
What To Do With Your Millions - abstractbill
http://paulbuchheit.blogspot.com/2010/05/what-to-do-with-your-millions.html
======
pwhelan
I've been pretty disappointed that I haven't heard people mention charitable
donations as something to do once you've hit it big. That we have talents and
opportunities makes us pretty damn lucky and helping out the unfortunate --
not just the less fortunate -- shouldn't be ignored.

~~~
paul
That's a pretty difficult topic of its own. Philanthropy is like investing,
except much more difficult. The good news is, like investing, you have time to
think and learn.

Philip Greenspun has some interesting thoughts:
<http://philip.greenspun.com/non-profit/> and
<http://philip.greenspun.com/materialism/early-retirement/>

~~~
mattm
Plus, it is very difficult to tell if charitable giving is actually helping or
if it is only helping people to rely on you.

~~~
iamelgringo
Wow. I couldn't disagree more.

I grew up the child of missionaries in Central America in the 70's and 80's.
My parents ran a school for Hondurans during a time when 1 out of 100 kids
graduated from High School. Half the students paid tuition and half were
scholarship students.

In 1997, my parents went back to Honduras to help with the disaster relief
after a hurricane destroyed much of the Honduran infrastructure.

And over the course of 6 months they were there, they had dozens and dozens of
former students find them after hearing that they were in the country, and
they stopped by to say "thank you". Those former students were now Doctors,
Lawyers, Teachers, Company owners etc...

So, I'd disagree rather heartily with the idea that charity increases
dependency.

~~~
adammichaelc
While your point about the help your family gave and the long term impact they
made is totally valid, you are missing the point I think. The incorrect
assumption you're making is that charitable donation == starting a school and
teaching self-sufficiency.

I think that the good kind of charitable giving is exactly what your parents
did, going and teaching a valuable skill that others can use to help
themselves. I guess it foes back to the "education is the key" mantra that so
many people tout, but it's true.

So while I disagree with your post and I believe that many, if not most, of
charitable donations are poorly spent, siphoned off by bureaucracy, or
otherwise wasted, teaching people skills is a type of charity that I would
support.

Though the model you post about sounds like it was actually quasi-charity, as
students had to pay for the classes. This I believe is the best of both
worlds, as it allows do-gooders (your parents and other donors who supported
the program) to do good, but it also requires sacrifice from the student and
their families, which builds character and makes it more likely that the gift
will be recognized for what it is and appreciated - and that the person will
go and do likewise for others.

From my iPhone - excuse typos etc

~~~
iamelgringo
_I disagree with your post and I believe that many, if not most, of charitable
donations are poorly spent_

Really? I'd be interested to hear why you think that. Are you speaking from
personal experience? Have you been involved with different charities and been
dismayed or shocked when you looked at how poorly run or wasteful they were?

I gave just one example of what my parents did. But, I was surrounded by
people that worked for Christian missionary agencies, and non-religious
organizations overseas while growing up. They all did a wide variety of things
from straight religious work, education, running hospitals, building houses,
schools, wells, teaching better agricultural techniques, etc...

All of that was funded by donations to the non-profits that they were working
for. If you want to call that other work "quais-charity" I guess that's up to
you. But, I've been involved in the grass roots with many different non-
profit's and that's pretty much what the vast majority of them do.

I can't think of a single organization out of the dozens that I personally
interacted with that simply handed out cash to people.

