
Ask HN: I made $24k over the last month. Now what? - maxklein
I sell apps on the app store. A lot of small cheap apps. Revenue is hitting $1000 per day on the weekends (Here is the graph: http://imgur.com/T0z5p.png).<p>But I'm facing another problem. I don't know what to do with the money, how to use this very large monthly income to actually make myself rich. The app store income is going to end soon enough - the ecosystem is pretty fragile. Now that I have this raw cash, no debts, have a job I enjoy, don't want or need a car, my apartment is perfectly comfortable, what can I do?<p>I do NOT want to invest in the stock market, or invest in anything long term like bonds or property. I want to somehow use the money to make more money quickly (within a 2 year time span). But I have no idea! What I know how to do best is the app store, but I want other type of things that do not require much time investment, but give as good returns as that.<p>What do I do with the money? How do I invest it in making more money quickly?
======
patio11
Hire people to do the things you do which have the worst tradeoff of hours
expended per unit of value added. Alternately, hire people to automate those
things.

And I'd SERIOUSLY consider at the very least a) setting yourself up a SEP-IRA
and b) socking away the maximum in an index fund. It is essentially monopoly
money to you anyhow at the moment, right? Trust me, you won't regret having 30
years of appreciation on your monopoly money when you retire. (This will also
simplify your tax planning for this year.) Index funds are a no maintenance
investment -- as long as you can pretend that the money doesn't exist, you can
get by with checking them once a year (or less!)

~~~
mechanical_fish
Yes, listen to patio11.

 _I do NOT want to invest in the stock market, or invest in anything long term
like bonds or property. I want to somehow use the money to make more money
quickly (within a 2 year time span)._

Excuse me if I'm too harsh, but you should spend some of the money on a
membership in Gamblers' Anonymous. Because you talk like a bad gambler. The
hallmark of bad gamblers is that, if ever they get ahead, they look
desperately around for a way to lose so they can get back to their comfortable
status quo: Grifting, in poverty.

If you have money that you don't know what to do with, put it in some
diversified investments that will make money over 30 years -- not two -- and
forget about it.

The exception I'd make is the one patio11 cites: If investing a portion of
your current profits in your current business will pay off, do some of that.
But don't invest _all_ your profits in this one basket: One of the most
important forms of diversification is to invest in things other than your
current project. You don't need another get-rich-quick scheme: You _have_
that, and it even seems to be _working_. Good for you. Now hedge your bets
with a get-rich-slowly-but-safely scheme.

~~~
nandemo
I disagree. Investing in the stock market is far from safe. Not even an index
fund over a 30-year period; we don't know what will happen in the next 30
years.

~~~
mechanical_fish
I didn't say to invest solely in the stock market. Some in stock funds. Some
in international stock funds. Some in bonds. Some in a bank savings account.
It's called _diversification_ for a reason. You can buy _more than one_
Vanguard fund almost as easily as you can buy one.

Time to plug Bernstein again:

[http://www.amazon.com/Four-Pillars-Investing-Building-
Portfo...](http://www.amazon.com/Four-Pillars-Investing-Building-
Portfolio/dp/0071385290)

What you don't want to do is spend all your time reading hysterical ravings on
the Internet and then somehow conclude that it is actually _safer_ to blow all
your money at the track, or on some crazy scheme to "double your money in two
years". I don't care how scary the stock market is: It is less scary than
whatever you plan to do to double your money in two years.

~~~
kirse
I always agree with you on these financial topics =) I remember back in
October 2008 when we both commented that the best time to sink money into the
stock market is exactly when everyone else is pulling out in fear. (I was 22
at the time and my most conservative index funds are currently up ~35%...
individual investments have garnered even better returns)

When the majority of people conclude that the "stock market is too risky",
they usually look at the single problem of their investments tanking without
looking at the bigger picture... which is:

First, if you invest money without setting a stop limit (rule #1 of investing)
then you shouldn't be investing.

Second, if you invest in a quality index fund and you somehow do lose a
majority of your investment (>50%), there are much larger problems at hand
than just the loss of money. We're talking major economic / political / global
unrest.

After witnessing the Sept 11th downfall and the October 2008 crash, I've come
to the conclusion that there needs to be some damn serious issues to cause a
significant loss in investments... Again, all of which could be avoided
through proper diversification and setting financial loss limits.

\----

As a side note, I do think many people got lucky taking the "too big to fail"
approach with many banks that ultimately received government guarantees. I do
believe, however, that the snap-back we experienced in 2009 is _NOT_ going to
be the same in 2010. Obama has spent insane levels of money to prop up the
economy and this sort of stomach-churning level of gov. spending simply cannot
continue. 2010 will be the year for finding individual companies that have
survived the recession trimming, but I honestly can't see the DOW/S&P indices
going much higher.

------
icey
First, congratulations; that's a pretty impressive feat on the app store.

Have you thought about taking some of the income and using it to hire other
developers to increase the number of apps that you've got being developed at
once? It seems like you know what works and doesn't work on the app store, so
it would probably make sense to start trying to make your efforts scale up.

~~~
jerf
The poster expressed the sentiment that the app store ecosystem is fragile and
the income will end. If you believe that, investing in hiring more programmers
for apps would be a move counter to your own beliefs.

Since I tend to agree with that assessment, I couldn't recommend doubling down
on building apps.

There may be other good reasons to consider that, such as moving in another
direction (consultancy, which raises the interesting question: is there a such
thing as iPhone app consultancy?), but not for that reason alone.

Edit: Google says that there is such a thing. It strikes me as likely that
would be more stable long term, and, potentially, even more lucrative.

~~~
icey
Noodle had an excellent point about diversifying, so I won't go into that too
much.

However, there is still a metric shit-ton of money to be made on the app
store. I don't see people leaving it in droves immediately. He knows how to
make money in this environment _right now_ , so in my opinion he should spend
at least some of the money he wants to invest on something he already knows
how to do well.

I just don't see the wisdom in avoiding a marketplace you already know how to
make money on; even if it has a chance of going away. Max has already proven
that he is able to identify a market and take advantage of it once, who is to
say he couldn't take advantage of the "next big thing"?

~~~
rabble
Yeah, i'd take at least %50 of your income, and put it in various things, some
CD's, some foreign currency investments, govt bonds (tax free), etc... Then
save the next %25, for rainy day's in an account, interest rates are terrible
right now, so you might try one of those savings accounts which earns miles.

Then with the last %25, use that to invest in more appstore / development
projects.

------
jpcx01
Pay your taxes. After that, it wont seem like all that much money.

~~~
wmeredith
Incorporate to soften this blow.

~~~
portman
If the OP is a sole proprietor in the United States, then incorporation won't
alter the tax burden.

Incorporation is still a good idea, for other reasons (simplified banking,
limited liability, etc).

~~~
Daniel_Newby
Incorporation _can_ help with U.S. taxes by enabling a tax-free retirement
account with a large contribution limit. (SEP-IRA has a 25% of salary / $49k
annual contribution limit.)

~~~
eds
Important note: incorporation is required neither for SEP-IRA nor for my
favorite, the individual 401(k).

~~~
Daniel_Newby
I stand corrected. Thanks!

------
hedgehog
Market yourself. Write a book & give talks about your process for making
winners. Lots of people want to know how to make money in the App Store. There
might be a higher-priced corporate training market for how to make popular
apps for marketing purposes (think packaged food or sports apparel industry).

