Cheat Codes for Life I Know at 36 That I Wish I Knew at 26 | Hacker News Reader

Cheat Codes for Life I Know at 36 That I Wish I Knew at 26

timdenning.com

39 pointssmn123478 comments

Most of this reads like the pseudo-inspirational BS that people post on LinkedIn. Things that seem deep, but are so blindingly obvious and/or incredibly broad that they are of absolutely no value to the reader.

Cheat 37: people will upvote based on the title, not the content, regardless of education or social status.

Some of it is self evident from a young age, the rest seems silly or plain wrong (earn less but take home more...that's not normally how tax works).

Any links for actual useful and rarely shared cheatcodes/heuristics for a positive life?

> earn less but take home more...that's not normally how tax works)

It shouldn't be the way it works, but unfortunately it is in many places. In the UK it's definitely significantly better to have your own company than be a PAYE employee.

Even without being creative at all, instead of working, paying tax and then using your post tax earnings to give your kids money, just hire them. Instantly you get another 12k tax free (or whatever the tax free allowance is). Not to mention all the stuff you can expense, being more creative with how you pay yourself (dividends have a different tax rate) etc.

He's definitely right that being self employed gives you more flexibility about how you pay taxes.

It definitely shouldn't be this way though. Just another way for the rich to keep the poor down.

Came to the comments expecting the typical HN putdown on top, was not disappointed.

Indeed. In particular, I’ve seen variations of “Watch how people treat service workers” in this kind of content again and again.

It really makes me wonder who needs telling “If the person you’re with is rude to people, they might not be a nice person”.

> It really makes me wonder who needs telling “If the person you’re with is rude to people, they might not be a nice person”.

People who generally don't think of service people as people, perhaps

This one seems quite obvious but many times in life we tend to look the other way, specially if we have some affection with the person in question.

Yeah, I was interested in this one and hoping to find more substance on the tax mechanisms that make this possible:

> Working for yourself means you can earn less income than a normal salary and still make more due to tax reasons.

When I clicked through to his "money" link, it was a category for his blog where he posts multiple posts per day on making money online. All with clickbaity headlines. Hard to take this seriously.

Edit: Ah yeah, he's selling money making courses and ebooks. This is complete spam.

The usual answer to that is you keep the money in the business entity while paying yourself a minimal salary. You spend it on business expenses (commonly stuff like travel or a vehicle or computer hardware, with some semi-plausible fig-leaf of business use), or take it as long-term capital gains later on.

The other answer that could fit the premise is a solo 401k, for the higher pre-tax contribution limit than a standard employer 401k.

I'd be surprised if there was really anything substantial besides those.

Yeah, that one caught my eye. If this is focused on U.S. readers, that advice is extremely suspect.

There are definite tax advantages to being self employed, but I think for most countries your total tax rate for most people would end up being around 25% to 35%.

For you to end up taking home more money whilst earning only half as much - you would need to some how end up paying a negative amount of tax as an entrepreneur.

> When you work for yourself there’s flexibility with how much tax you pay, and most importantly, when it must be paid.

Not in the US in my experience. Switching from full time to contract/1099 work was a nightmare for me. You have to file and pay quarterly expected income tax payments. If you want to maximize retirement savings (401k etc) or even just get good healthcare you have to do all kinds of machinations to create a business with yourself as sole employee, etc. and increase the tax burden, filings and paperwork even more. It's an enormous burden and I honestly would rather just work full time instead of deal with this stuff.

> When you work for yourself there’s flexibility with how much tax you pay, and most importantly, when it must be paid. > > That means you can earn half the salary from a job and still take home more money. Genius.

Either this guy doesn't understand how income tax works, or I don't. (Or he's just lowkey recommending tax fraud)

>Either this guy doesn't understand how income tax works, or I don't. (Or he's just lowkey recommending tax fraud)

What you're missing is tax deductions.

when you operate as salary, you get no deductions and pay maximum taxes.

When you operate as sole proprietorship you can deduct 'business expenses'

Business travel and parking? Deducted.

