
Rethinking 'Fuck You' money - herdrick
http://www.tonywright.com/2010/rethinking-f-you-money/
======
SamAtt
His premise seems flawed to me. He says people should forget about F@#$ You
Money because you can't depend on it to grow in this bad economy. That's
reasonable.

But then he suggests you aim for “f@#$ you influence and credibility” because
it "allows you to charge $30k+ for a 1 hour speaking engagement". But I know
people who used to make $10k per speaking engagement and they aren't getting
much work lately. In my experience the first thing people cut in a bad economy
are the expensive speakers and while influence can probably get you a magazine
column I wouldn't expect that to pay much at all.

So if the problem was finding a stable income in a bad economy his solution
really didn't solve it.

~~~
jacquesm
I agree with you fully, the first thing to go when the economy isn't all that
great is the stuff that you can do without.

So, no more lavish all employee trips to tropical islands and no more
expensive speakers.

Time to get up and do some more work instead of talking about your previous
successes.

And about dying penniless, who cares, you can't take it with you anyway. If
you plan on passing your wealth to your kids better do it while you are alive
and scale back accordingly. In plenty of countries that's the better strategy
tax wise anyway.

~~~
Vivtek
I think it's not about _dying_ penniless quite so much as messing up your
calculation by a year or two and _living_ penniless at the age of 87.

------
pg
Does the rule that you should get out of the stock market when random people
tell you stocks are sure to go up apply in reverse?

If so, this is a pretty encouraging sign.

~~~
nostrademons
Top money manager at major Wall Street firm != random people. It doesn't
necessarily mean stocks are about to go down either (Wall Street has certainly
been wrong too, eg. 2000 or 2007), but it's a far cry from having a shoe-shine
boy tell you to buy stocks.

~~~
Eliezer
No, I think "top money manager at a major Wall Street firm" and otherwise
unattributed actually _is_ random people.

~~~
euccastro
Bernard Lietaer (former central banker, successful currency speculator, one of
the architects of what today is the Euro, and nowadays complementary currency
advocate) starts most of his post-crisis conferences by asking the public to
raise their hands if they believe that the worst of the crisis is past/ahead
of us. Generally, most people will raise their hand to state their belief that
the worst is still to come. Here's an example, in front of an audience of
financial journalists:

<http://www.youtube.com/watch?v=OfMbYllbN6c>

(Skip to 2:40 for the actual start if you want.)

~~~
jimbokun
That doesn't necessarily mean you shouldn't buy stocks.

It is extremely unlikely that you will time the bottom of the market just
right. So even if it will continue to get worse for a while, it might still be
a good decision to continue buying into the market so that when the bottom
does hit, you will have bought some stocks right around that time.

This all depends on your investment horizon, etc. etc.

~~~
euccastro
There is still the possibility that a significant part of your particular
investment vehicles will just vanish forever.

------
wallflower
Repost but a quote from George Foreman about longshoremen. What is real
wealth?:

Mr. Foreman, who stared down financial collapse as an adult despite a
troubled, impoverished childhood, said he knew real wealth when he saw it. “If
you’re confident, you’re wealthy,” he says. “I’ve seen guys who work on a ship
channel and they get to a certain point and they’re confident. You can look in
their faces, they’re longshoremen, and they have this confidence about
them...I’ve seen a lot of guys with millions and they don’t have any
confidence,” he says. “So they’re not wealthy.”

~~~
lsc
in entertainment and sales, confidence is almost everything. The thing is,
outside those fields, confidence is dramatically less useful. (granted, sales
skills have a pretty wide applicability, but my point is there are jobs that
don't involve much sales, where confidence doesn't matter that much.)

~~~
BrandonM
Confidence doesn't have to tie directly to the work you do. One aspect of
confidence is knowing that you have the skill to find work, or the smarts and
personality to get a new job and learn the necessary skills quickly. A person
like that never needs to fear poverty, which is one aspect of wealth.

~~~
lsc
Not fearing and not needing to fear are two different things. Confidence can
help get you jobs, but without competence, you will have a hard time keeping
it.