On reading your blog it looks like you're already going down this road?

~~~
maxklein
Ehh, anyone who bothered to email me has gotten the stuff I know for free. I
don't want to give any talks or write a book. It's easier and less stressful
to just make the apps.

~~~
eru
Yes. Just make sure you also publish on your blog or so the stuff you send out
in emails. That helps build a reputation, in case you need to resort to
writing a book or giving talks (or doing some other corporate training as a
consultant) later.

You might also use some of your money to pay another guy to polish your
writing. Or to compile it into a book.

------
lrm242
Hrm, I think you're forgetting about the most important money making tool
available: compound growth. Let's assume the following:

You invest your current 24,000 and each month you add 20,000 to your
investment. Let's further assume that you can achieve an annual return of 3.5%
and that return is evenly distributed over the year. In this scenario you'd
end up with $520k after two years. You're half way to being a millionaire.

If you instead contributed $25k each month you'd end up with nearly $650k
after two years. That's 50k above your contributed principal or an 8.3% return
over two years. Further, your risk is significantly reduced over any other get
rich quick scheme and this allows you to continue to focus on what you're
doing.

~~~
Skriticos
Remember, that's not inflation adjusted. It's a common banking advice though.
(Not a stupid one).

As for your problem, do what most people say here: invest in the best asset
you know: your business model. If you are very lazy, then just simply figure
out how to let someone else do the work.

And I wonder if you meant that question seriously? The wording sounds awfully
naive.

~~~
lrm242
Not inflation adjusted but given the short time frame near 0 inflation (in the
US) means a small return still allows for growth. A 3.5% annualized return is
also a very conservative target.

------
ericb
I would focus on whatever you can do to keep your winning streak going in the
app store. Why search for another get rich quick scheme while the one you have
is still working? Most schemes don't work, so focus on optimizing your milking
of the cash cow.

------
blhack
The biggest asset that you have and the one that can create the most money for
you is yourself. Yeah, that sounds really cheesy, but you've already showed
that it's true.

Invest the money in yourself. Bank it and use it so that you can ensure that
you aren't going to need to spend your time making somebody else money in the
future.

Some people have said to invest it in companies...the thing is that _you_ are
a company and it sounds like you're a pretty profitable one.

~~~
milestinsley
I completely agree with you on this. This guy clearly knows how to
successfully conceive, develop and bring an idea to market. There must be
countless ideas in his head. Invest in those!!

------
portman
"What I know how to do best is the app store"

Set yourself up as an _angel investor for iPhone apps_. Like a mini-mini-mini
YCombinator.

Based on your experience, you should be very good at evaluating an
individual's chances of creating a successful app. Solicit pitches (HN would
be a great source) and make 5 small investments of $5k each.

If you make another $25k next month, do another 5 investments. Rinse and
repeat.

You probably can't produce 5 apps per month on your own. But you can use those
same skills to invest in 5 apps per month. There is greater risk (you could
lose all 5 investments) but also greater reward (each investment could in turn
become its own $25k-mo company).

Good luck!

~~~
maxklein
Actually, there is one thing I can do perfectly now: I can listen to an app
idea and tell you how much money it will make. If I knew developer who needed
5k to make apps, I'd def invest in them. I don't know any however, the ones I
know don't need 5k.

~~~
ericb
Any tips on evaluating app ideas?

~~~
maxklein
It's a complicated collection of things, but a lot of it boils down to: how
many people will get what the app does from the title and the icon. And also,
will your consumers search for the app?

For example, if I had an app called "Table Tennis" it will make money. If I
had an app called "River" it is less likely to make money, unless strongly
externally marketed. First app has search right from release, and everyone
gets it instantly. Second app says nothing from the name and nobody searches
app store for "river".

You need a constant low source of users for word of mouth to work.

------
mrtron
Be wary of trying to recreate the success using a similar but different model.
Many people fall into that trap and fail.

For example, if you carefully built apps and they seem to be selling well
hiring a bunch of people to build more apps may not work. The apps may not be
of the same quality, you may not be able to communicate your vision adequately
to them, and maybe just timing is incorrect now.

Personally I would continue doing everything you are now and completely ignore
the money side of things. Pay your taxes and pretend that money doesn't exist.
Keep progressing forward and see if you can continue increasing revenue.

Use some money to cut corners if you can, but throwing a bunch of money at a
problem doesn't tend to have a good success rate.

edit: Also by looking at your uploaded image - it looks like you half your
income this year is from the last month. Try to keep pushing growth forward,
whatever you have been doing is working well.

------
jsankey
_What I know how to do best is the app store, but I want other type of things
that do not require much time investment, but give as good returns as that.

What do I do with the money? How do I invest it in making more money quickly?_

Little effort, fast return? Then you need to take high risks. Is that really
what you want? Maybe you'd be better off trying to scale your skills (which
have gotten you this far) by expanding into other platforms/niches?
Contracting out some of the work could help.

------
hyperbovine
_I want to somehow use the money to make more money quickly (within a 2 year
time span)._

As others have pointed out the best asset you have is your ability to crank
out mobile apps that people are willing to pay for. Not to burst your bubble,
but even $24k a month is nowhere near enough for you to kick back and watch
the returns flow in. The investment opportunity you seek--short term, high
return, low risk--simply does not exist. If anyone attempts to convince you
otherwise, reach for your wallet, because you are being had.

------
petewailes
Build a business using it. Pithy version:

1\. Look for a niche that hang around online, but don't know much about web
stuff. Mumsy things, crafts... anything that's a tightly knit niche

2\. Find their forums/blogs etc, and ask them what would make their lives
easier? What would be the one thing that would be awesome that they want.

3\. Build it. Possibly hire people to help you

4\. Have a free, lightly crippled version (so it's still highly useful and
awesome, but clear there's more awesome where that came from if they cough up)

5\. Hire (hint hint) an awesome marketer and copywriter to design, write and
perform ongoing analysis and optimisation of the sales funnel, traffic
generation and site navigation

6\. Reinvest the money in entering more niches, and refining the process

You should be able to launch a site a month, with an average sales volume of
7-15k from each site after 6 months or so. 12 months down the line, that
should be earning you upwards of 100k p/m sustainably, with a max of 4
employees. I'm fairly sure you can live off that.

~~~
bioweek
I'd love to try your advice but I've never been able to find such a niche.
Everytime I try to think of one, I get "niche block". Any ideas?

~~~
prawn
Got a passion? Helps if you have a real interest in an idea. I've found that
first-round attempts I've made at sites have been successful (got a few sites
that took very little time to set up, but now make $4k/mo for zero effort),
but attempts to replicate that have failed (have a few more sites that barely
cover their domain registration costs!). Without the passion, you would need
to be _very_ disciplined, I suspect.

