How to retire at 30 on $1 million
ryanwaggoner.com
ryanwaggoner.com
So you're putting 25% of your cash down on a $5m property for $110k per year. Nice! How many such properties do you think the banks are going to let you buy? With the future values of these properties a bit murky, I imagine that someone with 4-5m in the bank ISN'T going to get the green light to buy $21m in properties (4 difference loans to service).
People keep bringing up INDIVIDUAL investments that can net a great return (in this case, 9%). That's missing the point. With big piles of money, you have diversified holdings. You're not going to drop 90% of your cash in real estate down payments. Nor are you going to drop it all in stocks. You're going to (generally) do a reasonable asset allocation to minimize the risk. While I did mention the S&P500's performance for comparative purposes, I wasn't advocating for a pure stock portfolio (any more than you're advocating for a pure real estate portfolio).
As he says, real estate has plenty of risk. You're betting on a local economy, construction pace, population growth, etc. But anyone with millions ought to be playing in real estate.
1) Commercial real estate underwriting much more heavily weighs the fundamentals of the property as opposed to the borrower. As a result, it's possible that you could have a lender who would be comfortable with you carrying several times your net worth in loans, provided the underlying collateral fundamentals are strong.
2) I'm skeptical that a long-term diversified portfolio will only return 5%, before inflation is taken into account. This would correspond to a real return of 2%, which seems overly-conservative. Don't wealth managers advise safely withdrawing 4% per year to protect your principal and keep pace with inflation? I may be mistaken here.
3) I'm not as gung-ho about diversification as you are. I think it can make sense, but as Buffett has said, it's a hedge against ignorance. If you sell a startup for $20m, you were highly under-diversified before the sale, but that doesn't make it a bad idea. Nor would it be a terrible idea to roll a significant portion of that capital back into a business that you knew well enough that the risk profile was low for you. This probably requires more work and self-assessment than most people are capable of or willing to engage in.
Anyway, thanks for your original post and your comment here. Food for thought, as always :)
I personally opt for a riskier portfolio than most (I have a few rental properties and assorted mutual funds), but I don't think you or I can pick 'em like Buffet! :-) It IS a hedge against ignorance, which I happily admit that I am (compared to buffet).
Interesting stuff, regardless-- I've actually never crunched the #s on big apartments. Thanks for doing it!
EDIT: I should mention that I own several smaller properties in another state that are managed and I spend maybe an hour a month on them. I'd spend more on larger properties like this, but it's hardly a full-time job.
I don't think smackfu meant to imply you'd be replacing lightbulbs yourself. But if you have employees who provide a service, and if they screw up it can affect your future income (and you therefore need to do some degree of management, minimal though it may be), well, that sounds a lot more like a job than retirement to me. It might not be 40+ hours a week in an office, you might not be writing code, but that doesn't make it retirement.
A 'day in the life' of what kind of issues you run into with those properties would be fascinating (to me anyway).
Conversations about real estate investment are so localized and situation specific, it's difficult to make generalizations, but I'll try making a few anyway:
1) Motives - consider carefully when drawing up a contract what financial incentives are being created for your manager. Our top priority was always filling vacancies, but as an owner, your sign-off should be always be required before a new tenant is approved[1].
2) Kickbacks - if you expect your manager to handle hiring of contractors, he will be offered money to award the contract. You will also need contractors more often than you think. When a tenant moves out, you'll either renovate or at the very least, re-paint their apartment... depending on the local rental market, this can be the difference between a one month and a six month vacancy. The smaller the property, the more important it is to get apartments rented quickly.
3) Repairs - if something can go wrong, it usually will go wrong. Appliances, doors and other fixtures will break, capital improvements will get pushed ahead in your schedule and tenants will misbehave, sometimes even breaking the law and requiring the police to get involved. When you see a property with a high cap rate, expect more of these issues[2].
4) Emergencies - if you don't live very close by, you should have someone on staff that does or, even better, have someone on payroll that lives on-site.
This is only the tip of the iceberg, feel free to get ask any questions.
[1] Personally, I would also want to deposit all rent checks myself and sign off before any invoices were paid.