Any new gadget or widget? Deducted.

It doesn't create new money, you have to still earn the money in the first place, you can't go buy a porsche but you'll be surprised at how many things you can get away with at least partially deducting and when you do this to a full extent. You end up paying little to no income tax. You take home more while earning less.

And then what happens when you want to pay yourself a salary? Aren't you essentially paying corporate tax rate and income tax on that amount? Maybe that doesn't apply for a sole proprietorship, but does it for a small business?

Payroll is a deduction as well.

You only pay taxes on profit. If you paid taxes on gross revenues it'd make running any business basically impossible.

Sure hope you're getting advice from a tax professional because just deducting every gadget you buy from Amazon is not how it works. You have to prove to the IRS (if audited) that the thing is 100% for business use. The rules for stuff like home office are byzantine and complex, getting down to the level of how big the space is and how much time you spend inside it a day.

In the US, at least, the IRS frowns a bit at people over-using business deductions. "Any new gadget or widget" might be deductible if your business includes, say, reviewing new gadgets and widgets. If you're a software developer, though, kitchen gadgets--for example--aren't generally considered deductible. In fact, if you're a software developer, very few things are.

>In the US, at least, the IRS frowns a bit at people over-using business deductions.

Fair, tax laws are different everywhere. Your mileage may vary.

>"Any new gadget or widget" might be deductible if your business includes, say, reviewing new gadgets and widgets. If you're a software developer, though, kitchen gadgets--for example--aren't generally considered deductible. In fact, if you're a software developer, very few things are.

The magic is in how you justify the expense as part of the business. Nothing stopping you from putting crappy reviews online for everything you buy and then deducting your life expenses.

If you run your own company you have many opportunities to turn your normal purchases into business expenses.

At least in the UK:

* Dividends pay less tax than income.

* Any work related equipment is a deductible expense. Includes computer, mobile phone, etc.

* A company car, particularly an electric one, is much cheaper than buying a car as a private individual.

Those are just the basics.

And all of those "tips", besides the dividends thing, are actually tax fraud.

I know "everybody and her mom" is doing it, but it's still fraud. If you get caught it could have quite bad consequences.

Nope. E.g. here is HMRC's page on providing a mobile as a benefit:

https://www.gov.uk/expenses-and-benefits-mobile-phones/whats...

Nothing to report if the company provides one phone and the contract is in the company's name.

I'm missing the part that says that the employee is allowed to use such phone primary for private means.

Of course a company (or legal entity for that matter) can get some tax benefits. That's not the point.

The fraud is when you declare to buy / use something for the company but use it privately. You just lying about the expenses.

Like I said, I know that "everybody" with a company does that. But in their position I would not tell anybody openly as this is quite clearly tax fraud.

In Germany this is even more complex as you can use some things in parts privately. But than things depend on how the "exact percentage" of private use is…

Of course nobody can really effectively control such things. The laws are actually made to help "some special people" to avoid paying taxes.

But things are very complex, and it's very easy to commit tax fraud by trying something like that without professional legal backing.

For that reason there is a whole "industry" helping people to avoid taxes!

But by just buying stuff "for your company" and using this stuff privately you will get in trouble pretty soon. I don't think this is different in any country.

Aren't there conditions? for example, in Mexico a company car must bear a logo of your company, and be used for company business at least half the time IIRC, otherwise it counts as a personal car. Business travel and clothes are also limited to sensible business needs, you can't your sky resort vacation as a business expense... well, you can, but if you're audited it will be very unpleasant.

Yeah, I was under the impression you pay more taxes working for yourself, because you have to pay all the payroll taxes normally paid for by the employer. And then there is the corporate income tax you have to pay before you can pay yourself a salary. Maybe you can get more creative with deductions, but the base rate will be higher.

I started fuming about the cliches, but then I kept reading and there were many great points, but then I started fuming again because the author wrote a self-help book and they are the worst, but I still kind of want to read it.