Here's something I just tried to see if it might help someone looking for a
niche (since almost all are massively saturated, at least at first glance):

Hit Dmoz, control-click five sections on the front page. For each tab that's
opened, choose a sub-sub-cat pretty quickly (maybe don't overthink your
choices, but don't necessarily go for the largest option). If necessary,
choose again on the next level. That should give you five things to look into
further. I ended up with:

    
    
      http://www.dmoz.org/Home/Family/Runaways/
      http://www.dmoz.org/Reference/Knots/Fishing/
      http://www.dmoz.org/Reference/Education/Instructional_Technology/Organizations/
      http://www.dmoz.org/Health/Senior_Health/Fitness/
      http://www.dmoz.org/Shopping/Food/Smoked/
    

Never know what any of these might turn up. Lack of decent, dedicated blogs,
need for small widgets, simple calculators/tools, etc. With anything though,
unless you have confidence in your content or idea, I would keep it quick and
simple and not invest too heavily.

~~~
bioweek
That's awesome advice! Thanks. I'm going to try it. Are you available for
mentoring :-)

~~~
prawn
Keep in mind that the Dmoz idea was just something I invented on the spot and
may or may not be at all useful. An old bookmark I have is this from a few
years back:

<http://seoblackhat.com/2007/02/21/online-business-niches/>

However, they're hardly niches and would be thoroughly dominated by MFA stuff
already with little room to drive in a wedge. You could however pick a few of
those, do keyword research on each and then pick a three-word keyphrase from
that wider list to think about and focus on? I wouldn't bother going after a
single keyword or even two-word phrase as the competition will be too fierce.

Happy to trade emails if you want to bounce any ideas off me. Can't promise
anything useful or insightful, but hey, it's free to try! My background is 12+
years web development (backend and frontend) with side projects in
forum/community, some passive content sites geared around AdSense plus bigger
ideas that I struggle to find time to work on.

------
cellis
I once read

    
    
      "Never give financial advice for free: 
      if it is good advice, you won't get credit, 
      and if it is bad advice -- you'll get the blame".
    

You should consider why anyone here would give you advice on how to turn
xx,xxx into millions quickly. HN is full of smart people who are fully capable
of getting their hands on that much in vc/other leverage and doing it
themselves. Any advice they give you, from a purely competitive standpoint,
erodes their chances of success.

tl;dr - If anyone knew of a way to turn 24k into millions, why would they say
how to do it for free?

~~~
Mz
_If anyone knew of a way to turn 24k into millions, why would they say how to
do it for free?_

Because people are social creatures and often take great pleasure in talking
about something they know a lot about and may have difficulty finding many
people that really want to listen/discuss it. Besides, as gets stated here
often, a great idea isn't worth much. You still have to put in the time and
effort to get any payoff. So it's not much of a threat, really.

~~~
cellis
Someone smart enough to create a black box (which a million dollar business
never turns out to be) that takes input of 24,000 and returns as output 2.4
million is _not_ going to give it away at a marginal cost.

He's asking, in essence, how to get rich quick. If i have a grq idea, i'm
either already doing it and getting rich, or planning on doing it (raising
capital, finding co-founders, et al).

~~~
Mz
A lot of excellent ideas are viewed as "crazy" when first proposed. That is
probably a bigger reason you aren't going to get a qrq scheme from an online
discussion: Either they are burned out on trying to convince people casually
or you won't recognize it as brilliant. And that comes back to my earlier
remark: An idea isn't worth that much. Execution is what brings in the money.

That still won't prevent some folks from wanting to discuss it just because
that's the kind of thing that floats their boat. Maybe you aren't that type.
Some people aren't. But some people just like talking about stuff. <shrug>

~~~
cellis
Ok, I'll bite. I just don't like talking about this sort of thing because it
often devolves into scammy ideas. For instance here is a dead simple way to
make money if you are really hard up:

Build a site where the only goal is to serve ads and get visitors. Give away N
of your ad revenue to a random visitor. Write viral hooks into it to propagate
it faster. Of course it won't work for long - someone will eventually try to
increase their chances by registering thousands of accounts - but while it
works you could probably make a ton of cash.

Edit: perhaps with his appstore experience he could do this on the iphone -
figure out a way to make it cost prohibitive to register thousands of accounts
by tying accounts to a phone number?

~~~
Mz
I think you and I probably see this much the same. It's not like I've made any
grq suggestions. I'm just one of those annoyingly chatty people who likes to
talk -- and it gets me in hot water all the time. I have refrained from
suggesting that this is a bad idea because a) sometimes a discussion is useful
to someone, even if it doesn't accomplish the stated goal and b) long
experience tells me that no one wants me to rain on their parade and say "Gee,
that doesn't sound like a great thing to be asking".

In addition to your concerns, I will add that people seem to typically get
rich pursuing a niche market which is a good fit for _them_ as an individual.
Which means a potential billion dollar idea is only a billion dollar idea for
some people and not just anyone....um, which comes back to "execution", I
think. :)

Nice chatting with you. I should probably shut up now and let people carry on
with discussing what this individual might want to do with their money.

------
bg4
My honest opinion is to bank the remaining after taxes - especially if you
don't have six months living expenses set aside in a money market fund or
something like that. If you do have that, then use it to buy other people's
time to make your small apps.

------
kp212
Nice work. I hope I can have this problem some day!

------
gojomo
Even if you know the app store flow is fragile, I doubt anyone can tell
whether it'll turn in 6-months or 6-years.

If you are an expert in making money there, ride that wave -- looking for
something comparably-lucrative-but-different is a distraction. Optimize the
hell out of your current flows -- find ways that spending $1 in marketing
makes you >$1, create small variants, port to other platforms, outsource --
with careful metrics so you detect early when your strategies are played out.

Meanwhile, on the side, sock some away in a completely safe non-distracting
portfolio. _When_ it makes sense to turn your attention elsewhere -- either
out of the app store opportunity ending, or a desire for something new --
_then_ that safe cache of money will help. But at this point, you've already
got a lucrative place to spend your attention -- why dilute it with other
plans?

------
gregcmartin
Seriously what ericb said, milk the app store and advertise your apps online
if you can, keep it going but the investment climate is lame everywhere. I am
now in the same situation where I had 30k cash for the first time with no debt
and I essentially put it in a safety deposit box at the bank so I won't spend
it. If you look at money market, CD's etc, they all stink right now so just
lock it up.

If you have not bought a house yet then I would look into doing that and
taking advantage of the 8k tax break for first time home buyers. Sounds like
you have enough down payment to cover 20% and get out of the PMI insurance.

You might use that money to hire another developer you can train and crank out
more apps, and hit the android market as well.

~~~
Readmore
Do not buy a house right now unless you really understand your local market
and it's very different than the national average. Home prices are going to
drop like a rock this Spring.

~~~
cadr
What makes you say that?

~~~
Readmore
I've read from numerous sources that the banks are holding foreclosed home off
the market until the spring to keep prices high during the 'first time
homebuyers credit'.

Once it expires there should be a large influx of new homes for sale which
will drive prices down. It's a game of buying now for the tax credit and
'saving' $8,000 or waiting a few months and possibly saving $20,000 because
home prices have dropped.

~~~
cadr
That is very interesting - thank you.

------
petervandijck
The internet thing to do would be to make a member-only site where you teach
people everything you know about making money on the appstore, and charge
97$/m subscription. Run that for a year or two, then sell it.

~~~
jackowayed
At first that sounds crazy (run a get-rich-quick scheme, and that will get you
rich quick!), but that's actually a pretty good idea.

Assuming you can pinpoint some of the secrets to your success (or, more
importantly, things that sound like they will help people succeed), you can
write a book, start a subscription website, etc selling those tips. Saying
"I'm making $24k from a wide variety of apps, and it's just me in my free
time" is a pretty good selling point.

~~~
maxklein
That seems like an even quicker way to end the profit run. If everyone knows
how to do this, the market will slow down and then soon my tips will be
worthless since they no longer work. Then I killed the goose that lays the
golden egg.