------
hugh3
If you ask me, the best way to invest the $2 million mentioned in the article
in order to retire comfortably would be rental property. Take your $2 million
and buy four $500K houses (or eight $250K houses, or whatever's appropriate).
Pay an agent to take care of them, or do it yourself, depending on how much
involvement you want. That should yield maybe $8,000 a month in rent, which
after you've taken care of all the extra costs should still be enough to live
on quite comfortably. Any capital gains you enjoy (and if you're smart you'll
have invested in an up-and-coming area) are a bonus.

The best part is that you don't need to leave some money on the table to hedge
against inflation, since in the long term rent will pretty much keep pace with
inflation.

There are areas where this is a completely terrible idea due to rent controls
and other landlord-unfriendly policies, obviously you shouldn't do it there.
Also, avoid any area where you're likely to get undesirables as tenants.

~~~
brc
Improvement on that is avoid family housing and go for industrial/commercial.

You can get a quality property with minimal leverage for your $2million. You
will get a blue chip tenant like a national retailer or even a government
department, and they'll sign a 10 year lease with mandated, upwards only, CPI-
indexed increases each year. You won't even have to fork over 8-10% on a
property manager because the tenant will maintain the property. And at the end
of it, you'll have a property worth much, much more than what you paid for it.

Compare to a portfolio of houses, this strategy is higher return, lower risk
and much lower management. The problem with family housing is that they are
full of families, with all the associated problems that brings. Families split
up, move out, get into trouble, have parties - blue chip businesses just keep
their place tidy, make money and get on with life.

~~~
roel_v
Commercial property is much more sensitive to cyclical downturns than family
housing. 10 or 15 year leases are mostly in either downtown, prime location
property (with very limited supply) or in new developments, where you only get
them once. After that you're left to the market.

As usual, I think diversification if best for a stable portfolio. Mix various
types of property, in various locations with various target markets, and then
real estate is very sensible investment option.

~~~
brc
Yes, I'm talking about a prime location property. That's why you are putting
down $2million with leverage (say $4 million total buy).

Of course there are cyclical downturns, and also upturns. The idea is to get a
low risk passive income, not to flip it and make money. Any blue chip property
is going to stay blue chip regardless of market conditions, unless the
location goes sour. But that's part of your due diligence.

------
strlen
8% ROI is unrealistic, but a 2-4% is certainly possible especially with
municipal bonds and insurance annuities. The former are also exempt from
federal taxes, state taxes (if you live in the same state) and even local
taxes (if you live in the same city). Both have guarantees against inflation
(at the cost of lower yield) .

Nonetheless, I do think the is somewhat overrated. If I had fuck you money,
I'd... write code, read books and papers. I'd have more freedom on how I write
my code during working hours (and it's important not to understate importance
of that, but the more senior you get, the more choice you have in what you
work on what tools you use), but I'd also not have the focus that comes from
working on systems that solve actual problems that individuals and
organizations have; nor would I be solving these problems at scale that makes
them much more interesting.

On the other hand, I'm pretty confident that if I were to spend my time
chasing a big payoff I'd be working on problems that are far less interesting
and more frustrating (which is almost axiomatically why these problems have
the payoff). There's very few early-stage startups doing systems programming
(and I'm speaking loosely here i.e., beyond just operating system kernels and
file systems). For web companies systems programming only becomes needed as a
scalability becomes a problem (in most cases it never does). The idea that
_may be_ I'll be able to go back to doing what I enjoy most of the time if the
business succeeds won't be enough to drive me: I already do that (perhaps
that's why so few "home run" startups have come out of Google?)

Keep in mind that while stock options after product/market fit (pre-IPO
startups, public companies) account for only a tiny percentage, the chance of
a payoff is much higher (which, again, is why it's a tiny percentage: you're
no longer taking a risk). That payoff is certainly no fuck you money (except
in rare cases e.g., Google in early 2000s), but it's often sufficient in terms
of giving you more freedom e.g., to go back to school for a Ph.D.

Were I to have a vision for a business (rather than a science project, which
most of my ideas have been) based upon interesting technology (i.e., not a
website) I'd certainly consider pursuing it, but even then I'd have no
illusions: I suspect, I'd spend _more_ of my time doing what I don't like
(general business operations) than what I do (coding); it would be the vision
of bringing forth new technologies that solves real problems that would let me
pull through that (as opposed to pure research or solving business problems
with well known existing technologies) .

