Ask HN: How do I get $2.2M dollars?

https://news.ycombinator.com/item?id=15808077

by gallerdude • 9 years ago

58 107 9 years ago

news.ycombinator.com

I've decided that the optimal path I want in life is $2.2 million dollars, and then to live the rest of my life off of the interest generated from an index fund (approx $80K/year after tax).

Right now I'm in college studying Computer Science, and in my free time I write (I'm not any good at either yet, but now's the time to get good, so I'm not worried).

I've thought about a start-up, but the risk and reward are both too high. A successful startup is around the $10 million to $1 billion, depending on what you create. This is way over my goal. I'm sure the risk is proportional to the potential money earned, so it'd be inefficient to overshoot my target.

itamarst• 9 years ago

1. Get a programming job with decent salary.

2. Live far below your means, saving most of your salary.

If you can live with less than 80K you will (A) save faster (B) need to save less money.

See http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim...

Also, you're young, so you may find you have different life choices in the end. Saving money is always a good plan, but there's other paths to having a life and a job (I cover them all in my book: https://codewithoutrules.com/saneworkweek/).

mtmail• 9 years ago

Treat startups as lottery tickets. That investment risk class is way too high for your goal. A high salary and saving will get you there.

corporateslave3• 9 years ago

Honestly? Just master data structures, get competing offers at FB and Google, make 350-400k a year, invest heavily and aggressively, retire in 7 or 8 years

gallerdude11• 9 years ago

Why data structures?

AjJi• 9 years ago

To get through the interview process. Their interviews are a bunch of algorithm questions, and data structures is the starting point.

shinryuu2• 9 years ago

you'll need them for the interview :P

stale20024• 9 years ago

When he says "data structures" he actually means "interview questions".

Data structures and algorithms interview questions are the only thing that Google and FB care about.

fpisfun6• 9 years ago

I keep hearing salaries mentioned like this and I'm sure some developers make this but I really don't think the average developer is making this at these companies, based on salary comparison websites, etc. A developer who makes this, I'm assuming, would be working in machine learning / quasi-AI type of stuff and that is probably not the type of job you're going to get right out of college unless you have a PHD. I can't imagine any reason Facebook would pay this to devs for run of the mill dev roles when it's clearly so far above market rate.

tmoullet• 9 years ago

Read reddit.com/r/financialindependence for more ideas, but the gist of it is what itamarst says.

CodingGuy• 9 years ago

Buy Bitcoin and wait a year...

nbarbettini• 9 years ago

... a year ago.

gallerdude11• 9 years ago

Even if this were the case, I would have needed $220K.

fwdpropaganda2• 9 years ago

Or now.

delbarital• 9 years ago

"Investing" in any currency is a very bad idea.

blocked_again• 9 years ago

Write down the price of BTC today and take a look at your comment after 1 year.

ryeguy_242• 9 years ago

Agree in totality. This is the same concept as buying South African Rand because the value moved significantly in the past year or two with respect to your current. These aren't assets, these are mediums of exchange. Plus, in a world where all we use is Bitcoin, the price change with respect to dollars becomes irrelevant.

yongelee• 9 years ago

start and sell a million dollar business 2.2 times

tpae• 9 years ago

You can find inspiration here: https://www.indiehackers.com/

tlackemann• 9 years ago

Find a niche problem, solve it

davelnewton• 9 years ago

You work, you save, you make safe investments, and you wait.

Seems mostly like common sense, really. Regarding "over-shooting"--the risk of startup-like-entities is manageable, particularly if it's a low-input resource.

Lower-risk passive-income projects don't necessarily bring in a lot of money, but they're largely no-input once the initial investment is made, and every little bit helps.

swarnie_• 9 years ago

So you will need to generate 3.6% on your 2.2 million to take 80k a year. No idea what your tax rate is so i cant comment on how far out i am here.

I doubt you can consistently make that kind of return year in, year out. Accounting for 2% inflation its looking even worse.