~~~
Psyonic
It kills the goose, but creates the elephant that drops the golden turds.
Which would you rather have?

------
jackowayed
Clickable graph link: <http://imgur.com/T0z5p.png>

------
Poiesis
Nice problem; I hope to have it someday.

First: I echo the previous posters urging you to reconsider the stock market.
It's low maintenance and is a nice way to diversify away from your business if
you feel it's not sustainable.

I just reread your post and noticed the implication of "I do not want to
invest...long term like bonds or property". If you plan to need/use the money
within, say, 5 years (preferably longer) the stock market isn't for you--so
you're doing something right there by not wanting to go with stocks. I just
think that people are urging you to think long term

That said, you want to make money fast short term. I will add to those
pointing out that this is generally difficult. However, you do have at least
one good idea proven to work at the moment: your success in the app store.
Your best bet to make more money quickly in the short term is to attempt to
scale what you're already doing. Note: this may not be possible. I still think
it's your best bet given the constraints you give. You're worried about time
investment, but that's nothing that hiring someone can't alleviate (but not
remove).

Finally, care to answer a few questions about your success? I imagine you're
hesitant to share more identifying info, but how about things like what you do
for marketing? Or how much time it took to get to this level, how many apps,
and how much time it takes?

------
eb0la
Congrats. But let me tell you this straight: you are not making money (yet).
You are now cash-flow positive.

So start paying up your debts. Did you say you don't have any? that's a lie:
you owe yourself some (a lot) working hours for programming, distributing,
promoting the app.

Also, you had to buy a mac which is also an expense, an iphone or ipod touch,
etc...

Step one: sum all that money. Put it wherever you like and feel free to spend
it: It's your delayed salary.

The next step is trying to figure out how much money you need to "forget"
about getting money everyday.

Maybe 10k/month or 20k/month to cover all your living expenses and get all
(physical) things you want without having to worry about money. Let's suppose
you're happy with $20k/month (tax free, of course).

Step 2: How much money do you need to have to get $20k in interest ? Figure
out that sum. Remember that next year today's $20k will be something like
$19,002 or something like that.

First: Keep making money (selling your app, and building one or two more).

Second: Invest in something like bonds (us, corporate bonds, etc...) with good
credit rating. You may earn between 1.5% - 8% yearly (if you can buy bonds at
discount, better).

Third: Invest in stock, funds, etc... just follow the tide: don't try to
outsmart the market because you will fail.

Fourth: When you have time, start looking at derivates. Then, build your own
guaranteed-credit deposit with options and swaps. Beat next year inflation
(mostly on autopilot).

Five: Enjoy !

------
CalinCulianu
I have the exact same problem.

And no, don't pay your taxes YET. I would actually invest in hiring some
artists and developing even MORE apps. Maybe just outsource their development.
It can be a lot of headaches but if you were able to code the apps yourself
then likely you can extract decent work out of shitty Indian or Chinese
consultants.

Or, find some people here in the states and convince them to work for you.

Keep growing your business. Become a player.

Or, retire to a cheap country and fuck girls and and enjoy life.

That's my advice.

-Calin

------
drawkbox
Like others mentioned, keep in mind you owe about 45% taxes. 30% ish for
actual taxes then 15% for self-employment tax. SO that 24K is really about
14K.

Also keep in mind that was during the holidays it seems or maybe after a few
game launches that did well. You won't see the same level of revenue steadily
unless you keep releasing and have good pricing strategies.

My advice, save it up or use it to reinvest in your own company for now.

~~~
sabat
Question for drawkbox: if this guy had formed an S corporation, would that
have changed the self-employment tax? He'd owe taxes for his own income, but
the S corp (IIRC) doesn't pay taxes, right?

~~~
grandalf
The amount of self-employment tax is lower with an s-corp b/c your salary will
be lower. With an s-corp you can also benefit from the standard deduction on
your individual return.

Consider:

Sole Propietorship: taxable income is equal to whichever is lower, gross
income minus expenses or gross income minus the standard deduction.

S Corp: you subtract expenses from the corp's income, and pay your self, say,
60% of the remainder as salary, which is subjected to payroll tax. However,
you calculate your taxable income by subtracting the standard deduction from
your taxable income. The corp then pays its half of payroll tax, but you can
take the remaining income (not paid to you as salary or used for expenses) as
a profit distribution, which is only taxed at capital gains rate.

So all in all it can save a lot of money, particularly if you have business
expenses (which in a sole proprietorship are eaten up by the standard
deduction)...

Note: You have to do payroll every month for it to be legit with the IRS, and
you need to file taxes once you create the corporation, even if your situation
changes and you don't use the corporation for anything. You also have to pay
yourself a reasonable salary. If you're a single employee S Corp then it may
be wise to pay yourself > 50% of the corp's gross income as salary, to avoid
arousing suspicion that you're doing the s-corp purely as a tax shelter.

------
kordless
Lots of people saying 'invest in yourself'. I'd take that a step further and
say 'invest in your company'. If you haven't already, set a company up and
hire someone to do stuff like customer support, basic marketing, etc. Do your
books yourself, with a CPA's help (and with his financial planning), or have a
relative do it. My wife does all our bookkeeping for our startups. Don't trust
a stranger to do your books!

Get a basic plan together on how you are going to grow the business, then take
it out and talk to a) companies in the same space, and b) VCs. Get feedback
and adjust accordingly to what feels right. If growing the business takes
outside capital, raise it. If it doesn't, then start down the path of growing
the business (according to your new plan).

I think investing in other startups is bad advice. You aren't making that much
net right now - maybe on the order of $14K net a month past taxes. It's a good
living, but if your sales are dependent on continued
development/advertising/luck/whim of Apple, I'd be REALLY careful about
expanding spend to fill the income.

Out of curiosity, which apps did you do?

------
jackowayed
I know it's risky, but I wouldn't count out the stock market.

With the whole financial meltdown, the stock market tanked, and there was no
doubt they'd go back up. A year ago, even though I was 15, only had a grand or
so, and needed the money a year and a half from then for college, I considered
the stock market because I knew they were going to shoot back up (and they
did).

So if it were a year ago, I would be _screaming_ stock market at you. But now
the Dow is back over 10k, so I see it as a much more risky move. That seems
pretty high considering the current state of the economy.

