Yeah, good point--I'd recommend investing only $10k or $20k if possible.
One of my points, though, is that you are effectively investing $100k in the company by taking a crap deal to work there (e.g., via a $25k pay cut over 4 years of work). For that $100k, you're getting much less than you would get by simply straight-up investing $100k.
- age
- Bay area/NYC or somewhere else?
- how do u deal with taxes, 401K contributions and still have 100K leftover?
I am possibly overcontributing 401K (maxing the 18K allowed by the IRS) and certainly overpaying rent (bay area :[). How the heck does one manage to save/invest 100K even at that salary? As a soon to be father, I need to get my act together asap.
I'm 30 years old, and my rent is about $1200/month (I'm married, which helps cut down on costs).
After taxes, $250k becomes $150k. After rent, food, staying alive, some travel, etc., I'm left with about $100k disposable per year. Like most of you, I don't really have nice things, fancy clothes, etc.
I would continue to max out contributions to retirement accounts, though! You can invest in startups via IRAs and Roth-IRAs (I have done it).
I see and agree to your point, taking that kind of cut in salary is an investment of that magnitude. However, there are not many people that could even afford to put 2k, let alone 10k into a company. For most, putting in the time to help a friend, possibly valuing the time at 10k and giving that to them for free, is a much easier and safer bet. I know that makes little sense in terms of dollars, but no-one I know of, save some very busy consultants, have anywhere near 10k to 'invest'. However, most folk I know of have a few weekends and hour after work to 'invest' and help a friend out, possibly worth 10k in time.
One of my points, though, is that you are effectively investing $100k in the company by taking a crap deal to work there (e.g., via a $25k pay cut over 4 years of work). For that $100k, you're getting much less than you would get by simply straight-up investing $100k.