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Comment by djim | Hacker News Reader

i sold my startup about 3 months ago, and immediately starting looking for another job. after a couple months, a couple interesting but-not-exciting offers, and one interview process that ended in me not getting an offer, i finally took a worthy vacation. while on a boat in the caribbean, a couple things occurred to me: (1) i really don't need to work for the next ~10 years (2) in that time, i will likely stumble on another opportunity similar to the previous one, which has afforded me this financial freedom (3) i am way more interested in learning, exploring, and art than a "real" job, even a job like my previous one, that i particularly enjoyed. (4) i am very fortunate to be in this position, and i really don't want to waste it.

so i've been giving this topic some serious thought. to work or not to work? that is the question.

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I am currently taking a sabbatical of sorts after slaving away and saving up for 5 years. I threw most of my savings into index funds, and then set up automatic withdrawals to my savings account. This forces me to try and live within a certain budget. If all goes well (i.e. market stays healthy), I will have only spent down a small amount of my savings by the time I return to the labor force. In the mean time, I have been taking some coursera classes, toying with some side projects, and doing some R&R. I highly recommend it for people who can afford to do this.

How much savings did you have? I'm considering doing the same at some point, though my quick glance at index funds makes it seem like I'd get basically nothing. What sort of budget does this afford you?

Same with me as well, I am doing some work in Forex, but that is proving incredibly difficult. As that is live intraday training.

I usually work a contract job for my University but I get my money in lump sums, so I was thinking I could put a sum into some sort of index fund, or even a currency fund.

Vangaurd low cost index funds. Supposedly, you can count on 8-10% annual return. I also did/do some occasional stock picking which has gotten good results (but I wouldn't count on that being sustainable). I probably spend about 20k a year, and have savings in the low 6 digits.

I waited until I had 5-10x my annual expenses, but obviously you can do it with less. My main recommendation would to be have at least an extra 6 months of living expenses beyond what you need (so if you are taking a year off, have at least 1.5 yrs of living expenses) in case it takes a while to find work again. The main advantage of saving more than that is you can use the returns from your investments to offset some of your costs a bit.

You can also count on index funds to lose 50% of their value in two years in an upcoming crisis. The roaring 90s and mid 2000s isn't a pattern that will continue to repeat itself. The fed can't keep printing the S&P500 up forever.

I think made a great decision, but you ought to diversify your nest egg.

I agree that there is some risk, but I am not sure how I would be able to diversify any more than I already have. I have my money split into about 6 different index funds, primarily diversified globally, although I have a few industry/sector specific funds. And then I have about 30% of my savings in stocks that I picked, most of which are pretty stable companies with fairly long term future/outlook (so they would, in theory, come out of a recession in good shape, even if they took a few hits).

If there is some other asset class I am missing, let me know. In the meantime, I think I will take my chances with the market. Worst case, if things get bad, I can just go back to work (left my old company, in a fairly recession proof industry, on good terms)

Well, based on my experience you definitely want to 'work', but work on things that fulfill you in some way. Hopefully your startup sale allows you to never again be dependent on the The Man, so if you're tasked with something onerous and/or stupid, you can simply walk away.

My experience is that reaching a 'work-optional' state is not the easy transition most would think it. I recommend that you search for a meaningful goal and get to work on it, drifting is dangerous.

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