I feel that they missed out more on the rocketship journey of being on a startup. And even then that's not everyone's cup of tea.
The "money doesn't make you happy" camp compares $70,000/year and $200,000/year; not $200,000/year and "I have enough money to never work again if I don't feel like it."
If you can put 1-2.5M dollars into investments you can pull safe returns of enough to live on indefinitely and never need to work again.
Making >$200k a year and being frugal it is not that hard to put together 1-2.5 million dollars in capital.
At 10 years of 250k with a 40% tax rate and 30k in annual expenses with 7% average returns, you pull down about 70k in capital gains at 5% returns in year 10 (so you can keep 2% extra nominal in to keep up with the fed's inflation target and maintain that purchasing power forever). $70k is less than you made, but is more than enough to live on without working for the rest of your life.
> being frugal ... 30k in annual expenses
Requires budgeting and is a bit of a standard of living lower than most people would prefer. Especially if they got kids.
Plus how you going to live in SV on $30,000 a year when rent alone is that much?
> 7% average returns
So requiring those 10 years are during a bull market.
There's a big difference between "work at a startup for a good salary living an average life for 10 years" and "live in a shoebox with 10 other guys, eat nothing but lentils and beans, and own no possessions for 10 years"
> So requiring those 10 years are during a bull market.
If your bull market includes the 2008 crash, then yes.
"The last decade provided an average return of 6.88% in the stock market. The lower return takes into account the tremendous loss the market took in 2008." https://www.creditdonkey.com/average-stock-market-return.htm... (question 2)
The main differentiator between rich people and others is the fact that rich people don't have to work. This is the biggest freedom. I figured out that I don't need to be rich to do that. I still work, but I mainly do this because I want to. I say no to things that I don't like and I've never been employed (I'm an employer myself).
I wouldn't trade this freedom for 10-20k/month (which I could achieve, but I would have to work my a* off). Deciding what to do with your time is the ultimate freedom.
edit: I worked like this in the past (making good money and having lots of stress), but nowadays I don't see the point anymore. Even if you like your work, wouldn't you prefer to work on your own visions and on your own terms?
Background of this question: Also form Europe (Austria), an EE engineer but modestly paid and overworked. I figure I should pivot to a passive income source as even switching jobs won't imporve my quality of life since companies are overly stingy on paying competitive salaries and most try ot burn you out in the long run as they try to be more competitive and government will tax the hell out of you the more you earn so I figure why bother, my healh is worth more than that.
1. Know your numbers: How much do you need to live? How much do you spend each month? How much money can you save up in your job every year?
2. Save up. Live extremely cheap and save every penny. You need enough money to live for ~9-12 months without any income, e.g. if you need 1200€ you need to save minimum €14k - no holidays and expensive stuff until you've reached your number. This is your lifeline money.
3. Save a little more: You need to invest money to make money. You need about €5-10k minimum for investments (buying domain names, themes, content, designs, ...)
4. You have saved up €20-30k? Continue the plan. Otherwise continue to live extremely frugal and increase your income.
5. There are many ways now: build websites, AirBnB, flipping stuff, writing books ... - first, you have to build something. After you've found something that works, you continue to increase the profit margin and automate the process (also utilizing manual labour). You can only do this if you already have some money, this is the reasoning behind step 1 and 2.
- - -
In my calculations, you need to invest roughly €30-40k to make €1-3k/month in completely passive income (I achieved it with 5-10k, but I was lucky). It's definitely achievable in 3-4 years to save this amount of money if you commit to a frugal lifestyle, save up and invest it correctly (I achieved it in some months, but as I said, I was lucky).
I think it's not fair to sell you the idea that it's easy - although my journey was extremely straightforward, I know that most people struggle to even make a dollar online. But I can assure you that you will find a way if you're committed to leave your day job behind.
But please make sure that you have enough savings, I know many people who left their job and after 6 months they ran out of money. You don't want to be the defeated one who wasn't well prepared for this type of lifestyle.
Incidentally, I'm not sure if this statement has any validity outside US. I wonder why that is.
Edit: Found my answers on quora, I’ll let you look yourselves as I don’t want to link to what may be gossip but I had a laugh and a wave of nostalgia for those heady nonsense days
I actually met Larry at a bitcoin event a while back. Seems like a normal guy. Is there some back story I am not aware of?
As for me, it worked out - soon after arriving in NYC, I took a chance at starting a company for myself. Unlike Burbn/Instagram, which I would have liked from a market perspective, I went all-in on an idea and an industry that I truly loved. I managed to raise a little bit of funding, hired a great team, and exited 10x a few years later. Still at the company, now CTO. Love it more and more every day.
Right around the same time I started my company, I also met a beautiful woman who is now my wife. Bonus!
Do I think about what could have been? Sure. But I didn't let it stop me from plowing ahead and moving forward. What happened yesterday or last week or last year only impacts you to the extent that you let it. All you can ever do is believe in yourself and make the best decisions you can with the information available to you.
The chances are low that life is better now, after losing out on a chance to be an early part of Instagram.