But if you see it fall back down toward 8k, I would buy, as one can be pretty
certain that it will be back around 10k sometime in the next 2 years. Also,
right now, interest rates are in the toilet, but stock dividends from most
companies are actually paying decent rates.

~~~
Psyonic
You'd have been SCREAMING stock market at him? It went down to... 7k? So if he
had invested in an index fund he'd have made 33%... another 8k? I don't think
that qualifies as GRQ, but ok

Note: not saying it's a bad idea, but he's asking for something to quickly
make a LOT more money. Your advice, while likely sound, isn't going to
accomplish that, unless he can pick one of those lucky stocks (like Akamai was
at one point) that goes up 33x in a year.

Second note: What he is asking for is a pipe dream. If it was that easy to
turn 24k into millions, there'd be a hell of a lot more people doing it. 24k
isn't really that much.

------
jseliger
Go read The Millionaire Next Door: [http://www.amazon.com/Millionaire-Next-
Door-Thomas-Stanley/d...](http://www.amazon.com/Millionaire-Next-Door-Thomas-
Stanley/dp/0671015206) , which ought to be mandatory reading for anyone.

 _What do I do with the money?_

Invest it in stocks or bonds.

 _How do I invest it in making more money quickly?_

You don't. That's the problem: there is no way to reliably do this. In fact,
there's probably no way to _unreliably_ do this either. At the moment, bank
savings accounts and CDs are paying next to nothing.

As The Millionaire Next Door shows, most people who we might think of as
"rich" don't actually get that way by being sports stars, or inheriting money,
or TV, or whatever: they get that way by spending less than they make and
saving as much as they can, usually in the form of investing in index funds.

------
nandemo
If you aren't doing it yet: translate and localize your apps, then sell them
in other countries' App Stores.

------
iamelgringo
Expand, grow, conquer.

\- Hire a few contractors to grow your stable of apps. You seem to know what
works. Expand on what you're doing so you can do more of the same.

\- Build your brand, that way you can use the market you've built to transfer
interest from one app to other apps, (as you've been doing on line with your
excellent blog posts).

\- Figure out a way to diversify your revenue stream. You're already concerned
about the app store closing or changing. Hire someone to port the apps to
Android. I think that's a long term play, but if Android takes off, I think
there's a large upside potential.

~~~
maxklein
I'm starting Android this month, everything is in place. I'll post comparison
posts on my blog after I test it out for a couple of weeks. I personally don't
think Android will work, but I'm generally a pessimist.

~~~
iamelgringo
What's the app? I'll buy it.

------
Apreche
Do what I would do. Just take a trip around the world, and forget about it.

~~~
holygoat
To quote The Sting: "I'd just blow it anyhow".

------
vessenes
Judging from responses here, and my own experience, I think you need first of
all to make some life decisions.

Here are the questions I'd try and answer first:

1) What sort of life do I want for myself? Do I want to keep programming cool
stuff as ecosystems come along? Do I want to manage programmers? Do I want to
run a business, become an internet marketing guru, based on my experience, or
try and live off of passive income?

The answers to those questions will shape your decisions, whether or not
you're thinking about them. If you do think about them, you'll have a better
shot at structuring a good outcome for yourself.

Based on your post, it sounds like you currently want to double down your
current income on the hopes of getting 'rich'.

Here's what I'd guess: I'd guess this is your first 'business' venture. It's
gone really well. You are used to seeing such rapid returns in business
because it's all you know. You are now trying to invest more money than you
previously have (since your time was not previously worth $24k / month), and
trying to get the same rate of return.

You will do yourself a huge favor if you give up on this plan. It is
incredibly unlikely to happen. I'll be clear: my guess is that you are
currently experiencing the best ROI you will get in your entire life. Never
again will you see these sort of _percentage_ returns on your money.

That's of course very different from what sort of _dollar_ returns you may
see.

If you're able to give up on your high ROI dreams, you'll be doing yourself
and your family someday a giant favor.

Now, if you're still on board with me, you're wanting to invest this money,
but you understand you need to follow the basic rules of capital, make sure
you can preserve your capital at all costs, and need some way to deal with
your total incompetence in the area of financial investment, while learning,
and without losing your nest egg.

Simplest advice here is to 1) choose some areas you're interested in, 2) give
yourself a couple _years_ to fully deploy the capital in those areas of
interest, 3) keep 3 to 6 months liquid assets in case your business blows up.

If I knew no more about you, I'd probably go with some average of the advice
here:

Split up your money into

a) reinvestment, become an app store publisher or app store angel investor
with 33% of your money. Stick with what you know here, and it will magically
become investing rather than 'gambling'.

b) cash -- 33% toward high liquidity cash alternatives until you've got 6
months or so set aside

c) long term investment -- 33% into index funds, split up between national and
international super low load index funds

Don't forget to hold onto .3-to.4x of (Revenue minus a) for taxes, or
.4xRevenue depending on how you structure your investments.

So that would equal like:

$24k

\- 3k living expenses

\- 7k deductible investment (a-la signing up apps to publish them)

\- 7k taxes

\- 3k cash

\- 4k long term investments

\----------------------------

super-smart young business person.

That's not quite what my upper paragraph math was, obviously the more you can
put into the deductible column, the more efficient you'll be. You could
rebalance it to like 4.5/4/5 or so with the balance going to taxes, if my back
of the envelope calcs are accurate.

------
imasr
Get yourself a woman. Problem solved.

------
toisanji
Can you share with us what apps you are selling on the app store?

------
andrewcooke
i think that it's pretty clear that getting rich is largely luck. you were in
the right place at the right time with the right skills. if it was more than
that, then you'd be able to repeat it without advice, right?

given that, two approaches make sense to me:

1 - treat it as a lucky break and consider how best to make it last over the
long term, as a one-off. but you say you don't want to do this in your
question.

2 - try to somehow increase the odds of getting lucky again. you can use money
to improve your chances in various ways: by improving your skill set; by
allowing you to fail more often before you starve; by out-sourcing work not
associated with "taking a chance" to someone else; by entering a market with a
higher barrier to entry (where you need to invest more up-front) but with,
hopefully, less competition.

perhaps the best approach is to see (1) as yet another way to do (2). in other
words: invest the money so that you have a small but reliable income over as
long a period as possible (a ramen fund, if you like), so that you can keep
trying new ideas.

ps i think the biggest argument against the "luck" hypothesis is that very
rich people tend to get richer. but i suspect that's because they exploit
information available only to people in their position; $24k doesn't buy your
way into that.

~~~
Psyonic
24k a month is near 300k a year... doing pretty damn well, if you can keep it
up, but like you said, nowhere near very rich. The very rich get richer
because, like Mark Cuban says, when they invest in a company, the CEO gives
them a call and asks if they have any recommendations.

~~~
andrewcooke
i didn't mean to imply 24k a month wasn't impressive (it's way more than i
earn!), but the impression i got was that this wasn't going to last for long.

which suggests another approach is to use the money to find ways to extend how
long this can last. for example, by porting to android.

------
rufugee
Rather than advice, I have questions....namely, is there a list of your
published apps somewhere? I'd like to understand the types of simple
applications you're developing.

Thanks!

~~~
wmblaettler
I am also interested in knowing this, if you are willing to share.

~~~
maxklein
That question is best answered per email.

~~~
rufugee
Great...email sent. Thanks!

------
prakash
I saw this book when Paul Buchheit shared his amazon history, haven't read it.
_How to Be Rich by J Paul Getty_.

Also, read this, [http://blogmaverick.com/2006/01/02/my-investment-advice-
for-...](http://blogmaverick.com/2006/01/02/my-investment-advice-for-2006/) &
this <http://blogmaverick.com/2008/10/04/how-to-get-rich/>

------
azf
So, you'll probably get about $100k until the income is gone. If you keep
working, you have 50-50 chance to keep going for a longer periods of time -
most likely less than that.

There's no way to multiply that little money in just few years by investing it
without jeopardizing it all. You won't even qualify as a professional investor
as you don't have enough money for it, so your options would be limited
anyway.

If I was you, I would try to milk the app store as long as it's good and
network like crazy while doing so. Focus on quality, not quantity - find out
the guys who actually get top-notch shit done. Get yourself known, you should
be able to build some steady secondary income by telling how you did it and
how iPhone apps should be done.

When your app store income is drying up, you should already have $100+k in the
bank. Go through your network and find some other overachievers who are
bootstrapping a startup with a solid business plan and who need your skills.
Apply some of your capital as a seed money to get leverage. Work your ass off
for a while. Profit. Retire or repeat.

------
anigbrowl
Good work. If this is solo, then I add my voice to others saying hire a few
people with half and save the other half.

You say you don't want to invest, but since California is in the first stages
of being hit by an epic storm system that will play out over the next 2 weeks,
civil engineering businesses on the west coast are about to be handed as much
work as they can handle.

Or talk to pg about putting some into ycombinator. With the relatively small
investment to each selectee, you don't need massive amounts of capital. You
could even stage your own little competition on HN and offer $500 or $1000
plus your (probably more valuable) management guidance to three worthy
candidates whose apps impress you in exchange for a share of their revenue.

