500k/year in your last year is "nothing", huh? It really undercuts the entire thrust of the post, because you're starting with a nice big war chest and a hell of a safety net, not "nothing".
The point is not that he is starving, or that he is desperate. The point of that number is what he gave up!
The point is he gave up a job of 0.5 million, potentially 1 million in a few years. To top it off the job had reasonable hours, great people and he was getting positive feedback.
You would not expect people to give that up. The question is why?
Instead, you're pointing out how lucky he was. Well, that is his point! He was so lucky and is giving it up! Aren't you curious why?
I would absolutely expect people to give that up, as well as any senior economist student would tell you, the labor preference curve is backward-bending after you start making a certain amount of money.
> He was so lucky and is giving it up! Aren't you curious why?
Not in the slightest. There are multiple studies saying that happiness plateaus after a certain amount of income. It's his life and he probably found his own plateau.
Are you sure this is a good student? The bend in the curve demonstrates the preference for incremental wealth. So you might forego $500k to $600k. Going down to $0 takes you through the steepest part of the curve.
(I guess with interest on savings, the person is going down to something like $25k-$40k.)
> There are multiple studies saying that happiness plateaus after a certain amount of income. It's his life and he probably found his own plateau.
I am not sure what you mean by "probably found his own plateau".
Do you mean he found he didn't need as much money to live?
He figured out that living on $150k (stated elsewhere) and doing his own thing 24/7 gives him more utility and satisfaction than earning $500k and working at Amazon full time.
Neither one is particularly interesting, because it's already in dream territory for most people and if you gave them a choice of living on $150k and working on their own business (an enormous safety net), most people would be happy with those options.
But a plateau would just mean he quit advancing. This guy didn't stop on a plateau, he stepped off a cliff. That's a pretty big difference.
Also, the people (me included) that don't question "why" are the people that would do the same if they had the opportunity. Of course anyone can create the opportunity for themselves, and of course the income and spendings are relative, but no matter how you slice it, a half a million safety net, or even 1/10th that, is still a pretty big help to take the decision.
Please. It was perfectly obvious from context that the "nothing" he was referring to was his "new thing". No product, no customers, no brand, no marketing, no customer discovery, etc... that's pretty much "nothing" in terms of starting a business.
It's not like he claimed to be broke, or a destitute, homeless, bum. If anything, I kinda feel like we should give the OP credit for being transparent in a way that most people aren't.
They have a bunch of money, move upstate, talk about all these crafty / cosey things they do and how great a life choice they made and contrast it with a lot of bad things .... that are the only reason they can make the choices they can now.
I’m reminded regularly about a line from the Dalai Lama. When we are young we sell our health for money and when we are old we will pay anything to get it back.
My original life plan was to do this maybe 8-10 years earlier. But the startups I picked didn’t go big (I chose for impact not cash out potential), two recessions and a divorce. And I can only do this now because I have simpler tastes (except for tools).
I'd like to do it, maybe try my hand at woodworking.
I come at it sideways by trying to encourage people to have more hobbies or at least see the sights/local events.
Since OP has a million saved I’m going to assume they had a similar plan in place. But. $150k a year with young kids (they haven’t begun to get expensive yet) in Seattle is pretty high. Getting that down is a good deal of effort that will distract from running the business.
I hope these kind of things are taught to people early. Somewhere in school, or may be at a level of a social value system. The default every day mode for most people is to work very hard and fail. In fact you are lucky to achieve mediocre success even after working insanely hard.
>>The best thing I ever did for the family budget is work out a plan ahead of time for windfall money.
Yes the best thing to do in case of a windfall period is to take all the money and put it into some kind of an investment. So that when the gravy train stops, you have something to fall back on.
>>Spending like this is the new normal is how rock stars and athletes end up broke at 40. You have to get out ahead of it.
It isn't just rock stars and athletes, its your every day cousins and uncles, who have some career run, spend like no tomorrow, when the gravy train stops, they realize they have their best years behind them, all their money is gone, and nothing that they can do will help them even get by, let alone take them back to their past glory.
>>$150k a year with young kids (they haven’t begun to get expensive yet) in Seattle is pretty high. Getting that down is a good deal of effort that will distract from running the business.
A lot of people will be willing to show sympathy to you if you met with an accident and bad things happened to you beyond you control. But if you threw away a perfectly fine opportunity and asked them to settle for less, they would be asking why should they even be doing it at all.
- almost broke startup founder
Usually big stock grants go out to those who have shown themselves to be force multipliers. If you can make everyone around you more productive than you’re contributing in ways that make companies like to put golden handcuffs on you.
“Now that I have some runway I’m going to build something from scratch”? Probably wouldn’t satisfy those that could only dream to make $500k and are frustrated you don’t appreciate it I guess.
I’m not making that much but your post makes sense and resonated with me.
What I think you mean is you don't have steady W2 income from an employer.
A different post would inspire me to try too. A post like this one makes me sad to be less privileged.
And I'm not saying that to make you feel bad or anything. People have different circumstances and make different choices for themselves, some biased by the circumstances and some not. I'm just saying it as a consumer of a text. Just throwing my opinion with no expectations of anyone catching it.
Depending on where you live, who you support (or are supported by), and how capital intensive your independent business is, that could be plenty. Plus, you've already got a book deal worked into the business plan it seems.
Getting a sustainable business is not easy. Lots of groups don’t get there with $10’s of millions in venture capital. So from a business prospective he is starting with nothing but does have a personal safety cushion.
But domain knowledge and contacts will probably be the biggest assets OP turns out to possess. Don’t undersell those.
And 80k is still well over the average household income
Even though I sold myself cheap, I still made more money that the salary I would get if I had worked for the big consulting companies. The biggest challenge is selling yourself, and I am not very good at it. Still it worked out great for 2 years until I joined a startup as the first employee which has gone from 3 to 100 employees in just 2 years.
If I was employed at a regular company, I would never have gotten the chance to join that startup.
Now, as warped as this all seems, this pales in comparison to what some tech people make in finance.
Capital helps. It won't make you profitable though.
EDIT: oh he just said $1M saving there.