Hacker News Reader

Comment by _rrnv | Hacker News Reader

There’s a moral in this story but the HN crowd ain’t gonna like it: money is capital. Two years ago the author had no job and 80k in the bank. At least half was disposable. Had he invested that 40k or more in a risk-averse fashion (20% s&p/btc; 80% t-bills) his position today would be much better. Instead he ate through his capital. Always invest your disposable savings or income. Hate me now. Thank me later.

View on HN

He was investing it, in starting new businesses. He has revenue from one. The return just wasn't what he wanted.

I’ll sell you a $600/mo revenue stream for $80k any day of the week. Bro should have just bought a business.

80k is worth the learning, our society spends more on a college degree. ain't gonna learn anything just throwing cash at everything

You can buy a $100/mo business for $5k and learn on that while you still have a job

do you want to buy one from me?

No, $100/mo for $5k is still overpriced

then why are you suggesting other people do that?

Yep, 2024 market is considerably too good though. When he about to quit, I'd expect 8% yield (pessimistic) per year, so $6.4k/yr or $533/mo, that's "good" living quality in non major cities in Thailand. But to be fair, it's only good for locals, not for foreigners. And that $80k also needs to be invested 1 year before quitting.

It's doable for extending up to 3x of his runway.

If you get 8% returns per year on average, the expected annualized return over a multi-year period is going to be LESS than 8%.

This is because you won't get exactly 8% each year. For example, suppose the returns over a 3-year period are: 20%, -10%, 14%. In this case, the return over the whole period is 23.21% (= (1 + 0.20) * (1 - 0.10) * (1 + 0.14) - 1). On the other hand, a 8% return each year would have resulted in a 25.97% return over the whole period (= (1 + 0.08)^3 - 1).

When people say x% average annual return this is almost always referring to geometric mean already, so the above math doesn’t apply.

The type of people that want to start companies rarely invest. Once you adopt an investor mindset you start to see startups as one of the riskiest investments you could ever make.

I've seen quite a few one hit entrepreneurs lose it all chasing the next idea and never investing anything.

Indie startup (or just simply call it "selling app online") is not bad if your "capital is lower than $1M" AND "desirable MRR at $10k". You can beat $1M capital, 10% return .. by making $10k MRR SaaS instead.

What's the difference in risk between the S&P and BTC? I'm all in on S&P and it feels as if BTC is an even bigger gamble.

oh that's funny, somebody saying they should buy bitcoin with part of their money rather than blow it in 2 years trying to pursue their entrepreneur dreams.

It still boggles the mind that everyone had 3 chances (cycles) so far to 5-10x their capital with btc but they still think it’s funny. Hfsp ;)

The difference is volatility. S&P and BTC hit their bottoms around Nov 2022. Since then the former is almost 2x up, the latter almost 7x. Similarly once they hit their tops, S&P will go down 15-20% but BTC more like 50-70% down.

Depends on when that money is going to result in the most valuable experiences, of course.

you can always earn more money after you spend it

Reply on news.ycombinator.com