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Ask HN: What to do after $8M (all cash, post tax) exit?
683 points by throwaway8m 7 days ago | hide | past | web | favorite | 508 comments
Going anonymous for this. I am just an average project manager who happened to be at the right tech company at the right time. They had a big exit and suddenly my stocks are worth $8M (the money came in my account last week).

I am just an average guy. I am 43 and middle level tech manager.I know coding (but nothing superb). I know business (but nothing much). I am not particularly very hardworking or particularly super intelligent. Not dumb or lazy - just average.

The point is I can probably find another similar job but probably nothing much higher.

I have two kids and a nice wife. I have a nice, small house and two small cars. Everything paid for. I have no debts or “vices”. I do not like smoking, drinking or going out. I do not think I have any real hobbies.

Just a simple guy with simple life and then this happens. What should I do? Should I donate it? Should I hire a personal wealth manager? Should I retire?

I am freaking out. Please provide some guidance.






This is a great thread. Throwaway also. Gonna write some stream-of-consciousness here, because I have to start my work day, but I personally made approx. this amount from an exit, and it has gone very well for me and my family (wife + 3 kids). Some additional fine-tuned advice of what worked for me: (1) don't be afraid to spend money - high hourly rates - for a good accountant and good tax attorney. (2) if I were you I'd sign up for a couple different brokerage accounts (e.g., Charles Schwab and one other) and split the money between them. It takes almost no time to do this, and it's nice to have some diversity there in case something catastrophic happens to one of them and your assets are locked up for a long time while it gets sorted out. (3) as others have said, just buy US treasuries (interest rates are good right now) while you sit back and think about it. (4) Eventually if you're not into picking things yourself, you'll just want some healthy mix of asset classes, which (5) you'll learn about by reading some books. (6) Those brokerages will put someone on the phone with you and help you buy the treasuries, if that's confusing. (7) The one thing you want to avoid is letting the brokerages sell you their own personal wealth management. Everyone from your bank to your brokerage will try to sell you the "we'll help you for 1% of your money per year" -- avoid this. Suddenly 10 years have gone by and $800k-ish of your $8million is in someone else's hands, who simply threw darts at a dartboard and did their best to obfuscate their performance during bad times. (8) AVOID PRIVATE INVESTMENTS. Unless you're a professional private equity investor, don't buy a piece of that friend's restaurant, that store that's opening up, that tech startup, whatever. This money tends to disappear. If you're ok losing money to support your cousin who's starting a new company, just give them some money and be honest to yourself and them about the whole thing (not that I advise this either, but don't confuse charity and investment.) Just don't invest in private stuff. The problems with private investments: (a) you lose all liquidity, (b) markets aren't efficient so you can actually do a veeeeery bad job, (c) it can get personal and/or skeezy. So seriously, avoid any kind of private investments. (9) Avoid starting your own business and pouring all your money into it. People tend to burn through windfalls in that way and regret it. (10) Don't race into fancier real estate. (11) Make no lifestyle upgrades at all during the next year. (12) Take your time with charities. It can be a fun family project in the years to come to pick charities together. You'll have income in many years from this money, so you're not missing an opportunity for deductions by not giving money in the first year. (13) OH ! When signing up for brokerages, don't enable options or margin trading. In addition to this being dangerous for you, I believe it allows them to be funky with your cash and holdings, and it complicates your relationship with the brokerage should they or a bank they work with ever go under. (14) don't rush into estate configuration, just start with a simple will. Then consider trusts and things like that in future years. From my and my friends' experiences, they tend to overcomplicate things. (15) TELL AS FEW PEOPLE AS POSSIBLE. (16) Keep working, but only on something you enjoy. (17) Stay or get in shape. Your body is more important than money.

Seriously, AVOID PRIVATE INVESTMENTS.

Kobe Bryant on taking care of family after a windfall: "You will come to understand that you were taking care of them because it made YOU feel good, it made YOU happy to see them smiling and without a care in the world — and that was extremely selfish of you. While you were feeling satisfied with yourself, you were slowly eating away at their own dreams and ambitions. You were adding material things to their lives, but subtracting the most precious gifts of all: independence and growth."

https://www.theplayerstribune.com/en-us/articles/kobe-bryant...


Wow. Great quote from Kobe. It's true. Parents have the urge to remove all the obstacles from their children's lives that they themselves had to struggle with. However, struggling builds independence and personal growth. It's a fine balance.

Hi,

Some tips from me:

- Take a nice holiday - Don't rush into investing. Take some time to think about what you want to do. - If you invest in stocks, do it in a staged plan. Resist the urge to sell when it's going down, and the urge to buy when it's going up. (I could not resist buying when it went up beginning January this year). Start with small amounts first. Be there for the long run (don't sell/buy all the time). Be prepared that you can go up/down a lot in one day. - Rather invest in index funds then specific stocks - Don't invest everything in one type. Don't just use 1 broker. Stay away from leveraged, turbos, bitcoins, etc... - Be careful about tax impacts on your decisions, depending on where you live - Be careful about private investments. Only invest into something which you understand and have knowledge of and can help and make it possible. Only take market risk, and not the execution risk. (I for instance have not yet done any investments so far) - I put some of my money in hedge funds (Millenium, etc..) through a private bank (additional yearly fee + performance fee).

And: - Think about what you would like to do. For me that's starting a new company (since I already did that before and succeeded). If you like your job, then stay.


Honestly this is mostly bad advice. The guy should just sit on his hands for a year or two while he processes the idea of having money. Telling somebody who has never made a big financial decisions to start buying millions of dollars worth of financial assets is terrible advice. Unless by "start small" you mean invest a non-material amount, which still leaves the question: what to do with the remaining 99% of the money. My answer: nothing. Checking/savings account is fine.

When you have a large amount of money the most important thing is not to make any huge mistakes. The best way not to make a huge mistake is to just sit on your hands and do nothing. This is advice that anybody can follow, as opposed to your advice which is vague and absolutely not without risk (there is nothing conservative about buying index funds 10 years into a bull market).


No, checking/savings account is not fine. They are covered for $100,000 (IIRC) by FDIC if the bank fails. [Edit: $250K.] That is, if the bank goes under when you have $10 million in it, you get back... $259,000.

I mean, it can be OK if you have 40 different accounts in different banks. But that's tedious.

Dump $100K into a bank account (one that does not have a debit card attached to it). As others have said, set aside one year's expenses; I'm going to assume that $100K is in the neighborhood of that. Put the rest into, say, a Vanguard S&P 500 index fund, a Fidelity high-quality corporate bond fund, and somebody else's Treasury fund.


You should NOT have 8 million in a checking account.

Because FDIC only insures $250K? SIPC only covers $500K somewhere like Schwab[1] - or do you mean because you think it's terrible not be earning something on the $8M? Presumably that's enough for anyone to live out the rest of their life on comfortably...

1: https://www.schwabmoneywise.com/public/moneywise/essentials/...


I mostly meant for safety. You want it split up for many reasons... so you can have the FDIC or SIPC insurance, so you don't have to worry about losing access to the account via fraud, etc.

It would be ok for a short term to keep it in checking or savings accounts, but don't put it all in one.


FDIC is not just a dollar limit, but also per bank. Someone can have CDs from multiple banks, all in one account. Millions of FDIC insured money is easy these days.

when you have $8mm, sitting on your hands for a year costs you ~$250,000.

If you make rash decisions based on your perception of opportunity costs at that kind of sum, it's a good first step for losing it all. I'm also surprised by the attitude of 5% gain is easy and guaranteed. It's not. Neither treasurey funds nor real estate yield anywhere near 5% and we are many years in a bull market. Expecting 5% yearly ROI in the market over the next decade is optimistic.

> we are many years in a bull market

I agree. Having most of his capital in the stock market or real estate is a great opportunity to lose money in the next 5-10 years. Holding cash and investing it when the market is down is a good idea. Buffet currently does that because Berkshire thinks [1] that most of the stocks are overvalued (he waits for the next crash to buy them when they're cheap).

Other assets which are stable in value (e.g. gold, inelastic resources) are also a good idea.

[1]: https://www.businessinsider.de/warren-buffett-berkshire-hath...

OT: I would get myself a New Zealand citizenship/permanent residency and buy real estate there ($500k-1m NZD). Many millionaires are currently heading to Australia and NZ because they expect that the inequality will get to the point where society will turn aggressive. A little bit paranoid, but they try to be better safe than sorry. Plus New Zealand is a wonderful place to live and the real estate price will rise in the next years because of growing fear. [2]

[2]: https://www.bloomberg.com/features/2018-rich-new-zealand-doo...


$SPY has lots of room to go. This bull market is just starting to simmer until the market tells us otherwise. Further to that, for many, me excluded, time in the market is better than time in the market. If you can afford to just leave all your money in the market, overtime, statistically, it has been proven to get better returns when we recover. Suppose OP drops $8M into the market and it dips to $150, it will likely recover in time and it won't be spent if you just leave it. You can also do the 4% withdrawal that many financial blogs suggest.

Leaving cash on the side will eat you alive especially when inflation goes higher. However, if inflation goes up significantly over the next decade, think 15-20% inflation per year, having money on the side to buy assets will give OP the ability to become an asset owner, as inflation provides the ability for the largest transfer of wealth, assuming items can be paid off and investments are made in assets which gain value, i.e. houses, not cars.


Most people lack the emotional capability to hold stocks that are losing value.

If inflation goes up he can use his money to allocate the most valuable asset. I just don't think it's generally a good idea to invest while the market is deep into a bull market. It's better to put 1/5th or 1/4th into this bullish market and wait on the sidelines for the market correction (crash). If you buy after a crash, it's definitely a better bargain. Finding other options for your cash (e.g. houses that are expected to rise in value) to avoid losing 2% to inflation is certainly a good idea. I would also consider the risk that OP had no contact with the stock market before and that the emotional toll you get when you see that -15% in your portfolio can be overwhelming. Most people lose their money because they realize their losses in the wrong moment (and vice versa - some people lose their money because they don't cut their losses early enough). Definitely no hassle-free money in the stock market.


I think you meant time in the market is better than timing the market. However your advice rings true.

Yeah oops. For most, time in the market is better than timing the market.

not opportunity cost, real dollar loss to inflation. the opportunity cost is even greater.

also I don't know why you are talking to me about 5%. $250k is not 5% of $8mm.


Yea you're right. I dunno why I added the 5% part here, it's something I saw across other comments.

What would it have cost you if you dumped your windfall into an index fund in July 2018? Answer — you would have lost money and get the shaft when you’re forced to sell to lay taxes, etc.

Prudence and dollar cost averaging are your friends. People who stay rich are conservative with cash.


I disagree on not hiring an adviser. The key is to know what kind of adviser they are. If they are a fee-only adviser with fiduciary responsibility, it is likely exceptionally worthwhile. It sounds like you have a good handle on how to manage your finances, but there is a LOT to know. Minimizing taxes, planning children's' college, etc. Also, the good ones don't charge a flat 1% all the way up. They will charge less the more money you have with them. Source: my wife is a CFP and works for a well-respected firm in that industry.

Hear here! My personal friend does accounting and wealth management (mainly accounting) for high net worths. I generally disagree that people need wealth managers, but if given the description it might make sense. He doesn't usually do anything more complicated than helping you decide your asset mix and throws it in Vanguard indexes, and makes sure you don't spend it on private investments.

The problem is that the industry is littered with con artists and the downside damage an unethical person can do to your finances is horrific.

The best thing is to read, read, and read more before even looking for outside consultation on any of these matters.


> Seriously, AVOID PRIVATE INVESTMENTS.

Good advice. My understanding is that private investments are the #1 way professional athletes with even more money than OP go broke (excludig straight-up fraud by their investment managers).


Sound advice. Also, I can't help but read it in the Baz Luhrmann "Wear Sunscreen" voice, which was a nice bonus.

Be careful and thoughtful about where your money goes. Spend on memorable experiences and things you and your family can enjoy together. Maybe use this as an opportunity to find hobbies together and get even closer than you are now. Enjoy!


That kobe quote is poignant and experience on a much smaller scale than kobe was on, has taught me the same. Also, your advice re: single private investment is spot on. If you read any story about a formerly rich athlete, etc going broke, it invariably involves a large investment in a dubious, high risk scheme (restaurants, companies, real estate, etc).