[2] Another "high cap rate" problem you'll be faced with is landlord-tenant court. These properties tend to just have more 'problem' tenants.
P.S. Some last thoughts for investors:
a) *You make your money when you buy.*
Putting all your eggs in the appreciation basket is risky;
if the cashflows are there, many of the above issues won't
be keeping you up at night.
b) *If your strategy is to hold for less than five years,
your management time just increased 10x.*
Commercial real estate loans generally have a balloon
payment after 5, 7 or 10 years. You'll need to roll your
loan over at this point and any equity built up above the
lenders required loan to value (c. 65% these days) can be
extracted. Don't put yourself or your investors in a
position where you are forced to sell at a loss.
Credibility in this field is hard to gain, but easy to lose.
My problem with the article: taking on a lot of debt. Bad idea, in my opinion. It is best to own much less property and have no debt on it. Of course, who wants to completely retire? I think that the trick is to make small income property investments, try to pay them off within a decade, and always work on what gives you pleasure, and don't concentrate on money.
If you own outright, you eat the entire loss yourself.
Basically -- debt increases upside and reduces downside risk. And inflation helps you pay it off. No wonder we're addicted?
That said, bankers and advisors know that this is somehow assumed to be common sense, and quite often use that as an argument to get you onboard investments that are not interesting at all in most cases (apart for them :-).
It's still true - real-estate, by it's nature, is probably a good long-term investment when compared to anything else.
Even after the current crash they're still significantly overvalued compared to their historic prices, once you take into account inflation.
The example of Amsterdam's housing prices comes to mind as an example of the risks of undiversification. Various accounts say that here has been no appreciation in house prices since 1736[1] or that it has only doubled in 350 years [2,3].
[1] http://curiouscapitalist.blogs.time.com/2007/11/14/house_pri...
[2] http://www.finfacts.ie/irishfinancenews/article_1019261.shtm...
My knowledge of the stock market, even if I get a fancy MBA and specialize in finance, still won't be able to compete profitably with institutional investors that have massive pools of capital, inside knowledge, aggregated expertise, and highly optimized trading algorithms. As an individual investor I have no competitive advantage, even if I'm savvier than 99% of other individuals, because all the spread will be grabbed en masse by the big players.
By contrast, the number of non-experts buying and selling real estate, along with its relatively high transaction costs and necessarily local nature, means that even if I were only smarter than, say, 90% of people, I'd be able to do quite well because the spread wouldn't be gobbled up by the 99.999999th percentile financier.
As soon as electronically-managed liquidity is thrown in, and transaction costs become substantially lower for an elite subset, then it becomes much less "worth it" to participate. Thus, even REITs, by their very nature, are going to yield a lower return (pre-fees) than clever, well-managed individual real estate investments.
First, for the rest of this comment I'll define income as 'what you've got coming in' and wealth as 'what you keep or what you grow'.
Most people fail to make this distinction (If you ask somebody if they are wealthy they will start talking about how much they get paid), but it's important, especially when thinking about how to optimize your tax situation.
Tony's article makes several assumptions:
(1) That you want to live a high consumption lifestyle. The $200k p/a first class lifestyle he quotes isn't necessarily what everybody wants. Even people with some wealth have to live within their means or they'll (as he correctly pointed out) lose it eventually.
I'd actually take a guess that a typical family wouldn't be able to spend $200k in a year if they did not make purchases whose primary purpose was to display status.
(2) That you would invest your $4m in a low-return investment.
(3) That you would invest the money in such a way that 100% of your income is realisable (subject to income tax).
The best strategy, imo, for somebody with a freshly minted $4m to play with is to put as much as possible into an investment where growth in their wealth is not realisable (which usually means buying property because appreciation is not taxed whilst it's happening [1]).
They have a balancing act to play because they want to invest as much in this way as possible whilst leaving enough in an investment that will provide them with an income substantial enough to live on.
As for Ryan W's article, I'd basically agree with what he said other than the part about buying a property with a mortgage. It would be better to buy a smaller property you could afford outright or partner with some other investors to buy the apartment complex (which has it's own set of problems).
