I would have to disagree with "that's a lot more valuable than a few more million dollars in the bank". Having a few million dollars in index funds (with some hedging) would also give you a Senior Developer salary, but would carry a lot less risk than running a software company. But I do understand what you're saying, and I certainly wouldn't complain if I had some passive income like that!
And we can also take in consideration that most of us won't leave those millions there. Getting fancy can be as risky as running a software company.
Comparing that with him working 6 months a year for the first part of his career and now living from two modest saas products seems pretty nice.
..and all the sitting-at-the-laptop photos are hilarious xD
The income you earn from owning your own business is worth at least twice as much as the equivalent income from dividends, interest, and capital gains.
However, in financial terms, these businesses are typically valued at 2x-4x annual revenue. So a business that gives you an income of $120k per year is worth far less than a safe $4M investment that gives you an average return of $120k per year.
If you could somehow prove that your business is extremely likely to produce at least $120k per year for the next 30 years, and with very little maintenance, then it would be worth closer to $4M.
Assuming you've come up with a different strategy that's netting better returns, would you care to share? And what is your strategy for hedging?
3-4% is the typical withdrawal rate that people use on the /r/financialindependence subreddit: https://www.reddit.com/r/financialindependence/wiki/faq#wiki...
My strategy would be to just put everything in a Vanguard Target Retirement Fund: https://investor.vanguard.com/mutual-funds/target-retirement... It's cheaper and safer than a financial advisor, and you don't need to worry about rebalancing. I'd also throw a little bit of money into angel investing, but no more than 3%, and I'd expect to lose it all.
For hedging, I think once a year I would just buy some OTM puts for the S&P 500. A sane number might be something like 0.2% of your assets. If you're absolutely convinced that we're on the verge of a stock market crash, then you should still use 0.2%, because you're probably wrong.
I helped my dad with a scenario like this when he retired. You approach the problem so that you draw as much income as possible from tax exempt sources and use other vehicles for growth -- which preserves your cash generating capability later.
When opportunity strikes, you overload. For example, buying NY tax exempt (and other municipal bonds) when they were depressed during the recession has yielded a decade of enhanced, safe, tax free income.
Typical senior salaries are between 60-80k.