~~~
btilly
_8% ROI is unrealistic, but a 2-4% is certainly possible especially with
municipal bonds and insurance annuities._

Amusingly, municipal bonds are in the top 4 likely candidates for our next set
of major financial problems. The others are default on consumer ARM mortgages,
debt on commercial real estate, and repayment on private equity.
Interestingly, the largest class of investors in private equity funds this
time around are government pension funds, which will just compound the risks
for the munis. (The last time there was a bubble the investors were Savings
and Loans institutions, the result was the S&L crisis of the late 80s/early
90s.)

~~~
strlen
> _Amusingly, municipal bonds are in the top 4 likely candidates for our next
> set of major financial problem_

There's several kind of muni bonds, however, each with their own set of trade
offs. The higher yield, the higher the risk. Some are guarantees, but only
offer a very low yield. If the guarantees lapse, the problems are likely to be
very deep, irrespective.

For what it's worth, I'm sticking with FDIC insured bank CDs across two banks,
but I my expectation is more of "retain value" rather than "investment".

~~~
illumin8
Insurance annuities are not as risky as municipal bonds. What's more, your
state's insurance commissioner guarantees them, similar to the FDIC guarantee
on deposit accounts, up to a certain dollar amount (I think it's something
like $100K).

So you have $2 million in F-you money? Stick $100K each into 20 different
insurance company annuities (staying below the guaranteed amount and
diversifying your risk) and enjoy guaranteed monthly (inflation adjusted)
checks for the rest of your life.

The only thing that will stop your income stream is the complete destruction
of the entire US financial system. I suppose that is possible, but if that
happens your money won't be safe anywhere, except perhaps gold bars buried in
your back yard...

------
Harj
"His belief was that it was likelier to get worse before it got better and
that it could be 10 years or more before the economy bounced back. “I think
we’ll see Dow 4,000 before we see Dow 12,000,” he told me."

sure but as long as you believe the economy is going to bounce back over 10
years then if you took a good piece of your $5m and simply put it into an
index fund now, in ten years (retirement) time you'd have a very healthy
return on it.

i don't agree that now is a bad time to invest. i believe now is a bad time to
invest for returns over the shorter/medium term but if you're talking about
investing over a retirement time scale then it's during periods like the one
we are in where big returns can be made.

------
istari
People who think 6-10% returns are unrealistic are sheep, and know nothing
about real estate.

A friend of mine, a complete novice, was able to buy a multifamily unit in
downtown San Jose for 500K and rent it out for 5000 a month. His down payment
is 100K. His expenses(400K mortgage, insurance, taxes, etc) is 2500 a month.
His rate of return is (5000-2500)x12/100K = 30% or so.

He did this while violating the #1 rule of real estate investing: you never
buy at market price. You pay 70% of what stuff are going for on the MLS.

I invest in courthouse foreclosure auctions, and manage about 40% cash on cash
returns.

Investing in real estate is a skill, just like building companies or coding.
Imagine how much a typical person know about building web apps. That is how
much a typical person know about real estate investment.

~~~
hugh3
So because your friend managed to get a crazy-good deal on one property,
everyone else is sheep?

Arbitrage opportunities do exist in the current market due to the current
craziness, but the present foreclosure pace can't last forever. I don't know
how long "70% of MLS" has been "the #1 rule of real estate investing", but how
easy was it to snap up properties for those prices in 2005?

~~~
istari
My point isn't that my friend got a crazy good deal. My point is that
arbitraging 12% rental income against a 5% mortgage rate is so easy right now
you can do it by buying right off the MLS at market rates, in one of the most
expensive(price to rent wise) cities in the US.