[1] I might actually be wrong about this. I know I've read somewhere that there have been attempts to tax wealth directly in some US states. I've no idea how the govt would be able to do this in a workable way though - how to you value the appreciation in somebody's house when the only meaningful way to value a property is to sell it?
A bureaucrat called a 'tax assessor' makes an assessment - which may or may not be fair - of your property's current value. You're then charged a percentage of this assessed value in taxes. That's how property tax works across America today.
I think property taxes are fairly widespread in the US, actually. Your county has a group of assessors, who pick a SWAG based on comparable recent sales and -- ahem -- their desire to have the county generate tax revenue this year, and then you get to pay .8% or whatever of the assessed value in property taxes.
My father has drolly noted more than a few times that he wishes this assessment came with a shotgun clause (i.e. if the assessors tell you your house is worth $X, you could say "Sweet! I'll have the lawyer draw up the sale documents. You can have the keys tomorrow.")
Challenging your Council Tax band is possible if you think the value assessment is incorrect.
It's not a direct tax on the wealth embodied by the property, but it is a way by which the wealthier pay more tax.
In my original comment what I was really trying to get at is that, as an investment strategy, you would want to maximise your wealth by minimising your realisable income and that the typical way to do that over time has been to accumulate wealth in property. I guess I was wrong about this in the US but it's still a valid strategy in the UK.
While you were _technically_ wrong that no one taxes on the entire value of the property, I think your point still stands, because the property tax rates are so low.
I believe that, in Canada, my trade-off looks like this:
On real estate, I'd pay a very low property tax (under half a percent?) on the principle, plus capital gains on the appreciation when I sell, plus income tax on revenue from the property.
On stocks, I'd pay some combination of capital gains on sale, and whatever the tax is on dividends. So the percentage on my income is higher, but it's only on the income.
The thing is, if you're gonna pay capital gains on the "wealth" (your definition) when you cash it out, the only reason it matters you're not getting taxed on the growth is that it compounds faster. So you get to ask yourself, which compounds faster, the non-realisable asset without tax, or the realisable one with tax.
A local council sets the charge for 'band C' (I think) and the rest are calculated from that. (This then pays for rubbish collection, libraries, all that sort of stuff.)
If you're buying a property as an investment, council tax isn't hugely relevant. If the property is occupied, the occupant pays it. (Unless they're exempt, like students are.) If the property is empty you don't need to pay it for up to six months.
So the tax does scale according to the value of your property (ie, your wealth) and is an attempt at progressive taxation, but it's not a direct tax on that wealth.
If you're buying investment property in the UK, your tax liability is going to be income tax on the income and capital gains tax if the market value of the property has risen. In addition you'll have to pay Council Tax based on the property you're living in, regardless of if you own or rent it.
Based still on wikipedia, I would describe this as a regressive tax. The amount to pay increases sub-linearly with increase in the value of the thing taxed.
In Canada, property tax is paid by the owner, not the occupant, and it pays for the same things (garbage collection, libraries, schools, etc).
also, "fair division": http://en.wikipedia.org/wiki/Fair_division
"(2) That you would invest your $4m in a low-return investment."
My assumption is that you'd invest in a BALANCED PORTFOLIO. What sort of return do you think a balanced portfolio would get you?
Many people would be willing to take risks, or don't want/need to hedge against everything. His real estate example is a good one - you are at the mercy of housing/renting markets. But over the long term these have been quite steady and wouldn't be outside most peoples' risk thresholds.
There's a pretty well-understood playbook for wealth management. You SHOULD be willing to take risks (with a very specific % of your portfolio)... But at any given time some of these risks will have gone south, some will have gone north, etc. Feel free to find me a wealth manager who offers big double digit returns over multiple decades.
I understand the 'balanced' wealth management approach - I am just not sure it is the ideal way to go. Is pg better off dumping money in mutual funds, real estate, commodity index funds and bonds - or driving the majority of his wealth into YC? He lives and breathes startups - so even trusting the best managers I would say he would be foolish not to invest a lot into YC himself.
