Yeah it doesn't make any sense at all.

He grossed over 800k on a video game, loves programming, but after another three years he has to go back to his day job? It sounds like he's burning over 100k/year and lying about his expenses in this report. In any case, there's a lot of information left out.

He has a revenue sharing agreement with the original creator of A Dark Room, which I think is 50%. Self-employment taxes plus regular taxes will be somewhere around 35%. Apple takes 30%. So, ($800k * (100 - 30)%) * 50% * (100 - 35)% is $182k. So not bad, but it's only $60k/yr for three years.

I really feel like Apple's 30% tax is not optimal and a lower % would actually stimulate more development for them

I'm sure Apple made a complex assessment to determine 30% as 'optimal'. The problem here is the oversupply of apps and the undersupply of paying customers - Apple has a duty to it's shareholders to skim that market as much as possible.

While it might appear unfair for Apple to take such a large cut of 'your' money, Apple looks at this the other way around: you cost them quite a lot of the money their customers are willing to spend on apps.

"I'm sure Apple made a complex assessment to determine 30% as 'optimal'."

Given that they've never actually run any large scale tests of the effect of different rates, it's probably safer to say this is a number that just 'feels right' - it doesn't look 'too greedy' up front, but isn't too low that shareholders might think they're leaving money on the table.

Dropping it to 22 or 25% for a couple of years would give some real numbers as to what the true impact would be. Even if the numbers were studied years ago, the current behaviour and ecosystem would be different.

As an apple shareholder, I would prefer that they explore other rates and then demonstrate that this is the best one.

The game theoretic problem is that they cannot explore other rates without giving away the fact. The 30% suddenly looks a lot less set in stone (and less initially justified), and cue incessant deluge of pushback.

> "and cue incessant deluge of pushback."

But really, where else are people going to go?

I don't think quantity, or rather the lack thereof, is the problem with any app store.

I give you my Armchair Expert of the Year Award. Congrats :-)

Must be nice to live in a world without having to give Apple 30%, insurance premiums, taxes, and royalties/partnership splits.

Take this comment in good spirit. We all make mistakes. Nothing but love for you. Go build awesome things. Hire a CPA for all the math related stuff.

I see this every day, people take the gross income number to the bank. In software world, the operational costs are less compared to other domains, but there are still costs and taxes.

Apple taking 30% cut is insane.

YESSS.. By itself it's just business right? The price of doing business. Don't like it? Go somewhere else. But that somewhere else is Android and Google ALSO charges 30%? Hmmm..

This duopoly situation isn't really good developers. Apple taking 30% cut and tossing it on their pile of 250b in cash; that's a depressing image.

It's interesting because Android is decidedly not locked in to Google's Play Store, yet it's entirely dominant in the Android app market regardless. Amazon's App Store is still kicking and side-loading is easy enough, but seems like very few users take advantage.

So don’t sell in the App Store. Set up all that distribution, collect correct sales taxes for every country in the world, accept payment from anywhere — deal with a potentially high rate of chargebacks and the fees associated with that, also create a search and discover platform so that people can find your game nobody ever heard of until they visited the App Store. Also, do it in nearly every language on the planet, accepting almost every currency. Also handle actually hosting your content and securing downloads to boot authorized devices.

I’m not sure 30% is expensive enough compared to doing all of that yourself.

Dark Room would not have sold $800,000 anywhere else. The author even said Google Play was an order of magnitude less than Apple.. so is an order of magnitude worth 30%? It seems like a lot of people would trip over a dollar to save a nickel.

You're right; my post was a mistake. I regret that I didn't read the article too carefully before posting. Alarmingly, instead of getting ignored or downvoted, I got a bunch of upvotes. What gives?

He also said he has 10 years of emergency funds saved. IOW, he's saving and not touching the retirement. Good for him!

He says he has a decade worth of emergency funds saved up.

4% withdrawal rate is a conservative figure often used to live “forever” from a portfolio (use 3% if you want to be more conservative, 5-6% for more risk friendly).

To get $30k a year, that’s a starting portfolio of $750k. [0]

If you’re making $140k a year and living frugally, you can amass $750k in less than 10 years, perhaps even 5-7 if you are really frugal + lucky with the market.

It’s within reach of most software engineers, to be honest - but of course many people prefer the regular ski trips, new Tesla every few years, and so on. But if your dream is to work on your own stuff free of bosses/corporate politics/etc, it might be worth doing.

$30k a year won’t be much of a living in the Bay Area or New York, but for a single dependent person it’s quite alright; and in many mid sized European cities with socialized healthcare/university/etc, it’ll even let you raise a kid or two without having to sacrifice much.