~~~
Retric
Haiti GDP graph:[http://www.google.com/publicdata?ds=wb-
wdi&met=ny_gdp_mk...](http://www.google.com/publicdata?ds=wb-
wdi&met=ny_gdp_mktp_cd&idim=country:HTI&dl=en&hl=en&q=haiti+GDP+graph)

Haiti population graph: [http://www.google.com/publicdata?ds=wb-
wdi&met=sp_pop_to...](http://www.google.com/publicdata?ds=wb-
wdi&met=sp_pop_totl&idim=country:HTI&dl=en&hl=en&q=haiti+population)

Haiti Unemployment: <http://en.wikipedia.org/wiki/File:Haitiunemployment.GIF>

Haiti aid: (for relative scale of aid) <http://www.devex.com/articles/haiti-
aid-facts>

USA GDP graph: [http://www.google.com/publicdata?ds=wb-
wdi&met=ny_gdp_mk...](http://www.google.com/publicdata?ds=wb-
wdi&met=ny_gdp_mktp_cd&idim=country:HTI&dl=en&hl=en&q=haiti+GDP+graph#met=ny_gdp_mktp_cd&idim=country:HTI:USA)

------
nreece

      Go for a walk in the park. Appreciate the trees.
    

I knew this was coming. You can, and should, do that regardless of whether you
have millions or not.

~~~
Evgeny
Maybe this becomes more important in the case when you have millions.

~~~
nreece
It does. But I think it's even more important on your way to making that first
million. It keeps you sane.

~~~
robrenaud
Has anyone else failed to parse or understand the logical structure of this
thread? This is what I see.

Your parent poster: x > y

You: Yes, but y > x

~~~
reitzensteinm
Almost, but I think nreece was separating out people who are on their way to
their first million, and people who are not. Which makes sense really - it's
stressful building something big.

------
DanielBMarkham
_First, it's important to understand that once you have the basics, happiness
comes primarily from healthy social connections and a sense of purpose._

 _Many people with jobs have a fantasy about all the amazing things they would
do if they didn't need to work. In reality, if they had the drive and
commitment to do actually do those things, they wouldn't let a job get in the
way. Unfortunately, if given a lot of money, they are much more likely to end
up addicted to crack, or even worse_

I used to watch a lot of cable TV (10-20 hours a week) and from time to time I
would hit upon one of those celebrity biographies. As much as they tried to
spin it, suddenly becoming rich and famous usually destroyed people's lives.

Meanwhile, some family friends we know who never made a lot of money retired,
joined an RV traveling community. Every year the same bunch of people take
several months touring the country. It is not very expensive. They are having
the time of their life.

The point is this: Paul's advice is good even without the money. Social
interactions (I would add travel) and a sense of purpose are foundational to
happiness.

Somebody said once that money is a magnifier. It takes whatever character
traits you already have and exaggerates them. I'm not an expert or anything,
and I'd certainly like to be better off than I am, but I'm willing to bet that
giving 5 or 10 million bucks to most people would be about the same in the
long run as shooting them in the head.

~~~
kirse
Happiness, by its very nature and definition, is rooted in _feeling_ pleasure
about the _happenings_ and circumstances of life. It's fickle and never
guaranteed.

Joy and peace (a positive confidence despite the sad or happy circumstances)
comes from having a set of principles one adheres to and complete self
acceptance.

Paul's advice here is utterly incorrect and sounds ridiculous to even read:

 _...if you quit your job and move to a new city where you don't know anyone
or have a clear purpose, there's a good chance that you'll end up depressed or
even suicidal._

Seriously? People should spend less time seeking happiness (a fickle emotion),
and spend more time becoming at peace with themselves, because inner peace
will carry you through no matter the circumstances.

------
dcurtis
With limitless resources, how do you determine what is truly worth your time?

When do you think, "okay, this project is worth a chunk of my life," and then
stick with it?

And then, once you do finally stick with something, something better will come
along eventually. What do you do then? You're not tied to your job like a
normal person, so you can't say, "if only I had the freedom, I would do that
better thing..."

I had never realized how much meaning the "institution" gives to life.

~~~
nostrademons
That applies to anyone with enough savings to sustain a reasonable period of
unemployment and enough skills that a variety of organizations would want to
have you. In the computer field, that should be most decent programmers that
have been out of college for more than 18 months or so.

