Cliff Drop in Money and Time Value

Level 2- Value Investor

Welcome Avatar! We’ve stated many times that the vast majority of people are better off with the tried and true W-2 (min to get promoted) and then scaling up any business to make inflation work in your favor. If you own a biz your prices go up and generally equity value goes up with inflation or more (more if you’re growing).

That said, tons of people get addicted to this game of seeing digits on a screen and lose focus on what the point is. We know a lot of guys from upper class families that are grinding it out making tons of sacrifices for no other reason than digits.

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The Cliff Drops - Money

Adding income/wealth improves your quality of life like an S curve. Each dollar improves your life quite a bit, then you hit a certain level it goes vertical and dies.

Looks something like this.

This is a great chart because you could just assume that working years is the time function. Around 20 years of working and the amount of stuff you’re doing with money really drops off. It’s all legacy stuff and the days of partying all night are over. Not going to see 45 year olds throwing house ragers unless they want to end up in a Shannon Sharpe, Bill Belichick type situation. By the time you’ve been grinding for about 20 years most of the craziness has concluded.

Initial $100K or So: This is probably the amount that people need to no longer feel a ton of stress. Living paycheck to paycheck and shacking up with a ton of roommates isn’t exactly exciting. You can do it for a few years when you are 20-24 but it starts to get old fast. Once you’ve got 6-figures to your name and are saving from paycheck + some mini “hobby” wifi biz you started that makes $500 a month, you’re at least comfortable.

This is the largest step up in terms of percentages and would represent year 5 or so.

Initial $500K or So: Your goal around this range is to really ramp up the income. By Mid-late 20s you’re already living with some experience. You’ve flopped on a couple wifi businesses, but one worked clearing 6-figs or so and you start to get some natural ego boost. Probably doing the standard ladies and liquor mistakes. In Silicon valley probably the psychadelic trips. Thinking its never going to get boring you start to knock on 30s.

Get to $2-3M: Most intense people get to around this range in their 30s. They all know each other. They all go out to the same places and joke/troll people who faded them. This is actually “eye for an eye” type trolling. In the background everyone is hoping you fail and telling people you’re a horrible person for improving your life.

They say “must be nice” “you changed man”

Everyone in your peer group says. “I didn’t work this hard to stay the same” and “Not interested in working for someone else for the rest of my life”

You don’t know it yet but now you’re at the flat-lining section of the S-curve. Your entire adult life so far? Making more has been a huge step function in your quality of life. You don’t worry about buying coffee. You don’t check the prices on the menu unless it’s something absurd like $500 caviar. You just do what you like.

Our rule of thumb is that the majority will see next to no quality of life improvement with $3-4M liquid and a paid off house. You are free to move that around by $500K but it’s really not going to make a difference. At that point your quality of life is essentially the following:

1. Able to easily live on income from your assets $150-250K spending (assumed 5%)

2. You will work. Don’t believe the BS about someone this successful earning $0 for life. Tack on another $100K bare minimum. Someone with this talent can just consult or run a boring business to make that type of money

3. You will own your time, no need to check in with someone to hang out with the kids/grand kids

4. Not allowed to do absurd stuff (lambos, jets, $40,000 watches to impress teenage boys etc.)

Whats the Money For?

That’s right, just ego. At this point many many many guys start chasing dollars for no reason. The whole private jet stuff? Okay great maybe you actually need it once a year. Unless you’re a celebrity like Taylor Swift or a politician, the chances of needing to fly around the world forever is pretty much zero. Just instagram that convinces you otherwise

The $500,000 super car? Yep. Now you get to watch every second to make sure someone doesn’t scratch it. Your neighbors all give you the evil eye. You attract all the wrong types of people - either impressionable young people or the sophisticated criminal types who can ruin your life.

If you want to become a billionaire just to say you’re a billionaire… You’ve actually failed at life. Many suffer from intense depression, have no friends and are surrounded by “yes men” and “yes women” who are just doing so to be close to that money faucet.

Don’t believe us? Here’s an insanely accurate depiction of what actually happens to a lot of these guys (not even billionaires).

“I do finances / taxes - people who INHERIT are the richest by far, AND are SUPER paranoid of loss, stepping out of line.

I respected my parents - BUT children who are set to receive $5+ Mil will NEVER piss off their parents, and will never be controversial. If media say be a dem is good person, they will be dem. If parents say ‘racism rules’ , they will be racist. They are true NPCs IN LIFE - because nothing matter aside making dad / mom happy, not being controversial.

People who MAKE their own money have ‘f u’ attitude by default - entrepreneurs know that ‘being controversial’ is the quickest path to insane riches - like E starting a rocket company, the first in world history basically.

In terms of wealth:

1) Is do you HAVE to work for ‘mid level’ living conditions - this around $1 Mil for single people, maybe $3 Mil for families of 2+ kids.

2) is can you afford large one time purchases - this is like car, house, furniture.. which could be $1 Mil pretty easy - so basically add $1 Mil to the goal, or if your parents will donate a large house, car to you, then blessings.