~~~
HockeyPlayer
> Or talk to pg about putting some into ycombinator.

Is ycombinator taking investment? I thought it was closed.

------
leelin
It sounds like you want to invest the money in yourself, which is
understandable and entrepreneurial.

As life continues, you'll find yourself with increasingly more disposable
money (hopefully), and directly investing in yourself doesn't scale (either
it's too risky or you can't use it to make yourself more productive).

Sadly, eventually you have to invest in other countries, companies, assets, or
people; in short, invest in something you wish you could control more.

It's a good yet stressful problem to have, but maybe the most comforting
tidbit in your case is I doubt the windfall you earned is a one-time thing.
The lottery winner or not-so-bright heir to a sizable inheritance is in worse
shape.

------
ShabbyDoo
There's nothing wrong with continuing to ride a gravy train you know is going
to end (or at least slow down) as long as you don't convince yourself it's
going to keep going forever.

>I want other type of things that do not require much time investment, but
give as good returns as that.

Why do you not have time? I presume you are referring to the time required to,
say, manage rental properties? You've already proven that you're very good at
creating software users want to BUY(!), so why not take some of the time that
this money affords you (pay a maid, etc.) and figure out something more
substantial to build while you're still able to milk the app store cow every
morning?

------
webwright
Seems like there MIGHT be some real estate opportunities in some parts of the
US. Short sales in Vegas or parts of CA might be interesting. Income
properties (strip malls) might be available for cheap. Fourplexes, too.

I tend to lean towards our current irrational spending/printing resulting in
hyper-inflation (or at least inflation) though plenty of smart people support
deflation, too. If you buy the inflation arguments, don't keep your money
liquid. i.e. If you buy a $500k house and inflation drives it (any everything
else) up 10x to $5m, you bought a $5m house for a song. If you keep $500k in
the bank and there is 10x inflation... Ouch.

~~~
maxklein
I am quite sure there is not going to be any inflation or hyper-inflation. The
U.S is spending a lot, but it's also very very high income. And a lot of
countries have no interest in one of the biggest consumer group for their
products disappearing.

The U.S dollar will stay weak because this promotes manufacturing, which is
what the U.S needs to be doing right now. But it will not weaken much more.

The one thing you can use to measure the long term financial stability of a
country is its infrastructure, and when you start seeing roads decaying then
start expecting inflation in a year or two. Till then, things are fine.

~~~
webwright
Wow. You are "quite sure" and feel that crumbling roads is a leading indicator
of inflation? I generally make a point not to be snippy on Hacker News, so
I'll just post some links and a suggestion to not say you're "quite sure" when
you aren't (or really shouldn't be).

<http://en.wikipedia.org/wiki/Inflation>
<http://en.wikipedia.org/wiki/Deflation>

Kudos on the success, though.

------
oomkiller
Keep making apps, use the money to hire people to work with you, and then
soon, FOR you. That's the endgame here. If you don't want to do that, hire a
financial advisor. They can tell you how to invest it that will suit your
wishes.

------
jorkos
I would think about monetizing your experience of making money through apps;
take a small amount of your money and create a resource for building and
deploying cheap apps - this could be in the form of a PDF, etc. Add a dynamic
element like 2 hours of personal consultation. Sell at a few price points and
package this through a new app "Learn to sell apps app" - buyers need to get
the app to get the PDF.

This type of strategy leverages your experience & diversifies your revenue
streams w/ very little capital requirements....to make serious income you want
to move beyond just creating apps which may have very short life spans. Good
luck

------
jeromec
I think the answer heavily depends on how confident you are in yourself. Do
you feel your success was a fluke, or could you mimic it with something else?
Having 24K in capital is great, but if you know anything about the tech
startup space you'll know it's no sure ticket to riches. You need to board a
train that can take you higher, and that either means something you do
yourself or tagging along with someone else. Both are uncertain roads, so my
best advice is to research and weigh your decisions carefully. You might come
back and ask HN a 'Should I invest money in this?' question.

~~~
maxklein
I'm pretty smart, but you still need a confluence of certain things at a
certain time, which was clearly the case with the app store about 8 months
ago, and which I took advantage of.

One can never know if everything will fall perfectly in place the next time.

~~~
jeromec
Something I'd actually seriously consider in your place is YC companies. They
get around 20K which is just enough to create a prototype/beta to solicit a
larger round. This is not very much and I imagine many don't raise money right
away after their Demo Day. Having another 15-20K could be highly desired in
these earliest days. YC has already placed their bets that these companies
will become great, and I think their portfolio could have a 40% or better
success rate (provided timely variables fit together). If you could add your
money and app expertise to make a YC (or another) company stronger, that might
be the best risk to reward ratio you can have.

~~~
maxklein
I'd be ashamed to approach a YC company with my 24k. Like - it's not THAT much
money!

~~~
jeromec
You might be surprised at the responses you'd get. As you probably know web
startups are cheaper than ever to build; that's why the YC model works so
well. It's not in a startup's interest to raise huge amounts and give up lots
of equity early on; it's far better to give up less than 10% (YC typically
gets 6-7%). If you saw a company that you could relate to, and which you
understood the dynamics of, and furthermore might also be able to contribute
your support to then that can be worth quite a lot. The money is just part of
what you can bring to the table. You've already built a successful tech app so
you obviously have some tech knowledge, which is likely valuable. It certainly
doesn't hurt to ask; the YC companies are the same types likely to be on HN,
so approach it as more of a community/team aspect than a rigid VC offer. An
early YC company might give up another 4-5% for what you could offer, and even
that small amount might be worth millions in the not-too-distant future -
meeting your criteria.

------
sethg
_I do NOT want to invest in the stock market, or invest in anything long term
like bonds or property. I want to somehow use the money to make more money
quickly (within a 2 year time span)._

If you’re looking for investment tips, I recommend the book _A Random Walk
Down Wall Street_.

If you’re looking at the broader question “what should I do with all this free
cash flow”, hiring someone else (as many others have suggested) isn’t a bad
idea, as long as you think that the time freed up by delegating work to
someone else will free _you_ up to work on your next money-making project.

------
taylorbo
No one has a guaranteed way to make more money quickly...but here's some
ideas.

Invest in startups - You might see amazing returns in ~2-5 years, but the risk
is very high.

High risk hedgefunds - All equity/bond/commodity investment doesn't have to be
slow. It can be risky and full of high returns/loses.