I don't really understand this idea of being tied to a job. I'm not wealthy,
I'm not financially independent. But if something better comes along, I _do_
have the freedom to go do that instead. It doesn't really take all that much -
a few years living expenses and a few marketable skills give you all the
cushion you need.

And then, of course, you're faced with the "what do I do with my life"
question. But I thought all 20-somethings (well, all middle-class
20-somethings in developed nations) faced that.

------
jl
More words of wisdom from PB! Especially the bit about people still needing a
sense of purpose even though they might not _have_ to work anymore.

------
njl
The letter from Buffet where he outlines how Wall Street has just turned into
a source of friction slowing down "real" industry is gold.

[http://money.cnn.com/2006/03/05/news/newsmakers/buffett_fort...](http://money.cnn.com/2006/03/05/news/newsmakers/buffett_fortune/index.htm)

------
adrianwaj
The original Ask HN post he speaks about is probably a lie anyway. But that
doesn't make it a good conversation starter.

"I'm a 20 year old guy who sold his company last month for $5m in cash. I
really don't know what to do with the money or how to manage it. I never gave
it a thought and now suddenly I have $5m."

You'd think he'd be smart enough, given he's just made $5m at 20. No further
comments left by radicaltype either.

~~~
fleaflicker
I doubt it's a lie. what would be the motivation? There's very little trolling
on HN. I see no reason to doubt its authenticity.

~~~
crystalis
Do you have showdead on? Do you scroll to the bottom of every post? It seems
like every third post has garnered a squadron of useless flip replies that sit
at -4 or dead. A troll post of this variety is almost on the level of effort
of the one word "yes" and "no" posts that show up when the headline is a
question.

------
sown
This is all reasonable.

The day before google went IPO and created new millionares, they brought in
John Bogle to advise them to stay away from mutual funds or whatever and at
the riskiest, stick to index funds if they were comfortable with risk and then
just put the rest into stable investments if they weren't.

~~~
takrupp
An interesting piece of advice I got from my finance professor way back when:
Put your money into either index funds (or the more liquid, cheap to get out
of Index Future) or treasuries. If you are risk adverse, do more treasuries,
if you are more risk taking do more funds (or if you really want to take on
risk, lever up). But always stick with these assets, as they are much more
reliable than mutual funds or the ilk.

Not sure what he'd say now. US treasuries arent the sure bet they were 5 years
ago and who wants to put any money into the movement of the S&P? There is
something attractive to me in having a few gold bars in a Swiss lock box,
though.

------
jamesseda
Financial advisers are great for people who currently are invested 90-100% in
Gold or a stock they saw on Mad Money last night. But if have enough sense to
be diversified and are interested in learning about managing your money you
are better managing it on your own.

------
brlewis
It's good to see Paul getting recognized for his expertise in this area. He
was ignored and downvoted earlier:
<http://news.ycombinator.com/item?id=1245906>

------
JMiao
"RAID for money"

and i was like, "go on..."

~~~
cperciva
The analogy doesn't quite hold. The key idea behind a Redundant Array of
Independent Disks is that under the assumption that disk failures occur
independently with known probability, you can compute the probability of the
array remaining intact.

In contrast, with a Redundant Array of Insolvent Banks, there is a very high
correlation between bank failures -- but you're saved by the FDIC per-bank
insurance limit. You're not modelling your risk based on known probability
distributions; you're eliminating your risk entirely (at least as long as you
trust the FDIC).

~~~
tkhoven
_You're not modelling your risk based on known probability distributions;
you're eliminating your risk entirely (at least as long as you trust the
FDIC)._

To (over?)extend the analogy further, there's always the possibility of a
controller failure.

------
arn
I know this goes against common sentiment. But I am going to disagree with the
notion of going on your own and just investing in index funds.

It's not as easy as it sounds to stay consistent with it over time (years,
decades). I did all the research, read a bunch of books, and used up a lot of
my time when I was looking into investing. I picked an asset allocation
strategy, and planned to contribute regularly and rebalance annually.

That just didn't happen. Rebalancing annually didn't. Contributing in a timely
fashion didn't. My income goes up and down, I have to pay quarterly estimates,
so I do keep some degree of excess cash. invariably, I forget to invest the
difference for long periods of time.

In the end I hired a financial person to just handle it and manage my money.
Yes, there is a drag on returns because of it. But the alternative was being
out of the market for periods of time, or off balance. Anyway, just another
opinion.