I also would like to see the results of how bubbles, world wars, massive inflation, depressions and other difficult to hedge against events impact balanced portfolios vs someone dumping all their money into a single apartment building. My instinct is both would be equally screwed. And an event like that is almost certainly going to happen during the next 50 years.
I don't disagree with you at all - there are just several angles.
Then again, your article was talking about startup founders, who (in general) presumably are quite willing to take risk!
Mortgage + 3 cars + 2 kids in college + 1 in a private high school + 1 family vacation = ???
I don't think any of that stuff is a status symbol, or excessive. And it seems like that would easily exceed 200k a year, and that's excluding utilities, food, etc.
You don't think three cars is excessive? We'll have to differ in opinion there.
A lot of your costs depend on location obviously but, yes, I stand by my hunch.
it seems to me like that wouldn't exceed 100k a year, and "2 kids in college, 1 in private high school" is probably your highest consumption year. Seems like we have vastly different expectations as to what's reasonable to spend on those things. See also my comment [0] and kscaldef's [1] on the previous thread.
I'd also assume you don't have mortgage/car payments with a $4.3m buyout, but instead pay those things in full but amortize the costs in your budget spreadsheet.
[0] http://news.ycombinator.com/item?id=1627640 [1] http://news.ycombinator.com/item?id=1627551
What if that million was invested in a low cost REIT index?
I have a small investment in an REIT and while the trust owns multiple properties, it is far from an index. An REIT is more like buying an individual stock, you are investing in a company that will use your money to purchase, improve, and maintain real estate in exchange for a share of the company. (That may not be technically accurate, but it is essentially what is going on)
http://www.forbes.com/forbes/2009/0316/056_reit_stuff.html
They've unsurprisingly been hammered over the last year or so. In the long run investing in focused REITs (like apartment rental, etc.) will give you similar exposure to investing in their target market yourself.
Of course, you pay the standard laziness premium. The REIT takes a fee, and sometimes their incentives are not aligned with yours. Perhaps they have $x they are incentivized to invest, forcing them to buy and run properties without top-tier ROIs and you, with a tiny fraction of $x, could do better. Perhaps you could just flat out do better than them by knowing your market and running your properties better.
But REITs are probably not a great way to go as a solo investment. Most that I've found have underperformed the S&P 500 over the last decade. I'd use them more to hedge though as we've seen recently, it's entirely possible for both the stock market and the real estate one to nosedive together.
It's a shame that even intelligent and knowledgeable people like Ryan and Tony choose to write articles with linkbait titles. There is clearly some interesting and valuable stuff in these articles, but they would be better if written more honestly without a pre-determined conclusion.
Depending on where you live that could put a substantial dent in your 'take home'.
And leveraging (to use a popular word) that money to obtain a much larger property by financing is actually a fairly risky strategy, especially if you are going to put the rest of your money in to different investments.
I believe Tony already took that into account in his article?
Leverage increases the risk, yes, but that doesn't make it "risky". It's very much the norm in the real estate world, which has a pretty stellar track record for creating wealth, once you get out of the levels where soccer moms are flipping houses. Buying commercial multifamily real estate isn't about the value of the property; it's about the value of the cashflow stream that you're buying. For certain markets and with long-term demographic trends and forecasts being what they are, I'm very comfortable with that level of risk.
If it makes you feel better, run the numbers where you put $2mm or $3mm down, which reduces your return, but also decreases your risk.
Tying yourself up like that might come back to bite you and if something unforeseen happens you're back where you started or worse.
But the other way to look at this is that you're going to risk the money one way or the other: either you risk it as indirect collateral by guaranteeing a loan at 80% LTV or you risk it directly by buying the property outright. The advantage in the first scenario is that you get a higher return. YMMV, but again, I'm comfortable with this level of risk.
I agree with the idea that real estate can be a good investment, but this article has very little to do specifically with investing after a startup exit. The article should be called "Why to invest in real estate."
Or, perhaps it should be called "A plan for generating retirement-suitable income using approximately $1mm of capital".
Oh, hey, that's what it _is_ called (modulo some aggressive rounding).
I agree with the first paragraph, though, that if it does turn out that you have $5mm, and if it does turn out that you can't secure nonrecourse debt, then it is true that you're also taking on extra risk.
