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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?

#61

Post by ryanmercer »

fsloth wrote: post #35
kvakvs wrote: post #8

Use the $$ as a sustain buffer to allow you live your comfortable life till the end of your days. 1. Do not sit there with your hands idle. 2. Start a business. Go talk with your friends, and friends of friends. Go talk to business owners who are friends of your friends and their friends. Find a business which needs something improved. Investigate how many more businesses have this problem. Figure out whether they wi…

"Start a business." Um, he has no need to work. Why would starting a business be the most important thing to do? Basically, he can find out what sensible or quirky thing he likes and do that - just as long as it does not cost more than a middle class income can support. If he's entrepreneurial then sure, business. But I see nothing wrong in spending ones life painting, sculpting, doing maths or science or volunteerin…

>Um, he has no need to work. Why would starting a business be the most important thing to do?

When you're financially independent you have the freedom to pursue ideas that are more risk-averse. It's when you have the freedom to do things that you wouldn't have felt comfortable doing when you were worried about paying your personal bills each month like me, like my fellow peasants.

>just as long as it does not cost more than a middle class income can support.

Uh, his 4% safe-withdrawal-rate is 320k, if he wants to be cautious a 3% safe-withdrawal-rate is 240k. That's quite a bit higher than middle-class income (median HOUSEHOLD income in the country is 59k).

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

#62

Post by soVeryTired »

mtgx wrote: post #31
hef19898 wrote: post #26

First, I would put my money somewhere safe, with close to zero risk until you figure out what to do. Depending on your living cost around 1% guaranteed return should be enough to not work again for quita a while, possibly for ever (that means you do not have any pressure on your finances ever again if you don't change you lifestyle). Put some money aside for your kids (education, base capital for a house one day,...)…

> Depending on your living cost around 1% guaranteed return should be enough to not work again for quita a while, possibly for ever Just a nitpick but even the "official" inflation rate is somewhere around 2%, is it not? The real one is probably 3% or higher.

Inflation is just an aggregate, based on a reasonably arbitrary basket of goods that someone decided is representative of the public's expenditure. If the basket doesn't reflect your consumption, then the rate of inflation isn't really relevant to you. Almost all PCE inflation in the last 20 years has come from housing, healthcare, education, and pharmaceuticals. On the other hand, the price of durable goods has fallen. The idea that inflation moves all prices together hasn't been accurate since the 80's.

The trick is to figure out what your liabilities are, how you might be affected by the price of X changing, and invest accordingly to attempt to hedge that risk.

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

#65

Post by AndrewDucker »

"Normal" Work is unlikely to provide you with much meaning from now on, as it won't provide an appreciable change in your living standard.

So, instead, look around at charities, or other positive works, and see what you can do to help them with your time.

Read the local news, and see what leaps out as being unfair or unreasonable to you. Spend some time researching it to make sure it's not just clickbait, but actually a real problem, and then go offer to work for them for free. A decent manager can do an awful lot to help a small organisation work well.

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

#66

Post by drmpeg »

I would blow some serious cash right away. Buy a Tesla Model S P100D. Tell the wife and kids you're going on a spiritual retreat but instead hang around with 30 something girls and party your ass off (you don't have to have sex with them). Do some ecstasy. A good role model is Dan Bilzerian.

https://www.instagram.com/danbilzerian/

Buy a bigger house. Preferably one large enough where you don't have to see the wife and kids unless you want to.

Stay employed, but act like Peter Gibbons in "Office Space". Just be a complete prima donna / asshole and see how long you can get away with it.

Get an expensive hobby. Drag racing, airplanes, competitive ham radio, golf and sports season tickets.

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

#67

Post by fsloth »

ryanmercer wrote: post #61
fsloth wrote: post #35

Earlier quoted context omitted.

"Start a business." Um, he has no need to work. Why would starting a business be the most important thing to do? Basically, he can find out what sensible or quirky thing he likes and do that - just as long as it does not cost more than a middle class income can support. If he's entrepreneurial then sure, business. But I see nothing wrong in spending ones life painting, sculpting, doing maths or science or volunteerin…

>Um, he has no need to work. Why would starting a business be the most important thing to do? When you're financially independent you have the freedom to pursue ideas that are more risk-averse. It's when you have the freedom to do things that you wouldn't have felt comfortable doing when you were worried about paying your personal bills each month like me, like my fellow peasants. >just as long as it does not cost mo…

"It's when you have the freedom to do things that you wouldn't have felt comfortable doing when you were worried about paying your personal bills each month like me, like my fellow peasants."

I completely agree, but we have no way to know what the best way for him would be to use his new freedom for self -actualization. There are lots of other interesting things to do in life as well.

"That's quite a bit higher than middle-class income."

Sure, but it's not still an insane amount of money. Before one gets the hang of finances it's better to think in purely middle-class (or upper middle class) financial terms. There are lots of ways to spend 8M fairly quickly.

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

#68

Post by kvakvs »

fsloth wrote: post #35
kvakvs wrote: post #8

Use the $$ as a sustain buffer to allow you live your comfortable life till the end of your days. 1. Do not sit there with your hands idle. 2. Start a business. Go talk with your friends, and friends of friends. Go talk to business owners who are friends of your friends and their friends. Find a business which needs something improved. Investigate how many more businesses have this problem. Figure out whether they wi…

"Start a business." Um, he has no need to work. Why would starting a business be the most important thing to do? Basically, he can find out what sensible or quirky thing he likes and do that - just as long as it does not cost more than a middle class income can support. If he's entrepreneurial then sure, business. But I see nothing wrong in spending ones life painting, sculpting, doing maths or science or volunteerin…

Idle hands are the devil's workshop. Having no passion and nothing to do is a sure way to lose everything and ruin your otherwise established life. So better to get to work on your own project now without the fear of going broke.

Painting and sculpting, science or volunteering are fine if the person loves it. Otherwise he'll be happy doing what he's been doing all his life before this moment — programming, creating his own project.

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

#69

Post by soVeryTired »

Figure out what your liabilities are. Wealth is one side of your balance sheet: liabilities are the other.

Want to retire in the Bahamas? Want to make sure the kids are mortgage-free? Want to make sure the kids don't have to take a soul-crushing corporate job and are free to pursue their art? Those are liabilities.

Once you know your liabilities, figure out the best investments to match them. If you want to retire in the Bahamas, buy a place in the Bahamas. If you want to hedge against price rises in elderly care, invest in the healthcare sector.

Just make sure your assets match your liabilities and you'll be fine.

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