[0]: http://www.firecalc.com/ gives us an 80% chance of success for a $750k portfolio on $30k withdrawal a year over 50 years.

If you’re new to this and want to delve further, check out https://www.reddit.com/r/financialindependence/

The problem with your assumption is you're "living frugally" not for the ten years to make your portfolio withdrawal rate, you're doing it _for the rest of your life_.

You live on $30K / year (in the Bay Area/NY, where you're most likely to find a starting / junior / midrange position that offers $140K - remembering that needs to be liquid)...

and after your ten years of "living frugally" (and let's be clear, it's gonna be frugal with $2500/month rent for a 1br 600 sqft apartment eating up well, 100% of your after-savings income, so you're going to be rooming with someone)...

That's what you've got for the rest of your life. Your $750K nest egg will give you an 80% chance of being able to supply $30K/year. Sure, now you can use it to work on your own stuff, but until (and unless) that catches on...

You can always still work (job, contract, consulting, etc) even if you're "soft retired." It's just that you have a lot more freedom in the selection, and you can pursue things that carry more personal fulfillment than MegaCorp job with lots of responsibilities.

As for living frugally: Don't live _in_ SF. For a short BART or Caltrain ride, you can live in a $1500/mo. apartment that is beautiful.

Where? Apartment in Oakland or Berkeley aren't that cheap. You'll have to spend at least $2500 for a decent studio/1BR.

Fremont. $3k for 2bdrm split 2-ways

>[0]: http://www.firecalc.com/ gives us an 80% chance of success for a $750k portfolio on $30k withdrawal a year over 50 years.

Which will be good 4 out of 5 times.

This is using all available 50 years "stretches" since 1871.

If you try limiting the "since" to 1960 the success rate goes to 25%.

Still since 1960, 40 years are 44%, 30 years are roughly on par at 79%.

And while sticking at the shorter 30 years, if you start from 1970 the percentage of success increases at 94.4%, if you start from 1980 you finally get 100%.

If you start from 1970 with 40 years period, you are at 75%, more or less the same.

Now what happens if - still starting from 1970 - you increase the period?

41 - 71.4%

42 - 66.7%

43 - 40.0%

44 - 25.0%

45 - 33.3%

46 - 50.0%

47 - 0.00%

And the troubling issue with the last one is that in the two cycles available you hit 0 US$ respectively after 25 and 40 years.

Not to put anyone down, but even the 3% is not that much safe when you go over such lengthy stretches, still as an example drawing 22,500 US$ out of the 750,000 portfolio, which gives a 100% rate of success limiting since 1960 gives 8 cycles, of which one is not a problem as it ends ove 20 millons, but the other 7 (or 87.50%) are IMHO too close to 0 to be reassuring.

To be fair, I think the parent poster is not suggesting that you retire outright with $750k in the bank, but work independently "free of bosses". Hopefully in several decades of self-employment, you would be able to generate some meaningful supplemental income during that time.

>To be fair, I think the parent poster is not suggesting that you retire outright with $750k in the bank, but work independently "free of bosses".

Honestly I don't know what he is suggesting or not suggesting, but the reference to the Reddit group makes me think that he actually suggests about becoming "financially independent".

My note was however only about not taking the 4% and firecalc calculator (BTW very good) as an oracle.

More a reference to:

https://www.goodreads.com/quotes/292417-every-morning-in-afr...

than anything else.

Much harder to make $140k in Europe, but I perfectly agree with the rest of your points. The opportunities you have for financial freedom as a software engineer in the US are absolutely amazing.

In the US your health insurance and rent alone will likely be over $30K. I have no idea how one can live on $15K, unless it's some really unpleasant place or an RV. And if you have any health issues, you're done.

The unspoken secret is own your home. Life is a lot easier when there is no rent.

True, but then you need more than the $750k to buy a house outright AND retire. And you certainly can't buy in the areas where you were earning that $140k. Owning outright makes things easier but there's always property taxes to pay, along with maintenance and upkeep.

With $500k, you could put 25% down on a 50 unit apartment complex, clear $12500 per month profit — tax free due to building depreciation — and that’s after the rest of the collected rent pays for property management, property taxes, a repair budget and the debt service — all while building equity in the building that you can then leverage to buy another property. With $500k cash you can turn that into real wealth rather than hoping for S&P rates of return. Cash on cash return for multifamily buildings puts the stocks and bonds investments to shame and other than finding the deals, it is pretty hands-off in terms of day to day work.

Where do you find a 50 unit complex that only costs $2 million?

He mentions in the course of the article putting a big down payment on a house after his big hit because his girlfriend/wife got tired of living in a small apartment, so he still has mortgage payments to make, plus his family didn't want to live frugally forever.