There are going to be distinct advantages and disadvantages with any investment philosophy you wish to make your own. The real question is what are your long term goals?
This is how I see real estate investment.
PROS - After paying off the mortgage you can still sell the house for its current value. If you select wisely, this is an additional investment. - Monthly income that is generated as safely as possible. Since you can select a good market to invest in, and even select who is moving in. You have as much security as in a monthly payout as you are ever going to get. - Can be used to leverage other investments. Equity can be an incredible tool. - Makes your credit score and personal financial statement look amazing. If profitable, of course. - You can invest money to make continued improvements on the property. And potentially increase it's value. - Can live there is your significant other kicks you out (haha)
CONS - Limited mobility. If you invest in real estate with are with it for a while. - High initial cost. Unlike investing in stocks, it is difficult just to buy 10 shares google. You have invest quite a bit of personal capital. - Ties your investment to the community. Which may be a positive if you don't like the swings of the investment market.
To say that an investment can be unsafe, or it is changing from a way you know how to make money to a way you don't, is an invalid reason not to do it.
Any investment can be unsafe. Business lose value all the time. General Motors has lost value consistently, buying there stock doesn't mean that Google Stock isn't going to be a great idea.
As for a learning curve, there was plenty to learn about stocks while learning to invest in those. There was plenty to learn about your startup before you could make it profitable. There will be plenty to learn about real estate as well.
Ultimately, what are your investment goals? How much money do you need, and how are you comfortable spending? Do you need money for huge investments, or are you content to have a steady safe income?
I love the idea of real estate investing just because it seems like it could replace the income from my job. Therefore, I would not have to work. Also, it gives you a base of credit to allow massive loans for massive expansions in business.
Also, if you don't screw it up, it can be multi-generational income. Which is something you can not say for capital style investment.
His point is to define "rich" as having your assets (which he defines as investments that produce income) produce enough income to cover your expenses. As soon as you reach that point, you can quit your day job and focus on managing your assets.
The point about redefining the meaning of asset is a good one - real-estate is his thing too - but he points out that the cycle joe average has been playing (at least, pre-crash) where he gets a mortgage, waits for the market to go up, then sells, then just goes out and mortgages a bigger/better place and keeps doing that...... he chooses not to define this as an Asset in this context because it's not generating income for you - it's a constant liability and bill you have to pay.
Kiyosaki might have some good nuggets of general wisdom in his book, but he is one of those whose actual success is based on book sales, not other business(real estate, investing, etc.).
Probably, we need to define what is retirement. =)) If it's doing nothing (business wise) - probably it's too boring anyway and learning new skills is good idea.
None of them are likely to be income-generating ventures, meaning for all intents and purposes, it's a life of retirement. Retirement does not imply doing "nothing" for the rest of one's life.
It sounds like you have a passion for real estate now, but maybe not when you started. The same is true for me and retail (I have a couple of franchises).
I am going to keep the multi-family unit idea in mind for the future.
This is only the start of the article's problems. The next thing he advocates is putting 20% down on a $6.5 million apartment complex, effectively leveraging 5 to 1.
Leverage has no place in any retirement account, period!
This entire article is a recipe for disaster.
Do you have any personal experience with multifamily real estate? It's valued based on the income stream, so unless the income stream is inflated, it's not really overvalued. And increasing population + more single-member households + fewer people buying houses now = more renters. Where the hell do you think all the people losing their homes right now are going to live?
Avoidance of the kind of knee-jerk reaction that you're espousing is what makes good real estate investors incredibly wealthy.
The leverage thing I'm more willing to concede, but the numbers aren't terribly different if you just buy the property outright. And let's be honest: this isn't a true "retirement account".
Do you have a source for this? I think the number of single-member households is actually declining in most parts of the US. People move in together to reduce costs during a recession. College grads moving back in with their parents, 2 imigrant families share a 2BR apt, etc.
Depends. In general when everyone is panic selling you want to be buying. Obviously you never want to be buying crap (bad stocks, bad property, bad anything), but the panic times open up great opportunities for those with cooler heads.
