

Ask HN: How much money is enough? - anonymousexit

Facing a potential exit and not sure if I should take it.
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mililani
I actually retired at age 40 with less than 700k. My wife and I own a house.
We both moved back to Canada, so we don't worry about health care costs. And,
we really don't spend money on much. I figured our food/living costs comes out
to $1000 a month. We don't have kids or any other big expenses. We're pretty
frugal too. Anyways, it all depends. Some will tell you 7 million. That's
fucking absurd. If that was true, hardly ANYONE in the US would be able to
retire. Others will probably tell you 5 million, which I still find absurd.
Anyways, regardless of what people on here will say, you already sound like
someone who is indecisive. I've noticed that people who are always searching
for their answers from others will never be satisfied by them.

~~~
anonymousexit
Thanks for answering. Out of curiosity, did the 700k include the house?

My company is quite small. It can maintain it and have a relatively stable
income, but I'm not sure if I have the motivation to keep working on it due to
other changes in my life.

~~~
mililani
Sorry for the late response. No, the 700k didn't. However, our house isn't
worth much. We live in a rural part of Canada, and our house here was just
under $70k. It's a pretty nice house too. You can even find cheaper houses, if
you're willing to compromise a bit. It's not that far from Kelowna, which is a
nicer area but over priced. In the States, I've lived in California (SF Bay
Area) and Hawaii. Those places are WAY expensive. I would probably end up
moving to a cheaper part of the country with cheaper housing. But, the health
insurance thing would really worry me. Health care in the U.S. is dauntingly
expensive. I know that private HMO insurance for people over 55 y.o. is over
$10k a year, and that goes higher as one ages. Canada is why my wife and I are
able to retire pretty young.

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31reasons
>Health care in the U.S. is dauntingly expensive.

It has become much better with new laws. For $200/month you can have a decent
health insurance in California.

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sdesol
Probably 7 million after taxes. The first million will buy you a decent house.
The next million will let you buy other materialistic goods and/or give away.
The next 5 million can go into a very safe savings account which will net you
6 figures a year in interest.

With 7 million, you should be set for life with a decent lifestyle.

~~~
stevekemp
I think I once decided I could live happily from £3 million.

To pay off the current house would cost me £50k, then spend half a million to
buy a huge house to live in, along with all the gadgets, furniture, and solid
wood you could need. After that spend 4x100k to buy four more houses.

That leaves £2 million to live off, plus the rental income of five properties,
and a spare 100k to cover emergency repairs, and furnishings for the rental
places.

If I won/earned/received £2 million I would probably need to keep working,
unless investments did exceptionally well, but £3 would be sufficient for
myself and partner.

~~~
sdesol
The thing with your route is doing the rental business would be too stressful
for me. For me, enough is being able to live off interest. Unless the bank
goes bankrupt, I really don't have anything to worry about.

~~~
stevekemp
Part of the reason for choosing rental-based income is that tenants would give
me "a job".

I'd go insane with nothing to do, so I'd probably find myself working for a
coffee shop or similar anyway, but the idea of the renting is to make sure I
had a token-job, or function. (Hell with five properties and low fees I could
probably become a management company..)

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mswen
What is the future potential of the business?

Do you personally have what it takes to lead it to that potential?

Are you a starter, who gets bored after the technically hard parts are solved?

Would the proceeds, if invested in a combination of bonds and dividend bearing
stocks, provide an annual income that you could live on in a modest manner for
the rest of your life? By this I don't mean SF, NY or London but a nice
location with a more modest cost of living.

If you are getting bored and the exit would provide you a base salary for the
rest of your life so that you could explore other new ventures ... I would
take the exit.

In the end no one but you can really decide but these are some of the
questions I would ask myself.

~~~
anonymousexit
I don't have the potential to turn it into a tremendously lucrative company
without sacrificing some of the principles that are important to me: non-
recurring billing, a non-aggressive sales channel, etc.

I'm not sure if selling is in itself a violation of those principles since the
buyer would likely want to be more aggressive, which is why I am not sure
about the prospects of a sale. That said, I have also been in the industry for
about 7 years and am frankly getting tired of it, so I'm curious how people
view numbers. Based on a revenue multiplier, the sale price would be high
6-figures, low 7-figures max. So not exactly move-to-Antigua, but certainly a
break from struggling to pay rent while getting the company going.

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hansy
When related to happiness, some have said (annually) $75,000:
[http://www.forbes.com/sites/robertglatter/2012/07/27/how-
muc...](http://www.forbes.com/sites/robertglatter/2012/07/27/how-much-money-
do-you-need-to-be-happy-2/)

Others claim $161,0000:
[http://www.cnbc.com/id/50027184](http://www.cnbc.com/id/50027184)

There was a good study about diminishing marginal utility of wealth I read a
while back. I'll see if I can find and post it. Don't quote me on this, but I
think $5M was a good number.

~~~
jayhuang
Yea, I believe the most common number was $70k/$75k per year depending on the
report. After that, it's mostly diminishing returns.

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memracom
Don't forget to factor your age into the equation. The more years you have
left to invest and/or earn more, the less you really need. And don't forget to
think about your skill with money too. The younger you are, the longer time
you will have to avoid wasting away your fortune. If you are smart with money
then you will need less than someone who is not.

~~~
anonymousexit
thanks

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fananta
It's always just one more dollar. I think you have to consider the opportunity
costs involved with the exit versus the potential financial upside. The right
number is the amount for which you are comfortable to part with your current
business.

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joshmlewis
When you first started the company, was your goal to be an exit or to keep
running the company? If it was an exit, and this chance will give you enough
money to live on a comfortable salary for 10 years, I would take it.

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AlleyTrotter
When the only thing the 'company' has to offer you is:

A corner office with two windows

A private toilet/shower

A wet bar

A kitchenette

Because you already have all the money.

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arisAlexis
you should think about life extension and plan things not for the common 100
but much longer if you are thinking of not working again.

in a general sense, id like to have as much money as needed to travel every
month for two weeks to some nice destination without super luxury

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onedev
Are you in the business of disappearing photos by any chance?

~~~
anonymousexit
No, nothing that lucrative I'm sure. :)