~~~
paul
I'm pretty sure that wasn't my advice though.

------
tmsh
i suggest people in a similar circumstance watch LE NOTTI DI CABIRIA. it
doesn't seem like it's on topic, but it may be (incidentally, i just saw the
film and thought it was pretty good).

anyway, money is such a hard thing for so many people in the world. my biggest
advice, if you don't have a lot of ideas for research projects yourself, is
probably to put yourself on a path where you can find people who truly need
help that you can partly provide. it has to interest you or else it won't be
sustainable. but if you can, with patience, find that path, you'll have
locally maximized the use of the money just as you've largely maximized making
money.

------
jister
If I have Million$, I will:

1\. Put it in a bank for my security (living on interest if that how you call
it) 2\. Quit my job 3\. Go some place cheap (probably asian countries) 4\.
Then just enjoy every minute of my time with my family

------
orionlogic
_Sometimes, good fortune can also make people feel guilty_

Fortune, which comes from Greek goddess _Fortuna_ might actually bring both
good and bad luck. Like, always only hearing the lottery winners stories and
dismissing millions of losers, we take the good luck notion of Fortuna and
leave the bad luck out of her.

------
Sthorpe
I always wonder why more millionaires aren't building the next iphone or a new
operating system. Maybe playing with AI theories.

I mean, am I the only hacker who dreams of being a mad scientist, where I can
have teams of people working on all the many new idea's I have. I'm frankly
pissed, I want my hoverboard. :)

~~~
rythie
Because you need to be a billionaire to successful at those.

------
antirez
("Money can also mess with your identity in bad ways. It's important to
remember that we're all made of the same shit, some people are just a little
luckier than others")++;

------
faramarz
Paul, while you're on subject, please explore the 'purpose' finding journey in
a blog post. If you think out loud about this, I'd like to read it.

------
blantonl
To me, this pandered to a lot of purposes and ideals all in the same blog post

~~~
paul
Is that a good thing, or a bad thing?

~~~
cma
"Pander to" is rarely used positively.

~~~
paul
I know, but lacking a how or why, I thought perhaps there was another
explanation :)

------
timcederman
I'm surprised, given this is from Paul, that angel investing is not mentioned.

~~~
niallsmart
Tim - he says "avoid long-term or illiquid investments, though it's fine to
put a few percent into random things such as starups, but understand that
you'll probably lose that money, so consider it an educational expense."

~~~
timcederman
I probably should've been more clear with what I meant -- I might've also
avoided getting downvoted below 0 if I had.

I am surprised that someone discussing what to do with your money (in the
context of selling your company and being posted on Hacker News) _and_
discussing what to do with your life did not mention the possibilities angel
investing offers beyond trying to make more money.

------
surlyadopter
I yearn for the day when I have this problem.

------
c00p3r
I don't remember exactly what is the name of this bias, but people used to
believe that if one is successful in some field, say, programming, he is also
authoritative in completely different fields, such as philosophy or finance.
=)

Actually, it is exactly the opposite, just because you need to spend almost
entire life (at least most of your time) to become a real pro in any field,
say a medical doctor or system engineer, or philosopher.

'Start early and evolve' is an universal mantra, which is correct in sports,
music, languages, communication skills, etc. So, the idea is very simple -
stay near your field and do not try to compete with those, who were spent half
of their life on it. Or at least do not try to teach. =)

You wouldn't join the boxing championship just because you're famous computer
engineer? Would you? =)

------
asdfghjkl1521
heya. i would like to donate some like to spend some..

