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The Real Silicon Valley

jfornear.co

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Re: The Real Silicon Valley

#51

Post by untog »

VexXtreme wrote: post #48
nodesocket wrote: post #26

Jesse, I completely feel your pain. I moved up to San Francisco the previous June with the grand vision of building out my team, raising a round of investment and building my PaaS for hosting node.js apps (NodeSocket) to something really special. I left a cushy director level job in San Diego and left a core group of good friends as well. I simply packed up everything in my car and made the drive up. The first couple…

Why move to San Francisco? One of the benefits of living in this day and age is that you can start a business from pretty much anywhere in the world. Sure, it is presumably easier to acquire VC, talent and deal with general logistics if you're located in the valley but still... It's pretty obvious that leaving your job, friends, moving to a different city and living off your savings is a high risk move vs staying whe…

I think he answered the question- he was looking for funding. You can do a great many things remotely these days, but investors want face to face meetings, so you have to go to tech hubs to get them.

Re: The Real Silicon Valley

#52

Post by nodesocket »

VexXtreme wrote: post #48
nodesocket wrote: post #26

Jesse, I completely feel your pain. I moved up to San Francisco the previous June with the grand vision of building out my team, raising a round of investment and building my PaaS for hosting node.js apps (NodeSocket) to something really special. I left a cushy director level job in San Diego and left a core group of good friends as well. I simply packed up everything in my car and made the drive up. The first couple…

Why move to San Francisco? One of the benefits of living in this day and age is that you can start a business from pretty much anywhere in the world. Sure, it is presumably easier to acquire VC, talent and deal with general logistics if you're located in the valley but still... It's pretty obvious that leaving your job, friends, moving to a different city and living off your savings is a high risk move vs staying whe…

The connections, venture capital money, talent, and general startup/technology environment aside, San Francisco is an amazing city. By the far the best place I have lived. I don't regret moving one bit.

Re: The Real Silicon Valley

#54

Post by rprasad »

arbuge wrote: post #40
noname123 wrote: post #9

Earlier quoted context omitted.

Point is having FU money, for most people it's $3mil at today's current interest rate to generate $30K which is annual young person's cost of living in a big metro. If you can cut your cost of living down $12K, then only $200K is needed.

Careful with that. That ignores inflation, which as a great man once said, is the most pernicious tax of all. Inflation is currently around ~1.8% per year. Money in a 1% CD is effectively losing 0.8% per year. If you're happy with a $30k return on a $3m portfolio, you need to get a 2.8% return in today's inflation environment.

Interest rates on investments take into account estimated inflation, so the $30k already takes into account likely inflation (but would not take into account higher-than-expected inflation).

Re: The Real Silicon Valley

#56

Post by jacoblyles »

And nobody will ever advise you that the large cost and huge risk might not be worth it because then they would have to admit the same thing to themselves.

Have you ever met anybody that works on the weekend, even when the startup doesn't need them to, just because they don't know what else to do?

There are incredibly amazing things happening in Silicon Valley. And also lots of people burning their lives away for little reason or return. Keep your eyes open to both sides of the ledger is the best advice I can give. Be sure that what you are doing is something you truly love, and not just something you want to love or want to portray that you love for the benefit of others. And it's okay to give up and/or take a break.

Re: The Real Silicon Valley

#57

Post by smartician »

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-...

Leveraged closed end bond funds are an option to get close to 6% with the added benefit of diversification (but the disadvantage of management fees, but the 6% yield are AFTER subtracting the fees): http://cef.morningstar.com/quote?t=FCUSA0004E&ops=&p...

Personally I have a diversified portfolio that yields about 6%, with corporate junk bonds (US and emerging market), emerging market sovereign bonds, business development companies, REITs, mREITs, and international high dividend stocks.

Re: The Real Silicon Valley

#58

Post by arbuge »

rprasad wrote: post #54
arbuge wrote: post #40

Earlier quoted context omitted.

Careful with that. That ignores inflation, which as a great man once said, is the most pernicious tax of all. Inflation is currently around ~1.8% per year. Money in a 1% CD is effectively losing 0.8% per year. If you're happy with a $30k return on a $3m portfolio, you need to get a 2.8% return in today's inflation environment.

Interest rates on investments take into account estimated inflation, so the $30k already takes into account likely inflation (but would not take into account higher-than-expected inflation).

Hell no. You invest in a 1% CD, you get 1% absolute return, even if inflation is raging in the double digits.

Edit: I assume you mean that over time interest bearing account rates rise with inflation. That's true in general, but as the current situation shows, there's no guarantee they're actually even above the inflation level at any point.

Re: The Real Silicon Valley

#59

Post by smartician »

bsims wrote: post #19
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…

Given that the last ten years include the greatest financial crisis since the Great Depression, a net gain of 7% is pretty good. Plus, the annual distributions were consistently over 6%, so you're looking at a total return of almost 7% per year. That's actually pretty good.

Re: The Real Silicon Valley

#60

Post by cabinguy »

Bah Humbug (please excuse me, it's just a seasonal expression). While I can feel your pain, this story has nothing to do with SV - it's the story of an entrepreneur. The same story exists in every state in the U.S. and every major city (and most small ones) in the world. Entrepreneurship is very hard.

I'm 41 y/o and bootstrapped my first internet company at 24. I owned a nice home, a beautiful vacation (lake) home, a big office building, 2 Mercedes Benz (wife's SUV, my car) & an awesome FICO score before I was 29. It all went away (except for my primary home) by the time I was 35.

As entrepreneurs we believe that the charts will always go up and to the right (we can't help it) - but they don't.

This year, after TEN (10) F'ING YEARS of working on what everyone in SV would label a little "life style business," we hit $1M+ in revenue. I am confident we will hit $2M+ next year and $100M eventually. Our company is debt free and my co-founder (and best friend since kindergarten) own 100% of the company.

My point: It's not easy. We have been working very, very hard for TEN (10) F'ING YEARS on this thing. I lost almost everything along the way...but I never, ever stopped believing in what we were building. When you hear those billionaires claim that "perseverance" is the key to success - listen to them, they are telling you the truth.

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