21–30 of 84 posts
Derek's writing influenced me quite a bit in the early 2000s. I bootstrapped a software business from zero to near $10m in annualized revenue, and sold it almost half a decade ago. I contributed 100% of my equity into a charitable remainder trust because I learned about that idea from his website. Since then, I've done a lot of "puttering". I'm teaching myself jazz guitar, and I'm currently enrolled in law school. I…
I too spent almost no money, went on almost no trips, and lived way, way below my means to make it happen in my 20s. It turns out as my income has increased my happiness has increased - and I'd agree with all the studies of once you cross a certain threshold in the 6-figure range that more money means "less". Generally it just means: I have nicer versions of the same things.
All that is to say: I sure as hell wasn't "rich" when I was making more than I owed each month, not even close. And I don't believe for a SECOND Derek would be happy going back to living in a flat with 3 other people, eating peanut butter sandwiches 3 days a week but "making more than he spends", which is what he implies.
Derek: there are people out there who are in their 50s who would still have to live with 3 other people and eat peanut butter sandwiches 5 days a week to earn more than they spend. THAT'S THE POINT. Maybe if I make $90k/month some day I'll also be blind to the reality of the common man, but I can still see it from this little perch I'm sitting on at the bottom of the mountain.
Does anyone else find it frustrating when people talk about not working too hard and already having enough, after they have become wealthy?
What if, learning to be happy with "enough", is how people get filthy rich? https://sivers.org/richand
Derek's writing influenced me quite a bit in the early 2000s. I bootstrapped a software business from zero to near $10m in annualized revenue, and sold it almost half a decade ago. I contributed 100% of my equity into a charitable remainder trust because I learned about that idea from his website. Since then, I've done a lot of "puttering". I'm teaching myself jazz guitar, and I'm currently enrolled in law school. I…
Earlier quoted context omitted.
Derek did not became wealthy. He gave the $22 million dollars he got from selling his company to a fund, and gets over $1000 each month, hardly "wealthy". Derek has worked in a circus and knows how to live cheap enough. He also has lots of friends so he does not need to pay for lots of things. I know people that earn in excess $10.000/month and spend it all or even get into debts.
Wikipedia disagrees: >Derek Sivers transferred ownership of his company to a charitable remainder unitrust for music education, and had the trust sell it to Disc Makers. This agreement requires the trust to pay Sivers 5% of the trust's value annually (hypothetically $1,100,000 pretax, based on a sale price of $22 million as reported by Sivers)[4] until death, while upon death the remainder will ultimately go to chari…
I agree with other posters, it’s a little annoying to have wildly successful people talk about “being happy with what you have” and “money isn’t that important” and “enough” etc.
While the concept is absolutely correct, and I believe “if you weren’t happy before hitting the lottery you probably won’t be happy after”, be successful independently twice then talk to me about how it’s done.
Derek's writing influenced me quite a bit in the early 2000s. I bootstrapped a software business from zero to near $10m in annualized revenue, and sold it almost half a decade ago. I contributed 100% of my equity into a charitable remainder trust because I learned about that idea from his website. Since then, I've done a lot of "puttering". I'm teaching myself jazz guitar, and I'm currently enrolled in law school. I…
Wow cool! For those of us who don't regularly create charitable remainder trusts, what are the tax consequences and why are they unfair?
Instead, I contributed my equity to a CRUT. I paid zero capital gains taxes at that moment, and the CRUT pays zero capital gains taxes ever. Also, because a contribution to the trust is a contribution in part to charity (with proportions calculated according to actuarial figures of my life expectancy), I got a charitable tax deduction of many million dollars which I was able to carry forward for many years.
Each year I owe taxes on the 5% which the CRUT distributes to me every year, but since this is capital gains income, it is taxed at a very low rate -- which is effectively reduced even further because it is offset by the charitable deduction which I have been able to carry forward.
The net effect is that I'm paying capital gains taxes in a tiny trickle over the remainder of my lifetime, and I also got a giant charitable deduction to offset those capital gains taxes. When I die, the principal in the trust goes to charity. The IRS will never get the kind of bite at this equity that I would intuitively expect it to get.
I don't understand how this capital gains tax loophole could be beneficial to society. I think it should be removed from the tax code.
Another side effect of the CRUT I hadn't anticipated: Occasionally, I note the intrusive thought that my continued life is the one and only barrier which is keeping a decent amount of capital from serving charitable purposes right now. That's honestly pretty depressing sometimes.
Earlier quoted context omitted.
What if, learning to be happy with "enough", is how people get filthy rich? https://sivers.org/richand
So what's the path from living with 4 other people working 40 hours a week at McDonald's to filthy rich? Haven't gone to college, don't have a skill that sets you apart (music/art/etc), and aren't particularly intelligent or scrappy. Seems to me there's literally no path from A to B.
Earlier quoted context omitted.
Wow cool! For those of us who don't regularly create charitable remainder trusts, what are the tax consequences and why are they unfair?
I had a bunch of equity in a startup that had a cost basis of, essentially, $0. Under normal circumstances, I would have sold this for $millions, and would have paid nearly 20% in capital gains taxes immediately. Instead, I contributed my equity to a CRUT. I paid zero capital gains taxes at that moment, and the CRUT pays zero capital gains taxes ever. Also, because a contribution to the trust is a contribution in par…
Of course the government also does many worthwhile things, but your extra money will be spent entirely on worthwhile things, and not at all on horrific ones.
Derek and his writing used to be a frequent top page link on HN. When I first started reading them I found them inspirational. As I read more of his writing I got the impression that most of the things he did were presented in the light of “I’m just a simple person that doesn’t need a lot” type of minimalism. However if you look at his “charity” he seems to have just figured out a way to avoid taxation and keep most…
But regarding the charity, from reading your comment I thought maybe this was another case of don't seek your heroes. Here's what he says about it: “Independent Musicians Charitable Remainder Unitrust.” When I die, all of its assets will go to music education. But while I’m alive, it pays out 5% of its value per year to me.
(Note: 5% is the minimum allowed by law. It’s still too much. I would have preferred 1%, but oh well. I’m free to use it to start new businesses to help people, or whatever.)
The trust has 8.8M in assets. http://www.nonprofitfacts.com/WA/Independent-Musicians-Chari...
I really don't see a problem with 400k/year tbh, and if you believe him, 100k a year. And I wouldn't define "giving up the assets on death" as "keeping" either.
The dude says on interviews that he lives in a house with pretty much no furniture, and has an empty fridge. He himself knows it's fucking nuts and doesn't prescribe it to anyone. It's just his weird schtick and it seems to be genuine to me.
Could this be a huge act to play up a persona? Maybe. But the guy's been pretty consistent throughout the years and appears to practice what he preaches. Any interaction I've had with him has been totally consistent as well.
Earlier quoted context omitted.
Wow cool! For those of us who don't regularly create charitable remainder trusts, what are the tax consequences and why are they unfair?
I had a bunch of equity in a startup that had a cost basis of, essentially, $0. Under normal circumstances, I would have sold this for $millions, and would have paid nearly 20% in capital gains taxes immediately. Instead, I contributed my equity to a CRUT. I paid zero capital gains taxes at that moment, and the CRUT pays zero capital gains taxes ever. Also, because a contribution to the trust is a contribution in par…