3) is status. At this point it’s ’never enough’ - my bud spends $300 / wk on groceries. For 1 man (all ‘organic’) - another guy does $30k vacations / year - etc etc.

A LOT more people than you think are at level 3 ($5 mil+) - BUT they almost always lie and pretend to be poor to fit in, avoid contributing to society.

I had two people worth $20 Mil staying with me 2 wks - they refused to contribute in any way, and tried eat all my condiments “because they are free” - another couple, like $10 Mil combined, routinely swamped the homeless food bank for free food, to drive it out of town (they’d go there everyday bring guests, etc) and at restaurants they never tip - another similar person will complain about $20 ‘if it benefits someone else’ but will spend $2,000 for a massage or similar..

This is a common phenom in wealth - PRETENDING to be poor. It’s VERY common.

Wealthy people DO have an obligation to better society, or at least not be parasites. But most commonly those who inherit are super parasites - and those they work are mid level parasites.

Only entrepreneurs - self made people - respect society, business, and community. The others see it as a game of ‘who can cry most’ who can cheat best - and have no ‘responsibility’ of money.. as in, they consider their social obligations as on par with homeless people.

The BEST people in the world, the entrepreneurs, reach level 3 and stay there 20+ years after death - they others lose all their money in about 20 years, basically the first time they meet a sophisticated criminal (like Ashley St Clair or Schwab financial advisor, etc).

One accountant took $10 Mil in properties the kids owned, and sold them all to himself. The kids barely caught in time, and barely had enough funds for the $100,000 lawyer to get it back… but still took 10 years. This is very, very common.” - Source

Does Any of That Sound Fun?

We’ve had the advantage to run into quite a few of these people. Tax havens have guys in $20 outfits with $20M, $50M, $100M, $500M to their name. They get their clothing from the same stores as the guy who has $100K to his name. Costco. Macys. Some Nike shoes. All the same. Perhaps one of them was the condiment eater from the quote above.

The game for them is quite literally running up digits. They have $20M houses, all kinds of staff and actually talk to their employees more than anyone else in the world. This includes their friends/family!

The fear of not getting rich is replaced by the fear of being used because they are rich.

In the long-run their life is not particularly different from the guy with a few million and a paid off home in Dallas, Denver, Chicago or any other area you personally want to live in.

Conclusion? On the dollar sign of the wealth game, it’s really a big race to around $3-4M and a paid off home. This assumes you will do something for work to avoid boredom + drug/alcohol addiction. Digits on a screen become irrelevant. Unless you are a musician/politician we can assure you that private jet isn’t going to be useful for anything. You will be able to live where you *want* to live making travel infrequent.

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The Cliff Drop - Time

Time is the most valuable asset in the world. Can’t make more of it. Goes away every day. As we’re typing this sentence, can’t get it back. Fortunately, we’ve been diseased with constant overthinking where writing is the best outlet. View it as a form of mental health at this point.

20-40 is not 40-60: Instead of trying to plan out a year ahead (you will always over-estimate talents in 1 year), try to think of life in phases. 5-year phases are good because that is generally when preferences change.

Go through your own interests. What did you love in high school? Now do College. Now do 5-years after college. Now do 5-years after that.

You can see it clearly right in front of you. High school you unlikely has the same hobbies, interests and preferences as a 30 year old. In fact, college you and a few years after is a different person entirely.

Time Looks More Like This

One day you’re still doing a lot of the same stuff then *poof* it seemingly dries up overnight. No longer the cool guy from NYC in Krakow, Poland for fun. Now you’re seen as a potential sex tourist visiting strange places “why is this guy escaping his home - something is wrong with him”

Where is this time cliff drop? Rough range is 35-40.

Lots of funny memes about the female wall on the internet. What the same accounts don’t tell you is that there is a male wall as well. While a 25 year old will happily date a 32 year old with millions and a cool lifestyle. It gets real ugly when the guy is 40 because he can’t even go into the spots with 25 year olds and the number that find him attractive drops off a cliff.

Options are no longer expanding in terms of things you can do they are declining. Essentially age 25-35 is the real sweet spot where if you have a ton of money you can do literally anything. You can still pull off hitting clubs in your 30s. You can do that at 25 as well. But something happens right around 35-40 where your body breaks down, you’re not seen as a put together guy and you look like the guy who *made bad decisions*. If you’re in the hot night club they assume that is because you’re a bad mate.

How to Know When It’s Hitting: As usual, “it depends”. Just like your interests in high school you suddenly wake up and don’t really care about MTV (a CIA operation btw). You care about high quality restaurants, good weather and nature. That last one means you’re really over it. Preferring to wake up early to drink coffee in central park vs. recover from 10 Clase Azul Anejo Ultra shots from Saturday Night.

Even the expensive stuff doesn’t go down well.

While this initially reads as purely dating market it’s actually your body telling you to prioritize control of your time.

