Quote:
Originally Posted by gostatego
1. how can you say that the money you've made from poker won't last forever?
2. what made you want to risk such a large % of your earnings on a risky investment such as a startup?
3. I would think that with smart conservative investing you would be comfortable forever.
1. If I live in a tiny apartment on 25k a year and never travel or spend money on things I want, it will last forever. If I want to live in a decent apartment and eat sushi whenever I want, it probably wont.
2. I like the companies, I see a future in each of them, worst case scenario I lose half of my money and learn a lot. Best case I get rich and learn a lot. I am also not really in on the ground floor, so I would imagine these investments are slightly less risky than 2 dudes in an office garage. Still obv risky though.
3. Smart conservative investing is what, 2-3% per year? Does that even keep up with inflation? The books I read 5 years ago and financial advisers I talked to said that smart investing was index funds and real estate. I did that and lost almost half of my money.
Let me break down some numbers.
Win 5 million over 6 years.
Pay ~2 million in taxes.
Lose ~400k in index funds.
Lose ~400k in housing.
Invest in some startups.
Spend like 100k per year on stuff. (Seemed reasonable when making 1m/yr)
Go to really expensive university.
Sure, there is a lot left over still, but not as much as you probably think seeing a 5m number. I have plenty of money, I don't need or want anything else in my life that money can buy. I don't have expensive tastes, and I have plenty to sustain my sushi and semi nice apartment and expensive school habits until 2020 I would guess. I also have lived with my girlfriend for almost 2 years and am essentially consuming double. I expect to be able to do a lot of cool things in the future and am by no means trying to 'sit back' on whatever money I have and try to make it last forever (hence startup investing, getting involved and trying to learn about a variety of different fields).
I was a good poker player. I was not a good investor, though hindsight is obv a lot better. At the time, I think you would be hard pressed to find people that said don't invest in index funds. Don't buy a rental property. I read a lot of books, talked to a number of financial advisers, and did the best I could with what I knew. I probably got a little unlucky the way things turned out, but I am still in pretty good shape. I am not super sure what I could have done much differently. Arguably invested all my money in bonds or gold or something and never bought houses, but the prevailing investment wisdom of the time didn't really think that was best. (Yes, I am probably a little defensive about all of this, I really did think I was doing things right to put myself in a really great position for the future).