The original poster was moaning about how hard it was in TODAY's environment
to make money off of several million dollars in cash(!). I wanted to provide a
counterpoint to that attitude.

~~~
Eliezer
If what you say is true, why is all this free money still lying around? Is
there some systematic reason for why hedge funds don't do it, or why too few
people bid on courthouse auctions?

~~~
istari
It's not free at all.

Buying a rental property off the MLS means you have to manage it, and is like
starting a small business. This is fairly safe to do even for beginners, and
is a good way to leverage a few tens of thousands and a good credit rating.

Buying at courthouse auctions is a completely different ball game, and
requires you to

1\. pay all cash(this eliminates 99% of competitors)

2\. research title and liens on the property(if you screw up you might end up
buying the second mortgage instead of the first and lose everything)

3\. estimate the market price without being inside

4\. be there on weekday mornings

5\. have strong intestinal fortitude.

6\. have heard about them in the first place and have taken the trouble to
learn the system.

The above are why you can get discounts of 30% or more off of market price.

Properties need to be individually researched, fixed up and resold. Someone
has to physically go attend the auction. It's MUCH too messy for hedge funds.
It's ideal for individuals, or groups of individuals, with cash and local
knowledge. More and more people are showing up at my local auction, and good
deals are getting harder to find.

Are you in California? Go to your local county courthouse at 10AM on a weekday
and look for a circle of homeless looking people holding large cashier's
checks. Depending on the state, it might be once a month on a designated
weekend. Let me know if you want more info.

Stop reading HN and get back to work on chapter 35.

~~~
7d9bf2471be6f39
I would like more info. I am in the position to invest on this scale and the
idea of being a landlord is not too scary to me (actually sounds kinda fun in
a twisted way). Some questions off the top of my head:

\- What attributes constitute a good rental property?

\- Is it ever worth it to hire a manager?

\- How often do you have to visit the property? I live in SF but I understand
being a landlord here is difficult due to renter protection. If I were to buy
a property in an outlying area, how often would I need to visit it? I'd also
like to take some extended travel in the future. Would being a landlord get in
the way of that?

\- What else should I be thinking about?

Thanks!

~~~
istari
Right a mortgage is 5% or so. So around 0.5% per month, roughly.

Rule of thumb #1 for rental properties is that if it can get 1% of its total
value in rent per month in rent, you can get positive cash flow. 1.5% is worth
your time. 2% is what you want to aim for.

Rule of thumb #2 is that the crappier the property, the easier it is to get a
higher % of rent vs price. Multifamilies are in general more profitable to
rent than single families.

Don't hire a manager when you're starting out. Do it yourself, invest close to
home.

SF is too expensive, anyways. Everyone has their own comfort level trading off
profit vs crappiness of neighborhood. I'm drawn towards slums, myself.

Richmond/Concord has some nice cheap properties, is close, and has good rents.
Oakland is even cheaper but slummier.

The default first step would be to fire up realtor.com and craigslist, and
compare prices versus rents. Start with the cheapest single and multi families
in Richmond, Concord, and Oakland.

How much cash do you have? This is important since it defines your options.

Join bigger pockets, it's a great forum with lots of pros.

Always try to buy below the market price set by the MLS.

You can get away, but you'd need to get someone trustworthy on call to take
care of emergencies.

Shoot me an email at foreclosurevision dot com, once I know exactly what
you're looking for I can offer more targeted advice.

------
betterlabs
I know of a couple of entrepreneurs who made a good few mil by selling their
startup and were looking to start a business as a lifestyle cashflow only
business. When I asked him why, he said they did not want to dip into their
savings for daily expenses and wanted to have a business that was sure to make
them just enough money without way too much effort. I think this is not a bad
strategy unless you just don't want to work, which I think is rare.