There is a pretty good discussion here which expands further - https://www.reddit.com/r/investing/comments/5xmr3y/does_anyo...

bpicolo• 9 years ago

A few different vanguard funds have 5-10% annualized for the last 15 years. There's never a guarantee but > inflation has been a good bet so far

tarboreus• 9 years ago

The S&P 500 has an inflation-adjusted yearly average return of about 7%. 4% is a generally agreed-upon "safe" percentage if aiming to live off that amount.

timthelion2• 9 years ago

I am aware of a real existing portfolio (not mine) which started with a sum slightly higher than 2.2 million in 1997 and invested in 70% medium risk mutual funds 30% lower risk bonds and real-estate. The portfolio has made a very consistent 6% per year since 1997. Almost exactly 3.6% after inflation.

SirLJ6• 9 years ago

The way for me is the stock market - building trading robots, this is the way to get your FU money and believe me it is well worth it and it is the ultimate freedom in life...

I would recommend starting with Interactive Brokers or similar API (it is free), small linux VPS, some data for back testing and off you go, for around $100 you can start + a lot of time of course... Start by testing any trading strategy you can fin on the net for free, they will fail, but you'll observe why and one day you will find your own edge...

shinryuu2• 9 years ago

Did you succeed?

SirLJ6• 9 years ago

Absolutely, been doing it for a few market cycles already and the automation is a god sent, everything is working on an autopilot...

gallerdude11• 9 years ago

I’ve considered going into this with neural nets - given your bio it seems you have some experience. But is this viable with a low amount of starting funds? If I programmed a .51 optimal crypto trading bot, it’d take a long time for my money to grow.

SirLJ6• 9 years ago

Crypto is too risky for me: the market is tiny, lot of hacks and crooks, not regulated/no government protection and probably manipulated...

For the money, yes, to make money you need money, e.g. trading with less than 6 digits account is not going to make a difference and for sure it will take time, this is not a get rich quick gimmick...

Scarbutt• 9 years ago

What's your net worth?

SirLJ6• 9 years ago

enough to not work a day in my life and hopefully will leave it to my children when they are old/wise enough...

fpisfun6• 9 years ago

Cryptocurrency currency bots can be way more profitable in my opinion, I'm working on this myself. The complexity is no joke, to build a truly robust system, but hopefully it will be worth it

readhn3• 9 years ago

You are entering the market at the time similar to a tulip bubble mania.

Be VERY CAREFUL.

There is time to be IN the market and there is time to be OUT of the market.

readhn3• 9 years ago

Are you really smarter than a bunch of Quants with PhD's in math/CS and unlimited resources (hedge funds etc)?

Get rich quick does not work in the stock market. Get rich quick = lose money quick in 99.999% of cases.

SirLJ6• 9 years ago

Works for me, so looks like I am smart enough ;-)

lee1013• 9 years ago

Checkout our Live Updating Forecasts at https://bitbank.nz They are driven by a trading bot based on machine learning, doing a pretty good job predicting when things are overbought / sold. We have a free 1 day trial then plans starting at .03 BTC for 3 months.

Also checkout our affiliate program where you can earn .003btc per paying user referred :)

We also provide a live API and bulk data to the technical HackerNews types.

There is a lot of money flying around in the Crypto space right now and with some good forecasts/data you can go a long way even manually trading :)

SirLJ6• 9 years ago

Thanks, but I’ll pass... My system is actually working, so I don’t have to sell “predictions” with affiliate programs to make money in the markets...

drakenot• 9 years ago

There is a subreddit dedicated to this idea [0]. There is lots of good content there to go through.

[0] reddit.com/r/financialindepdence

superdex• 9 years ago

You forgot a key variable in your equation: WHEN?

When do you want to retire with this $2.2M? That might guide your investment choices. Sounds like you might want to take some financial/econ classes as well ;P

sillysaurus3• 9 years ago

I'm surprised no one has mentioned this, but if you want to attain your goal, you're basically swearing off having a serious relationship.

It's very rare for you to meet someone serious about saving money. Before you know it, they're complaining that you never do anything even though you have plenty of money (relatively).

Are you sure you won't want a relationship? You're young enough that within a decade you'll be a completely different person. It doesn't seem that way now, but a decade is a massive force.

There are other things you'll be giving up: Pets, for example, are quite expensive. Sinking $3k into an electronics hobby is also rewarding. You'll also be buying everything second-hand if you're really serious about saving, and it's hard not to become frustrated with all of the poor-quality things in your life.