That's like saying a homeless person's life may be better than if he had a home. Ya statistically that scenario is possible.
But if you had a choice, do you really want that homeless person to stay homeless and just keep telling him "your life may be better now"? Or do you want that person's life to improve so that he eventually has a home?
Just name one important relationship he formed in NYC. Done. (Or any of the other infinite ways events could have unfolded more favorably in NYC than in a hypothetical SF)
An engineer in America is wealthy, and has lots of opportunity to see and experience new and interesting things. The idea that his life is almost assuredly worse just because he forwent one unlikely opportunity to become wealthy 50x over instead of just 5x over is silly.
Of all the choices he’s made and will make, I doubt that was a very important one.
I don't think the argument is conclusively "Done" after naming one important relationship he formed in NYC.
I can name one important relationship he would have formed if he stayed in SF. A relationship with the founders of Instagram. That relationship is valuable too.
What makes you doubt that this choice is less important than other choices he will make in the future?
You don't need to consider the infinite possibility of events that could have unfolded. You really only have to consider the origin event--if you had the chance to choose again, would you make the same choice.
Homelessness is a financial hardship that actually will ruin your quality of life, which stands in stark contrast to being a homeowner. Whereas making 150k/yr in NYC instead of 2m/yr in SF just means you have plenty of space on hardwood, instead of too much space on marble. The relationship between wealth and quality of life is logarithmic.
That's not the question being asked. Obviously being an early employee at Instagram is better than having an above-average engineering job in NYC, and more money is better than less money.
The question is, do all of the events that unfold throughout the rest of his life after he moves to NYC sum to a better life than the events that would have unfolded if he had taken that job and stayed in SF?
It can't be known, we can only speculate on the probabilities.
If we know for certain that Instagram will be the success that it is, that means NYC and SF present two radically different sets of human relationships and life experiences spanning decades, but in NYC he will make a lot of money and in SF he will make an excessive amount of money.
When I consider the infinite variation and possibility contained within those unforeseeable human relationships and life experiences, and think about the impact those factors have on a person's quality of life, I don't think there's even a comparison to be made between that and the difference between making lots of money and making tons of money. The relationships and life experiences will be the dominating factors in these outcomes. Since they're both unknowable, the relative probabilities of either NYC or SF resulting in a better life lie somewhere close to 50:50, even if we know he would have been successful at Instagram in SF.
I actually do think it was an important choice, just not because of Instagram. He was tired of SF and the contemporary startup scene, and Instagram's success was still very unlikely at that point. Staying would have been a bad decision.
It's egotistical to assume that it being you instead leads to the same result
I mean, what signals lead you to believe one scenario is more likely than the other?
It didn't sound like he was a weak employee in any way--if anything, he sounded like a strong employee because the founder of Instagram wanted to create a full-time role just to keep him, despite not having much money for the startup back then. I would assume the founder of Instagram is a better judge than I am, of who is good to hire.
It's possible that Instagram would have been more successful if he was there to support it back then.
Startups still have "lottery ticket" chances. Better, but still not a guaranteed payoff.
What if instead of IG it was Theranos or Color (or that startup that nobody heard of)?
In the valley you leave the trench and come back to find that all your friends are rich.
No words can alleviate that regret. But if you’re having near misses like this you’re actually really close to something good.
I go to the gym most days and am pretty well disciplined but I still feel this way every so often (I've been ill earlier this week so I'm feeling down, which is probably what bought this on). How does someone get traditional discipline?
I can relate. I cry myself to sleep every night thinking about those bitcoins I didn't mine, back when you could get hundreds on a single GPU overnight.
If he could have sold them at that price without moving the market, that is.
(Also, this is a plot point in Bostrom's "The Fable of the Dragon-Tyrant" - the last people to die will really be mourned, and people will then start asking if, maybe, they could have started working on the problem sooner...)
That’s the only thing and best thing you can ever do in life.
I doubt they would be that much better off...
In 2009, the startup where I was working was hitting the skids, and our investors (correctly) were not willing to back us. We all kept grinding for a month or two in honorable futility, but after a while, my bank account depleted and I had to go.
To make various ends meet and to keep my mental health during the wind down however, I took up some contract work that I found through various friends in the SF startup scene. One company that I really liked and did some small stuff for was Burbn, which was a mobile-only location check-in that was hinged around taking photos of your location.
Missing my friends in NYC (I made a lot of friends in SF, but my inner circle were my college buddies from CMU; I went to tech and they went finance, sigh), I decided to leave SF to head to NYC and get a fresh start.
As I was leaving, I wanted to tie up a few loose ends, so I emailed my contact at Burbn and said I was likely to be unavailable for any more work, but that I liked the project and hoped for the best for him. He responded and said that he was near funding on a small pivot, and that if I was interested, there might be a full-time role available. I declined - I was mentally done with SF and the startup scene (Larry Chiang, 111 Minna, the rise of FB spam-crap like RockYou, etc.) as it was then.
That person was Kevin Systrom; that pivot was Instagram.