Re the 1% thing: might be worth it. Lots of people chase returns and pick risky investments. Instead of picking a diversified portfolio of index and/or blue chip stocks and sticking with it, they "play" the market, and almost never beat it. The 1% to a wealth advisor saves you from yourself. Of course, milage will vary

I think most everyone in the sub-$25M bracket is better served paying a broad-based index fund 0 to 4 basis points for VTSAX or similar and using fee-only planner/advisers for tax, estate, and investment advice.

Completely agree that if OP wasn't previously a skilled investor with a track record of beating the market (extremely unlikely), that they shouldn't now try to become one.

With this amount of money, they've "won the game" and have no need to beat the market. They only need to match the market over the next 50 years. That can be done very simply, reliably, and cheaply.


Having worked at a hedge fund, most "skilled" investors aren't. I would just do what you've suggested and park it in a diversified portfolio of index funds even if I had all that money. I've seen some atrocious usage of investor money at hedge funds. It mostly goes toward stoking the ego of the partners.

I think you should not chase returns and pick risky investments AND not have a 1% manager. You can pay for a good CPA and a good attorney, but I am very skeptical that in the long run you will do better with someone managing your money than ETFs and bonds. There is a myth that the wealthy get better advice. Sometimes. But people that want to advertise their skill advertise to the wealthy. There is tons of survivorship bias in wealth managers. You tend to hear about success, people are embarrassed by setbacks. Take it with a grain of salt.

Unsurprisingly lots of people have been in similar situations, so there is a Wiki article on one of the Internet's best personal finance and investing websites: "Managing a windfall" https://www.bogleheads.org/wiki/Managing_a_windfall

"Do nothing rash. Set aside one year's living expenses[note 2] and place the rest of the windfall into low risk investments (FDIC insured accounts, money market funds, treasury bills) for one year. As it may take as long as five years for the windfall recipient to adjust to a new life, this pause provides a chance for emotions to cool, helps avoid impulsive behavior, and, if warranted, allows the recipient time to put together a team of professional advisers."


Agreed with the bogleheads suggestion. I’m a lawyer who does some consulting to people in similar situations, and the mistake that everyone makes is thinking that because it’s a lot of money somehow it has to be treated differently. This is just plain wrong.

Resist the urge to hire a fancy money manager or do anything different beyond a celebratory dinner with your family.

Don’t tell anyone beyond your wife and very trustworthy family about this. Otherwise,you will quickly have lots of “friends” and family members who “love” you.

Going forward with work is a personal decision. Obviously, you don’t need to. A tried-and-true conservative investment approach will pay you sufficient income for the rest of your life (and our kids through college, and everything else). But it’s tough to stop working. Anecdotally, I’m about half retired (on a lot less money) and it’s a big challenge.

I’m getting long winded. For now, resist the urge to do anything special, anything too different.


"Don’t tell anyone beyond your wife and very trustworthy family about this. Otherwise,you will quickly have lots of 'friends' and family members who “love” you."

I completely agree with this if he had won the lottery. Money found is different than money earned. In this situation though, the OP picked the right startup, put work and effort into making it successful, and was financially compensated for the risk and effort he took. I would say he should own his success; the money is rightfully his.


It’s not really about owning anything. It’s thieving friends of family who will hold it against you if the wealth is not shared on account of your apparently deep social bond, if not trying to wrings it out of your wallet outright.

I think in practice though, if you act that you "earned it", it is much harder for people to assume they can ask you for it. You here a lot about lottery winners going broke, but you don't hear as much as startup employees on exit eventually going broke. This may be just a result of education and income levels, but I also believe that people don't mind asking you for money if it seems like it came to you through luck and not effort.

The justification isn't that OP came by the money unfairly, it's that because he has so much he doesn't need it as much as his friends and family need it. "Oh, can I get $20,000 for my business idea? Will you help send your niece to private school instead of state school? I'm paying 25% interest on this credit card debt, can you give me the money to pay it off?" etc etc. Everyone from his parents to that one guy he knew in college will want to solve their "small" money problems with OP's windfall, because to them he'll still be a millionaire and never have to work again. What eventually happens is OP will have to start saying NO to people then they will resent him and it will change the dynamic of their relationship. Or he could just keep his finances to himself and not bring this on himself. I'm not saying he shouldn't be able to help anyone who really needs it. It's just in his best interest to not advertise how much he really has to other people.

>> ...allows the recipient time to put together a team of professional advisers...

Yeah, because it takes a TEAM of people getting paid to figure out what to do with money. I could accept one financial advisor though I don't know how to select one, but a team sounds a bit like vultures ;-)


I agree. A financial guru I've listened to off and on for many years is Clark Howard and he suggests always using a financial advisor that you pay outright with fiduciary responsibility. His favorite recommendation is to talk to someone from the Garrett Planning Network. If you aren't paying upfront you are paying far more in bad investment advice that isn't designed to make you money. Think bad investments that offer kickbacks to your "advisor."

For those who don't know, a fiduciary is legally obligated to work in your best financial interests, so it's pretty important that your financial advisor is one.

Reinforcing this, someone with constrained by fiduciary duty must make (and be able to show) recommendations/actions based on your best interests when it comes to your money or be liable.

An adviser that is not operating under the duty, can place their best interests above yours legally (and this is expected).


Anecdotal, but a friend of mine works directly under Clark Howard. By all accounts he is a wonderful and generous man, rare for one giving financial advice. I would generally trust him.

Yes, if they get a commission from what they sell you, they do not have fiduciary.

Apart from investment advice you'll also need legal advice to know how to comply with your fiscal obligations and structure things in the best possible way (including estate planning). So you need at least an accountant and a lawyer. The investment part is much less urgent.

Estate attorney, tax attorney, CPA, and possibly a financial advisor. Doesn't sound crazy for someone who just got $100 million from selling their business.

> Unsurprisingly lots of people have been in similar situations

According to this article[1], you need $8.4 million to be in the top 1% of net worth so 1 out of 100 HN lurkers can probably also give useful first hand advice!

(assuming being rich doesn't make you less likely to visit HN)

[1] https://economix.blogs.nytimes.com/2012/01/17/measuring-the-...


That is across all ages and I would guess that few here are seniors. At 35 the top 1% is $2.3m. So many here may be more wealthy than you realize.

https://www.financialsamurai.com/the-top-one-percent-net-wor...


Judging by the already pre-selected crowd here, it's likely more than 1/100.

You should also be able to find plenty of discussion threads in the Bogleheads forum started by other people who have found themselves in this position over the years.

IIRC Reddit also has a bunch such threads, I want to say in /r/personalfinance

https://np.reddit.com/r/AskReddit/comments/24vo34/whats_the_... is a pretty famous series of comments.


seems like a great problem to have

a source of depression for some.


The thing that concerns me is that "I do not think I have any real hobbies."

I suggest continuing to work, but perhaps being pickier about where you work. Perhaps there's a dream job you've always wanted to do that up until now wasn't feasible because it doesn't pay enough, like fireman, park ranger, teacher, musician, etc? The key here is to have an obligation (people depend on you) and social interaction.

Also, see if maybe you can develop some hobbies. It can be as simple as hiking or collecting stamps. Preferably one that has a social aspect so you have human interaction.

You're going to need, at the bare minimum, a passion project to keep you engaged.

Sometimes, retiring early is the worst thing to happen to a person. Make sure you know well in advance how you're going to fill your days. Because having a bunch of empty days in your immediate future can be very detrimental to your mental health.

Good luck!


"Also, see if maybe you can develop some hobbies. It can be as simple as hiking or collecting stamps. Preferably one that has a social aspect so you have human interaction."

I would avoid material intensive Hobbies where you can buy accomplishment.

Unfortunately I am not in a similar situation but if I was I would try to maybe put some effort in to being healthy and not just focusing on beeing stimulated constantly. You can afford taking it slow, give it a try.


Agreed, it's super easy to pick up a material hobby (like collecting something). Instead, I'd pick up a working hobby. Let's say you really enjoy volunteer work. I'm sure there's a ton of good not-for-profits that need an experienced project manager.

Money can't buy happiness. Money can free up your time to explore enriching endeavours. A windfall should be a gateway to really explore what the world has to offer without limitations.

My top things that I would do in this situation:

- Make sure my debts are paid, and ensure long term stable income

- 1 hour minimum workout every day

- Be outside as much as possible

- Learn new applicable skills (home or auto repair, woodworking, music, etc...)

- Possibly go back to school

- Play video games

- Read more

These are all things that I try to do now, but don't have the time because of work or debt.


- Make sure my debts are paid, and ensure long term stable income

Totally. No need to carry a car loan, mortgage, Credit card debt anything anymore.


Depending on the mortgage rate, it might be better to keep it and invest the money that would have been used to pay off the mortgage instead.

Nah, once you've got 8MM in the bank there's no point worrying about maximizing returns. You've already won. Keep it simple, pay off the house, enjoy life.

This is exactly right. Mortgage/debt represents risk. Many people do the math on potential returns, but calculate risk as $0, which it definitely is not. I think it helps to consider this transaction in reverse. If you had a paid for house would you mortgage it so you could put that money into an investment account at Schwab? Almost certainly not.

If you pay off your house, shouldnt you also set aside ~10 years of annual property tax + X%/year for upgrades/fix/whatever - such that you literally do not have to think of a house expense for a decade.

Add in a lump sum for the monthly utilities for a decade and make a house account. Have the house account pay all these other incidentals from that account which you otherwise ignore.

Then, anytime you look at your bank account, the future costs of living in that home are never reflected in the balance you see in your daily account(s)


some would say that depends on the cost of borrowing. i know high net wealths that borrow any time they can if the rates are low enough.

And this is how monetary policy works :)

I felt the same. Hobbies, especially the ones that promote health or fitness (like some cool sports) would be something I'd clearly look out for.

On top of that I'd be very keen to invest in health of both yourself and your family. Dead people do not enjoy wealth, and while the sick sometimes need money to fix themselves up one can argue they do not really enjoy it. Some doctors may help you with a proper preventive plan that involves some recurring tests, I'd certainly invest in that. You may need a few, like: an MD, a holistic doctor and a nutritionist.

Then investigate what it takes to "live healthy" for you. Food (more raw organic produce), exercise/sports (yoga, running, cycling, gym, climbing/bouldering, kite surfing), some spiritual practice (meditation, breathing techniques, some philanthropy). This all can bring a person years of healthy life.

If your are not hung up on the location to live, you may want to explore some over the years. Having 2 places to call your home is well within reach. Then if you are into it, you can build, or remodel a place to your interests: a hobby in itself.


For you or anyone else who is looking for hobbies, there is an enormous universe of amazing projects that desperately need volunteers with modest levels of skill.

I run a small science fiction magazine with some friends and we're always looking for support to help this project grow. What we need most is volunteers who can commit enough time to learn the ropes and move the project forward - it's hard to find anyone who can commit more than an hour or two a week.

Pick literally anything that you are interested in, and there's likely a community of people trying to do interesting things in that field. All you have to do is reach out! So, go get 'em.

You have the freedom to chose what you do with your time, but that freedom could become crippling if you don't fill it with something that you find meaningful/fulfilling.


It can be equally detrimental to your physical health as well.

It may feel like infinite money, but can be burned through at terrifying speed. This happens to a lot of people who suddenly get money.

My advice is do nothing with it, and start reading books about finance, investing, and money management. Then start gradually investing it as you learn the ropes.

Hire a good CPA to help you with taxes.

Buy liability insurance, because you're now a target for jackpot lawsuits.

Don't listen to advice from the internet, your friends, family, any personal wealth manager, or anyone who wants you to invest in their business.


> My advice is do nothing with it, and start reading books about finance, investing, and money management.

I see where you are coming from, but if you step back for a second, this just sounds bizarre.

OP now has more money than they need or ever have had, and instead of relaxing and finally caring about something other than money, you suggest they actually start caring more about money.


Yeah, try to ignore the fact that it's money; imagine it's some other asset the person wants to keep, like 100 ponies.

You would definitely suggest reading up on how to successfully keep ponies, right?


They are not closely similar. Ponies will die if you dont know how to handle them, money while being gobbled away by inflation will more or less hold its value.

It's a smart thing to do learn money-management at any point of your life, even more with a sudden windfall like this. The OP seems like a straightforward guy who isnt really interested in money hence this post.

So it's up to him what kind of impact he'd like to have to the world around him. If you really get down to it there's no wrong or right way to proceed. To maintain that wealth he should definitely learn how to manage it. To spend that money on things he deems important he probably doesnt need to learn much money-management.