In terms of growth, I think its wiser to invest in BRIC where the core
domestic markets are getting stronger and the stock market returns are a lot
better, though choppy. Also if you diversify into real estate (recurring
income), CDs (monthly income), and such other opportunities, then you can
strike a balance for yourself.

Influence is VERY tough though. I wouldn't count on it as an indefinite
opportunity to earn money when needed, assuming you are able to cut through
the noise and build credibility (which itself may be tougher than having a
decent exit. Plus it is not for everyone). New influencers constantly displace
current influencers and it would take a lot more work to maintain it unless
you founded Google or something.

------
ehsanul
Two words: permanent portfolio.

[http://crawlingroad.com/blog/2008/12/22/permanent-
portfolio-...](http://crawlingroad.com/blog/2008/12/22/permanent-portfolio-
historical-returns/)

<http://crawlingroad.com/blog/tag/permanent-portfolio/>

~~~
barmstrong
I keep seeing this pop up on HN and I'm intrigued.

Any wealthy people out there using this who can comment?

------
smalter
what's the moral of this story? you most likely, even if you make a good
amount of money, will not escape the anxiety associated with money. or,
escaping the anxiety associated with money is not accomplished by making
money. the idea of fuck you money is for kids. being able to say fuck you to
anyone is more about what you've got on the inside than what you've got on the
outside.

~~~
MisterWebz
_being able to say fuck you to anyone is more about what you've got on the
inside than what you've got on the outside._

Sure, but the consequences will be different.

~~~
roel_v
"Sure, but the consequences will be different."

Well I guess that with that reply you missed the whole point of the comment...

------
troygoode
The first 3/4 of this article is _fucking terrifying_.

~~~
Super_Jambo
If you are not fucking terrified at the moment you're not paying attention.

~~~
marvin
Why don't you just put your money in a global index fund instead? No one
forces you Americans to invest your savings in your own country..in fact, that
seems like a pretty bad idea in the first place, since this means that when
the economy is bad and it is hard to find jobs is the same time it is a very
bad idea to take money out of your investments.

Seems pretty obvious to me that the American economy as a whole has so much
shenanigans going on that investing broadly in it is a bad idea. Is it really
that hard to move your money to a foreign currency`

~~~
nostrademons
Which country? Europe is worse-off than America, China likely has their own
bubble. Japan has been in a funk for 20 years. Russia has recently been
cracking down on political freedoms in a worrisome way, there's no guarantee
that you'll be able to take your money out once you put it in. Same for many
Latin American countries.

~~~
nileshtrivedi
How about India? Indian economy has bounced back some time ago. Here is sensex
over last 5 years.

[http://in.finance.yahoo.com/q/bc?s=^BSESN&t=5y&l=on&...](http://in.finance.yahoo.com/q/bc?s=^BSESN&t=5y&l=on&z=m&q=l&c=)

Risk-free return rate is still at around 8%:
<http://www.bajajcapital.com/gss/nsc.html>

~~~
tkhoven
If I'm reading it correctly, that risk-free return rate is only available to
resident Indians. In addition, even if international investors would be able
to access it they'd be adding currency risk to the equation.

~~~
nileshtrivedi
Yes, and Yes. I quoted the risk-free rate to give an idea about the economy
and its risk-level. Equity market here can be expected to give decent returns
(~15%). I'm not sure about the citizenship requirements but the equity markets
should be quite open.

<http://new.valueresearchonline.com/funds/default.asp>

------
mattmaroon
It's actually silly to think that stock market ROIs won't rise again. They're
abnormally low now, but we've seen it many times before.

Market returns are based on the amount investors need to take the inherent
risks. Unless stock market investing gets considerably less risky (seems quite
unlikely) investors will leave the market for less risky vehicles until rates
return to the amounts needed to justify taking the risk, which have
historically been around 7-10%.

Stocks, real estate, bonds, and all other market-based investment vehicles
will always have returns in-line with risks in the long run.

Nobody should ever retire hoping to get a steady income from the stock market
or real estate or other volatile investments. By the time you're ready to
retire, you should be entirely in FDIC-insured CDs and the like. If your
retirement plan is contingent on 6% annually you're asking for trouble, and
you're probably going to get it if you live long enough.