And then before you know it, your youth will be gone. Time is more valuable than money.

Just think carefully about your goals. It's easy to set a lofty aim, like becoming a doctor, and then set yourself on a trajectory you may regret.

fnord772• 9 years ago

"And then before you know it, your youth will be gone. Time is more valuable than money."

Can't agree more. If I had to do it over again, I'd just live my life, not worry about being super frugal or saving a ton of money.

hawkice• 9 years ago

You seem to delight in not actually helping the OP with their considered and specific goal. I strongly recommend avoiding specific personal advice when people have clearly thought through what's best for them (and have stated so) when you have neither met them nor attempted to understand their specific personal life.

an_ko• 9 years ago

Is there no value in criticism? Sometimes the correct answer is that you're asking the wrong question.

stale20024• 9 years ago

You do not have to limit as a hermit to save up tons of money.

Daily "spending money" to go to the movies or the bar with friends is very very little when compared to the average salary of a Google engineer.

The way to save up money is to get a job that pays 2X or 3X more than a comparable job (or in other words, don't work for startups. Go work for one of the big 5 tech companies).

You are wasting your time if you are worrying about saving 20 dollars here and there by not going out to a bar with friends.

derekp7• 9 years ago

To add to this, make the saving automatic. If possible, have your check direct deposited between two different bank accounts, a fixed amount going into one, and the remainder to the second. Use the fixed amount account to auto-pay all your living expenses, and other fixed bills, and to auto-transfer a set amount into whatever your investment vehicle of choice is. You will need a bit more going into this checking account than the average of all your bills, to cover variances. Then once a year take the excess, and dump that into an investment.

The second account is then used for daily expenses such as groceries, restaurants, and other entertainment.

edent2• 9 years ago

you're basically swearing off having a serious relationship.

Ha! What nonsense. It is cheaper for two people to live together, to cook together, to go on holiday together, to travel together, to game together, to invest together...

I'm struggling to think of anything that isn't cheaper when done as a couple. Even if you find the cheapest living space possible - it becomes a lot cheaper if someone else is contributing 50% of the costs.

bshimmin• 9 years ago

Couples have this tendency to produce children, which tend to come with additional costs.

benzor• 9 years ago

I agree with the spirit of your post ("make sure you actually want what you say you want"). But I wouldn't go so far as to say that you need to swear off relationships. Anecdotally, I (M) have found someone (F) who is just as serious as me about saving money, and we're very happy together.

In order to repeat finding someone like that, I'd suggest the following: open yourself up to all dating channels (in-person, online, Tinder, etc), make yourself visible, and be honest about your objectives. If you don't wanna be too direct about your frugality, you can casually name drop Mr. Money Mustache as a personal hero and anyone with similar interests will get the hint. Then once actually dating, aggressively cull anyone that doesn't meet your money-saving criteria.

As you might expect with all things dating, this is time-consuming, difficult, and discouraging at times. But if you're reading this, you're technically minded and you already understand that it's all just a numbers game, and success is just a matter of time. Adopt a systematic approach and you'll get there eventually

To end on another positive anecdote: I've met at least a handful of female candidates that are equally frustrated with the average guy not being seriously able to save money. So when you finally find the right person, the relief is mutual and it kicks off the relationship on a strong positive note.

Hang in there and good luck.

aureli• 9 years ago

And then before you know it, your youth will be gone. Time is more valuable than money.

For precisely this reason one should find out exactly what they need to be content and quit the rat race as soon they can. No point slaving away your time at work for unnecessary comforts.

gallerdude11• 9 years ago

Yeah, this is what scares me. How do you live in the moment and plan for the future? How do you be fulfilled in work while having a good personal life? I’m kind of scared that some sort of balance between the two is completely idealized.

I’ve read a lot of Alan Watts recently, and his deal is enjoying life where you are. But at the same time, I really value personal freedom and doing my own thing.

And on top of all of that, I want to be happy with my future SO, whoever she is. Maybe I’m just going through a conflict of goals right now.