Wisest thing in my mind, and what others have suggested, is to wait and ponder what he really wants to do in life. Maybe read some money-management books, sure. To see if it's any interest to him.


Not always plenty of rich Boxers, Sports stars have lost vast amounts of money and ended up destitute.

"... money while being gobbled away by inflation will more or less hold its value."

This is a false statement. In fact, it is false ipso facto.


It's quite silly to say something is false without providing a logical reasoning. And what is false about that statement, that it will absolutely not hold its value? Sure, but it wasn't my main point.

If he's into ponies, yes, but most people don't care and would rather do something else.

In this case, selling the ponies and do something they like with the money.

Or selling some ponies, and pay someone to take care of the rest and make them reproduce/sell them, so that you can live with the pony-benefits.

It might not be optimal pony-wise, but it definitely makes more sense life-wise.


That's for the part where they need a hobby.

Ponies are not a fungible currency that underpins almost all of our day-to-day lives.

Thinking you have more money than you'll ever need is the first step to losing it all.

Exactly. If it were me, managing that money would become my full time job! Might even consider raising the kids to run the “family business”, they could become financial professionals as a career.

It's more like homeownership. It doesn't need to become your life, but you do need to be aware of the risks and start thinking about maintenance.

>you suggest they actually start caring more about money.

This is how the rich stay rich. You can't just spend (I mean, you can if you're really disciplined and treat it like a retirement income). When you've got a lot of money you need to park your money somewhere it appreciates and then skim off some of the appreciated amount when you want to use it.


Unfortunately, that's what happens when you get a windfall. It happened to my wife and I when we sold our company. It's a fantastic "problem" to have, but it takes some time to get comfortable. This is especially true in OP's case, when they could feasibly retire immediately.

I diagree with you, in a sense this is now a huge responsibility, especially if you see this windfall as the start of a family legacy, something to be rolled forward for all time. I would read about legacies. How did the Bushes, Kennedy’s, etc do it ?

This is nuts. They should just take time to pursue things that actually interest them and continue living as they were.

The only way you'd spend all this money is if you started doing crazy things like buying speed boats and other such nonsense.


with a wise investment strategy, the guy can spend about $300k per year without losing money in the long term. that's a lot of money, but it's not so much that you can't easily overspend if you're not careful and/or start "seeing green". if his kids end up going to top schools for college, that'll be ~$150k per year right there.

Even if OP spends 1M on college fees ( I forgot how expensive it is in the US ), I would imagine that they'll still be very comfortable for a long time.

Plus, you need to factor in their future earnings. When people speak of retirement, they really mean just doing something else they're interested in. The likelihood of these activities generating income, at some stage, is substantial.

Also why would anyone need to spend 300k in a year? If you own your house, there's not much to spend other than utilities, food and a couple of holidays... Or am I missing something?


no one needs to spend $300k in a year, but unless you are some kind of ascetic monk, you are susceptible to lifestyle creep.

the reason i bring up college expenses (which are about $70k/year at top US schools) is that parents tend to do whatever they can to give their kids the best possible chance in life. even if someone is not purchasing luxuries for themselves, it's not hard to spend tons of money on children. about $600k needs to be set aside if he wants to guarantee that his children can attend any college they can get accepted to. in the meantime, there are plenty of expensive things he can do to improve their chances of admission. maybe this means buying a house in a better school district or paying for private school (possibly >$40k per year per child). maybe it's private SAT prep to boost test score. extracurriculars are also very important for admissions (and are enriching in their own right), and the most impressive ones aren't cheap either. there's always something you can spend more money on to improve life outcomes for your kids.

you can't just say "I have a lot of money, I'm going to spend modestly, and everything will be alright," and have it be so.


Your holidays can become progressively longer and more extravagant. The cost of this can add up quickly. Maybe you previously just went to Florida for a week for vacation. Now you decide to take the family to Italy for 3 weeks in the summer and to New Zealand in the winter....

There can also be an urge to buy that vacation home in Tahoe or Jackson that you always dreamed of. Maybe you used to rent a house in Tahoe for a weekend every winter before windfall. Now you buy a place and have a mortgage for a cabin that you use a handful of times a year.

Before you know it, you can have a lot more expenses creep up.


Add up a few even ifs of $1M each, and the comfort level drops considerably. $8M should be enough to live comfortably, but it requires a bit of planning and a reasonable definition of comfort.

It doesn't take a lot of reading to get towards get a nice umbrella policy, talk to an estate lawyer, and then put most of the money in a diversified bond fund and a diversified stock fund', and plan to pull out a small % per year as your annual budget; allow for large expenses occasionally, but be aware of the impact on your future annual budget. Maybe set aside a specific amount money (in consultation with your significant other) for unwise investments, if you want to learn first hand why they're not recommended.


A fool and his money are soon parted, and whilst OP does not sound like a fool, he came to this forum for help so he would not act foolish.

To wit, this is probably the wrong forum if people are going to respond as you did, Sir, so he is probably better off over on Bogleheads.


I suspect the ratio of older HN people who have had experience of windfalls is higher than on boggleheads.

Though my personal game plan was take one of they founders of nominet worth well over 100m at one point) out for lunch in the best restaurant in Brighton and ask hime what he would have done differently :-)

Or do a cheeky letter to one of the Rosthchild's I met at fast Tuesday years ago


Try to imagine a third choice which is both caring about it and not spending it. And raising your children to do the same.

This. Buy liability insurance. It's cheap and sadly, you are now a worthwhile target.

In some places, liability can be based on lifetime earning potential, so OP may have already been a good candidate for liability insurance. Don’t wait for a windfall.

> Don't listen to advice from the internet

Strongly disagree. Don't listen to the wrong advice from the internet. Do listen to wise, earnest, un-conflicted advice from the internet (e.g., Bogleheads).


Can you elaborate on why you think he should not listen to a personal wealth manager (assuming that's the same as a financial advisor)?

https://www.reddit.com/r/AskReddit/comments/24vo34/whats_the...

> You will be encouraged to hire an investment manager. Considerable pressure will be applied. Don't.

> Investment managers charge fees, usually a percentage of assets. Consider this: If they charge 1% (which is low, I doubt you could find this deal, actually) they have to beat the market by 1% every year just to break even with a general market index fund. It is not worth it, and you don't need the extra return or the extra risk. Go for the index fund instead if you must invest in stocks. This is a hard rule to follow. They will come recommended by friends. They will come recommended by family. They will be your second cousin on your mother's side. Investment managers will sound smart. They will have lots of cool acronyms. They will have nice PowerPoint presentations. They might (MIGHT) pay for your shrimp cocktail lunch at TGI Friday's while reminding you how poor their side of the family is. They live for this stuff.

> You should smile, thank them for their time, and then tell them you will get back to them next week. Don't sign ANYTHING. Don't write it on a cocktail napkin (lottery lawsuit cases have been won and lost over drunkenly scrawled cocktail napkin addition and subtraction figures with lots of zeros on them). Never call them back. Trust me. You will thank me later. This tactic, smiling, thanking people for their time, and promising to get back to people, is going to have to become familiar. You will have to learn to say no gently, without saying the word "no." It sounds underhanded. Sneaky. It is. And its part of your new survival strategy. I mean the word "survival" quite literally.


>>...they have to beat the market by 1% every year just to break even...

It's even worse than that.

1% ON TOP of inflation, which is reported as 1.9% but many financial experts say the actual figure is closer to 4% once goods such as energy and food are factored in.

So the hypothetical investor must make ~5% just to break even. Anything less is a loss of spending power. Add 4% to realized losses and the figures can be especially gloomy.


Financial experts most certainly do not say anything like 4% inflation in the US.

Energy is extremely volatile, so it’s annual rate spikes up and down by as much as +/- 25% in any given 12 month period, but over longer time spans it’s close to flat, with US consumer prices driven down by fracking.

Food prices, similarly, are volatile, but have trended flat over long timespans.

Food and energy are going to be a tiny, tiny fraction of consumption for someone living off float from an $8 million windfall; core inflation (removing the volatile food and energy categories) is the right number to pay attention to.


I have a personal friend who is a wealth manager who basically gets his clients to put their money in index funds.

I wouldn't paint the whole industry this way. Some people are simply not good at handling money and paying someone to keep your hands off of it is wise.

For the record, my buddy works with sports/entertainment stars (and including tech founders who exit) that categorically have the worst discipline when it comes to money.


This is a recommendation for early management of a large windfall (large inheritance, exit or lottery winnings).

If in the long run you believe/understand that a wealth manager could do a better job than the basics and you want less safety, you can always hire one: wealth managers will still be there next year or decade. However if you get a wealth manager right now your funds may not be.


The cocktail napkin stories are one-off anecdotes that all law school students go through in their first semester to learn about what actually makes a contract. They are great example to show how a formal document with signatures is not the critical piece of a contract. They do not mean that you should never scrawl notes on a napkin because napkins have some special legal power. And any quote that implies such should be taken with a fairly large grain of salt.

Also, wealth managers don't simply try to beat the market over a short term. They try to help you diversify so that in the case of a market change or complete meltdown, you don't lose everything. You pay that percentage not to maximize every penny, but to make a reasonable return while minimizing your losses in odd scenarios, so that you can live on the returns while never even touching the principal assets. Again, anyone who boils it down to "just invest in index funds" is missing the big picture. (And that includes bad financial planners. If they give simple advice, call someone else.)


Agree. And some people will just sleep better knowing a professional is helping with their investments, and that's worth something.

One hint is to talk to a couple of local estate planning attorneys and see who they recommend for financial planning/wealth management. They will have seen who does a good job and who doesn't. It probably isn't the guy working at the local Charles Schwab or Edward Jones office in a strip mall.


Eh. You can just say no and save yourself all this hassle and risk.

Most of them are simply salesmen, selling high-load products. Incentives are not aligned, but if you can find one is who independent of any particular set of funds and who only earns from a percentage of your earnings, and not from brokerage fees or commissions, then it might be worthwhile but you should still learn about this stuff yourself.

^^ seconded. I've lost a windfall to an investment manager.

my business partner is all about liability insurance, and has had to use it.

to the OP, re: "should I donate it?"

yes, but not all of it. buy potting soil & sow some seeds somewhere.

also, to the point about investing generally... seems like maybe we're at a top, so pick something stable


There are different types of advisers. People often get burned because broker dealers, stockbrokers, and insurance agents do not have fiduciary responsibility (they do not need to act in your best interest). A fee only adviser (with fiduciary responsibility, which will only charge you a fixed fee is a solid choice and worthwhile to keep you out of trouble.

Yup, this is why if you really want to be hands-off with your wealth and put it in the hands of an independent professional, look for FEE BASED financial advisors/wealth planners. Finding one via NAPFA is one's best bet.

This is not nearly enough money to justify a wealth manager. People always think they're special when they aren't, and salespeople are always willing to encourage their delusions.

>My advice is do nothing with it, and start reading books about finance, investing, and money management.

Unless you have serious interests in it, you're likely to be a lazy investor and lean on index funds with some gambling money.

There's a big pit where investment performance tanks between lazy index investors and serious investors. These people simply want to trade on their own invented investing signals and feel like they are doing something. It's a big, easy trap to fall into.

Maybe stay out of index funds until Trump is gone because he's volatile for world politics and the market has likewise been volatile and that swings index funds. Not because you'll lose money long-term (in fact, time in market > timing the market), but because seeing your portfolio drop $300,000 in a week is going to shock you and you might make bad decisions before you've developed resilience to these things. This is because the news is so good at making the world seem like it's going to end while you are treating it as serious investment warnings because you don't have the experience. It's like armageddon calculus.

Definitely don't invest in cryptocurrency though, even with your gambling money.


Speaking as someone who made a decent pile in cryptocurrency:

1. Don't ride on the stocks forever. You'll feel it as a windfall now, but it's an investment. You invested in the company, and it paid off, so you should probably part ways and start a new chapter, since the company's fortunes can change quickly. Every investment comes with risk and the more you have in one investment, the more you will feel that risk - so get some diversity in the portfolio as you are able to. Assume that you will have to give up a hefty percentage of the $8mm in taxes and fees in the process of doing so. Advisors can help mitigate that, but you want to keep watching the finances while you rearrange your life.