Resist. Resist. Just copy and paste the relevant points into a text file like I may do, and move on. A broken watch can be right twice a day, Patek Phillipes are no exception.

Edit: Don’t even waste your disk space.

Skimmed these. Oof.

The updated post at age 46 should be pretty funny.

> At 26 I had a closed mind, eating disorder, and thought I was smarter than Einstein. At 36 I’ve come a long way.

Mmm.

Now he's smarter than two Einsteins!

For number 4, what should one do other than work? Number 6 seems to be their answer, but that's still "work" just not at a salaried job.

For number 6, any details on avoiding taxes? Are they in a different jurisdiction? My experience is that self employment taxes (FICA), and the need for benefits makes it so you cannot earn half as much and still take home more.

Have goals and people that aren't work related. Pursue your own personal interests instead of focusing on your work or career. He kinda gives it away at the end:

> 36. When you stop having big dreams that’s when you’ve died, despite not being buried yet.

How do those dreamers support themselves?

13. Use money to buy your time back.

I think this is the opposite of what I'm asking. Where does the money come from?

That was the joke. A lot of the comments are with the assumption that basic life needs are met.

Most of them probably have a job. This list advises that one should not have a job as the top priority in life, but it doesn't advise against having one.

Ok. I took it in the context of what to do for money and supporting oneself. There are plenty of other things I'd rather be doing, but I have to make money somehow.

FIRE - https://www.investopedia.com/terms/f/financial-independence-...

Yeah, and you have to do something to FIRE. The question is, what is that?

It might help to consider this irony:

* point 4 from the post is "Most people don’t want to go to work. They just don’t know what else to do."

* your question above is "what should one do other than work?"

One interpretation of point 4 from the linked article could be phrased as "Nobody really knows what they would even do with their life without work". What if the points in the article are considered as an aspiration or future state rather than something you manifest immediately _right now_?

You can change your mind in an instant and commit to either generating cash flow from a business or real estate, or more passive income via investments in financial securities like stocks and bonds.

While the mindset change is a prerequisite, action and compounding take time. You can live the ideas behind principles of the points today in an instant, but it may take many years to actually realize the actual state described in the article.

There are many resources that seem to mix in with the career/finance/income points made in the article. For example, in the US-centric book "Set For Life" Scott Trench advances the theory that one should:

* build a $25k buffer/fund * use that safety net to take swings at cashflow opportunities

While I don't really even subscribe to that, there are many, many avenues that have worked for different people. It's probably worth exploring which one appeals the most to you if you'd like that sort of radical change.

Even investing a salary towards FIRE goals is a HUGE mental leap vs. the status quo if taken seriously.

It's not ironic at all. There's plenty of stuff I'd rather do. The question is how does one support themself.

"You can change your mind in an instant and commit to either generating cash flow from a business or real estate, or more passive income via investments in financial securities like stocks and bonds."

Generally requiring significant capital. The question is how does one secure that capital without work.

If you're self-employed, the income can go into the business and you can pay yourself based on what you actually need, while the rest of the income gets put back into the work/business. Even when taxed, those taxes that aren't individual income are taxed much lower than income taxes, so you can "avoid" paying taxes directly until you actually reach a point of profitability where you want to extract that wealth from the business you've grown (aside from the money you actually need at the time, which would still come out of the company to yourself in the form of payroll).

Not an accountant, so I'm likely not perfectly stating the point.

Yeah, there's distributions and draws. But you still can't make 50% and take home more than before.

I'm pretty sure that applies to something like a non passthrough LLC, but would explicitly not apply to a sole proprietorship, which he is advocating for.

I share your skepticism about the author’s outrageous claims, but I can give details on how self employment has given my family more flexibility with taxes and benefits.

We set up a solo 401k let us max out tax-deductible contributions on the employer side as well as the employee side, which is great for our early retirement plans because we have a much higher limit than if we were contributing to a typical employer’s plan. We are also able to work part-time without forfeiting our ability to participate in the plan, unlike a lot of employers which only offer retirement accounts to full-time employees.