Life is a huge and beautiful thing, and I just want to live as much of it as I can.

timthelion2• 9 years ago

I believe the opposite may be true. You may be swearing off marrying or dating a gold digger, but why would you want to? I have a well dressed, intelligent, good looking wife and she makes more than she costs.

ranic• 9 years ago

Even if you're not swearing off a serious relationship, you're almost certainly swearing off having children. And this is an interesting thing because my attitude toward having children wasn't the same in my twenties as it was in my thirties. Children weren't a serious consideration at all when I was younger, but after I met my now wife, I began to want children far more seriously.

dejv• 9 years ago

Or maybe he is living/want to live somewhere cheap. In my country (still in club of rich countries and part of EU) will 80k/year puts you in rank of 1% by earning.

Even if you are not living in somewhere that cheap, 80k should be enough to afford you dating, children (or two) and probably even enough to live off that one income stream.

purplezooey• 9 years ago

Hangin' out the passenger side

of his best friend's ride..

throway8675309• 9 years ago

Adding to what everyone else is saying, remember that $80k/year will be great for now, but if you're not letting the principal grow at all, you'll still only be getting $80k/year in 40 years, at which point it'll be a lot less useful

gallerdude11• 9 years ago

Yeah, I’ve considered this. Maybe in years where return exceeds 4%, you invest the excess.

TwiztidK• 9 years ago

I'm going to assume you mean 'in years when 4% exceeds $80k, leave the excess invested'. As the whole point of using 4% as a safe withdrawal rate is that it allows the good years to balance out the bad years.

ta99229977• 9 years ago

I don't think you fully understand what the 2.2 million represents at 80k/year. This is a 3.6% SWR, which is considered "safe" because over a long period of time, the stock market will typically do well enough to offset any downturns. The average market return from 1985 - present is about 7%, so i have no idea why you would assume principal remains the same after 40 years.

the-dude• 9 years ago

Start with a billion and create an airline.

stale20024• 9 years ago

The best way to get a ton of money, really quickly, with little risk is to go work for one of the big 5 tech companies.

Google, FB, ect pay 150k+ total compensation to new graduates and can quickly rise to 300k+ for "senior developers" with 4-5 years of experience.

I'm not really sure how much higher it goes after that, once your are promoted higher than a "senior developer". But it is probably a lot. And I am NOT exaggerating on those previously mentioned salary numbers.

maerF0x0• 9 years ago

The simplest advice* people can give you without predicting the future can be found here : https://www.npr.org/sections/alltechconsidered/2016/01/08/46...

Basically: Get awesome grades, get a top offer, jump ship when you can earn 15% more elsewhere (and its not a down step job), Save at least 20% of your gross salary into some kind of index ETF/fund, live way below your means, wait 10+ yrs.

* Assuming you're in the USA

AstralStorm3• 9 years ago

You also need to graduate from a recognized top university or have to get really lucky.

Whoops, now you have some hundreds thousand of student loan.

Unless you studied abroad in a country with free education.

known• 9 years ago

Don't marry :)

gallerdude11• 9 years ago

Well, I think marriage helps give life some sort of meaning, and from a pragmatic standpoint, two salaries and a permanent roommate for life. So it might actually make more sense to marry.

fpisfun6• 9 years ago

You can do everything that a marriage entails without the legal contract that gives someone else leverage over everything you own.

conductr• 9 years ago

Marry smart. Meaning she needs to be frugal too. Or at least practical and ready to compromise. Also, she should be an earner too. If you can both be 6 figure DINKs for a decade you're well on your way.

fpisfun6• 9 years ago

Haha nice, I always like when people think this way because I've realized I only need so much money also and killing myself working to get more than that is pointless because I already know very well that money doesn't bring happiness by itself but having too little also leads to unhappiness. I have no idea what the answer is to your question but I'm going to be reading the comments.

gallerdude11• 9 years ago

Yeah, it’s quite freeing in a way, knowing that I don’t want a billion dollars. Everyone wants to be rich, but by knowing how rich, you can plan a lot better.

fpisfun6• 9 years ago

I think it can be a good way to size up a person too, I once was in talks with an entrepreneur who was working on a business and wanted to eventually hire me as a technical lead. He would keep mentioning how he wanted to make the company into a billion dollar company (at the time I think it had like $30k in revenue), of course it didn't work out. Setting realistic goals is very important.

fnord772• 9 years ago

the problem with living on a fixed income is some big unexpected inflationary event.