2. Even as a multi-millionaire, you can't afford "big things" like premium real estate or private jets. The numbers do not pencil out. It's healthy to still want a simple lifestyle and use the cash to indulge more modest luxuries. I like being able to order anything I want from Starbucks!

3. It doesn't matter if you succeeded financially, you'll still have plenty of things to struggle with in life - the Stoics say as much. The only difference is that you have room to choose which things you struggle with. You don't have to plan to take on the world, but you can now devote yourself to any altruistic pursuit you wish, any academic study or athletic achievement, or travel wherever you like, for as long as you like. These are things that you mostly can't do if your existence is premised on paying the bills. But you do want to stay hungry in some way, even if a paycheck can't do it.


OP said the $8M hit his account after taxes.

Not next years taxes. Hence, why tax shelters exist.

This sounds much like the situation Paul Buchheit found himself in as Google employee #23.

He wrote a blog post [1] on this topic back in 2010, in response to a HN thread just like this.

Note that the post is no longer available on his own blog, so as you're reading it, try to read them as the words of a 2010 version of Buchheit, not a present-day one, as it seems that for whatever reason, he doesn't want this post attributed to his present-day self.

[1] https://web.archive.org/web/20180119114049/http://paulbuchhe...


HN founder Paul Graham has some fantastic advice[1] on how to avoid losing your fortune:

When we sold our startup in 1998 I suddenly got a lot of money. I now had to think about something I hadn't had to think about before: how not to lose it. I knew it was possible to go from rich to poor, just as it was possible to go from poor to rich. But while I'd spent a lot of the past several years studying the paths from poor to rich, I knew practically nothing about the paths from rich to poor. Now, in order to avoid them, I had to learn where they were.

So I started to pay attention to how fortunes are lost. If you'd asked me as a kid how rich people became poor, I'd have said by spending all their money. That's how it happens in books and movies, because that's the colorful way to do it. But in fact the way most fortunes are lost is not through excessive expenditure, but through bad investments.

Be careful with anything other than the most ultra-conservative investment if you're putting millions into it.

[1] http://www.paulgraham.com/selfindulgence.html


Mental trick I recommend: You don’t have $8M - you own a business that lends money to people. Your business gives money to various companies through financial vehicles called ‘index funds’, which ensure that your loans are distributed across many different companies. The businesses use this money to fund their ventures, and are happy to pay you some money for the access to this capital. Your business is quite successful, earning you (.03 * 8M) = $240,000 per year. If someone else saw your balance sheet, they may be willing to pay you $8M for access to such a lucrative and easy-to-run business! Thinking this way allows you to spend the money however you want. Want to buy a Lamborghini? Go ahead! Use your $240k salary to finance your new car, just like any other normal person. But NEVER mortgage or sell any part of your amazing business just to buy a toy.

Retire. You can live off the interest if invested in mostly stable stuff (so I've heard) assuming you don't have a larger tax bill looming.

You may read lots of "awesome coder, great bizdev person" stuff online but 95% of the people out there in Tech are just working on someone else's idea/company bringing home pay. You are free from that now.

Be bored for a while and your interests will emerge. Take up a hobby, be a stay at home dad, think back to what excited you as a kid and explore those things.


Retiring is pretty dull at age 43. Maybe work on something you're into but which doesn't necessarily bring in much money. Personally, also having some money, I'm working on startup idea to fix the world etc which currently brings in zero money but is fun. Maybe it'll turn in to something real later, who knows. By the way re investing I recommend mainstream stuff like blue chip stocks, income producing real estate etc.

I "retired" in my mid-20s for about 3 years. I only went back to work when I ran out of money.

Describing complete freedom as "dull" is an insane concept to me. You can work out, read, watch TV, go to coffee shops, cook, or even just sit around all day with no commitments.


I agree. I am 46, and my wife was joking a few years ago that we're living a retired's life. (I'm working from home, but at a rate that's about ten times the local average, so it's pretty much whenever I feel like it.)

Complete freedom is amazing.


Not everyone is like us. I'm a relatively successful software engineer currently and I still think back with fond memories to when I was tech support sitting there answering 30 minutes of calls per 8 hour shift. For some people that's torture.

You didn't retire, you just quit working until you went broke.

That's exactly what retiring is, only with the hope you die before your funds run out.

Ideally you die with $0 left. As the philosopher Karl Pilkington once said, "The only reason you need money is in case you don't die today."

It should be more than a "hope." If you really retire (and really plan to never work again), you should have some reasonable confidence that you will never run out of money. Having 25x to 30x current expenses saved and invested is a good starting point.

I did have ~40x my monthly expenses saved. I just spent them over the course of about 40 months!

I had no illusions about not working again, but I did do what retired people do: whatever the heck I wanted!


Sorry, I meant yearly expenses!!!!

I knew what you meant.

x is usually years, not months. I think that 3-4 years is closer to a long sabbatical.

I don’t think that changes my original point that if you find freedom to do whatever you want “dull” then you are the problem.

How does that differ from your definition of retirement?

This.

Sounds like you have enough to live off of, with a little planning. Enjoy the time you get to spend with your family. Find a few things that interest you, taking some random classes, try new stuff. Were I in your shoes, I'd buy a home with enough dirt to build a shop and I'd tinker.


Having been in your shoes, and having had many friends in a similar place, I can only share what did and didn't work for us.

Diversifying was a positive for everyone who did it. John Doerr's advice to a friend was 'sell half' and diversify that. Because of the dot com crash (which may have been an anomaly) the folks who diversified completely (sold it all and moved into a balanced portfolio) did better.

Not changing your lifestyle. You have a 'burn rate' just like everything else (car payments, house payments, tuition bills etc). Leave that alone and your life will continue as it has, only more securely. One of the folks I know switched over to the lifestyle of the 'rich and famous', lots of parties, upgraded house, new cars, vacation trips all around the world. Burned through all their wealth and when it became obvious they had to go back to work, was in the place of going to people who had known them as the rich playboy type, and really impressing upon them how much they needed a job. It wasn't fun for them.

I would recommend you work with a financial adviser, or take a class at a community college on the basics of finance, or both. Back in the dot com days when I thought I was going to be a zillionaire I took the Forbes Wealth Management home study course. It was like 30 cassette tape lectures and a workbook. It did a good job of covering the foundations so that I could understand what people were talking about when they were comparing various options.

Put some aside for your kids college, giving them a debt free college education has a strong positive impact on their future success.

Sleep better and take care of your health.

EDIT: And talk to a tax accountant. Seriously. Moving around money in the "wrong" way can expose you to serious tax liability that might be surprising to you come April.


$8M is a big chunk of money, but most retirement advise being followed by the upper-middle-class still applies to you. If you follow the recommended investment advice given to retirees, you can afford to withdraw ~4% of your principal every year in perpetuity. This comes out to ~$320k (inflation adjusted) per year. Find a financial adviser with fiduciary duty, and he can help you get set up with this.

If your wife is working, I'm guessing $320k/year is a little higher than your existing household income. What that means is that both your wife and yourself can now quit your jobs and still maintain the same quality of life you currently have.

Note that quitting your job doesn't mean doing nothing. It just means that you can be intentional about what you want to do. If you want to spend time with your kids, read books and travel the world, you have the option of doing that. If you want to work as a teacher or non-profit volunteer or even start your own non-profit, you have the option of doing that. If you want to go back to work as a tech manager, you have the option of doing that too.

It may take you a while to figure out what you really want to do with your time... but don't try to rush it. Once you've quit your job and have time to think and experiment, you'll eventually figure it out.

The most important thing you can do in the short-term is to not burn your principal on something stupid like a private concert with a celebrity. The $320k/year I mentioned earlier is assuming that you have the entire $8M invested. If you splurged half your $8M upfront, your investment income will drop to ~$160k/year. Still a nice amount of money, but you'll find yourself in a situation where you have to continue working to maintain your desired lifestyle.


As one of the "wealth managers" who you apparently should avoid like the plague, I'll just put my $.02 here for what it's worth.

There is undeniably a lot of crap in the financial services space. I live in it and I could not agree more. I have to face this down every time someone asks what I do for a living. But this isn't really relevant to whether or not OP should hire an advisor. It just makes the job of finding a good one more difficult. But they exist.

The HN community is mostly made up of DIY types, so there's lots of advice to that effect popping up here. But, much like the infamous Dropbox announcement comment, some people don't want to "get an FTP account, mount it locally with curlftpfs, and then use SVN or CVS on the mounted filesystem", as "trivial" as that might be. Some people just want a little green check mark telling them that their files are synced. I'm 100% pro-DIY for the person who has the capacity mentally and emotionally. (Sidenote: the significance of the emotional capacity peace is severely underestimated by almost everyone). And I will happily tell a prospective client that they don't need me and wouldn't be happy with me if I can see that's who they are.

Finally, most people think my job is making money for people. It's not. I'd argue that one of the most significant pieces of info OP shared was:

> I am freaking out.

That's my job. Talking people down and helping them avoid all the bad advice their getting from family, friends, and internet strangers (there's a lot of GOOD advice here, for the record).

Congrats on your success, OP. Best of luck. $8M is a good thing. Don't freak out.


Well that the thing though a therapist will cost way less than 80K a year.

Comparing opening a Vanguard account and dumping a few mil into Admiral class index fund shares with the complexities of FUSE is a clever, albeit entirely inaccurate, attempt at analogy.

Just to add to this, having gone through a similar situation I went it alone and kind of wish I hadn't. I simply didn't care to learn and stay updated about markets, currency fluctuations etc. So there were some simple opportunities I didn't do (even boring things like sticking cash in a 6 month CD to earn 1% instead of 0).

I do think the advice to "do nothing for a while" is the best advice though. Give it a few months, anyway. If and when you DO want to consider a wealth manager guy, find a guy who doesn't take a percentage and works for a flat fee. Still, they might get kickbacks from certain investments so don't just jump into anything if it doesn't make clear sense to you (being skeptical is free, being closed off can cost you). I know a few high-up investment banker types and the interesting thing is most people with wealth aren't trying to find the next Apple stock but simply want to not lose their money. Most people with a lot of money invest with this mindset, so your feelings are pretty normal.

At a certain amount of money you start to realize there's no such thing as a safe place to stash it all. Keeping it in cash has risks (inflation!), FDIC only insures to a small amount and the stock market tends to move all at once because everything is tied together. So don't stress yourself out too much about it and don't try to get too cute because "you have a feeling the market is gonna..."

Change your life as little as possible is probably the best advice for not spending too much too fast with the risk of forming lifestyle changes that grows out of control over 10+ years. But I DO recommend spending money on things that make your day-to-day life easier or happier. That could be anything from buying 30 pairs of the same socks and throwing away your old ones so you don't have to find matching socks all the time to moving closer to work (if you still work) so you have less of a commute, or anything in between. I found it really helpful for a while to ask myself "is this something I wouldn't previously buy but it will improve my happiness every day?" If the answer was yes, I mostly made that change and it helped me continue to apply money to things of value without hamstringing myself needlessly.


Be careful: You can burn through $8M post-tax quicker than you think. We have a annual household income of >$1M pretax, so I have some experience here.

I'm assuming you live in the bay area. The price of nice but not stunning houses in many desirable areas is around $4M. Assuming your life expectancy is another 50 years, that's at least $45K/yr in taxes, so at least $2.2M in lifetime property taxes. The median home in Palo Alto is now >$3.2M, and that figure includes small or decrepit teardowns listed for land value alone. You won't be able to afford (and it would be a mistake to buy) some of the larger or newer houses on the market for $8M+.

Private school for two children can approach $100K a year (Castilleja in Palo Alto is $44K/year). You didn't say how old your children are, but if you include preschool and college, that could be $2M. You might want to hire a nanny. That's $30/hr, or over $70K/yr with employer taxes, or $1.4M without a raise for 20 years.

That's $9.6M for just a house, schooling, and child care. That doesn't include food, household cleaners, insurance, clothing, landscaping, pool maintenance, cars, a second house, hobbies, gifts to children, travel, etc.

Sure, maybe your investments will do OK. But on the other hand they need to beat inflation. Castilleja isn't getting cheaper. Your property taxes will increase, slowly but steadily, every year for life, and then there are local bond measures for additional taxes.

So my advice is to live below your means. We've tried this ourselves. Also you might want to stay employed, at least one of you, to extend your runway. Finally look for something meaningful in life. Attend a local church service over Christmas. Spending money by itself won't do it.


