on children. about $600k needs to be set aside if he wants to guarantee that his children can attend any college they can get accepted to. in the meantime, there are plenty of expensive things he can do to improve their chances of admission. maybe this means buying a house in a better school district or paying for private school (possibly >$40k per year per child). maybe it's private SAT prep to boost test score. extracurriculars are also very important for admissions (and are enriching in their own right), and the most impressive ones aren't cheap either. there's always something you can spend more money on to improve life outcomes for your kids.

you can't just say "I have a lot of money, I'm going to spend modestly, and everything will be alright," and have it be so.

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

#336

Post by sfblah »

ryanmercer wrote: post #221
SmellyGeekBoy wrote: post #178

Amazing how many people think $8M is enough to retire, or even that you'd want to. Go travel the world with the family for a while. Clear your head and have a good think about the future.

>Amazing how many people think $8M Um. Come check out https://www.reddit.com/r/leanfire/ but make sure you are sitting down and don't have a heart condition.

My view is those people are banking on stock market performance that is influenced by a massive bubble still underway. I think in 3-5 years a bunch of them will regret this decision, as their net worths will have been cut in half or worse. I’m curious what you think about that.

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

#337

Post by bbarn »

Have you tried playing Warhammer? Eat up that 8 mil real fast ;)

In seriousness though, I think changing that "no real hobbies" statement is the way to go. Find something not work you enjoy doing, or if it turns out work is really what you enjoy, keep working! Don't let the money burn a hole in your pocket - you don't need to change anything at all.

Another option is do work you think matters or would be fun if you never had to think "but I couldn't support my family doing that.." Working at a bike shop is that for me. Charity work, maybe getting involved with your kid's education boards, etc., something out there must make you tick that you couldn't afford to do before.

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

#338

Post by looping_lui »

I can tell you two very real scenarios that happened in my family (a lot of wealth inherited):

1. Burning through $10m in 30 yrs. is a piece of cake. Bad investments probably ate 50% (“I am wealthy, I know how to manage money”), excessive spending of shit nobody needs ate another 30% and 20% gone for fun things like divorces, private schools for retarded kids, lawyers getting kids out of prison and that kind of “wealthy people shit”. 2. That kind of money can last multiple generations. Do not let physical possession get in place for independence and growth of yourself or your family. Maintain a decent lifestyle, buy nice fancy but long-lasting stuff (eg. Steinway piano, Glashuette watch, etc) and invest in yourself (travel to places fewer people have seen, exercise, buy a nice bicycle and cross the Alps, learn a new language, get a pilot license,...). Keep yourself and your wife busy with some income generating mechanism you generally enjoy mostly. Keep a low profile, live a decent middle class life and when your kids are out of the house and know what “making a living means” increase your spending.

Let me tell you (from personal experience): 90+% of the people burn through this kind of money in 25 yrs easily without actually enjoying themselves, creating only greed, jealousy and hate around them.

I am not sure I would recommend learnjng more about investing, getting prepped up: watch Wulf of WallStreet, WallStreet, the big short, read the books from Taleb (brilliant) and the book “fooling some of the people all of the time”. Academia is full of retards and morons in the field of investing. If anybody starts talking crap like “CAPM”, “beta” or “trend analysis” - run. It’s fairy dust and bullshit wrapped in suits (I worked in investment banking, strategic management conaulting and have a PhD in that shit). Diversification doesn’t help during “correlation breakdowns” (aka everybody withdrawing money) and a bull on the stockmarket may just be actual inflation people don’t realise.

You need to invest money because inflation will take it all away. But more important than your asset allocation is whether you are invested/not invested...

Like always in life, it is the big picture/decision that matter: - Move to Europe: free university tuition and cheap real estate (saved you 750k for your kids med school) and 1.5m in housing - Don’t invest if you don’t know what you are doing. Doing nothing is a very good idea sometimes... But keep in mind how inheritance works in Europe - setting up a fund or something and may make sense... - Talk to a tax advisor: can you move and save taxes? Can you transfer/restructure the money so you don’t have to pay tax now/taxes at all? - Are you legally prepared for a divorce? (Not saying you should change your spouse - but what if she wants half the money and files for a divorce?)

Ask yourself the following questions potentially:

- Will you be more happy if you buy more stuff? What made you happy in the past? - How will you feel if you lose 20/30/50% of an investment? - How will the relationship with your spouse change if you stop working? What emotions may your spouse have? (feeling of entitlement, greed, panic, frustration, hate) - What will your kids be like if they feel they are rich? How will wealth affect their aspiration, growth and seld image? What role model will you be? - How will you GROW when you stop challenging yourself?

I would highly recommend not to give your kids any money upfront or promise anything. Let them develop ambition and grow. Give them a safe place if they fail - so they can keep trying. Start building a sustainable fortune for your family - so it lasts for generations. Invest, don’t gamble. Be humble and understand: you may just have been a lucky average guy - what makes you think you make great investment decisions (sorry for coming off like that, but ask yourself)?

“Having a fortune is one thing - being able to manage it and be happy another”. It can be a real curse - take away your happiness and ruin your kids and spouses life (I saw it happen).

Congratulations! I hope you will enjoy longlasting prosperity and joy!

Post reply on HN