We also realized that at least in our state, the income threshold for qualifying for state-sponsored health care is based on adjusted gross income. Our ability to contribute so much of our income to pre-tax retirement accounts means that we can qualify for health care despite earning significantly more, as long as we’re putting all the extra into the retirement accounts. We have to keep our spending low to be able to save that much, but that’s in line with our FIRE goals anyway.

Just curious, what is the state sponsored healthcare? Where I'm at, I'm only aware of Medicaid and CHIP.

Maybe they meant the offerings via the healthcare marketplace available in U.S. via healtcare.gov?

Ah, thanks!

I meant Medicaid but I'm pretty sure marketplace eligibility is also determined by AGI so the same principle would apply. As long as you can keep your spending under the limit, you can put the rest of your income into tax-deferred accounts and still qualify (until your income is so high that you start running up against the contribution limits).

I'm talking about Medicaid — I don't know how it works in other states but in Pennsylvania, one way to qualify for Medicaid/Medical Assistance is by having a MAGI (modified adjusted gross income) below a certain threshold based on family size.[0] (It might only work this way for people with kids under age 21; I'm not sure.)

My husband pointed out that another option available with a solo 401k that is not often available via employer-sponsored plans is the ability to set up a Roth 401k. My understanding is this would allow for much higher Roth contributions compared to a Roth IRA.

[0] https://www.dhs.pa.gov/Services/Assistance/Pages/MA-General-...

Yeah, looks like there are resource restrictions if you don't have kids under 21.

Also a bit risky depending on your exit strategy and the assest recovery mechanism.

Not going lie either... this is generally the type of behavior that gives these programs a bad name and creates pushes for reforms - using them them to FIRE while maxing out the 401k. Most people are fine with assisting the needy through these types of programs. The support for these programs completely changes when given situations like this. Especially when knowing the over a third of the state budget is used for this program and that my own medical care is more expensive due to provider taxes to help cover it.

I'd expect that somebody who believes

   "The world wants you to be normal. F*ck being normal. That’s when being extraordinary becomes impossible."

would probably treat service workers poorly (they're normal, F*ck them) but instead there is the advice

   "Watch how people treat service workers. It tells you a lot about their character."

Non sequitur.

Why does being extraordinary require being a jackass to people who are often merely a front? (Is the service worker in control of the discount rates, for example?)

See (1) https://en.wikipedia.org/wiki/Narcissism ("I'm special") and (2) vulgarity as a tracer for a lack of conscientiousness. ("The F*ck" bit)

That is, I'd expect people who use vulgar words gratuitously to be rude in general.

One interpretation is that this person is narcissistic but they are also Machiavellian and knows they'll be judged for how they treat service workers.

That's a rather creative expectation to form from that sentence.

He also says:

> Taking things for granted is a slow demise into madness. Be grateful.

I feel the opposite, being normal is highly underrated.

What does normal even mean?

Well adjusted to the current default societal game.

Depends on what attributes you attach to the word "normal" but I somewhat agree. The bad version tracks with "incurious" or "credulous" for me, the good version is aligned with "emotionally stable" or "grounded", although that doesn't feel too normal in 2022.

Is there an assumption here that all service workers are "being normal"? Nowhere in this blog is there a point about treating others differently for "being normal".

> "Busyness is a sign of poverty that will eventually lead to personal bankruptcy"

"People who like pseudo-profound quotes are not so smart, science says" [1,2]

[1] https://qz.com/566050/people-who-like-pseudo-profound-quotes...

[2] https://journal.sjdm.org/15/15923a/jdm15923a.pdf

> If you say I’m busy a lot it’s a red flag.

> Stop being so freaking busy. Prioritize 2–3 goals and ditch the rest.

Tripped over this one haha. If I tell someone I'm busy it's because I have prioritised 2-3 goals and am ditching them.

The idea that life has cheat codes that can just magically make things easier is a disservice to all the learning and the struggle that people have to go through to actually figure things out. The one thing I have figured out is to stop forcing all the things(sometimes it's okay), life really does have a way of bringing things around eventually.