Friend of mine in his 60s who was semi retired for the last 15 years had all his brokerage accounts emptied by hackers this year. He might get his money back, but might not. Make sure you use 2fa for all accounts. I prefer RSA secureID where you have a detached fob. Your phone can be hacked and hackers can then get verification codes.

Dont invest in anything except (almost) guaranteed returns for now(1 year CDs are starting to pay 2-3%) .

An emergency fund of 2+ years expenses in cash.

Slowly increase your standard of living over a long period of time (or not at all). I operate from a budget, not from cash in the bank. Religiously stick to the budget (this is hard) but dont beat yourself up if you go over. Quicken does a reasonably decent job of setting up a budget and allows you to keep spending in various "accounts" under control.

The standard safe withdrawl rate is 3%. Im planning for a more conservative 1.5% approach. This means you can take out up to 3% of your total funds each year and never run out. At 8m and 1.5% safe withdrawl you still need to work.

The strategy requires you to have a reasonably significant percent in the market. While the market could keep going up, I think you can wait a few years for the inevitable recession, but eventually you will have to get it into index funds.

I make a good income from my business and it is easy to get sloppy when I have too much cash. Last year at a fundraiser I got drunk and dropped 30K. Im not mad about the donation, but Im mad about the way I did it while being out of control.

Also this account is an example of a wasted $100k :)


> At 8m and 1.5% safe withdrawl you still need to work.

$8m at 1.5% is $120,000/year. Since he's already mentioned the house and cars being paid off already, that's going to be a living wage even in Silicon Valley, especially considering he also said the $8m is AFTER taxes. He doesn't need to work.



I see reddit mentioned by multiple people. I think the sub https://www.reddit.com/r/financialindependence/ might also be a nice fit, as it is about how to become financial independent (already achieved by OP) and then what to do after (retire early? how to manage the money? etc)

warning: high value individuals can expect a fair amount of abuse on that subreddit, it's for how to get to FI not how to manage being there

For those that fall into this abused category, a lot have moved to https://www.reddit.com/r/fatfire

I'll second this, all of the FIRE subreddits are not a great place to discuss your situation. Those subs are full of people saving about 40-50-60%+ of their take home and slowing building wealth overtime.

Edit: FIRE = Financial Independence, Retire Early


I came into a windfall about a year ago. I found that it's easy to fall in a rut. Having so much money made me feel like that what what other people perceive as the biggest thing about me. I miss the praise and respect that a job well done gave me, that I had while working. After retiring, it's easy to think that, besides the money there is nothing worthwhile about me.

Then there is the question about what to do when meeting new people and they ask what I do? Tell the truth, and I create this weird social dynamic. Mutter “computer programmer” and I've just stunted any possibility of a real longterm connection by not describing who I truly am. Not sure what can be done about this, except say to prepare for loneliness.

The other piece of advice is to get deeply involved in learning something or creating something. I was amazed by how much the feeling of accomplishment gave me happiness and contentment over going to a fine restaurant or buying expensive clothes.


Maybe don't associate your existence with programming, tell them you're a guy with interesting hobbies and wide knowledge who just happens to do programming to empower people to do things/pay the bills/insert narrative here.

As with everything, it's more about the perspective and delivery than actual message.


I don't suggest the 'do-nothing' route. Time is limited. I'd suggest:

1) Splurge a little bit. Like $100k. Buy that Oculus VR you've been thinking about. Trade in your car to the new Tesla Model 3. Your wife has been eyeing a vacation to Hawaii for a few years now, go do it. Finish off your mancave basement project. Life is great, enjoy the fullness thereof. Don't feel bad about buying your kids a dozen new nerf guns and video game systems.

2) Focus your time now on improving the quality of life for others. You're rich. You've made it. You can live off of 2% interest the rest of your life and so will your wife/kids/grand-children. Now.... what are you going to do about the other 5.8 billion people on this planet who are struggling to make ends meet and are literally a few dollars away from death? Are you going to sit in your high-castle and collect bond coupon payments the rest of your life? Life is too short. What will be the legacy you leave this world? You have to do it now while you're still relatively young and healthy. Just volunteering your time and technology skills can affect the quality of life of thousands of people and their offspring for generations. Trust me, that's more fulfilling than buying a bigger house.


I just wanted to chime in to say that this is just terrible, terrible advice.

It's clear you're not speaking from experience.

One has to be incredibly careful with a windfall like this. $8m is not a whole lot - certainly nothing like what you're fantasizing. Behaviors like you're suggesting can be incredibly damaging and snowball fast.

This is why most people who obtain sudden windfalls (an extraordinarily high percentage) go broke within years.


Put it all in VTSAX. Sell 4% or less per year. Enjoy a six-figure income for the rest of your life. If anyone ever asks you to do something you don't want to, tell them "fuck you".

This. Mr Money Mustache and JCollinsNH (Simple Path to Wealth) all rolled into one comment. Wish this was higher up.

First of all, the taxes are probably not all paid on it. Some shares have been withheld (perhaps at 28%) when the actual figure is going to be higher (if ordinary income) or lower (if capital gains). You will need to find out next year when you actually file what the figure will be and be prepared to cut your state and Uncle Sam a fair-sized check.

Second, there may be a lockup period where you can't actually access all of the funds for perhaps 6 months. Then, if lots of people stampede for the exits on the same day, you could see some volatility then.

In your situation, I'd plan to keep working (or doing whatever you currently do) for at least 6-12 more months. You have enough money to retire (figure that you can treat as income 3.5-4% of your investment portfolio each year, provided it's invested appropriately [mostly in equities], so you're looking at $200K-$300K in pre-tax income just from the portfolio).

Why keep working? Well, you need something to create stability, normalcy, provide the same social interactions (with other people going through some similar things, presumably) and it keeps your health insurance and everything else "normal" for a while.

Other advice around is mostly good. It's a retirement amount of wealth, but it's not a crazy-large amount, so your lifestyle doesn't have to change much (and probably shouldn't) If you were happy 3 months ago, you should be about as happy now (not a ton more and not any less).

Don't buy annuities with it. Or at least not without talking it over with at least 3 financially savvy people that you deeply trust and letting the idea kick around in your head for 45 days.

Give it time to settle. Don't be in a rush to go through any "one-way" doors (quitting job or locking the money up in complicated investments). Put the money in something like VTSAX while you wait (that will give you broad-based stock market exposure).


I don't see how not having access to the funds applies or that the stock price might have volatility since he said the money was in his bank account already.

OP called them both "stocks" and "money" seemingly interchangeably. (I don't recall the title showing "all cash" when I replied but maybe it did.) If it's actually in cash, you're totally right of course. Some people treat vested and released shares as if they were cash and look at the balance (shares times last trade), call it "money", and start making plans based on that.

Spend time with your kids. You'll never get another chance.

This. At 43 you're about half way done if you aren't unlucky. Spend time with the family. They're all that will matter to you later in life.

And avoid spoiling them [the kids]?

Most of the comments about not losing wealth amount to either poor investment or "spoiling" oneself - ie spending excessively on luxuries. But, I imagine it's harder to avoid spending excessively on other people; what does "my parents can just buy me a new one" do to a kids perception of value, how do they develop a sound work ethic, would retired parents in their youth have a negative hold over their ability to perceive themselves as workers (for themselves or others).


Gosh came here for this advice and can't believe how far down the page it is.

Indeed. Focus on what's important, like family.

There are many valuable answers here. I just wanted to say that you seem a humble guy and I'm happy that you are aware of it because that's what puts you in the right starting position. I think if you manage to keep your head there, you'll make the right decisions.

Congratulations! You've finished the hardest game of life. Now you can never do anything you do not want it again, if that's your wish.

Now you can do whatever you want. This includes: Spend how much time you want with your family and important people to you; Work on something you really want, or some significant project for you; dedicate your life to arts or an hobby; Have time to know wherever you want; Take maximum care of your health; Take some risks in general, but not so much, or you might end up dying or being broke again; etc;

You have three resources to manage now: Time, Health and (assuming you won't spend all your money at once) your stocks/bonds [EDIT: or any other passive income of your wish.].


Figure out what your liabilities are. Wealth is one side of your balance sheet: liabilities are the other.

Want to retire in the Bahamas? Want to make sure the kids are mortgage-free? Want to make sure the kids don't have to take a soul-crushing corporate job and are free to pursue their art? Those are liabilities.

Once you know your liabilities, figure out the best investments to match them. If you want to retire in the Bahamas, buy a place in the Bahamas. If you want to hedge against price rises in elderly care, invest in the healthcare sector.

Just make sure your assets match your liabilities and you'll be fine.


Assets matching liabilities is an accounting idea that has nothing to do here. Wanting to do something is not a liability.

Liability may be the wrong term for it, but if you want to do several expensive things, you probably want to make sure you've got enough money for all of them and prioritise if you don't.

Maybe you never want to work again, and you want to buy a yacht. It'd be poor planning to end up back in work at age 60 because you got a bigger yacht than you could afford at age 45.

That doesn't mean you can't buy a yacht, it just means you might want a 60ft yacht instead of a 100ft yacht.


Liability is exactly the right term for it if it costs money.

No. Liability is money you have an obligation to transfer.

Dreams that involve money are not liabilities, at all.


i invested close to the ETH ICO. just $10k or so, but that gave me a windfall of $3.5m (I sold in early to mid-December).

im not super conservative with my money (i.e., i don't do t-bills, and other "super safe" investments).

i am just dollar cost averaging into index funds, like ive always done. I anticipate that I'll get anywhere from 5% to 15% per year, compounding.

i also have pre-tax income of roughly $500k. i still abide by my financial plan as if my windfall didn't exist. we save about $100k a year.

im around 31, so im hoping that the combination of these two will lead to enough accumulation in wealth by the time im 40 that i can retire early and live off investment income.

by my current calculations, assuming increases in compensation (and retirement contributions) that match inflation, and based on my current war-chest, I should have between $8.1m to $19m by the time I reach my 40s. If I average out investment gains to 8% compounding, we're looking at $10.5m.

By that point, 5% gains should give me around half a million to live off of every year. And anything higher is icing on the cake.

And I can definitely live very well on that budget. That's basically life now. And life is good.

i'm not going to tell u what to do, but just sharing my experience.

other people made a lot of money doing similar bets in crypto. they decided to launch crypto funds, buy altcoins, do more investing.

i just recognize that i got very, very lucky, and decided to take cash off the table. ill still do some risky betting with my money, but that's with a very, very small % of my investment capital.


Isn't index funds risky for living off year-to-year returns given they have up to 50% drops occasionally? Especially if you assume up to 15% return which sounds super optimistic too me.

E.g. You would have made 0% return off the S&P500 between March 2000 and March 2013. That's 13 years! That would burn through 5,2 million off your capital at your expense rate of 400k


note this isnt incompatible with "upgrading" your life. it's all about setting a sensible financial framework and living within that framework. if that framework permits private jets and lambos, go for it. but if it doesnt, dont. bankruptcy and financial ruin happen when you spend money blindly. but if you work within the framework you set, it shouldnt be hard. because i strive to live within my existing framework, i havent upgraded anything. my close friends and family say im being cheap, but i think im just being smart with my money.

you obviously got a bit more, so framework can be a bit larger. Good luck :-)


I invested close to the ETH ICO. just $10k or so, but that gave me a windfall of $3.5m (I sold in early to mid-December).

Wow. You got out at the top. ETH has dropped 90% since then.


You ought to put some in t-bills and FDIC insured CDs. Putting all of it in index funds is too risky.

What are you doing that you have a take-home of $500K?

I work in venture and my wife is a consultant.

Damn. How do I get into venture? I'm ecking out a living as a chief architect.

My path is 1% hustle and 99% luck. Given how lucky I've been, and worried about regression to the mean, I play things relatively conservatively :-)

Good on you. I might ask for some lottery ticket numbers at some point :)

I recently met a friend's father-in-law at a party. He seemed like a super modest guy, and then I realized he acquired a similar windfall twenty years ago. He kept working at the same company, and then jumped to a project manager role at a new company. Even after major back surgery, he kept working like an average joe (and seemed to enjoy his job). Outside of family vacations, he has only made one major purchase from his fortune - a crash-pad apartment in the Upper West Side that ended up doubling in value since the nineties.

At the time, I thought he was a bit eccentric; maybe even a workaholic. Especially after reading this thread, I think he did absolutely everything correct.