Looking specifically at property many people still need places to live, but again it comes down to good versus bad. Should I invest in an apartment complex out in the middle of the desert, probably not. If I find a good deal on a complex in a city near a college, now we're talking. Rates are currently low and a lot of people are being forced into selling which makes many prices low. You can also look at the financials of a rental property and value it much easier than say a residential house. Examining a rental property is much closer to examining a business than pricing residential.
Now, the above ignores the work that goes into owning rental properties. Depending on the income level your property targets you may end up spending a full day in court every month throwing people out. Does the owner of the property have the stones to throw out a mother and her kids because they don't pay? Then you have repairs and other complaints. You can get a company to handle most of this, but that does cut into your profit.
"Greene began investing in real estate while in business school, and continued to build a successful real estate business. Greene went from being a bus boy at the Breakers Hotel in Palm Beach to being one of the most successful businessmen in the world. [8]
In mid-2006, Greene, worried about the possible collapse of the real estate market, spoke with John Paulson, a fellow investor who discussed with Greene his investing strategy. They agreed that the real estate market was unstable and a bubble might be forming in housing. After the meeting, Greene engaged in a similar investing strategy to that of Paulson, which involved a series of unconventional investments trading credit default swaps. The return on Greene’s investments ultimately saved his business, and even put him on the Forbes 400 list."
You get the obvious mortgage deduction, while living there as well.
I am on my 2nd house (I bought #1 in Metro Detroit in '08) with no experience fixing up houses, so it can be done.
Have to be willing to be patient and study the market. Generally, you make your money on the "buy"
We need to say this louder and stronger.
Examine the chart at the bottom of this article:
http://motherjones.com/kevin-drum/2010/08/chart-day-housing-...
Then try, as hard as you can, to realize that if you've been paying attention to house prices over the last decade you've been training yourself to think that this epic once-in-a-lifetime bubble is "normal" behavior for real estate prices. It isn't.
Not everyone can handle that, though - people are unlikely in general to be able to treat their home impassionately as an investment.
The key is knowing that you've already won before you sign the papers.... as you said, doing the research, etc. Good investors always make their money on the "buy" - you buy something you KNOW is already undervalued - you never buy and then just hope.
But when I see this I think: why the hell would I want to retire at 30 when I can just start another company?
If I made $4 millions I would use that to make another company. No need to worries about investors before a loong time.
But real estate is a very good way in general for ordinary people to become financially independent or even rich.
a better solution is to buy tax free municipal bonds.
You're probably going to be just fine. However there is a non-zero (and impossible to calculate) risk that you're going to lose the entire income stream.
Equities / ETFs allow much greater diversification.
The bit which bugs me though is why are you spending 200k a year. Countless studies show that greater income is not linked to happiness above a fairly low level. I refuse to believe the USA is so expensive that this level is $200k per annum. Reductions in living expenses are far easier to guarantee than increased returns.
you don't think that there's a similar risk in the market? sure, you pick how much risk you take when you invest, but i'd say that you're doing the same when investing in this type of real estate -- making a choice to exchange some safety for higher returns.
> The bit which bugs me though is why are you spending 200k a year.
i don't believe this was point of the article.
Or are we talking about the possibility that your occupancy may fall or rents may fall or maintenance costs may rise to the point where it's no longer profitable? That makes sense.
I don't think you can decide on a hypothetical without investigating. At the very least, this article has given you another point of view of a problem most of us try to solve every single day.
World's population is growing exponentially. Tourism (flights) becoming cheaper, etc.
In each small town in Himalayas I visited there were a lot of opportunities.
—Fitzgerald, The Great Gatsby
I think I recently drove by a sign on the road that said this too. It was right next to another sign that read "Make Money Fast", and another sign that said "Get Rich Working from Home." However, a much wiser man than I once said: TANSTAAFL.
Now I know this is gonna get nuked, but I don't care because I can prove my point if you can understand me. Money is all you guys ever talk about here. Can we get more up votes on articles about oh say, extravagant assembly code or hardware hacks, instead of the daily echo chamber of TC driven $pablum?