This happened to my parents in the 70s. They retired in the early 70s and then BOOM inflation went nuts and what was a comfortable retirement turned into subsistence.

doesn't seem likely anytime soon, but it is still a risk.

_m8fo2• 9 years ago

I don't see why this would be an issue, as you still have the principal, and such events can be amortized into the adjusted "income" you pay yourself out with.

AstralStorm3• 9 years ago

Because say you remain with say 40k/y (instead of 80k/y) of value in the principal in addition to reduced compounding.

daSn0wie• 9 years ago

Build something:

2,200,000 = Delivering $1 of value to 2.2mi people. Just play with that numbers until you can figure out something that you can build that fits into that model....

$1 of value to 2.4mi people (in a year) // (i fudged the number to make the math easier)

$1 of value to 200k people a month

$2 of value to 100k people a month

$3 of value to 75k people a month

$4 of value to 50k people a month

$8 of value to 25k people a month

$16 of value to 12.5k people a month

$32 of value to 6.25k people a month

...

The tricky part is figuring out what people want to pay for.

There are also abstractions to this... like advertising... An average cpm is $2.80. So you'd have to get ~$3 of value from 75k people a month (if they viewed 1000 pages/mo each).. or 75mi page views a month would get you 2.2mi a year.

acconrad• 9 years ago

Building something actually drastically reduces the requirements. OP stated $2.2MM to live off of the interest ($80k/yr); put it another way, OP wants a passive income stream of $80k/yr, which can come from $2.2MM invested via the 4% withdrawal rule.

In the case of building something, that replaces the need for $2.2M in capital, which means the 75mm page views/mo reduces down to 2.7mm views/mo, or in the case of the SaaS business, looks something like:

$1 of value to 80,000 people / year

$1 of value to 6,667 people / mo

$5 of value to 1,334 people / mo

$6.67 of value to 1,000 people / mo

$10 of value to 666 people / mo

The key insight is that $7/mo (in perpetuity) from your "1,000 true fans" gives OP the lifestyle he/she is hoping for.

sn9• 9 years ago

The problem with this is that no service is likely to maintain that level of profit indefinitely in the way that $2.2m of capital will.

In fact, it might be easier to build one product that millions of users pay $1/year for a few years than it would to get $1/year from 80,000 till one's death.

littleweep• 9 years ago

In my very limited experience from what I have seen:

build a company and then sell it.

tryingagainbro• 9 years ago

>How do I get $2.2M dollars?

Get $3.5m and give away $1.3m. You'll have exactly what you asked for.

If you get atop job, salary plus options you could do it. Of course, unless you spend it.

seunosewa• 9 years ago

Why do you wish to stop working once you reach your goal? How do you intend to spend your time?

gallerdude11• 9 years ago

Um, I just like doing my own thing more than doing what other people want from me. Maybe running my own business is the best foot forward.

This is a good question, and I’m going to keep thinking about it.

dakrootie2• 9 years ago

How would you describe your "own thing"? What does a day look like when you're living off the 80k interest? Be as specific as possible.

I have a lot of experience in this area. (Obsessed about retirement from about age 22, and set a goal for 30. Did it.) This is a very important question to ponder at the beginning. :)

I should probably add why I'm asking this question. I thought all those years I was working my ass off, missing out on so many things in life, and destroying my marriage over this goal that I needed to have the money first THEN realize my dreams. If your dreams are "freedom" and "doing my own thing" you probably don't need $2.2 million to do them today. But I don't know what they are, so that's why I asked. Sure, if your dream is to buy Ferraris and pop expensive champagne every night, you really do need that money.

Mine or more simple: traveling practically full time, getting a farm and building crazy inventions on it, etc. I really didn't need a lot of money to do either of these things. For example there are sites like workaway.info where you can go live and work on a farm, or on a beautiful vineyard in France, or in a cool hotel in the tropics, etc. TODAY.

There are similar resources for travelers.

For anything I could imagine wanting back then, I could've easily achieved by being a little resourceful, creative, and reaching out to those who could help me in exchange for my skills/talents.