You're free. Don't take up another job unless you want that. If you want to slouch on your couch, go for it. Want to learn how to sail? You can do that. Want to teach kids how to code? You can do that.

Don't put the money into the stock market -- we've been going on a bull run for 10+ years.

You've got plenty of cash to wait out a next crash.. it's not going to take another 5 years before a next recession hits.

But realistically you'll at some point want to reinvest most of that money into passive, safe(r) investments so that you can book a x% annual return and live off capital gains. (Fun fact; capital gains are taxed lower than income)

Feel free to put some (i.e. $500k to $1m) aside for higher risk investments if you feel like you wouldn't mind the money disappearing or going 50x.

Also: DO NOT JUST GIVE IT TO A BANK -- best way to pay a ton of fees and end up with no (or worse, negative) returns.

Also: (but this is me) I would give back to a cause you care about. Maybe something local where you know the money will have a big impact? Those donations are often also tax deductible (so might as well).


interesting comment.

since the bear market started, wouldn’t this be a good time to buy at bargain prices?


Give it a month or two to confirm the bear market started. If the bear market has truly started it has plenty of room to fall.

Bargain prices are at the crash. Beginning of the bear market is by definition the time when prices will continue to decline.

(I'm leaving it up to you to decide if it's a short-term correction, beginning of bear streak or anything else)


buy when there is nothing but negativity and depressive comments on the stock market; once we are there it is a signal of the bottom

when everybody including Goldman is expecting a crash , is it really a crash ?

> DO NOT JUST GIVE IT TO A BANK -- best way to pay a ton of fees

Why you'd have to pay a ton of fees on a heavy deposit?


Give it to a bank, in the sense of handing it off to a private banker.

I've been in that situation since the 1980s. I put the money into T-bills, back when they paid 7%. Now it's mostly in brokered CDs and index funds. I still have about as much money as I had back then, although I haven't quite kept up with inflation. Brokered CDs are useful because you can spread them out across multiple banks and get the $250K FDIC guarantee at each bank.

Most people who get a lot of money all at once blow it within 7 years. I found "The Challenges of Wealth", by Domini, to be useful.

The trouble with investing is that you're competing with people who are smarter than you and do it full time with other peoples's money. Not that they do it very well. VC funds, as a class, lose money. So do hedge funds. There really aren't many good investments right now and there's too much money chasing them. So go for safety, not yield.


I went through something similar a few years ago. Briefly, the things that stand out for me now are: depending on your circumstances and where you live, and your goals for the future, this windfall may not be as big a deal as you think at first. Create a spreadsheet and calculate how much you want to set aside for your kids, do you want to at least give them the option of studying at a top US University on full fees? Do you want to get them a foot on the property ladder? Do you want to fund a trust for them and your wife that matures at some point in the future and provides meaningful means for them to live on? What investments do you want to make in order to feel secure? For some people, this only comes through ownership of physical assets like land and buildings in juristictions that are stable and have well developed legal systems. Once you've got a handle on the long term goals, then make a habit of keeping a budget for your spending, there are lots of tools for this. It keeps you grounded and reminds you that every decision to spend money on something impulsively means you are taking money out of some other category. This doesn't change just because you have "lots" of money. I've seen many people (working in finance in London) who regularly got annual bonuses in the millions, who are now having to live very modestly because they allowed their lifestyles to expand unfettered and forgot the basics of long term planning and daily budgeting. Don't fall into the trap of thinking you are "rich", you have the means to have funded some of your long term goals but only if you are disciplined in future and continue to be diligent about money.

Best benefit of all is if this helps you spend more time with your family, and doesn't add stress to your life. Having lots of investments can be a lot more stressful than just having an adequate income and living within your means. Be careful of bankers selling your "wealth management" services.


Find an ACTEC estate planner who will help you with putting the money in a revocable trust, depending on your state, which may shield it from estate tax for generations to come. So long as you're the only trustee, it's like you holding the money personally. You're married, so you're a safe distance from the lifetime exemption for now, but laws may change. Find a tax attorney who understands estate issues. Sign up at Vanguard and you'll get preferred treatment and access to advisors of many kinds free just because of the amount you hold.

Now for the controversial advice. As far as lifestyle, stick with what you care about. The things available to buy now for the wealthy are not particularly interesting unless you're vacuous and vulgar or your time is extremely valuable. Fractional jet ownership that gets you where you want to go a few hours faster? A huge house that you can fill up with stuff you don't use or care about? A car that speeds up a little faster or looks a little nicer? There’s nothing available now qualitatively inaccessible to someone middle class.

That won’t always be the case. Invest with a strategy that’s been successful if back-tested for 100 years, like total market index, and in 20 or 30 years, there will be extremely interesting things worth buying. Life-extending treatments, trips to space, Chappie-style robots as bodyguards (or dishwashers), brain implants, organ replacements, brain backup services. Things we can’t even imagine. Hold onto your money until there’s something worth buying.


Just continue your normal life of "average" (as you say).

If all $8m went into your checking account, the first "simple" step you can do is to start breaking up the $8m into different account types at different banks with you and your wife as depositors for FDIC insurance purposes, in case you are not paying attention or ready to do anything immediate with the funds. https://www.fdic.gov/deposit/deposits/

Then after this, your full time job can become just learning how to manage your money which includes self-education first, before hiring anybody. It is not that hard and I'm sure you can do that on an average, not very hardworking 8 hour day, 5 days a week :)

Since you are a tech manager and seem to know "pieces" of your job (coding and business) but not enough to consider yourself a specialist (like a coder or the business guy), use this same mindset to be a manager of a team you can build around how to manage this $8m. In truth, $8m is not a lot of money per se so you may not need a team ... most people will want 1% of that per year to manage it. Your hope is that they are making at least 1% + inflation rate but you would probably do better yourself.

Good luck and congratulations!


One thing for certain, it can go quick. If you do anything entrepreneurial, start with a small allocation of your total net worth, and keep your overhead low as possible. It is really amazing how easy it is to get trapped in sticky things like rental leases and salaries. I'd also remind, don't forget about basic safe fixed-income investments like USA Government Bonds. Sticking most of it in bonds at 2-3% is probably not the worst move you could make, over these next few years.

If it was me I'd take whatever your current annual post-tax household income is, multiply by 22 (to get you to 65), and put it in the bank. This is the money you'd have made between now and retirement - treat it as a salary, paying yourself out monthly, and contribute to a pension as you would have if you'd been working.

Doesn't really matter what you do with the rest of your money, but I think hiring a personal wealth manager is pointless - you have enough, you don't need to grow it.


First, I would put my money somewhere safe, with close to zero risk until you figure out what to do. Depending on your living cost around 1% guaranteed return should be enough to not work again for quita a while, possibly for ever (that means you do not have any pressure on your finances ever again if you don't change you lifestyle). Put some money aside for your kids (education, base capital for a house one day,...).

Educate yourself on investment and then find someone to manage your money, in Germany I would go maybe even for some rich-peoples bank and invest with the lowest risk portfolio possible.

In zhe meantime, enjoy life and your complete freedom. I know it is hard, but now you can do whatever you want and you have the time to figure it out, too. Go back to college if that's your thing. Tutor students from troubled families or not so well off backgrounds (you think about donating, so I assume you have a social sense). Or do some consulting on the side. I would suggest to not brcome idle, that breeds boredom which doesn't go well along with $ 8M.

Or go a long vacation with your family, visit the world. That is if your wife and kids can come along with you.

In general, be patient, stay cool and take your time to figure things out. Be conservative with the money.

And finally, congrats to your near complete freedom you and your family have now!


> Depending on your living cost around 1% guaranteed return should be enough to not work again for quita a while, possibly for ever

Just a nitpick but even the "official" inflation rate is somewhere around 2%, is it not? The real one is probably 3% or higher.


Inflation is just an aggregate, based on a reasonably arbitrary basket of goods that someone decided is representative of the public's expenditure. If the basket doesn't reflect your consumption, then the rate of inflation isn't really relevant to you. Almost all PCE inflation in the last 20 years has come from housing, healthcare, education, and pharmaceuticals. On the other hand, the price of durable goods has fallen. The idea that inflation moves all prices together hasn't been accurate since the 80's.

The trick is to figure out what your liabilities are, how you might be affected by the price of X changing, and invest accordingly to attempt to hedge that risk.


I think there also should be a concept of 'personal inflation'. For example, if you consume a lot of electronics and only use little petrol or whatever is becoming more expensive that time, your personal exposure to inflation is lower than the official number.

Don't buy expensive stuff, including houses and other properties. Maintenance cost a fortune and it takes an eternity to sell them if you want to cash out.

Don't lend money to people. Give money to people to help them if you want, but don't expect them to pay it back.


Put it all in a mix of a worldwide stock and bond index, look up the suggested distribution fitting youe age, probably like 60/40, then take a supet conservative take on the trinity study which suggests a 4% safe withdrawal rate and make it 2%. This puts you at 160k per year. In virtually every circumstance, you can reasonably rely on spending this amount annually, adjusted for inflation, and not run out of money, same with your kids after you die.

Is this enough? Then you may retire, if you don't like to work, or switch work to anything else regardless of pay. That is a personal question, talk to your family mostly, and experiment. Volunteer, travel, sabbatical. Take it slow, don't rush. Like something? Build it out gradually, but don't change overnight. Most people don't enjoy permanent vacations for example.

Donate part of the 160k annual budget as you please.

Hire a wealth manager for a few sessions for advice. But managing it yourself is easy if you stick to simple strategies. No need for exotic investment products or a manager.

But, do hire an accountant. Understand your tax obligations first and foremost.

That's your base. From there you can breathe and think about bigger plans.


You now own yourself. You only have to work if you like working, and you can work at something that doesn’t pay much since you don’t need the money.

Watch out for isolation.

Try to change as little as possible because the truth is not much has changed except you owning yourself.

Don’t give it away. Don’t give it to your friends, they won’t be your friends if you do.


As a father, if I came into that money I would use it to spend all the time I could with my kids. You don't get that time back and it's really precious and easy to take for granted.

Obviously you have to be guided by your own priorities which are different from mine. But I wanted to counterbalance the idea that you should "not do anything rash." Certainly, financially this makes sense; upgrading home, cars etc could bite you by raising your cost of living.

At the same time, you no longer have to give the best 8 hours of every weekday to a company. Your time is the most precious thing you have. At a certain point you will probably want to assess -- and I'm sure you would, regardless of my comment! -- if you want to keep allocating it to an activity that from what I can tell serves primarily to generate monetary income.

Just my $.02. In a way, like everyone in this thread, I'm living vicariously by giving it so do with it what you will.


Practical advice aside, take a step back and bask in the pleasure of the wonderful, unambiguously lucky thing that's happened to you. It's OK to feel excited and happy about all the freedom and peace of mind you now have.

Loved one gets sick? You don't have to think about money. Kids need something? It's taken care of. Getting 8 million dollars out of thin air is amazing and you shouldn't let your anxiety and self doubt stop you from feeling happy for a while.

You can figure out what to do with it later. Just enjoy having it in your checking account and looking at it every few hours in your bank's app. Buy something frivolous that costs $10,000 that you've always wanted. Give each of your family members a great gift. Donate $10,000 to something that matters to you. Let yourself spend $40,000 or so to celebrate, and then be responsible with the rest.

Congratulations, my friend!


First, congratulations.

Second, now you have the not so easy task of running family assets as your #1 job to provide security and freedom for your family.

The most important thing is to educate yourself. Hopefully you enjoy reading macro economic news and investment books. It’s not necessarily to DO anything. It’s often so you have the confidence to not do anything.

Regarding asset allocation, standard allocation to liquid assets will do. Plenty of literature on it.

Running family assets is not about maximizing EV. It’s about minimizing risk of ruin, and asset preservation over asset growth.

The emotional side of investing is often harder than the numbers side of it. Feeling like you’re being judged by others for your newfound wealth is hard too. A support group of peers with similar asset levels who are also searching for balance will be really helpful, though hard to find.

Happy to talk more via email.

Again, congraulations. We all need to get lucky. You deserve it.


$8M is fairly close to the number that I use for calculating "retirement ready" in the SF Bay Area. Assuming you live somewhere cheaper, the number is lower. Also my calculation involves some very large annual expenses that most people don't have, so your number is probably lower regardless.

So, you could probably retire.