He did apparently have a girlfriend during his sabbatical, whom he supported.

I suspect most of those budgets were aspirational as well, and he ended up spending 10k more for each of them.

Those numbers are ridiculous. I saved up about $100k in 3 years at a tech job and I haven't worked in the last two years on that, no problem (living in a not-inexpensive US city with a car, also).

It isn't that you cannot live for 10 years off a large chunk of change... it is that you don't know what will happen during those 10 years. If you are fully stocked up on health, disability, life, and home insurance, you are probably OK. But most people I know who are taking time off are not fully insured for all possible scenarios, with backup plans in place. So instead, they hoard their savings.

His actual income (after Apple and paying the original game creator) was $276k - which replenished the savings he had cashed-out for development time and then gave him several more years of development on sequels/prequels.

Apple only report to you the remaining 70%, so the 800k is after the 30% is deducted.

Edit: It seems the $800k includes Apple's cut. As an app developer myself, even considering that amount is torturing yourself. Apple _only_ report the remaining 70%, especially when you consider promo codes, refunds, etc... - doing a crude sales*price is somewhat inaccurate.

(Fun fact: I'm an Australian developer. Of the amount I get paid, I also need to deduct sales tax for any sales I make to Australian consumers. For a 99c app, I would make 63c for Australian sales and 70c for other countries).

What do you do with 100k of savings? What's next?

Spend it on rent. Work again when it's dwindling.

Keep saving. You probably plan on living to an old age?

The other thing is it doesn’t seem like he’s generated that much wealth. If you’re taking half a million out of savings, working for a year to maybe double it (at long odds, 10-1 or 1000-1 as the article suggests), isn’t a trip to Vegas a viable alternative?

Could be that the $100k is pretax and the $30k spending is post-tax.

That'd roughly halve the amount going into savings, if tax is a third, he's spending a third, and he's saving a third.

Of course, he'd still have savings of $220k+

lol, I did a year off with 10k.

Nice! Where did you go/what was your living style like?

I've done something similar, though still working full time: went to rural Japan to teach English for about $30k per year (and subsidised housing -- it ended up costing me about $150 per month). I had lots of free time after work to write software and since teaching and programming are completely different things to do, I had a fair amount of energy left over. My work day officially ended at 4:30 and usually I stayed until 7-7:30 at my desk programming.

I was quite happy living in rural Japan doing my own thing and spent less than $10K per year, which meant that after taxes, health insurance, pension, etc I saved more than $10K per year.

I did that for 5 years, then I got married and I'm back in the programming business ;-). But anyway, the point really is that you don't actually have to take time off from "work". Find a cheap and wonderful place to live in the country side and a 9-5 job that will pay the bills, but leave your mind free. Then replace TV, video games, socialising, etc with programming in your free time. Even with limited time, because of the complete lack of politics, it's amazing how much you can actually do.

How old were you when you made that jump? How much dev experience did you have? Which countries are best for that these days?

I was very nearly 40 (40 is the age limit for the JET Programme, in which I participated, and I just barely squeaked through). I actually had to apply for the position a full year before selection, so it was something I thought about pretty thoroughly. (What follows is a bit of an autobiography -- sorry if it is boring, but I wonder if it might be helpful if you are going through some of the same things I did).

Dev experience is hard for me to measure :-) I worked at the university where I went to school. I also love to work and hate to study (err... "study" meaning attending classes or doing assigned homework -- for some reason I hate that and love independent study). So basically, I worked full time through school and squeaked through academically with a so-so mark ;-) Somewhat related, I even started a company at school with a few friends to write a game, but that got canned when the "business guy" embezzled all the money (great lesson, BTW).

Also, "sabbaticals" are not a stranger to me. In the late 90's I quit my job and spent 8 months writing free software. At that time I guess I had around 10 years of experience, depending on how you count. I had just suffered from working in a really messed up group and was questioning if I really wanted to be a programmer. Because I'm naturally frugal, I had saved up a fair amount of money by that point. My actual thought was, "I know I will need this money when I retire, but I think it will be better spent now." (In retrospect -- best thing I could have done).

To be honest, it was a crazy time. I would wake up at 6:00 am, go have a shower, have an idea while I was showering and literally run to my computer. Then I would program until it got dark. This is when I realised that I loved being a programmer and that I would do it as long as my body/brain could handle it. (Funny, but true story -- when I moved out of my apartment an older woman said, "Oh, are you the nice young gentleman who used to program in his front window all day? It's a pity you are leaving." Only then did I truly reflect that half the time I was programming, I was naked, having neglected to get dressed in my excitement to get back to the computer!)