This is a bunch of fluff:

> 20. The best life experiences make you nostalgic later on.

Oh really!

> 21. Taking things for granted is a slow demise into madness. Be grateful.

Gratitude. So insightful.

Flagged.

When you are 46 and look back at 36, you realize that you still didn't have the world figured out, and it was so cute how you believed that everything was your own hands. Now, I'm curious what I think at 56 in a few years.

I found this list by a 70 year-old to be significantly more interesting and useful:

https://kk.org/thetechnium/103-bits-of-advice-i-wish-i-had-k...

Genuine question: who is the audience for this? Or more broadly, what is the purpose of this piece?

Any 26yr olds care to chime in? Are there people that get something out of this? What's that like?

> what is the purpose of this piece?

selling a self-help book.

> Are You Operating With Maximum Energy?

> For those who are tired of dragging through the day, who want to get back the fire they once had, who are ready to reclaim your natural energy… this is your book.

It looks like the author is somewhere between a self-help dude and a productivity chap and a “life hack, growth hacker” man. So he’s trying to sell us a book, maybe teach us how to earn passive income. Things like that.

I reckon that this post resonates with exactly who he’s describing in the title: Twenty-somethings (predominantly male), who are looking for advice that would give them (theoretically) a ten-year head start on whoever doesn’t read this post?

Fascinating. It would be a real treat to engage with someone for whom this material felt transformative. It feels like there would be a rather large gap between someone such as that and myself and it would be interesting to learn what makes them tick. Thank you.

I’ve met some of these people and its less that it’s transformative and more that it’s reaffirming their world view. It’s a circle high-5 that they know more than us sheeple.

Is it possible to summarize this world view? I'm afraid I am (like many others here) a bit too much of a cynic to appreciate these sort of mantras. It feels a bit like learning about a new (sub-)culture.

"If I could describe my former mental illness in five words it would be this: thinking too much about myself."

This is an awful statement in so many ways.

If you're affected by mental illness please don't think that you're the problem. Or that it can be solved by thinking less about yourself. Even if it's the case, it's likely just a symptom, not the cause of your suffering.

You can get yourself out of depressive phases with repression and 'everything-is-awesome-actionism' but it will probably come back to haunt you. The depression wants to tell you something but you have to listen to it, not give it a pep-talk.

Maybe his ways are right for him. But almost every single point can have a detrimental effect on somebody with a mind that works differently.

I hate the way these articles tug on the part of yourself that already shames you anyway for not having 'figured it out'. Even if you know you shouldn't listen, you can't help but feel a little worse after reading it. At least that's the way it is for me. I don't even read this type of content anymore but I felt like I needed confirmation on why I avoid it. Boy did I get it.

Now that I've read it I need to articulate my thoughts and feelings to get it out of my system. It's not to be 'a hater' who wants the author to pay taxes. I wish him all the best and hope that his house of cards doesn't come crashing down again.

Maybe these types of content creators are in kind of a pinch. Even if some part of him feels like he might do a disservice to certain people, he can't really write it out. It would be 'off-brand' to not write in absolutes and it would take away from the persona who knows it all. (Because despite saying he doesn't think he knows it all he comes off very much as someone who thinks he knows it all. 'Cheat codes'...)

But I'm pretty sure this type of content is more damaging than helpful to most people. You can't really 'teach' life. If you know a lot about a person and his circumstances you can point them towards options they haven't considered. But that's about it.

Most self-help is a scam. They sell dopamine. You feel good while reading it (if you believe in it) and making plans, but as soon as your brain is back to homeostasis you see that nothing has changed. I've seen it a dozen times in dozens of people.

The only good literature in self-help is the one that actually identifies a real problem that holds you back and helps you solve it. (Trauma, ADHD, bad relationships, stress for example)

Who drinks vanilla-flavored milk?

>Do the work so you don’t have to pray to a fake god to get what you want.

While I agree that work is needed...James 2:17 says faith without work is useless...that comment was straight up uncalled for.

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