First, congrats. I think your humility comes through in your comment, which is refreshing.

The nice thing about money is that you can simply put it into an investment or savings and defer the decision about what to do with it. I recommend against pressuring yourself to make a quick decision.

I recommend just finding a new job or taking some time off and thinking about life for a while. Based on the time it has taken people I know to adjust after retirement, I'd give it 6-8 months before you can trust yourself to really know what it's like not to be obligated to work and to have your self worth defined that way.

So you may not want to retire, but I think an 8 month break would be a nice period of time during which to evaluate all of the options.

One thing that I think about is that in many ways my life is about as comfortable and pleasant as it could possibly be, even though I have not had a major exit. In one sense this is a good thing, but many philosophers tell us that struggle is what makes life meaningful.

So you might frame the question thus: Now that you no longer have to worry about basic financial security, what struggles might you choose to undertake that you could not undertake before because of your duties?

It might be a personal struggle (learning, accomplishment) or an inter-personal one... maybe political, maybe athletic or philanthropic.

The biggest thing to watch out for which you may or may not have encountered, is that people will flatter you extensively. While $8M isn't major wealth, it's enough that you will attract flatterers and your ideas will be given much more serious pondering. People will act toward you as though you are more attractive, smarter, and more insightful than you actually are. Beware of this because it is a reality distortion field.

Getting rid of the money quickly to avoid this sort of thing is a mistake, because dealing with it is just an important life skill just like learning to avoid people who are overly negative or mean-spirited.

Good luck to you!


Make a safe investment and go to work in a NGO which goals resonate with you. I'll get all the stability of a job, have social interactions with interesting people, and do good. Remember that now you have free will and you fc them all at any moment. A real superpower.

> Make a safe investment

there are no safe "investments", everything is a speculation.

that said, yes one could try and keep it conservative.


I remember watching a sketch about a genie that was supposed to grant wishes, but instead gave reasons not to do it. The guy asked for one million in cash, and the genie told him that if he was capable of handling that amount of money, he would already have them on his own, so fulfilling his wish would be a total waste.

People already said it many times. Don't go in "rich mode". Take your time to figure things out, not changing your life too much. If you look at all rich people on the world, most of them work even harder than common folks to keep their wealth. Make sure your kids will learn to appreciate life and won't go poor without your support.

Congrats anyway!


I almost never post but here I am for you mate! I had a smaller version of your life but at 30 and have spent the last 12 years living happily with my family; wife and two children. We travel, still work from time to time when we feel like it on projects that interest us, but our family and selves come first. I exercise, took up squash, we went on a 7 month trip around the world last year etc etc. Our kids or not spoiled, other than the travel, which they would prefer to not do in order to stay in school :)

Do not squander, DO NOT work because everyone says you should. FOllow your bliss, read, learn, explore.


Amazing

Precious little conversation going on here about donating...

Lemme start by putting my cards on the table - I think it's morally wrong to be rich. In a world where people are starving to death for the want of a few dozen dollars a week, people with billion-dollar valuations and extravagances are among the worst people I can think of.

That said, I'm not going to stand here and say "if you don't give it all away, you're evil". It's absolutely a logarithmic thing, and even at $8m, there are a lot of questions and plans you have to make to ensure that you don't do the whole "sudden windfall" thing and end up worse off than before.

But I'm in a similar situation to you (sans windfall), and I know I'd feel awful not using at least some of that money to improve the lot of those less fortunate than myself. I keep a running list of organizations that I personally feel do plenty of good to causes that are important to me and don't just exist to funnel donations into operating expenses, just in case of a big exit or whatever, and I plan to start with 10% of the total and work my way up to as much as I can stand.

So definitely make sure you and your family are taken care of, take things slowly, try to get over the rush. But maybe re-watch Schindler's List, and consider investing as much as you can stand into good causes.


Even in the most expensive areas in the world, this is a life-changing amount of money. Assuming that as you said this money is post-tax and you're not going to pull large pieces of it out to pay off debts, you're looking at conservatively being able to pull off $300k+ a year, every year, without touching the principal (assumes a 4% annual withdrawal).

I can only speak to what I would do as a 32 year old without kids. I'd follow the top comment and basically pause for a year. No big purchases, no extravagant vacations, keep working if you enjoy your job. Without touching it that amount of money is only going to get even bigger. And I'd find an estate attorney and fee-for-service financial adviser that I trust.

After that, chances are I'd retire. This is nearly 1% level money (in terms of income you can pull off it's like 90% of the way there). But it really depends what your goals are. This is truly enough where your kids would not have to work. You could work for a non-profit if there are causes you care deeply about. You could donate half of it and keep your job and still be in the $300k/yr+ club.

You could also risk it all and start a business or start investing in others' businesses. The world is your oyster at this point, man.


Firstly, congratulations! You sound very level-headed about it all which is refreshing. If you're UK-based I'd withdraw it all and hide it in a safe... FCS only protects up to about £70k (from memory) and who knows what state the banks will be in post brexit!?

If you're UK-based I'd withdraw it all and hide it in a safe... FCS only protects up to about £70k

OP almost certainly isn't in the UK, but even if so, you spread it around numerous banks and different asset categories (stocks, gold, bonds) rather than risk it all in a safe. Even just dumping £1m into an NS&I Income Bond would keep it pretty safe.

I'd personally diversify as much as possible and buy into a variety of funds covering most major geographic areas (e.g. a fund that tracks the Dow, one for the Asian markets, and so on.)


You're almost certainly right, I was being a little flippant.

Maybe best not to be holding cash during brexit..

Hey mate its understandable you are freaking out a little. I would definitely suggest starting to do some education on basic finance and investment. Please tho dear god can you not do TWO things...just two things.

One...don't donate your money...donate some for sure, but most organizations generally fail by eating up the lions share of donations through administration costs and other costs of business. So your money gets nowhere...now if you want to make a difference this leads to point two.

Two. PLEASE dear god don't invest all of your money in stagnant safe investments, invest some small portion of your 8 million into starting a business. I don't mean this in order to grow your own wealth...but to help grow that of your community. I don't know where you live...but in Australia...the hoarding of wealth through property and the stock market is basically killing small towns/communities left right and center. Investing money in that doesn't really grow the economies of small towns/communities. Start a business, nothing huge, nothing too fancy, but invest in training you community/small towns! Seriously it will provide a bigger difference to those whom you employ than if you were to give to a charity supposedly servicing them!


You should not retire, but quit working. If you worked 9-5 you ll realize how much time was wasted in daily routines. What are your interests? Would you be interested to devote time to studying something (a phd maybe? you re not that old :) ). Why are you freaking out? money is a tool, it gives freedom of time and the ability to say FU to some thing, think of it like a tool not as a goal in itself.

Yeah, you should probably invest most of it responsibly. Don't buy yachts.


You have a once in a lifetime opportunity to be there for everyone you care for no matter what. Seize it with both hands. Don't tell people, just be your best self.

For Charities, look at www.givewell.net. then, on a vacation, go visit some of them and see for yourself. if this doesn't provide life-changing perspective ---> therapy.

Congratulations! This is a blessing, not a burden. You are not "average." You saw something in this business that made you want to work there, you took stock and held it, and it paid off. Some luck, sure, but also good business sense. You're also good with money, not average. How many 43 year old's do you know that have a house and two cars that are paid for? Nothing average there. Focus on you and your family, not on the money. Take this opportunity to teach your children about money and giving, go back to school, or follow that passion you've always had.

     As far as what to do now, find a good family attorney, you now need a will!  He or she can also help with the money.  I think putting it in a 6 month CD so you can take time to think about your future is a great idea.  That way, when everyone comes to you for a loan, and they will, you can say, sorry, the money is all tied up now.  Take some of the money and enjoy it.  Go on a nice family vacation, buy that new car you always wanted, donate to your church, the Salvation Army, Red Cross, or your neighbor who is down on his luck and needs some help.  In the interim, keep the simple life you have, keep working, and feel good about yourself.  You don't seem average to me, I think you're a very smart guy.  Congratulations again, and good luck!  Tom.

Was watching an ESPN doc about professional athletes that had earned a lot of money and suddenly became rich. These people usually came from low income (broken) families and had no idea how to manage this sudden financial change.

One of these ex-athletes now tries to educate the younger generation about this. He tells them:'Better to live like a prince for your whole life, then to live like a King for 5 years'.


I would recommend retiring and enjoying your time with your family. The money can come and go, but the time you have is irreplaceable.

Please consider donating and investing it in causes you believe in. There are so many ways this money can have a real positive impact to people and the world. Don't feel you need to throw massive gobs around - talk to the people running these causes and see what would help them out.


1. Get an attorney to make sure you don't get screwed in taxes or by some wanker trying to make a dime.

2. As you described it, I would say invest all of the money. If you're fine living humble, then use the money as security. With eight million you can pretty much comfortably. A low risk investment like a CD can provide you with roughly a 120K (@1.5% interest) salary.

3. Continue to work. But rest easy knowing that if you have a trash job, you can quit and find a new one without worrying about how you're going to provide.

4. Pay off everything.

5. Find a couple decent indulgences. Buy a Corvette or take the family on vacation. But don't go crazy. Spend 100k.

Lastly, I think being too comfortable makes people unhappy. Personally the times when I am most secure, are the times I am least happy. Take up rock climbing, skydiving, marathon running or anything that makes you uncomfortable (preferably without destroying yourself). It'll keep things in perspective. I rock climb, canyoneer and run Spartan races and those make me far happier than any amount of money I have earned thus far.


Put most of it in the stock market. Set aside some cash and use it to improve your everyday life whenever you feel like it. For example, don't fly Economy class if it's crowded and uncomfortable. Spend your holidays in a nice place, better hotel. Eat at better restaurants. But a safer (larger?) car. Do NOT hire a wealth manager or go to some private banking advisors.

this is probably some sort of contra-indicator when average joe off the internet recommends Putting most of your money in the stock market. We must be near the Top of this bull run.

This bull market is almost 10 years old. We are overdue for a "breather".


> This bull market is almost 10 years old. We are overdue for a "breather".

I've been hearing this for years. It's just FUD. Yes, the market will deflate again, but in the long run - and I assume the OP plans for the next 40 and not 3 years - it's hard to beat the stock market with other non-time-consuming investments.


What If You Only Invested at Market Peaks http://awealthofcommonsense.com/worlds-worst-market-timer

Haven’t you been paying attention? We’ve been breathing for the past two months. My tech stocks have lost over $120k of value since September highs, in just two months.

Ha ha, I sunk a few $k in NVDA at $235, thinking they would not be affected by crypto currency (since most people use AMD).

You can’t time the market, so either advice is just as wrong/right. Though the stock market will probably be higher 10 years from now.

>> You can’t time the market,

What about these 4 guys just before 2008?

• Economist A. Gary Shilling warned his newsletter subscribers about a housing bust and wholesale deleveraging of household debt that would hobble the economy for years.

• Money manager James Stack also told his clients the housing bubble had burst and that a new bear market was coming—while stocks were hitting all-time highs.

• Raghuram Rajan, then chief economist of the International Monetary Fund, said the amount of risk and leverage in the system was much higher than most people thought.

• John Mauldin said a housing bust would lead to a drop in consumer spending, a bear market, and a recession (though at first he thought it would be a mild one), and that credit default swaps (CDSs) posed a systemic risk.

Plenty of folks "predicted" 2000 dot com crash and 2008 crisis. Noone listened though.


I did. So what? I have acquired some Google, Amazon, Apple and Nvidia in August 2007 - guess how much times it's higher now?

all i know is when people start to get cocky and complacent mr. market usually does not take too long to serve a lesson.

nothing. goes. up. forever.


Sounds like you're in a state of shock. Understand that you don't need to decide anything now. Don't make any irreversible decisions yet. For now, why not take a year out, spend time with your family?

I have been in your position for a month. I can honestly recommend leaving work and pursuing things that interest you instead of continuing to go to work, m-f, 9-5. It's just much nicer to operate on your own schedule.

Isolation is a thing though so make sure to maintain contact with friends and try to work with others. Contribute to open source?


Not to be a downer, but you might want to look into getting a post nuptial agreement and parking a good chunk of that money in trusts for your kids that you'll have access to for the next 10 or so years. This kind of money can change people, depending a lot on their background and upbringing.

