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The Real Silicon Valley

jfornear.co

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Re: The Real Silicon Valley

#11

Post by noname123 »

fearless wrote: post #8
noname123 wrote: post #4

Why be depressed? If you are young and a programmer making 100K at 25, party with your hipster friends and sock away 40K in savings every year. You'll end up with 200K by 30, not a cool billion dollar but with 6% muni-bonds, you suddenly have tax-free interest income of equivalent of $1.2 million at regular 1% CD rate. Work on interesting projects that you want to work on. Do some traveling. Go back to grad school fo…

Everyone knows startups are not the optimal economically rational way to make money. But to an entrepreneur, living off 6% muni bond interest is profoundly uninteresting, and dare I say soul crushing. Repeat after me: If you think it's only about the money, you're missing the point. And even if it is all about the money, most 25 year olds would jump at a 1% chance to make $10 million over a $100% chance to make $200K…

Better way to make money is to take out a personal loan for 100K, same opportunity cost of two years of programmer-salary on startups. Buy out of the money options on small-cap pharmacuetical facing FDA decisions, you have the ability to also make $10 million overnight with 30% success. Go for insider-tips to max out on your success.

Re: The Real Silicon Valley

#12

Post by eli_gottlieb »

neilk wrote: post #3
jenoneal wrote: post #2

Hey Jesse, great post though I'm sorry to hear about your startup. If you need a place to crash, I have a spare room for friends who are starting companies, folding companies or just passing through the Valley. Feel free to get in touch anytime. In the meantime, thought you might like this quote from a piece Michael Arrington wrote a while back: "Some of the richest people I know aren’t really entrepreneurs. They wor…

You hear that, loser marriage-having people?

Loud and clear!

Re: The Real Silicon Valley

#13

Post by zaidf »

The real Silicon Valley will never be televised.

I feel this way as well but I am curious as to why. My reasoning is that the incentives for entrepreneurs to swap dirty laundry for publicity isn't a worthwhile exchange for most entrepreneurs. I hear about how startups are extremely boring but I think people overestimate how much "fun" other professions are and how television works. It doesn't matter if 90% of a start-up is writing code like a robot; what matters is the other 10% and I think we have plenty of true, crazy stories to go around if founders had much of an incentive to play them out on air. I sure don't. I don't want my B2B customers nor investors to judge me only from the 10% dramatic part of my life.

Re: The Real Silicon Valley

#14

Post by [deleted] »

noname123 wrote: post #4

Why be depressed? If you are young and a programmer making 100K at 25, party with your hipster friends and sock away 40K in savings every year. You'll end up with 200K by 30, not a cool billion dollar but with 6% muni-bonds, you suddenly have tax-free interest income of equivalent of $1.2 million at regular 1% CD rate. Work on interesting projects that you want to work on. Do some traveling. Go back to grad school fo…

[deleted]

Re: The Real Silicon Valley

#15

Post by rmason »

noname123 wrote: post #4

Why be depressed? If you are young and a programmer making 100K at 25, party with your hipster friends and sock away 40K in savings every year. You'll end up with 200K by 30, not a cool billion dollar but with 6% muni-bonds, you suddenly have tax-free interest income of equivalent of $1.2 million at regular 1% CD rate. Work on interesting projects that you want to work on. Do some traveling. Go back to grad school fo…

Where can you buy muni bonds that earn 6%? Most of the muni bonds yields I've found online are in the 3.5-4% range.

That is unless you're talking about the city of Detroit (which is flirting with bankruptcy) that pays 7% plus and is riskier imho than doing a startup.

http://blogs.marketwatch.com/fundmastery/2010/03/12/goldman-...

Re: The Real Silicon Valley

#16

Post by fearless »

sukuriant wrote: post #10
fearless wrote: post #8

Earlier quoted context omitted.

Everyone knows startups are not the optimal economically rational way to make money. But to an entrepreneur, living off 6% muni bond interest is profoundly uninteresting, and dare I say soul crushing. Repeat after me: If you think it's only about the money, you're missing the point. And even if it is all about the money, most 25 year olds would jump at a 1% chance to make $10 million over a $100% chance to make $200K…

nitpick: It's a loooooooooot less than 1%

Source? I've seen data pegging startup failure rates anywhere between 50-90%, but I've never seen a credible source claim that over 99% fail. Mathematically, no investor would be able to stay in business if 99% of their investments fail. I'm guessing failure rates for startups that have funding or bootstrap through revenue are closer to 75%.

Re: The Real Silicon Valley

#18

Post by noname123 »

rmason wrote: post #15
noname123 wrote: post #4

Why be depressed? If you are young and a programmer making 100K at 25, party with your hipster friends and sock away 40K in savings every year. You'll end up with 200K by 30, not a cool billion dollar but with 6% muni-bonds, you suddenly have tax-free interest income of equivalent of $1.2 million at regular 1% CD rate. Work on interesting projects that you want to work on. Do some traveling. Go back to grad school fo…

Where can you buy muni bonds that earn 6%? Most of the muni bonds yields I've found online are in the 3.5-4% range. That is unless you're talking about the city of Detroit (which is flirting with bankruptcy) that pays 7% plus and is riskier imho than doing a startup. http://blogs.marketwatch.com/fundmastery/2010/03/12/goldman-...

Found some Mass. bonds (because it's my home state, so tax-free for both federal and state) yielding 6.43% just now, with expiration date of 2029-05-01 and with credit rating of AA+

http://massachusetts.municipalbonds.com/bonds/issue/914440KJ....

Also can also buy some REITs with annual high-dividend yield of 17% such as AGNC or NLY. These are a bit riskier due to fluctuating principal out on the open equity market. However, can mitigate this risk by owning ITM calls prior to ex-dividend dates and capture also run-up profits.

Re: The Real Silicon Valley

#19

Post by bsims »

noname123 wrote: post #4

Why be depressed? If you are young and a programmer making 100K at 25, party with your hipster friends and sock away 40K in savings every year. You'll end up with 200K by 30, not a cool billion dollar but with 6% muni-bonds, you suddenly have tax-free interest income of equivalent of $1.2 million at regular 1% CD rate. Work on interesting projects that you want to work on. Do some traveling. Go back to grad school fo…

It is hard to tell if this is a serious or sarcastic response.

If you think Muni Bonds will stay at 6% for a lifetime, you're misinformed. 1) Government owned consumer debt is up nearly 5x in 5 years 2) Lately Muni Bonds have been swinging more than stocks themselves 3) Take Pimco Municipal Income Fund (NYSE: PMF) as an example. It's price has appreciated 7% over 10 years, TOTAL. Even with dividends you're looking at best 3% and at that point you've successfully managed to do nothing more than keep up with inflation.

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