Bottom line is, you would be amazed at the life you can live outside the mainstream economy. I think it's one of the best kept secrets in the world.

I don't regret how I did things entirely, but thinking about this very carefully in the beginning would've saved me a whole lot of heartache and distress.

I'm excited for you and wish you the very best.

JonFish85• 9 years ago

Others have mentioned similar things, but there are a few things to consider.

Remember, $80k/year now may seem fine, but you have no idea what the future holds. First, you may average $80k/yr, but remember that volatility can be rough. If you got your $2.2m in 2007, you'd see losses for several years, and a decade before it recovered -- can you afford not to draw down on principle for a decade?

And then if you're aiming to live off of $80k/year, that's today's dollars. It sounds like you're pretty young (college), so if you're expecting to live another 60-80 years, you have to account for inflation. For example, if you had $100 in 1937, you'd need $1,666 today to have the same purchasing power[1]. If you do the same math going forward, you'll need $1.3m/year in 80 years to have the same purchasing power.

On top of that, there are other things to consider: having kids, unexpected costs, health care, rising taxes, etc. As has been posted even here on HN recently, a wealth tax would almost certainly blow your plans up in a big way. And if you have kids, they're not going to qualify for financial aid, because you're a multi-millionaire! So you'll be in an interesting pickle there.

This isn't to say that you shouldn't aim for this goal, just wanted to mention some things to at least consider...

[1] http://www.in2013dollars.com/1937-dollars-in-2016

saluki• 9 years ago

I recommend a goal of creating a product and/or SaaS.

Listen to this for inspiration: @DHH Start Up School Talk https://www.youtube.com/watch?v=0CDXJ6bMkMY

Great advice here: StartUpsForTheRestOfUs.com Listen to the archive you'll follow Rob from drop shipping beach towels to selling his SaaS for $XXM exit.

Since you're in college you have plenty of time to make this work and build a 'lifestyle' business that will allow you to get to $2.2M and maybe even have ongoing recurring revenue on top of that.

gallerdude11• 9 years ago

A lot of people on HN talk about SaaS - why this route? It seems passive, but then you have to maintain it and update it to the current needs of the market. Furthermore, unless you’re a really technical mind and can do straight CS work, you have to completely understand the needs of a different field. Is this really the best way forward?

vannevar• 9 years ago

Assuming you want to do this with low risk by the time you're in your 40s, and that you're starting with a net worth of around $10K, you'll have to invest over $5K/month and generate an average rate of return of at least 5%/year. If you want to play around with the numbers, there are lots of investment calculators like this one: http://www.bankrate.com/calculators/retirement/investment-go...

ryeguy_242• 9 years ago

"live the rest of my life off of the interest"

You are still young but the people who live the longest and happiest are the ones with purpose.

While you didn't ask for an opinion on this, if I were you, I would first identify your true purpose. Maybe that purpose is playing tennis 5 times a week and reading books (I know I'd like that) and which case, your question above makes total sense. But maybe it's helping improve the life of others via biotechnology innovation. Who knows. Don't discount having purpose in this mystical thing we call life. I've seen what happens when people retire early and have no purpose - it can lead to the unhappiest time of your life.

gallerdude11• 9 years ago

Thanks for the advice! There are a lot of things I kind of like, so I’m pursuing them more, hoping that one will stand out. We’ll see how it goes!

edent2• 9 years ago

I'll tell you what my plan is. It will vary from your plan because we're different people and I'm in the UK.

1. Don't have children. They're probably the biggest expense that you'll ever have.

2. Find a partner who also doesn't want kids. Everything is cheaper when you're a couple.

3. Loyalty doesn't pay the bills. Whether it is your phone supplier or your employer - if someone is offering a better deal, take it.

4. Your equity in a start-up is worthless. Even on the chance that it does take off, there are some very clever accountants out there who will make sure you don't get much.

5. Remember Citizen Kane. "Well, it's no trick to make a lot of money...if all you want is to make a lot of money." At some point the quest for riches will be harmful to you. Make sure you have a release valve.