Here's some of the things I did in a similar situation- - I told work I was cutting back my hours. They had some concerns, so I'd start the conversation early. Currently I'm only working 4 days a week & it makes a huge difference in my life. - My wife & I picked out "IPO presents" for ourselves. She got a minivan, I got a nice grill. This seemed like a good balance between "don't do anything for a year" & "we worked hard to get here & can afford it". - if you can find a good fee only financial planner, hire them. We pay ours a ~$200/mo retainer to just talk about money things on our mind. She's been able to make many valuable insights & suggestions as we've been trying to adjust to the changes in our lives & futures.

Retire. I'd buy myself a hundred acres or so here in Indiana (probably not for you, but I like quiet), make a lazy 3-fund portfolio ( https://www.bogleheads.org/wiki/Three-fund_portfolio ) with a million in each fund, throw another million in a robo advisor and leave whatever was left as cash. I'd never have to work again, I'd have many times my FIRE number.

Then schedule a physical, an optometrist appointment if you wear glasses/contacts and a dental checkup. You now have time to be mindful of your health.

Then I'd just take a few months off. Do absolutely nothing. Just relax, think, recharge.

Then I've always got a bazillion ideas I want to pursue, I"m sure you have some too. I'd probably start working on the idea I'm currently waiting to hear back from YC for the winter 2019 batch. I could spend 20-30k of my own money collecting a lot of data and quietly looking for a key person or two to help me with the project and I might actually pivot and go more of a non-profit route with the idea.

You do you though, just be sensible about it.

Read about the Trinity study https://www.bogleheads.org/wiki/Trinity_study_update

Basically, if you put some money into a lazy three fund, or just a broad market/whole market fund you can likely retire and withdrawal 3-4% of the initial amount for the rest of your life depending on your risk tolerance. If you just did 3 million like I suggested above if I were in your situation, you have 90-120k a year to live off of relatively safely.

If you move somewhere with sane housing prices, pretty much anywhere in the midwest, you can live fantastically wealthy off that as the median household income in the country is 59k.

What I'd also do is take a small percentage of the money, maybe 50-100k and go Brewster's Million(s). Go spend it on something fun or goofy, something you've always wanted or wanted to do but could never justify. Get it out of your system. Something like these vacation experiences (secret agent for a day, vomit comet, shark diving) or buy that car you always wanted, or take a 700-702 AD French drunken pottery spinning while standing on one leg while singing Won't You Be My Neighbor class that you thought would be fun.


Staying unemployed (if you're planning about leaving) is usually hard on most people mind. Try asking for a part time job (or look for a part time job) - that will leave you with enough time to think and find out new hobbies or what you'd like to do in the future.

Spend time with your wife and families, save in different places/accounts/things so you don't risk too much. Very often you don't have hobbies because you feel you don't have time - now you have that.

Just, imho, don't start overspending in stupid things, like luxury cars or boats or huge houses, or your expenses can go quickly out of control.

If you want a hobby, i suggest things that are 'physical' and group/community activities, maybe some sport or building things. See mr. Money mustache for inspiration.


Apparently you think you are average at everything, but it looks like at least once you were good at picking a successful tech company. If this sounds right to you, why not do it again?

I would set the money aside (invest it like others said in this thread) and join another company which looks like the one that just exited, but at the time you joined it. You should be valuable to them, especially since you have experience with hyper growth now.

If it works, you hit the jackpot twice, and you have learned that maybe you have a knack for this. If it doesn't, you didn't lose much, and you have $8M so does it really matter?

The only caveat is: avoid telling people at the new company how rich you are, and under no circumstance let them have you invest unreasonable amounts of money in them.


  make yourself a million bucks
  partly skill, mostly luck
  now you can afford a down payment
  on a small house
https://www.youtube.com/watch?v=I6IQ_FOCE6I

Don't do anything. The number one difference between needing and having is that when you need, the status quo is your enemy; when you have, it's your friend. If you need to pay rent, you gotta make money. If you need a new job or new clients, you gotta hustle. If you need to keep your bosses or investors happy, you gotta watch those metrics and keep on grindin'.

You pushed because you needed. Now that you have, stop pushing and learn to wait. If life was fine two weeks ago, it'll still be fine two weeks from now – as long as nothing changes. What $6M buys you is as much "nothing changes" as you want. The status quo isn't everyone's friend, but it's yours now and it takes some getting used to. So take your time.


Have you tried playing Warhammer? Eat up that 8 mil real fast ;)

In seriousness though, I think changing that "no real hobbies" statement is the way to go. Find something not work you enjoy doing, or if it turns out work is really what you enjoy, keep working! Don't let the money burn a hole in your pocket - you don't need to change anything at all.

Another option is do work you think matters or would be fun if you never had to think "but I couldn't support my family doing that.." Working at a bike shop is that for me. Charity work, maybe getting involved with your kid's education boards, etc., something out there must make you tick that you couldn't afford to do before.


My two cents:

First, Congratulations.

Second, breathe. Take your time. If you are still stressed about it, talk to someone IRL. It will really help to get the weight off your shoulder.

Third, beware of self-doubt. It sounds contrarian but I see lots of people who have a big win - money, beautiful girlfriend - start to doubt if they ever deserve any of it. They tend to go the "I am not that great. It is just a case of being lucky". And my answer is - You deserve it. You worked for it. You are awesome. Believe that.

Fourth, take your time understanding your options.

IMO, Bogle heads is a good start: https://www.bogleheads.org/wiki/Managing_a_windfall


First of all, congratulations! I've had a similar situation (with less money) but still, I went through the exact same exercise. You have 2 choices basically, you can keep working or you can retire.

When I say keep working I mean working for someone. Let someone dictate your day, week and year. Some people need structure in life to function properly so if you're one of them, I'd highly recommend you to get another job at another company in order to learn new things. Ideally, you'd study a new position in between so you wouldn't get bored too quickly. Switch to Product, design, or dev for example. You're not chasing for high incomes so that allows you to come in as an "entry level". You seem to be humble so that could fit you well. But definitely look for new challenges since you'll be spending most of your time at work. There's also the entrepreneurial route but I'd put that into the second bucket.

Retirement. Unfortunately, unlike you, I could not simply retire from the 9-5 life. When I say retirement I mean not having to work for anyone. What I would do is to work on my own projects and take a year or 2 to explore different domains and ideas until I'd find something promising I'd be deeply passionate about. Needless to say you'd be learning every day.

In terms of what to do with your money? Here is exactly what I'd do personally. I'd put $5 million into government bonds with a 100% guaranteed return of about 2.5-3%. That would bring you about $150k of passive income per year for the rest of your life (based on inflation rate). That's it! I'd move to a not too expensive place and I'd still have $3 million dollars left. I'd actually split it in 3 in your case. $1 million for each of your kids. For each kid I'd split it like this: 50% into a more aggressive portfolio like stocks, then 50% into bonds. I don't know how old your kids are but the idea is to lock these accounts until they get old enough to understand the value of money. With your million dollar left, I'd buy a new house for about $300-400k. Then I'd leave the rest into a savings account to be used for fun, big purchases, etc.


You know what? You don't need to do anything for now.

What you need to do over the next few months is answer a single question:

"What do I want to do with my life?"


> "What do I want to do with my life?"

That's a hard question without the $8M too :)


Indeed it is!

Also to add. If you can't work out the answer to that question then don't feel pressured into trying to force it.

It's ok not be able to answer the question. Life is a search for meaning. Sometimes it comes, sometimes it doesn't. The money in and of itself isn't going to answer the question. And in fact, freedom from the 'toil' required to make ends meet might remove some of the purpose that OP previously felt. But I think when faced with change and upheaval that removes the certainties of life (in this case 'work, eat sleep, repeat') you owe it to yourself to see if you can work out the answer.


There are good threads on reddit and other money forums that have advice on things like this, as I recall:

- Don't make any drastic changes to your life now

- Learn how to make your money work long term (diverse investments with plenty low risk etc)

Give yourself time to understand what you are going to do with it. You don't sound like the type of person that will end up like the lotto winners, but bear in mind a sudden increase in wealth can lead to pretty negative things if not managed.

Of course - it can bring a boatload of positive things too. Think of the things you could do. Retire early, help others, work on something special without worrying about salary, find a hobby :P Congratulations!


  start anon profit put in all moneis.
put it in 7%to10% gariantead no loss always up not annuity only goes up not down.

start at 8miil then reinvest the 8ook interest less 80k salary +320k to charities

         that gets 8,400,000
         then        840k -(80ksalary+380kdonate)
         then      8,780,000
         then       878,000
         then     9,658,000
         then      965,800 965,800-(80ksalary+442,900donate)
                   +442900 
        then     10,100,900

            when you get to 11,000,000
    increase salary to 100k.
            always 1/2 back in 1/2 to donate.
    when you get to 15,000,000 increase salary to225k
       always donate 1/2 back before you take out salary and donation.
         Cap salary at375k,

 donate to shrine's,st Jude, wounded warrior make wish  proportionately.

         there will be some compounding yearly.
         in 20 years surprise.
                          " GOD BLESS"

When I retired I went through a process of reverse engineering my life...basically creating a dialog between the factors that I thought contributed to life satisfaction and how I rated different jobs, hobbies, projects, etc that I had been involved in. The objective was to see if my story correlated. (Hint, it didn't.) Once I had a list of more-or-less verified factors, now verified, I then listed all things I imagined that I might do next and evaluated them on those criteria. I picked the three that ranked the best and started exploring. 5 years in, this seems to have worked well.

IIRC there exists an association created to help lottery winners. Your situation is kind of similar. I forgot the name, but if you google "curse of lottery winners" or something like that you should find a link somewhere.

According to some random article I've just found[1] for instance, one of the first things you should do is hiring an attorney. Sounds like a sensible advice.

1. https://www.businessinsider.fr/us/what-it-is-really-like-to-...


Don't do anything sudden, as others have said. But as you start to adjust to this, you may realize that there is something, or a few things, that you have wanted to do, but never could because of money. That place you wanted to go on your honeymoon, but it would have cost $2000 more than you could afford? You can go there now, on a second honeymoon. Take in a game at Yankee Stadium, even though you live in the Bay Area? You can do that now.

There may be several such things. Most of them don't take that much money (from your current perspective). Pick one of them and do it. (Note well: don't go do everything that you've ever wanted to do but couldn't afford to do. As I said, pick one.) You don't have to do it right away. It can wait a month, or a year, until it's sunk in that it's OK to spend a bit more money than I used to. Not a lot - you don't want to drastically change your lifestyle. But you also want to have some benefit from the money. When you've adjusted to the point that you feel free to spend $2K or $10K on something that you've wanted to do, but couldn't, well, go do that.

And now a negative: Pay attention to your marriage. As others have said, spend time with your kids, but don't forget your marriage. Bluntly, your wife can now afford to divorce you. Do your best to see that she never wants to.


Take the time to get one or more really, really good references to true, professional investment management services. (Not showy and "expensive", but good -- not "cheap", either, but real value for the real money you spend. This can be hard to determine, if you don't already have connections. And it can build on personal relationships; however, those can cut both ways, so be cautious.)

You want safe, diversified portfolio. You may be a bit challenged, near the end of the year, trying to position to manage tax exposure. But overall, be thinking long-term, not short-term.

Add to your daily, weekly, monthly schedule, time and resources for learning investment management. You don't have to do it all at once and overwhelm yourself. First, get safe. Then, learn, so that you can speak with and interact with your advisors from a knowledgeable position. You'll come to know what investments you're comfortable with, and what not. You may well also get better service from them, as a result. The good ones appreciate well-informed clients; they may even enjoy talking with you, on a personal level but also to the extent you have knowledge of and insight into your industry/segment that they may be interested in (not confidential knowledge).

This is what I know not from having large assets, myself, but from observing and speaking with a family member who does.

The professionals really do help, but he's also had to bring his own considerable knowledge and smarts to the table and sometimes override their advice. It's really more of a partnership, than one side or the other calling all the shots. If the people you are working with don't have this perspective (especially once they get to know and hopefully respect you), you may be working with the wrong people.


"Normal" Work is unlikely to provide you with much meaning from now on, as it won't provide an appreciable change in your living standard.

So, instead, look around at charities, or other positive works, and see what you can do to help them with your time.

Read the local news, and see what leaps out as being unfair or unreasonable to you. Spend some time researching it to make sure it's not just clickbait, but actually a real problem, and then go offer to work for them for free. A decent manager can do an awful lot to help a small organisation work well.

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