Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Taking money off the table

zachholman.com

Post reply on HN
Print view View original

61–70 of 114 posts

Re: Taking money off the table

#61

Post by IrishTechie »

jocaal wrote: post #51
GCA10 wrote: post #29

There's a crucial extra factor that isn't in the original article, but ought to be: Money's ability to buy great experiences decreases as you get older. I've seen this with beach vacations, road trips to see a favorite band, fast cars, ski trips, etc. Seize the moment, friend! What you can do NOW with that 10% slice will never exactly be on your possibilities map again.

I don't agree. How can wasting your money in your twenties and thirties be more valuable than saving for an early retirement. Imagine being able to retire at 40 and do whatever you want. If you weren't stupid, your health should be good enough. Why prolong the time you have to do stupid chores for other people when you can be strategic and opt out as early as possible.

Kids is one big reason. You can have totally different experiences before you have kids, once they arrive your outlook on life changes, risk tolerance changes etc.

If you can retire at 40 having lived your 20s/30s to the fullest then game on, but it would be crazy to sacrifice that time when you are so free and full of energy otherwise IMHO.

FWIW I am fortunate enough to have really enjoyed by earlier years and be mostly retired in my early 40s.

Re: Taking money off the table

#62

Post by jonathan_h »

jimkleiber wrote: post #34
GCA10 wrote: post #29

There's a crucial extra factor that isn't in the original article, but ought to be: Money's ability to buy great experiences decreases as you get older. I've seen this with beach vacations, road trips to see a favorite band, fast cars, ski trips, etc. Seize the moment, friend! What you can do NOW with that 10% slice will never exactly be on your possibilities map again.

I think you're hitting on something that very rarely gets discussed, at least in the US and maybe some other Western societies. I wonder if it's just simple depreciation or compound depreciation (or whatever the opposite of compound interest would be). Me finding the money to climb Kilimanjaro at 23 is different than me having the money at 40 but worse knees. Thank you for pointing this out and I hope someone formali…

Die With Zero by Bill Perkins talks at length about this concept (it's a nonfiction book, so suffice to say it could've been an essay.)

Re: Taking money off the table

#63

Post by collinmcnulty »

mason55 wrote: post #7

A 10% tender offer isn't really an interesting discussion. You should take definitely take 10% off the table unless you're already pretty wealthy. The interesting discussion is how much you should take off the table if the offer is uncapped.

Growing up around people who lost everything, job and savings, working at Enron, you should take all the money they’ll let you. You are structurally long your company already, because if they struggle you could lose your job. Diversify your wealth away from that concentrated position as much as possible if you’re offered a fair price.

Re: Taking money off the table

#64

Post by dkural »

jimkleiber wrote: post #34
GCA10 wrote: post #29

There's a crucial extra factor that isn't in the original article, but ought to be: Money's ability to buy great experiences decreases as you get older. I've seen this with beach vacations, road trips to see a favorite band, fast cars, ski trips, etc. Seize the moment, friend! What you can do NOW with that 10% slice will never exactly be on your possibilities map again.

I think you're hitting on something that very rarely gets discussed, at least in the US and maybe some other Western societies. I wonder if it's just simple depreciation or compound depreciation (or whatever the opposite of compound interest would be). Me finding the money to climb Kilimanjaro at 23 is different than me having the money at 40 but worse knees. Thank you for pointing this out and I hope someone formali…

As someone who is not so young anymore, but also not old, I think it is compound depreciation.

Re: Taking money off the table

#65

Post by gwbas1c »

jocaal wrote: post #51
GCA10 wrote: post #29

There's a crucial extra factor that isn't in the original article, but ought to be: Money's ability to buy great experiences decreases as you get older. I've seen this with beach vacations, road trips to see a favorite band, fast cars, ski trips, etc. Seize the moment, friend! What you can do NOW with that 10% slice will never exactly be on your possibilities map again.

I don't agree. How can wasting your money in your twenties and thirties be more valuable than saving for an early retirement. Imagine being able to retire at 40 and do whatever you want. If you weren't stupid, your health should be good enough. Why prolong the time you have to do stupid chores for other people when you can be strategic and opt out as early as possible.

You can take once-in-a-lifetime experiences in your 20s and still save for retirement. I went to Burning Man and traveled to Amsterdam in my 20s and that didn't impact my savings.

I should point out that it's cheaper to travel when young: Back then I stayed in a tent in the desert and in a friend's room near Amsterdam. If I did the same trip today, I'd have my family in tow, and would need more comfortable accommodations.

I should also point out that startup equity is not retirement savings. Selling 10% of your equity, investing most of it, and then doing something that you won't be able to do when you're old is a very wise and mature decision.

Re: Taking money off the table

#66

Post by creakingstairs »

gbriel wrote: post #58
throw0101c wrote: post #46

I participate in a personal finance sub-reddit, and there is often a question of whether someone should pay off their mortgage (completely, or make some lump sum payments). The mathematical answer is that if your interest rate is lower than the expected returns of some kind of portfolio you have, than you'll make more money investing. But I like to bring up what Morgan Housel, author of the book The Psychology of Mon…

If you have a 2.6% mortgage which is less than inflation, then you are making money from the bank. Paying that off would be ridiculous.

I mean there are other factors right? How long the rate is fixed for, penalty for paying off early, what you think the rate will be after term is over, you and your family's circumstances etc.

Re: Taking money off the table

#67

Post by [deleted] »

jonathan_h wrote: post #62
jimkleiber wrote: post #34

Earlier quoted context omitted.

I think you're hitting on something that very rarely gets discussed, at least in the US and maybe some other Western societies. I wonder if it's just simple depreciation or compound depreciation (or whatever the opposite of compound interest would be). Me finding the money to climb Kilimanjaro at 23 is different than me having the money at 40 but worse knees. Thank you for pointing this out and I hope someone formali…

Die With Zero by Bill Perkins talks at length about this concept (it's a nonfiction book, so suffice to say it could've been an essay.)

[deleted]

Re: Taking money off the table

#68

Post by pyrolistical »

Another way to think about it is, take the dollar amount if you sold it all.

Then consider it as an offer to buy into the startup at the same dollar amount.

Would you invest?

Not selling is the same as investing in the startup.

This same logic applies to stocks you are holding.

Re: Taking money off the table

#69

Post by tonyedgecombe »

gbriel wrote: post #58
throw0101c wrote: post #46

I participate in a personal finance sub-reddit, and there is often a question of whether someone should pay off their mortgage (completely, or make some lump sum payments). The mathematical answer is that if your interest rate is lower than the expected returns of some kind of portfolio you have, than you'll make more money investing. But I like to bring up what Morgan Housel, author of the book The Psychology of Mon…

If you have a 2.6% mortgage which is less than inflation, then you are making money from the bank. Paying that off would be ridiculous.

Paying your mortgage off comes with no risk, it’s not going to come back again. Meanwhile your investments could collapse tomorrow.

Re: Taking money off the table

#70

Post by jstanley »

throw0101c wrote: post #46

I participate in a personal finance sub-reddit, and there is often a question of whether someone should pay off their mortgage (completely, or make some lump sum payments). The mathematical answer is that if your interest rate is lower than the expected returns of some kind of portfolio you have, than you'll make more money investing. But I like to bring up what Morgan Housel, author of the book The Psychology of Mon…

> The mathematical answer is that if your interest rate is lower than the expected returns of some kind of portfolio you have, than you'll make more money investing.

You maximise expected value not by putting everything into the single highest-EV bet, but by sizing your bets according to https://en.wikipedia.org/wiki/Kelly_criterion

Post reply on HN