My favorite idea... Expand what you're doing: Use your proven track record and
revenues to bank roll your own app store based startup/shop. Hire some people,
branch out a bit and look into the android platform. You can avoid the need to
take money from outside investors, and multiply your money that way.

~~~
Imprecate
The original poster probably doesn't meet the requirements for investing in
hedge funds <[http://www.fool.com/investing/mutual-funds/2006/02/28/are-
yo...](http://www.fool.com/investing/mutual-funds/2006/02/28/are-you-a-
qualified-investor.aspx>); and they don't take $24k investments anyway.

------
jasonlbaptiste
Find something that is undervalued significantly, dress it up with great
tech/service/usability, and dominate that area. Odds are it won't be anything
in the mainstream tech circles (ie- realtime web).

------
jonnycowboy
Just travel, with a small laptop (for support). You'll be able to live for
over a year on that money in places like New Zealand, China, India, etc etc.
Or rent/buy a small RV and see rural America!

~~~
cellis
Why rural america? I've driven through my fair share of it and lived in it for
a long time, and based on this heuristic I've got to say that you will mostly
just be seeing large expanses of farm fields.

With the kind of money he has: Costa Rica, South of France, Tahiti, [insert
sunny place]. _Mojito Island_

~~~
eru
Berlin is also cheap and interesting.

------
rsheridan6
What you're looking for is a get rich quick scheme, but you're not going to
find one here (not a legit one, anyway).

Here's an idea: have your cousin in the Illinois state legislature throw you
some lucrative contracts. That's the kind of get rich quick scheme that works.
Don't have a cousin in the Illinois state legislature? Then you'll have to do
something that requires more time investment if you want both a reasonable
chance of success and a high, rapid ROI.

~~~
PieSquared
It seems to me what he's looking for is more like a "get-rich-investment". He
has time and money to invest in something, and wants to use them to maximum
advantage. No need to belittle the post, it's quite valid.

------
perlpimp
Convert your apps into chinese. Even tiny fraction of possible market like
that is huge. Conversion should be more or less trivial, translation effort is
cheap :)

~~~
maxklein
Tried, does not work. Chinese market in the app store is small.

~~~
oceanician
What are the Chinese using? Maybe Android or S60 works better for them?

------
kyro
You have the method by which you can generate lots of money in a short period
of time; you just proved that to us with that $24k. But you say your problem
is the time and effort expended to create your apps, so I'd suggest you take a
portion of your money to hire others, create more apps, and saturate the App
Store. What's it to you if the App Store won't last forever? You want
something quick, so exploit it while it's there.

------
gyardley
You've probably got enough money and enough of an analytical mindset to
explore the cost-per-lead affiliate marketing space, figure out what works
through test buys (like poker, you've got to play a lot before you get good at
it), and then have enough cash left over to float your operation while
spending at a decent scale.

Downside - this can be an ethically-challenged business. But so are most 'make
money fast' schemes.

------
iterationx
You could promote and seed a couple of stackexchange sites. I really have no
clue what the revenue looks like but it seems like a dead simple idea.

------
joe_the_user
Great that you're making money with your business. Great that you can tell
it's far form from guaranteed.

Just about any other business you'd name is also risky. (and if folks in HN
know about something, you know you'll have competition). So no matter what
else you do, keep a cushion. There's story everyday about formerly successful
entrepreneurs who lived beyond their means and wound-up broke. Don't be them.

------
gte910h
1\. Make More Apps 2\. Diversify into Android 3\. Stick it in the bank until
something great comes along.

Cash is very useful. Do not downplay that.

------
hello_moto
Buy a house (or a couple houses). Rent some of them, live on the one you like
the most. Let the rent pays for the mortgage.

Start thinking about having a family. Save money for your kids education. Save
money for your parents. Save money for yourself for the old age (retirement
plans [whatever the shape and form is], hospital bills, traveling).

------
rphlx
Why are you opposed to stocks/bonds? Not implying the trend will continue, but
there are commodities and diversified foreign stock market ETFs that returned
50-100%+ last year with greater liquidity and less risk than nearly all
startups.

Also, there are bond ETFs/funds that are very liquid. I am a big fan of the
JNK ETF (~11% interest).

------
jonallanharper
1\. If you don't already have one, set up a gold-backed IRA and contribute the
max.

2\. Then, I'd personally either invest in gold or silver 1 oz bullion.
Apmex.com is a great site to buy from. Chances are extremely slim that you'd
_lose_ the cash your making, if you convert to gold.

3\. Keep some in a money market account, like EmigrantDirect.

------
sreitshamer
Invest in yourself! Working for yourself can make you a lot happier. Since
your living costs are low you're in a great position to build a business using
that cash.

EDIT: Plus by starting a company you'll immediately promote yourself to CEO.
If you ever get a job again in the future, it'll be at a higher level, more
pay, etc.

------
bravura
Invest in my company (or another hner) in exchange for convertible debt. Micro
invest to help startups pay for concrete little expenses like hosting. It
might not give a high return on investment but it would be personally
rewarding, and help you evaluate potential future collaborators.

Congrats by the way!

------
messel
I'd suggest angel investing in startups that compliment your view on where
things are headed. It's more fun than the stock market. You have proven
knowledge of what's selling now, and understand software.

The turn around is probably longer than 2 years though.

Can you do the same thing with the Android store?

------
colinplamondon
The ecosystem is pretty damn stable when you have a relatively up-market app.
We've had stable growth with one application for the past six months, and
crazy little variance in our category rank. Maybe develop a larger
application, one that you can market for the long-term?

------
swombat
_I don't know what to do with the money, how to use this very large monthly
income to actually make myself rich_

What would you do if you had already made yourself rich? What would you spend
your time on?

Why not start doing that right now? Why do you need to "make yourself rich"
before you can do it?

~~~
maxklein
I'd look for ways to make myself even richer. It's a game without an end, and
it's fun to play.

~~~
bOR_
The end is when you die :). Money doesn't travel over that well.

But as long as you're having fun finding ways to make more money, there's
really not that much wrong with playing the money game. Just don't care too
much about money :).

------
richardburton
Stash half and experiment with the other. No harm in putting some away in a
cushion account.

------
barmstrong
There are no 100% safe investments. But if you want to take the time to
educate yourself on one of them, you can do well. Real estate is my preference
over stocks.

But if not, an ING direct savings account is a good start.

And talk to rich people, to see what they are doing.

------
thinkbohemian
Thought Experiment: Give it to your 18 year old self...what would they do with
the money?

~~~
maxklein
Probably buy video games and make an arcade. That was the business I was into
at the time, never could afford the equipment though.

------
lo_fye
The $ should be paid to your business, not you. Then pay yourself very little
as a wage. Roll the rest back into the business (i.e. pay yourself to create
apps/software that you think would be cool to build and sell). Repeat.

------
AndrewHampton
<http://www.kiva.org/>

~~~
icey
While microloans are certainly an admirable use of money; I don't think that
really helps Max with his request at all. Kiva is something you do to be
charitable, not something you do to make money.

~~~
eru
If you get a decent return on your microloans, they can be a good way to make
money (and give some capital to people who need it).

But I agree: I doubt Max has as much of an advantage in evaluating promising
targets for microloans than he has building software.