~~~
logicalmind
One thing that worries me, and I'd love to hear other people's opinions, is
that as baby boomers retire they will be removing their retirements from the
stock market. Whether they move their money to other non-stock investments or
whatever. But don't you think the transfer of money out of stock-related
investments by such a large percentage of people is going to cause some
problems for those of us who still have money in stocks in the market?

------
vaksel
I think after you get fuck you money, your goal should be to create a
lifestyle business. Something that can more or less run on autopilot and
generate money for you to live on.

If you are a web guy, you can create some software product(or pay someone to
build one for you). Then charge $50 a month...and you only need to make 6
sales a day(via adwords) to make $100K/yr.

If you are not...you can buy a franchise...i.e. McDonalds franchises make
something like 1-2 million a year. And you as an owner don't need to do
anything...just hire a good manager...and it'll more or less run on
autopilot(from your perspective)

~~~
troygoode
If you can make something that makes you $100k/yr why wait until you have
already made your fuck you money?

~~~
vaksel
because a lot of these niche $100K/yr products...hit the ceiling at 150-200K.
So you have no security like you do when you have 5-6 million in the bank.
Anything can happen...Google might slap your adwords account, someone might
release a competing product etc.

And starting a lifestyle business with FU money, means that you can tough it
out as it grows from 1 sale every other day, to 1-2-3-4-5-6 sales a day.

~~~
lsc
If you can build a $100K/year product, why not do that, and then use that
money as your runway while you build your five million dollar product?

building a company is /much/ easier if you don't have to worry about where
rent is coming from three months from now.

~~~
vaksel
because at that point it's very easy to get complacent...and building up to
$100K for a niche business still takes time and money.

~~~
lsc
personally, I'd rather try to run a starup while fighting complacency than
while either trying to wrangle investors or working a dayjob. I think
complacency would be a lot less distracting.

------
yewweitan
Well, there must be some correlation between money and influence. If Paul
Graham is right, then the guy who has $5M at 30 by virtue of a startup exit
has created enough value to be compensated as such. Which of course, leads to
influence.

FYM in it's old-world sense (retirement) is probably getting more obsolete
anyway. As Tim Ferriss put it, "The goal isn't to work less. It is to live
more."

------
ww520
I come to this thread late but couple points:

1\. Low return on money. That's because money itself worth more now; the Fed
has destroyed whole bunch money via credit tightening. We have gone through an
asset deflation phrase and the money you have can buy more assets now. It's ok
to have low return on money for now.

2\. Asset allocation. Should not just put your FU money in stocks or Treasury.
Read up on asset allocation. Have better downfall protection and better
return.

3\. 4% withdrawal rate. Studies and simulations have found that annual 4%
withdrawal rate of a portfolio can make it last for very long time adjusted
for inflation. 4% of 2M is 80K, which can provide a nice living.

4\. Count net worth, not just cash. That 80K makes a big difference with a
paid-for house.

5\. Don't discount Social Security/Medicare/IRA/401K/Pension. The discussion
of couple millions of PRESENT day often ignores the age restricted retirement
funds. Those can be substantial.

------
gcheong
What about dividend paying stocks? Good companies are usually very reluctant
to cut dividends even in bad times and with stock prices suppressed, this
should lead to higher dividend yields. Probably not a total solution but
should be looked at.

~~~
philwelch
In theory, shouldn't all stocks be dividend paying? If your stock doesn't pay
dividends, what makes it any different from baseball cards as an investment?

~~~
astrofinch
It's different from baseball cards because a given baseball card can't _start_
paying dividends if all the people who own the card have a vote and decide it
should.

I used to spend a lot of time playing Railroad Tycoon 2, and in that game a
good way to get rich is

1\. Put all your money in to a railroad you control.

2\. Grow your railroad. As your railroad grows, the value of your stock in it
grows. This causes your purchasing power to rise, allowing you to borrow money
to buy more stock in your railroad.

3\. Eventually you're in a ton of debt, but you've also got a ton of stock in
your (presumably successful) railroad. Then raise the dividend paid by your
railroad's shares and rake it in.

The problem with raising the dividend paid by your shares early on is that it
will give your railroad less capital to expand with. So you only want to
execute step 3 when your railroad is making more money than you know what to
do with.

I think there's a good argument to be made that companies like Google know
what to do with the money they're making.