IMHO everyone here, or at least the most vocal minority, is far, far too obsessed with making money. And the kind of money amount always being talked about is literally winning the lottery. Fools! You want to know why the American Empire has hollwed out and is about to fall? Everybody is a fucking true-blue believer that they deserve to be rich,at the expense of everything and everyone else! Why can't people just be happy with enough to get by? Spend time with your friends and family, stop chasing the bullshit ideology of conspicuous consumption which much richer and much more powerful individuals want you to believe in order to trap you into their completely distorted mentality, a simulacrum of un-reality! And those biggest fish only benefit themselves by getting everyone else to chase their white rabbit btw.
Here's my one "TED" wish: instead of the pursuit of money and winning the lottery, I want more of you super-smart, elite, "WEIRD", technophiles to spend the same amount of time & effort doing something intrinsically meaningful, creative, in the pursuit of knowledge for yourself or others, or sacrificing & helping those people in your communities who are disadvantaged, oppressed and less fortunate, or the noble purpose of doing something(anything!) because it is Right and nobody else seems to be doing that thing.
What kind of ignorant fuck truly wants to live the hollow lifestyle of a wealthy young aristocrat? You might think you're making sacrifices now for freedom from money later, but I, and every single philosopher going all the way back to Thales would warn the pursuit of wealth, for it's own sake, or for the sole sake of being "freed" from money, ends up becoming a tragic, inescapable anchor you will be permanently chained to in your life, and it will fully consume and ruin whatever goodness and potential you might have started with.
There is another way. Take only what you need, don't need much, give generously without regard, and redirect all your newly found free time & energy into efforts that truly matter.
Fuck you, Money!
Then you may realize that you don't really want to be even more exploitative towards other people by being living a more wasteful way-of-life than you already do.
Your point hits right to the heart of the matter. And it's why I utterly despise the rich so much. When I look out on the world, I don't see what is actual, rather I see all the lost potential(opportunity cost). It's heartbreaking. And it's not just how much wealth they take—it's also how much resources they divert from the natural ebb & flow of capital to support their meaningless, empty, wasteful lifestyles. And all for no practical reason other than keeping up with the Joneses. Meanwhile people are starving and killing each other in ghettos not 10 miles away.
It's funny how such a stat like the French textiles leaps right out in historical hindsight, yet every era of human history has it's own economic sinkhole into which the rich and the powerful throw societies collective wealth. I suppose for the present day US, instead of lavish dresses for the royals, it's lavish military spending for the gravy-train DoD fucktards. (We'll hit a $1 trillion defense budget in less than 5 years! If that doesn't make you want to take to the streets with a molotov, then nothing will). They don't realize it yet, because they are all narrow minded pigs blinded towards their own trough, but their economic parasitism will inevitable trigger another revolution in America. Malcom X's proverbial chickens will indeed come home to roost, and it's going to be simple, unsustainable economics that triggers it. Archaeologists will dig us up in 1,000 years and wonder why we couldn't see the pattern.
Wealth = Exploitation.
QED, bitches. If this belief makes me a radical socialist, so fucking be it! I know I'm right from a high level perspective.
> If that doesn't make you want to take to the streets
> with a molotov, then nothing will.
> If this belief makes me a radical socialist, so fucking
> be it!
* I don't want to think about money
* I want to be able to chose stuff to work on
* I want some expensive things, like learning to fly and moving out of my country
To get rich, I'm trying to create value by writing useful/entertaining software.
Is there something wrong with me? It's not that HN is full of lazy wishful thinkers who just want to get rich so that they can go insane with a new Maserati every week. We just want to get some more freedom and a safety net, and are willing to work hard and create value.
This particular article is more of a thought experiment than a pratical investment advice. Very few if any startup-culture people will spend their money this way. Most will spend it to pay off debts, start new companies, maybe invest in others' startups, buy a new car.
I've got a wife and four kids, and if I didn't have to work I wouldn't have this ten hour hole in my day where I can't spend time with them. And, you know, time for learning a new language. Or, maybe, a hobby. I could play catch with my kids instead of fixing the washing machine.
It's about the time.