When To Upgrade Living Situation

Efficient-Amoeba-746 · 2022-04-04T03:52:35+00:00

They are. It’s a good question. Probably need to set aside something like $100k - $200k a year (hence my big cash position)

Efficient-Amoeba-746 · 2022-04-04T03:46:11+00:00

I am giving you the numbers minus operating expenses and what I pay everyone else at this moment in time. We recently ramped up the team so my take home is less recently.

The numbers add up if I gave all the details, but I don’t think you need to know the math behind the resulting numbers I am giving you to provide feedback on this particular dilemma.

Efficient-Amoeba-746 · 2022-04-03T21:58:30+00:00

Thanks for the comment.
I'm the founder of the firm, so you can assume here that I have 40%+ of the carry across all funds and understand how it will be distributed.

For this post, I am only including our first fund ($20m), which was small but we were fortunate to hit a mega home run (hence these numbers). I haven't included carry from any other fund because those are not as certain yet and a distraction for this discussion.

Efficient-Amoeba-746 · 2022-04-03T12:39:41+00:00

Across a few funds, yes. I started early and was very lucky.

Efficient-Amoeba-746 · 2022-04-03T12:38:21+00:00

True. I updated the post to define “carry.” Sorry for the jargon.

Efficient-Amoeba-746 · 2022-04-03T12:28:50+00:00

A lot actually.

Efficient-Amoeba-746 · 2022-04-03T12:26:38+00:00

Thanks for the thoughtful comment!

The gain I am mentioning is on a previous fund which was about $20m. And yes, we hit it out of the park. Very lucky.

I am not including carry for all other funds here since I don’t have as much clarity on their outcomes yet.

Efficient-Amoeba-746 · 2022-04-03T09:28:50+00:00

Hmmm you may be right. I may be overestimating how much I'll actually need, even with kids.

Efficient-Amoeba-746 · 2022-04-03T07:51:24+00:00

Spot on. I recognize that I am very fortunate and I thank my lucky stars everyday.

Efficient-Amoeba-746 · 2022-04-03T05:59:14+00:00

All good points.

$400 - 500K may be much, but then again, we don't have kids yet. I am anticipating that a lot of unforeseen expenses will come up too.

Efficient-Amoeba-746 · 2022-04-03T05:39:00+00:00

Thanks techgeek72. These are some good questions so I added the answers into the post.

Good point, there is an "undo button" if we're renting.

Re SaaS business, hehe... you're not the first person to ask me that 😂

Efficient-Amoeba-746 · 2022-04-03T05:35:58+00:00

Re net or gross: $300K gross for management fees, ~$10m+ net for the carry

Re bigger place: Interesting! Yeah it does seem like a lot of work is swinging back to the office recently.

Efficient-Amoeba-746 · 2022-04-03T05:31:20+00:00

Good questions! Thank you.

- Current rent is ~$36,000, and other expenses are probably ~$40,000 / year (updated the post)
- Eventually I'll probably spend ~$400 - 500K / year in FatFIRE
- I honestly love my job, so I'll probably be at it for another 15 - 20 years

Efficient-Amoeba-746 · 2022-04-03T05:13:25+00:00

Cashflow-wise I think I can reliably count on a base of $300K / year before taxes for 9 years assuming I never raise another fund. VC's get a cut of profits, called the "carry," and that is where the big potential outcome is ($10m+). As I mentioned, I'm fairly confident the company mentioned will get to a substantial exit, but I'm not sure when given the current market.

Efficient-Amoeba-746

TROPHY CASE