If you can control your time, you can squeak out more performance out of your body over the course of 365 days in a year. You can sleep in if you feel like garbage. You can hit the gym hard if you feel good. You can go to the beach during work hours. You don’t need to ask for permission to meet your brother, sister, mother, dad, daughter, cousin, son, best friend who recently had a strange (but mild) cardiac event (get ready to receive a lot of phone calls on health related matters!)

Signs of the Cliff Drop

1. You lose interest in what your neighbors/colleagues are doing for work. Don’t care if they have the latest watch, car or $20,000 restoration hardware furniture (all Indonesian garbage btw)

2. You find yourself looking at work (assumes still W-2) where you can reduce your hours while maintaining 70-80% income

3. Can’t party hard 2-3 nights a week and find yourself becoming interested in nature again - know a guy who went from bottle service to traveling around the USA for bird watching (yeah it gets weird fast)

4. No longer refresh Coingecko, Stock Markets, Redfin and Bond Markets when you wake up on your iPhone

If any of these are you, strongly suggest that it’s time to optimize your liquid cashflow income (WiFi money, Real estate rentals, reselling business, consulting calls etc.). Your mind and body is already saying “don’t care much about materials, need to control time”

Conclusion? Time has a *deadly* cliff drop in what you can do. Don’t bother telling us that you want to do the same stuff at 60 vs. 40 either. Unlike the S-curve of money, where you can squeeze out tiny gains by moving up a bit, the actual things you can do does *not* recover. You don’t wake up and have an interest in dive bars. You wake up and think “These guys are going to go home and sleep in the same clothing. They will also walk around in their house with shoes that were busy scraping the floors of public restrooms, puke, urine and all kinds of stuff”

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Goal is To Maximize Your Priorities Over Decades

The crazy thing about this is your can actually predict it with scary accuracy.

• 20s most exciting thing is seeing digits run up. Second most exciting is wild partying and travel

• 30s most exciting thing is building the blocks for freedom (owning your own time) and going to major events (for tennis people might be Wimbledon, for a music guy might be front row seats to various events)

• 40s you’re more excited to see young people get their first wins, more interested in your family/friends and where you live

• 50s is basically 40s but with a ton of health scares and shifting energy to low impact entertainment

• 60s+ is when most just focus on friends/family and legacy stuff. This is a danger zone and sophisticated criminals prey on wealthy people with too much time on their hands

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Now Enter the Life Tax

Got no idea how old you are. That said just know that life tax is a real thing. The way this works is pretty simple. The longer you wait to build something the more that Lady Luck makes you pay in terms of years.

• Killing yourself to work on a small biz in your 20s? Give up three years and we’ve never seen a true high intensity person fail. Fail would mean they never find a way to make a few hundred thousand with a business. Practically none of them have failed that we know of

  • Note: they do fail at their first several ideas, most fail at 3-4. Better to get the failures done now. We’ve failed at an incredibly large number of ideas and have no problems saying that. We’ve also ridden down outrageous losses but held with investments as well

• Trying to do this in your 30s? Probably looking at 4-5 years. This is again how the game works. It’s not because you’re less talented than you were at 20s it is because life is a game of increasing responsibility. No one really cares about the lower level sales guy bringing his laptop to work. They *will* care if you’re bringing them to meetings where there is a 7 figure contract on the line

  • Note: the one advantage of people in this range is that they can spin up something a lot faster. In a weird way we’d bet on the guy in his 30s making $2-3K a month fast vs. the guy in his 20s. The difference is the 30s guy typically just quits because $2-3K is “nothing” compared to his $300,000 a year salary

• Trying in your 40s? Energy issue. Probably takes the same amount of time 4-5 years but most quit because of the Turkey drop from above. Health issues become a real risk, those rolled ankles take months to recover not 10 days. Even worse if the person isn’t particularly gifted athletically

  • Note: this general group is the most likely to tell you that your idea will fail. They are actually reflecting their own regrets onto you. Please remember that. They didn’t try and most are closet haters hoping you don’t make it because they don’t want *another* story of someone who did it right. Ego is too big

• 50+ doubt you’re here unless you’re just keeping up to date on what’s happening in the tech world, ecom world or RE world. If you’re in this camp and here, you’re more likely staying up to date to pass on to your kids

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Interested in Paying the Tax?

Well we wouldn’t be out here writing all the time and trying to find a gazillion people to start making WiFi money if it wasn’t possible. What we’re really interested in is seeing people make connections via the internet. Most people make the excuse that they have no peer group and that’s now eradicated.

We’ve got new people including BowTiedBills and BowTiedStealth who recently ramped up (yes they are willing to guest post shortly on what they did!).

Once again, publicly and right in front of everyone.

Hope the next is you.

Remember: You need a lot less than you think and Time is not on your side anon.

Disclaimer: None of this is to be deemed legal or financial advice of any kind. These are *opinions* written by an anonymous group of Ex-Wall Street Tech Bankers and software engineers who moved into affiliate marketing and e-commerce.

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