
Derek Sivers and the Art of Enough - Bcahill82
https://brendancahill.io/brensblog/dereksivers
======
tkiley
Derek's writing influenced me quite a bit in the early 2000s. I bootstrapped a
software business from zero to near $10m in annualized revenue, and sold it
almost half a decade ago. I contributed 100% of my equity into a charitable
remainder trust because I learned about that idea from his website.

Since then, I've done a lot of "puttering". I'm teaching myself jazz guitar,
and I'm currently enrolled in law school. I have basically unlimited time to
read whatever interests me. If I could go back five years and give myself some
advice, I would say that "enough" is not durably satisfying. Purpose is
durably satisfying. Purpose arises from constraints. Having "enough" means you
lack a particular type of constraint. Thus, enough" can get in the way of
developing purpose, particularly if you are somewhat undisciplined like me.

(Also, I would abolish charitable remainder trusts from the tax code. I
created one for lifestyle reasons not tax reasons, but after experiencing the
tax consequences firsthand, I think they are profoundly unfair.)

~~~
skrebbel
Wow cool! For those of us who don't regularly create charitable remainder
trusts, what are the tax consequences and why are they unfair?

~~~
tkiley
I had a bunch of equity in a startup that had a cost basis of, essentially,
$0. Under normal circumstances, I would have sold this for $millions, and
would have paid nearly 20% in capital gains taxes immediately.

Instead, I contributed my equity to a CRUT. I paid zero capital gains taxes at
that moment, and the CRUT pays zero capital gains taxes ever. Also, because a
contribution to the trust is a contribution in part to charity (with
proportions calculated according to actuarial figures of my life expectancy),
I got a charitable tax deduction of many million dollars which I was able to
carry forward for many years.

Each year I owe taxes on the 5% which the CRUT distributes to me every year,
but since this is capital gains income, it is taxed at a very low rate --
which is effectively reduced even further because it is offset by the
charitable deduction which I have been able to carry forward.

The net effect is that I'm paying capital gains taxes in a tiny trickle over
the remainder of my lifetime, and I also got a giant charitable deduction to
offset those capital gains taxes. When I die, the principal in the trust goes
to charity. The IRS will never get the kind of bite at this equity that I
would intuitively expect it to get.

I don't understand how this capital gains tax loophole could be beneficial to
society. I think it should be removed from the tax code.

Another side effect of the CRUT I hadn't anticipated: Occasionally, I note the
intrusive thought that my continued life is the one and only barrier which is
keeping a decent amount of capital from serving charitable purposes right now.
That's honestly pretty depressing sometimes.

~~~
DennisP
Whether that's bad depends on how you feel about the way your government
spends tax money. Because you used a CRUT, the money that doesn't support you
will go to some worthy charity, instead of funding a series of wars, pervasive
surveillance, and cages for kids.

Of course the government also does many worthwhile things, but your extra
money will be spent entirely on worthwhile things, and not at all on horrific
ones.

~~~
rapind
The problem with this thinking is that only those privileged enough to take
advantage of it get to pick how their tax money is spent.

I disagree with (even despise) some of the ways government spends our money,
but should I get to choose like some special snowflake while most don't have
the same opportunity?

This just enforces a rigged economy... and guess what? Many of the privileged
few would support government programs the rest of the so called democracy
wouldn't.

Your tacit assumption is that wealthy individuals who can take advantage of
bullshit tax favoritism will spend that extra money in worthwhile (subjective)
ways.

~~~
DennisP
I would certainly prefer a government that doesn't spend money on horrific
things at all. It'd be great if I could pay my taxes without feeling dirty.
I'm hopeful that maybe, with a lot of hard work and creativity, we'll manage
to fix our democracy.

But in the meantime, I don't think there's anything morally wrong about
legally reducing taxes and sending the money to charity instead. I'd even
argue that, since privilege is an issue, we should expand this opportunity
beyond the privileged few.

~~~
rapind
I'm criticising the system more than the individual. That being said, I've
noticed that people will rail against big brother and _all these rules_ and
yet turn around and take advantage of any flaw in the system because they can
(everyone else is doing it!). Proving that we need hyper-specific and
cumbersome rules because no one is capable of policing themselves.

------
sivers
It's weird to come to my favorite forum, and see my name in the title of a
post.

It's weirder to read comments claiming to know about my personal life and
motivations, though they're all wrong. (Both the good and the bad.)

The public me is not me -
[https://sivers.org/publicu](https://sivers.org/publicu) \- so I don't feel a
great need to correct the errors here.

But thanks (tw04, lukego, marcinzm, s_a_p) for the reminder that anything I do
can be spun negative.

~~~
jraby3
There are so few famous people online that have been so giving with their
time, willing to reply to every email.

I think your (public) actions speak volumes about who you are.

Your writing (and also whenever you’re interviewed on a podcast) has had a
huge positive impact on me. I appreciate it and you (or at least the public
persona of you).

------
chrisblackwell
Does anyone else find it frustrating when people talk about not working too
hard and already having enough, after they have become wealthy?

~~~
pritovido
Derek did not became wealthy. He gave the $22 million dollars he got from
selling his company to a fund, and gets over $1000 each month, hardly
"wealthy".

Derek has worked in a circus and knows how to live cheap enough. He also has
lots of friends so he does not need to pay for lots of things.

