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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?

#311

Post by masklinn »

mbesto wrote: post #308
masklinn wrote: post #123

Earlier quoted context omitted.

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 fu…

I have a personal friend who is a wealth manager who basically gets his clients to put their money in index funds. I wouldn't paint the whole industry this way. Some people are simply not good at handling money and paying someone to keep your hands off of it is wise. For the record, my buddy works with sports/entertainment stars (and including tech founders who exit) that categorically have the worst discipline when…

This is a recommendation for early management of a large windfall (large inheritance, exit or lottery winnings).

If in the long run you believe/understand that a wealth manager could do a better job than the basics and you want less safety, you can always hire one: wealth managers will still be there next year or decade. However if you get a wealth manager right now your funds may not be.

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

#312

Post by rsweeney21 »

Large sums of money gives you freedom. Don't like your job? Quit and hold out until you find your ideal job. Don't want to work? Retire! Want to travel? Now you can!

If you are happy in your life, you don't have to change anything just because you have a lot of money in your bank account.

I'd recommend considering three things:

1. Try helping people with your money. Start small - pay for someones groceries at checkout, pay a small medical bill for someone that needs it (checkout watsi). I find helping people very rewarding and you might decide it's something you want to start doing.

2. Travel. Traveling can give you perspective on life that can help you figure out what is important in your life.

3. Park your money in real-estate that produces income. Your money will grow with the increasing real-estate value and also provide you with income to live on. So your $8M grows slowly, you have money to live on and you aren't slowly draining your bank account.

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

#313

Post by codingdave »

masklinn wrote: post #123
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)?

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 fu…

The cocktail napkin stories are one-off anecdotes that all law school students go through in their first semester to learn about what actually makes a contract. They are great example to show how a formal document with signatures is not the critical piece of a contract. They do not mean that you should never scrawl notes on a napkin because napkins have some special legal power. And any quote that implies such should be taken with a fairly large grain of salt.

Also, wealth managers don't simply try to beat the market over a short term. They try to help you diversify so that in the case of a market change or complete meltdown, you don't lose everything. You pay that percentage not to maximize every penny, but to make a reasonable return while minimizing your losses in odd scenarios, so that you can live on the returns while never even touching the principal assets. Again, anyone who boils it down to "just invest in index funds" is missing the big picture. (And that includes bad financial planners. If they give simple advice, call someone else.)

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

#315

Post by Majestic121 »

hnaccy wrote: post #56
dagw wrote: post #42

Earlier quoted context omitted.

It's "rich" in the sense that if you're smart and a bit frugal about it you'll never have to work again. It's not "rich" in the sense of never having to worry about money again. Really rich people will spend $8M adding a new garage to their summer house.

>It's "rich" in the sense that if you're smart and a bit frugal about it you'll never have to work again If does nothing but spend money he can spend $150k every year until he dies. Not exactly frugal.

150k$ a year is rich in Vietnam maybe, but if you plan to stay in the west, you'd be upper middle class at most

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

#316

Post by samfisher83 »

Do what Warren Buffet says:

Buffett specifically recommends them as a way to boost retirement savings. "Consistently buy an S&P 500 low-cost index fund," he told CNBC's On The Money. "I think it's the thing that makes the most sense practically all of the time."

Most likely in the long term a hedge fund is not going to beat it.

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

#317

Post by mapgrep »

As a father, if I came into that money I would use it to spend all the time I could with my kids. You don't get that time back and it's really precious and easy to take for granted.

Obviously you have to be guided by your own priorities which are different from mine. But I wanted to counterbalance the idea that you should "not do anything rash." Certainly, financially this makes sense; upgrading home, cars etc could bite you by raising your cost of living.

At the same time, you no longer have to give the best 8 hours of every weekday to a company. Your time is the most precious thing you have. At a certain point you will probably want to assess -- and I'm sure you would, regardless of my comment! -- if you want to keep allocating it to an activity that from what I can tell serves primarily to generate monetary income.

Just my $.02. In a way, like everyone in this thread, I'm living vicariously by giving it so do with it what you will.

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

#318

Post by nazgulnarsil »

Don't think of yourself as having 8M, think of yourself as having 320k/yr (4% rule) with minimal work (managing the money). This will sober up some of the emotional parts.

Also, you are over the threshold to true freedom, so think carefully before doing the 'obvious' things like buying a house or two that will only, in reality, saddle you with obligations.

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