Good luck!

eagsalazar2• 9 years ago

Don't get sucked into the idea that "startup" means VC funded startup with high risk, multi-year investment of your time. Consider bootstrapping many "utility" startups with the aim of getting 1-2 that have an aggregate value of $2.2M and that, as assets, will provide > $80K in revenue versus $80K in interest, which amounts to the same thing practically speaking.

I think the math in valuing these things is tricky but just for the sake of this conv let's say you want to create assets that produce $160K in income/year (to offset for the fact that these assets might only produce value for a few years or require additional investment down the road). That means you need assets that produce $13K/mo. Which, honestly, is not much.

So ask yourself this, what is more fun, easier, and more likely, making $2.2M from a single big gamble? Scrimping your dev salary for 20 years working on someone else's dream? Or making 2-3 bets (apps/products) year for a 2-3 years where 1 or 2 turn into actual money makers? I think by following a strategy like this, by the time you are in your mid 20's you easily should be basically retired. There are a million little needs and still backward industries where people are willing to pay for some automation and/or convenience. Finding and scratching those itches is pretty satisfying IMO.

It is a very personal thing and obviously you need the few years of space to build these things without also worrying about how you are going to eat.

hkmurakami• 9 years ago

Something like 15 years at one of the mjors should do the trick.

kangnkodos• 9 years ago

After you get 2.2 million, you say you can take $80K per year. So you're saying that you'll be able make 3.6% interest per year. I think that rate of return (after taxes and inflation) is reasonable. In my opinion, the best way to get this is to invest in the S&P 500 via a low cost ETF such as SPY. There are many different opinions on this point.

Assume you can get the same 3.6% rate of return while you are saving. Assume you save the same amount every year. How long will it take to get to $2.2M?

Save $10K per year - 62 years Save $20K per year - 45 years Save $30K per year - 37 years Save $40K per year - 31 years Save $50K per year - 27 years Save $60K per year - 24 years Save $70K per year - 22 years Save $80K per year - 20 years Save $90K per year - 18 years Save $100K per year - 17 years

But I suggest you look at the whole thing a different way. Start with your estimated salary. How can you have about the same amount of spending money while you are working and after you retire? (A lot of people say you need a little bit less money in retirement, so you can adjust for this.)

For example, assume you get a job with take home pay of $100K per year. If you save $20K per year, and work 45 years, you'll have $80K per year while you're working, and $80K per year in retirement. If you are able to save $30K per year for 34 years, you'll have $70K per year while you're working, and $70K per year in retirement.

I made a little spreadsheet, and came up with all the above numbers. It's not too hard to set up a small spreadsheet and play with these numbers yourself. I have some constants at the top - A1 has amount saved per year and B1 has interest rate, as a fraction, not a percent, 0.036. After that, each row of the spreadsheet has a different year, starting with year 0, balance 0. The first column is the year, for easy reference. The second column is the new balance. Old balance + (Old balance * interest rate) + Amount saved per year. Use $A$1 and $B$1 to refer to the constants at the top.

I ignore inflation to simplify things. Instead I use an after-inflation interest rate. These are all very rough estimates, after all. Who can really predict investment returns 20 years from now?

lee1013• 9 years ago

I created https://bitbank.nz providing live crypto forecasts.

I havn't reached that amount but in terms of income... You don't need to build a 10M+ business, just one with a 80k a year income rate, which is fairly achievable.

I only just launched it, i have negligible traffic and we are already getting about 1 customer every week, each customer pays .03 Bitcoin for 3 months ~300 usd perhaps the lifetime value may be 1000 usd if they continue, i'm sure there will be some churn but its fairly achievable that in a few years we will have atleast 80 paying customers.

I'm currently reinvesting the money that comes in into marketing/improving the business and into trading the cryptocurrency markets with the product to validate that its got value for our customers, its not too hard to double your money every few weeks using a high leverage trading platform like bitmex, or something like poloniex if you pick the right coins with our forecasts :)

I built the product in between my day job at Weta Digital.

You can do the same!