~~~
jimbokun
"I think there's a good argument to be made that companies like Google know
what to do with the money they're making."

There's a good argument that a company like Microsoft doesn't anymore, which
is why they were pretty much forced to pay out a big dividend a few years
back. Just to give an example at the opposite end of the corporate life cycle.

Just found this article suggesting it's still an issue:

[http://www.bloomberg.com/news/2010-07-22/microsoft-may-
use-c...](http://www.bloomberg.com/news/2010-07-22/microsoft-may-use-cash-to-
boost-dividend-this-quarter-after-two-year-lull.html)

------
harscoat
maybe it safer strategy not to think of retirement at all and try to find what
really motivates/fulfills you. If you get good at it whatever it is, there
will always be a way to make money with it.

------
myoung8
Slightly myopic given that we're still very much in a recession, but good
points nonetheless.

I would have to disagree, though, because fame and influence fades. You still
have to work hard to maintain it.

------
exit
this may be good advice for people who have the potential to earn fu money.
the corollary to average people seems to be that it's no longer possible to
retire.

how did we go from an age in which average people could hope to retire, to one
in which someone with 5M needs to worry?

------
webwright
A couple of folks are tossing in that you can get 2-4% returns nowadays.
Here's the historical rate of inflation (scroll down for the recent years):

[http://www.usinflationcalculator.com/inflation/historical-
in...](http://www.usinflationcalculator.com/inflation/historical-inflation-
rates/)

Looks like about 2-4%. :-(

~~~
nostrademons
If we get deflation, as many people are predicting, then you can get several
percent "interest" just by holding your money in cash. That's built into the
interest rate expectations for a lot of securities right now. You wouldn't see
these near-zero interest rates unless people were expecting the dollar itself
to become more valuable in the near future.

~~~
francoisdevlin
The Fed, with all of the T-bills out there, will never allow deflation. It's
not in the government's interests.

------
Vivtek
I have a really hard time believing that there will be no investments for _30
years_.

------
brianbreslin
am I the only one who sees a flaw in the math here? I mean I wasn't a math
major in college, but i did take financial math, and think he's forgetting a
key thing called compound interest.

~~~
starkfist
I can't figure out his math, either. In his second example, if you put $4M in
a bank account that gets 2%, and can still save $10K a year you'll have $7.6
mil in 30 years. If you can get 8% (which I think you can, all arguments to
the contrary) you will have $41M. Maybe he just means once you get the cash,
you quit your job, put the money under the mattress and spend it all?

~~~
brianbreslin
yeah, he ignores the money growing on its own.

------
hrabago
$5M is definitely not retirement money if you're only 30 years old. I figured
at that age you'd need about $15M, and even at that you'd need to make sure
you invest it properly to at least keep up with inflation.

I've always thought that FYM and retirement money are two different concepts.
If I had FYM, I can quit my job. I would still be looking for what's next, but
I can take my time. (Usual disclaimers apply re: deadlines)

~~~
CapitalistCartr
I'd have no problem extracting 250,000 in annual income from 5 million, after
it's been invested for a year. Whether or not that's enough t decide to go
walkabout depends on the person.

~~~
jmillerinc
What would your strategy be to get that 5%?

~~~
adammichaelc
Tax free municipal bonds.

~~~
jerf
Come back and tell me about dumping all your money into tax-free municipal
bonds in two years.

~~~
adammichaelc
<neutral question> What is the reasoning behind your comment?

~~~
jerf
See btilly's comment that mentions them. There is a lot of chatter about
bankruptcy. It's still just chatter, with a small number of exceptions. Let us
all hope it stays that way.