~~~
icey
The feel that I've gotten is that nobody is really making any money with Kiva.
Most people I've read have gotten roughly a 1% return. Have you heard much
about people having success with Kiva that exceeds a bare return on principal?

~~~
eru
I agree, and, no, I haven't heard of people making money with Kiva, but that's
(at least partly) because I haven't really heard of Kiva at all. My comment
was meant to reference the success of e.g. Grameen bank which seems to get
decent returns on its microloan business, but also applies a lot of local
knowledge.

------
mike463
I'd say, invest in yourself. If you're short of creative ideas on what to do
with your time and finances, I think you might find the book "the 4 hour work
week" interesting.

------
mydigitalself
Property can be a short-term investment too. Buy something that needs work, do
it up, sell it on. It's fun, creative and rewarding too, although not without
risk either.

~~~
maxklein
They require a lot of time I would think.

------
teeja
Bank it and don't sweat it until you've got $250K lying around. Starting an
IRA with part of it would be good ... but rewarding yourself is also good.

------
cognomen
What is the software you used for the graph? Thx.

~~~
maxklein
AppViz.

------
stewiecat
1\. Taxes 2\. Retirement savings.

Max out your IRA, Roth, etc to take advantage of your (I'm assuming) youth and
the magic of compound returns.

~~~
maxklein
Just turned 29. Want to start retirement stuff at 30.

~~~
timdorr
You should have started retirement stuff the instant you took your first job.
The sooner you start, the more money you'll have when you start taking it out.

------
Keyframe
Buy AAPL, they made you some money already - they will make you more with
"iSlate" soon enough. </semi-serious>

~~~
maxklein
iSlate is an opportunity I am watching for. Let's see what Steve tells us. I'm
appropriately positioned, seeing as I have all this know how.

------
bucciarati
Donate 0.01 of your money to Wikileaks, like I did. Your 0.01 will make more
difference than mine did.

------
DanielBMarkham
Find a co-founder (or not) and invest in an app in a more stable ecosystem
with longer-term potential.

------
vaksel
you can do what Jacques does, he also has a "passive" income from one of his
sites, so he makes a few small time investments here and there.

You really don't need a lot of money to invest. Just look at the HN model. As
an angel all you need is 25K to get into most early rounds.

~~~
icey
That's pretty risky - you'd need to put 25K into one company to make it
worthwhile for the company. Angel investing is like VC on crack; you have to
spread your investments around because the failure rate is likely going to be
well over 50%. The goal is to make the 1 or 2 in 10 that succeed pay off well
enough to obviate the cost of the failures.

~~~
Psyonic
Angel investing without connections probably won't work, anyway. Most people
are looking for more than money.

------
iworkforthem
Invest in companies.

~~~
jackowayed
That's pretty risky. If you have a few million dollars that you want to invest
into a dozen companies, you're diversified enough that if you make good
decisions, it should pay off.

But at an angel level he probably only has enough to invest in 1-3, even
fairly small rounds. So it's not too unlikely that all 3 of those companies
fail and he loses it all.

High-risk bets, even those with high expected values, are bad if you can't
afford to make the same bet enough times.

------
CalinCulianu
BTW the dollar is going to tank in the next couple of years. The stupidest
thing you can do is buy dollar-based securities. If you MUST invest, buy GOLD.

No joke.

------
tjoozeylabs
What apps are you flipping?

------
throwaway5566
Invest in yourself.

You've already proven that you are capable of doing great things. Work to
increase your capabilities.

To generate wealth, in my opinion it's best to do things that are aligned with
what you are interested in. Since you have demonstrated ability with business
and technology, and some capital, start with that.

One way to generate wealth is to start a company, then sell it. There are many
skills necessary, but the essential one you already have - being able to just
plunge in and do it.

I'd say, dive in and see if you can learn to build a small company by
bootstrapping it - without taking investment money or going into debt... take
it slow and incremental, not going into debt or taking investment unless you
think you have a winning team and product. Usually at that point you don't
really need investment, but can use it to expand a lot.

These days, software development done by yourself or a few friends and servers
in the cloud are so cheap that you can build whole software or software-as-a-
service companies with your existing cash flow. Learn the technical and
business skills you need. Plan experiments that help you learn - that won't
kill you if you fail. You can learn much more from failure than success, so
make mistakes as fast as you can.

Oh yeah, and find a good accountant and make sure you pay your taxes.

Here's some resources:

Cheat sheet on how to get people to change - and buy your products. The best
summary I've read:

[http://www.chrisoleary.com/projects/TheParadoxOfPain/Documen...](http://www.chrisoleary.com/projects/TheParadoxOfPain/Documents/TheParadoxOfPain_SummarySheet.pdf)

. . . .

My bible on how to learn customer problems and turn them into money. Also has
a great annotated bibliography of other good books to read, and a methodology
for becoming a self-taught entrepreneur. The author founded 5 well-known tech
companies that did IPOs, generating a great deal of wealth, and now teaches at
Stanford business school. I can't say enough good things about this book:

The Four Steps to the Epiphany - Steve Blank [http://www.amazon.com/Four-
Steps-Epiphany-Steven-Blank/dp/09...](http://www.amazon.com/Four-Steps-
Epiphany-Steven-Blank/dp/0976470705)

. . . .

The inside story on nitty-gritty details of how to start a start up, do the
legal work necessary to create the machinery for wealth generation. Written
from the perspective of helping tech entrepreneurs protect themselves. If I
would have had this book when I was starting out, I'd have held on to much
more of my wealth:

High Tech Start Up - John L. Nesheim [http://www.amazon.com/High-Tech-Start-
Revised-Updated/dp/068...](http://www.amazon.com/High-Tech-Start-Revised-
Updated/dp/068487170X)

. . . .

Last but not least, a very important short text on how money works. Written by
the founder of MasterCard. Extremely helpful in thinking about money, how to
work with it and think about it, what it's good for, not good for, and its
capabilities and place in ones' life:

[http://www.amazon.com/Seven-Money-Shambhala-Pocket-
Classics/...](http://www.amazon.com/Seven-Money-Shambhala-Pocket-
Classics/dp/1570622779)

Bonus text - the classic manual on leadership - really helpful instructions on
gracefully working with others. How to lead effectively and with a minimum of
muss and fuss. This is my favorite translation.

Tao Te Ching - Lao Tzu, translated by Stephen Mitchell
[http://www.amazon.com/Tao-Te-Ching-Stephen-
Mitchell/dp/00608...](http://www.amazon.com/Tao-Te-Ching-Stephen-
Mitchell/dp/0060812451)

\- a serial entrepreneur

------
st3fan
Pension fund.

------
medianama
How?

------
w3matter
Make sure you pay your taxes dude

------
mschy
1) I'd set aside enough money to live for a year in something that's boring,
low-return and dead safe. And I wouldn't touch it. This will give you enormous
flexibility when deciding what to do with your life and career.

2) I'd talk to financial professionals to figure out how to structure things
for maximum gain (e.g. what can you legally write off? can you create
retirement programs for yourself? etc.)

3) I'd take classes in my areas of weakness, so I'm better prepared for the
Next Big Thing.

------
Nassrat
I think what you are looking for is to incubate startups

~~~
chrisduesing
From what he said this is his first real financial success, which means that
he does not qualify as an 'accredited investor'. He needs to continue to make
that kind of money for 2 years before he falls under more investment friendly
SEC regulations. Until then he would be placing a large burden on a startup by
trying to invest in it with additional legal work, filings and fees.

------
johnconroy
Well done! play it safe though: a nice property and an equity tracker fund.

Jesus I wish I was in your shoes.

------
shareme
invest in building products

------
eraad
Give it all to me. I will make good use of it and give you back some extra
bucks in a couple of years.