Also checkout our referral program where you can earn .003btc every paying user :)

The Sooner you get your business/secondary income stream off the ground the sooner you'll hit your financial freedom goals, with running a business you build trust/authority and traffic over time through many sources and the sooner you start the easier it will be, i started bitbank.nz as just a ghost blog about cryptocurrency trading about a year ago to get something out and eventually snowballed into doing things in a more advanced way, now the company is benefiting from the odd blog post i writ a year ago,

Keep doing things that don't scale and hitting 80k year on year is very reasonable, you don't need to have hockey stick growth or be unicorn level, you should be happy to run a business that would never get funded because your aiming for 80k and not the moon.

brudgers• 9 years ago

[Random Remarks from the Internet]...because this sort of thought experiment is intoxicating.

+ The scenario is based on applying the wrong capital allocation strategy at the wrong time. When you have 2200k dollars and you want to make it last, the important thing is capital preservation, not growth. Because growth can be negative and even positive average growth can be locally negative.

+ Once you have 2200k dollars keeping it in your mattress rather than investing it will for growth provide 80k dollars/year for more than twenty-five years. Twenty-five years is a long time even if you're old.

+ Assume the plan is to get to 2200k dollars in five years. This requires an after tax income of 484k dollars/year. And the discipline of living on 80k dollars/year while earning 6x that amount. In ten years it is 282k dollars/year with a 3x discipline. In twenty years it is 181k dollars per year with 2x discipline. That's still tough.

+ The proposed plan does not reflect a discipline of spending only a small fraction of available yearly income. The proposed plan is 80k dollars/year in and 80k dollars/year out.

+ More broadly the proposed plan's 80k per year does not strongly imply holding frugality as a principle virtue. It's about the top 1/8th of US incomes (before not after taxes). This suggests that status is playing a role alongside financial independence.

+ 2200k dollars is an abstract X in an X -> Y problem if the goal is 80k dollars/year of passive income. There are more concrete X's in the X -> Y problem. For example twenty years US military service as an officer could come close to providing 80k dollars/year in retirement. It would still require discipline but not the 2x spending discipline.

+ Not that I am suggesting a military career, only that it is a concrete plan with a reasonable chance of producing 80k dollars/year in twenty years. The downside of concrete plans is that they are less intoxicating.

+ There's an old joke that the easiest way to make a small fortune is to start with a large fortune. That's why most people don't have a small fortune.

Good luck.

jacknews• 9 years ago

"interest generated from an index"

Who generates the interest? You're saying you want to live off other peoples hard work and creativity for the rest of your days. To do that fairly, you need to be thinking how you can contribute a lifetime of value in a short period of time.

tomaha• 9 years ago

Start doing interships at companies that look good on your cv and pay well enough (Google, Facebook, etc). Get hired at one of these companies after you finished studying (or if you can see it catch one of the up and comming companies at the time). Invest as much as you can into stocks (and if you're adventurous a small fraction into the main crypto currencies). After 10-15 years you will have a pretty high chance of having $2M+ in your accounts (just 401k at e.g. Google will give you 416250 without any returns and after 15 years it's ~800k with 7% returns). Even if you enjoy your live you'll be able to have no problem getting there if you don't spend your money on stupid things like leasing/new cars or overly expensive vacations. Everything you save in the early years compounds so much that you'll likely have no problems spending much more after 5-10 years when really your investments start to bring in the same or more as your salary.

Startups are for lottery. So if you have saved a nice amount you can start playing it and see if you can get to the next level and get to 10M+. But otherwise big (and better companies on the way to get there) will be a much much safer bet.

tiplus• 9 years ago

If I got hit by a bus tomorrow - dying in the streets - I would not want to think about how I put 2.2 M$ in my savings account.

To get you started... you could try to think about the cliche "how to be the person selling shovels in the gold rush".

Write an online course on how you parametrized RNNs to predict Bitcoin markets. I got it to work well on predicting a certain low frequency event well with not too much effort. This resulted in 2~3 trade opportunities per day, making only very few $ each trade. So no luck in the gold rush but maybe not a bad shovel to sell?

Switch professions, maybe? 2.2M$ are not uncommon if you can wait a few years... Become a medical doctor and freelance across the country? Enter the middle management in any 200+ B$ company? Marry into a rich family? Low tier drug dealer in Europe (short prison times)? All of the above require working long/stressful hours over years. This brings me back to my first point: forget about the 2.2M and do s.th. you enjoy doing.

Ask HN: How do I get $2.2M dollars?

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