Mind you, I'm not guaranteeing they'll all go away, but it won't take very
many bankruptcies for your returns to go below inflation. (Or worse.)

I might invest in specific municipalities, if that's possible for a mere
mortal investor, but I wouldn't think it's necessarily a safer assert class
than anything else right now.

------
vgurgov
ok, thats all nice, but if author is so much worried about his financial
perspectives in US, he should look at other markets. Hey in Asia, even
somewhere Europe after some research you can easily find that 6-8% safe
investment opportunities. So retirement with 2M is still no problem if you are
willing to open your eyes, and see that there is something going on outside
US.

------
motters
Personally, I'm not at all motivated by money so long as I can pay the bills
and have some modest standard of living. If I had been interested in
accumulating money I would have taken a quite different career path.

------
euccastro
FU money can be just enough to buy a patch of land and build one of these:

<http://earthship.com/>

------
ahoyhere
Oh yes, you shouldn't sit on your ass after banking a wad of cash and expect
to live forever, not doing a thing.

But neither should you rely on _influence_ and _credibility_ , because those
things still imply gatekeepers. You have to have influence and credibility...
to convince somebody else.

Why not just rely on yourself? Why not foster the ability to make money in any
circumstance?

I cashed out my IRA because, so far, the money I've put into my SaaS has paid
back itself 1000%, not 10%.

Based on that, and my other efforts/products, I know I could easily earn 7K
euros a month just by working a few days. Training is lucrative. My
information products are lucrative. I'm about to open my "your first product"
launch class again - last time it made $25k (as I was building it!), this time
I aim to double that. Shouldn't be too hard.

Sometimes I sit back and think about it, and I can't help but laugh (in a
nervous way), that I can earn more in a few weeks than one of my parents'
yearly salaries from when I was a kid.

Now, back to my influence/credibilty/gatekeepers argument - the perceptive
HNer will point out that I am using my credibility to bring in customers.
That's true, at a few hundred bucks a pop -- which is a far cry from hoping
somebody will hire you for a sweet job (which means, of course, that you have
to work that job), and miles away from trying to use your credibility to get
millions in investment.

My way is very do-able for a normal person, the other is incredibly hard and
requires much luck in addition to a full-out effort.

------
startuprules
A very easy solution to this: Go live in a cheaper country. Go now, before the
heavily debted countries lock down money transfers (In which case, buy
gold/silver)

~~~
rortian
How does crazy paranoid stuff get up-voted here? Very Sad.

Cheaper countries can be fun, but there's lots of downsides as well. If you
are asocial, it could be your dream to live there. I'll always want a vacation
there, but not to live there.

~~~
GFischer
It is a bit paranoid, but then again, you've never been in a country that
locks down money transfers, right? You still believe you can emigrate
anywhere.

It's currently unlikely, but I suspect the U.S. could implement that much
faster than you think if it keeps going downhill. It already implemented a ban
on holding gold in the past, for example (
<http://en.wikipedia.org/wiki/Executive_Order_6102> in place until 1974 ).
It's not the scenario I envision, but thinking "The U.S. would never do that!"
is naive.

By the way, I believe the original post had a reasonable suggestion... you
could live like a king for your lifetime in, say, Uruguay or Costa Rica with 5
million (and those are reasonably safe countries). Yes, emigrating is a quite
hard decision, but it is a possibility.

~~~
rortian
Keep in mind that 1974 was 36 years ago. I am working with a very different
model of the world than you are I think. Capital controls exist in the world
and some are quite harsh. However, no serious person is even close to
advocating them (for wealth nations like the US). What problem do you imagine
they would solve?

------
Charuru
IMO Fuck you money is not just when you have enough for a life of mindless
consumption, but enough for when you can do the things that you really really
want to do.

eg save the world from malaria, build that skyscraper with your face on it,
start an iron and blood revolution (there are a few governments that I would
want to overthrow).

------
lizzard
More like 'fuck other people over" money.