At the same time I was doing this, I read a lot of daoist philosophy... Well... that's not really true. I spent a lot of time reading a little bit of daoist philosophy -- because it's incredibly dense (if you are interested, save time and just read translations with annotations by Richard Wilhelm -- He was German, but English translations of his translations exist. I wasted a lot of time reading extremely poor translations by people who didn't understand what they were translating). Later I wrote this: http://mikekchar.github.io/portfolio//UsefulAndBeneficial I still think it's the best thing I ever wrote (probably because I didn't really write it -- just pieced together other stories ;-) )

Armed with a better understanding of myself, I got another job and was very successful. After about 5 years, that job disappeared (the company was bought out and our division, being a kind of experimental division, was disbanded). I took the opportunity to take another 8 months "off". This time, it was less of a reactionary, "I need to find myself" affair and more of a deliberate, "I'm not going to get a job right away because I want to invest this time doing self study". Again, I wrote a lot of free software, but actually I was experimenting mostly with techniques around legacy software (refactoring, planning, prioritisation, etc).

I actually put all of my work on a business card sized CD-ROM and would occasionally hand it out to people who were interested in what I was doing. This actually landed my next job in a tiny start up. The founder had looked through my planning and prioritisation work and thought, "This is what we need!"

I really enjoyed working there, but the angel investor who bankrolled the company had similar qualities to the person who embezzled all the money in my game company. His interference cost the start up pretty badly and I saw the writing on the wall. After a few years I moved to another start up, but this time with an awesome management/investor team. I stayed there for a few years as well.

I was quite successful at this point. I had a good reputation in Ottawa, where I had mostly worked. I had a much bigger house than I needed. I had a good job, working with people that I liked. I had developed a way of working that was both successful and fulfilling for me. But... I've never been one to enjoy success, unfortunately. I always procrastinate because I hate finishing things. To accomplish something is to have it taken away from me -- I love to work on interesting problems.

So I moved to Japan. My initial idea was to go for 1 year to try to learn Japanese and to improve my mentoring skills. I had virtually no interest in Japan, and only picked it because: The JET Programme seemed like a comfortable way to do this kind of thing (and it is -- highly recommend it if you qualify: http://jetprogramme.org/en/), and also because I had randomly been practicing karate at the time.

After 3 months in Japan, I sold my house in Canada and incredibly reluctantly allowed my friend, who had been looking after my dogs, to adopt them (still sad about that, but also think it was the correct thing to do).

I think the most interesting discovery for me was: I don't have to be a professional programmer to be a programmer. In RMS's Free Software Manifesto, he spends considerable space devoted to the concept that not everybody needs to be a professional programmer. In the past I always read that section with considerable scepticism. But, at least for me, he was absolutely correct.

I loved teaching -- especially in a Japanese high school. I loved being with the students: chatting with them, helping them, joking with them, listening to them. It was at that point that I realised that jobs all have good and bad points and for a person who likes working (like me) there are probably hundreds of jobs that I will enjoy. Even though I love programming, I can do that whenever I want -- and on my own terms! That is the wisdom in the Free Software Manifesto. Whether or not you agree with the concept of software freedom -- as a programmer, you have a choice and you are free to take that choice. Do not overlook this!

I'd love to spout on more about that, but I'm sure I'm near the limit of the message size (not to mention your patience). I think Japan is still the best place to go to teach English comfortably. The other major place you can go is South Korea. I would say, try to find organisations that can place you in the school system (either public or private) because some of the "language schools" can be fly by night affairs. But it really depends on your tolerance for crappy situations -- some people are pretty good at rolling with the punches.

Also, even without leaving whichever country you are in, consider the idea of moving to the poorest, cheapest place that still has internet, renting an apartment for a year and doing whatever regular job you can find. You can probably do it for no more than $15K even if you don't get a job. When coming back to the industry, though, it helps a lot to be able to show what you've been doing during your sabbatical, so make sure to program every day :-)

Hope that helps!

To the library. Lived in a shared flat. lol

So basically you just studied/worked on projects for a year, lived very cheaply in a shared flat, cooked your own food? Worth it do you think?

For that kind of money, I would rather go to a different country as well. Like Thailand. Find a nice place in a city with a co-working space. If you'd be ok eating asian food, life can be very cheap (1,5 USD a meal depending on where you buy the food). A nice apartment + gym + swimming pool can be rented pretty cheap as well, maybe starting around 300 USD a month and more expensive depending on the size of the apartment.

I'm not the traveling kind of guy. Also I have many close people here where I live.

Pretty much, yes.

Gave me new perspectives on life. Went into self-employment after that year. Also I invested much time in my peronal life, stopped doing monogamy and had much time for my two partners.