I know people that earn in excess $10.000/month and spend it all or even get
into debts.

~~~
marcinzm
Wikipedia disagrees:

>Derek Sivers transferred ownership of his company to a charitable remainder
unitrust for music education, and had the trust sell it to Disc Makers. This
agreement requires the trust to pay Sivers 5% of the trust's value annually
(hypothetically $1,100,000 pretax, based on a sale price of $22 million as
reported by Sivers)[4] until death, while upon death the remainder will
ultimately go to charity.

So he actually earns around $90k per month. The foundation was also probably a
tax dodge more than some altruistic thing.

~~~
lukego
He also acquired a second nationality, renounced US citizenship, and moved to
a country that doesn't tax foreign sourced passive income. It's the most
extreme example I've seen of planning your whole life around tax optimization.

Understandable though if you've read his book because he's had big problems
with the IRS in the past and probably really wanted to show them his "FU
money."

~~~
sjg007
I was under the impression that the US does not allow you to revoke your
citizenship purely for tax reasons.

~~~
freddie_mercury
It doesn't but all that means is the form for renouncing has a checkbox asking
"are you doing this for tax reasons"? And you check "no". Then during the
consular interview you spew some line about how you no longer have attachments
to the US -- "I haven't been back in over 3 years, own no property, let my
driver's license expire" and you do have attachments in your new country "All
my friends are here and I even spend Christmas here!"

It is more of a retroactive "if we find out later you lied we now have a legal
basis to add extra penalties" but in practice nobody is really checking or
cares. The underfunded IRS doesn't care about the tiny number renouncing and
the consular officials doing the interview certainly don't care.

------
S_A_P
Derek and his writing used to be a frequent top page link on HN. When I first
started reading them I found them inspirational. As I read more of his writing
I got the impression that most of the things he did were presented in the
light of “I’m just a simple person that doesn’t need a lot” type of
minimalism. However if you look at his “charity” he seems to have just figured
out a way to avoid taxation and keep most if not all of his CD Baby exit.
Additionally despite using what was the .com boom environment of the late 90s
and early 2000s to generate his wealth I believe he has renounced his US
citizenship and lives abroad now. I don’t care that he did that really, it
just seems that his public persona is a bit of an act and hides a bit of
entitlement/petulance.

~~~
johnwheeler
“I don’t need a lot” isn’t mutually exclusive with “I don’t want to pay a lot
in taxes”. Besides that, he lives in New Zealand where everything costs twice
as much. Sounds like your crediting his success solely on being at the right
place at the right time. I got news for you - that’s pretty much all success
or a component of it. Not to mention, he did build a sustainable business that
gave independent artists an outlet to distribute their music. I’d say the guy
is a saint.

~~~
ashconnor
When I emailed him in March he said that he left Singapore for England because
he wanted his son to grow up near nature.

------
war1025
I remember when I was in college trying to figure out what to shoot for in
life, I had the realization that if you shoot for "more" it's a goal you'll
never reach. There is no end to it.

But if you shoot for "enough", there is a very definite point between "more
than enough" and "not enough".

It's a nice goal to shoot for. When you are above "enough", it means you can
relax and enjoy life.

~~~
bob33212
But then you have to answer the question of what makes you happy. For some
people buying an ocean front house and fishing or playing golf all day is the
answer. But for the successful entrepreneur type that isn't "enough" usually

~~~
war1025
> But then you have to answer the question of what makes you happy.

Self-introspection and awareness are helpful basically always, in my opinion.

If you don't know what you want, you'll never be satisfied.

------
mcaswell
That #10.5 point really resonates with me. Especially now with all of this
isolation, it’s become very apparent that almost all communication on the
internet is the screaming from inside the car type instead of the real human
connection type. I made [https://otherrs.com/](https://otherrs.com/) as an
experiment to see if I could drum up more of that second type

------
simonebrunozzi
> now living in New Zealand

Derek does not live in New Zealand anymore. He moved to England some time ago
(perhaps 1 or 1.5 years ago?)

~~~
loktarogar
According to his website he moved back to New Zealand this year.

~~~
simonebrunozzi
Ouch, missed it. My bad.

------
pricci
Just listened to this episode in [The Knowledge Project with Shane Parrish]
podcast.

#88 Derek Sivers: Innovation Versus Imitation

------
tradewarsonlyn
Like anything else in life this piece has good parts and not-so-awesome parts.

My opinion: take the good and forget the rest.

If I can draw the line on what is enough for me, I can lead a life that is
happier and free of divisive depression that comes from comparing myself to
others.

------
tw04
"I became rich when I earned more than I spent" are words spoken by a rich man
with 0 self awareness. I can tell you the second my life became infinitely
less stressful: when I paid off my student loans.

I too spent almost no money, went on almost no trips, and lived way, way below
my means to make it happen in my 20s. It turns out as my income has increased
my happiness has increased - and I'd agree with all the studies of once you
cross a certain threshold in the 6-figure range that more money means "less".
Generally it just means: I have nicer versions of the same things.

All that is to say: I sure as hell wasn't "rich" when I was making more than I
owed each month, not even close. And I don't believe for a SECOND Derek would
be happy going back to living in a flat with 3 other people, eating peanut
butter sandwiches 3 days a week but "making more than he spends", which is
what he implies.

Derek: there are people out there who are in their 50s who would still have to
live with 3 other people and eat peanut butter sandwiches 5 days a week to
earn more than they spend. THAT'S THE POINT. Maybe if I make $90k/month some
day I'll also be blind to the reality of the common man, but I can still see
it from this little perch I'm sitting on at the bottom of the mountain.

~~~
johnpaulkiser
I think it is noble to preach being rich in the moment. I think for Derek
quitting his job in his 20s to play music full time was for sure a mark of
affluence in his social circle at the time.

