8 ms·
Taking money off the table
- BinaryIgor 11mo agoTL;DR: don't be greedy, guaranteed a lot now is better than highly unlikely more in the future
- tidwall 11mo agoA bird in the hand.
- ant6n 11mo agoA sparrow in hand is better than a pigeon on the roof.
- madeofpalk 11mo agoAnd where does the stone fit in with these two birds?
- selimthegrim 11mo agoI never heard of sparrow pie.
- AnimalMuppet 11mo agoWhen money is growing on trees, pick it.
- SoftTalker 11mo agoPigs get fat, hogs get slaughtered.
- simonswords82 11mo agoAKA quit while you're ahead
- don_neufeld 11mo agoA+ advice.
- mason55 11mo agoA 10% tender offer isn't really an interesting discussion. You should take definitely take 10% off the table unless you're already pretty wealthy. The interesting discussion is how much you should take off the table if the offer is uncapped.
- vlucas 11mo ago100% correct. Taking 10% away to remove downside risk of the remaining 90% is an absolute no-brainer, especially if it is a meaningful sum of money to you.
- defen 11mo agoIndeed; I can't imagine a world where 11% higher gains makes a significant difference. Either that 11% is a large number in an absolute sense, in which case the 89% you retained is also VERY large; or it's not that big of an absolute number and doesn't matter that much anyway.
- toomuchtodo 11mo ago> The interesting discussion is how much you should take off the table if the offer is uncapped. 50% for security, let the remaining 50% run. We can spend countless hours modeling the risk and return delta of various percentages and against non correlated asset classes you might diversify into once liquid, but most of life is luck; you can do everything right and still lose. This makes it easy, imho. (not investing advice, just a rando, n=1) Edit: noir_lord indeed! Good eye. https://www.youtube.com/watch?v=1TCX90yALsI https://www.youtube.com/watch?v=1TCX90yALsI
- deleted 11mo ago[deleted]
- noir_lord 11mo ago> you can do everything right and still lose. ST:TNG fan? - That was an important lesson for me as a kid. “It is possible to commit no mistakes and still lose. That is not a weakness; that is life.” - Picard
- thomas_witt 11mo agoThat advice also serves INHO well regarding angel investments and potential secondaries. If you made some x in a short time, take the money and run and leave the risk to institutional VCs who are not investing their own money.
- bryanlarsen 11mo agoYou don't have to take all the money off the table; in fact you usually can't. Take some off to have your cake and eat it too.
- nachox999 11mo agoI believe the complete opposite. If someone is willing to buy your business, no matter the amount, it’s because it’s worth MUCH more than what they’re paying. It’s illogical for them to pay less than its real value. It’s even illogical to think they’d pay exactly what it’s worth. Why would somebody bother buying a company if they were only going to break even?
- AstroBen 11mo agowhat if the buyer has something that can add value to the business?
- deleted 11mo ago[deleted]
- charcircuit 11mo agoYou are ignoring the risk aspect. There is a chance that it is worth more than they are paying, but there is also a chance it will be worth less. Selling a part of your business can help spread risk to a new investor reducing your own personal risk.
- arjvik 11mo ago
- nonethewiser 11mo ago[flagged]
- apsurd 11mo agoWhy do you feel the need to talk about how people talk? And now you got me doing it lol. It's just something to do. we're all doing it. chill. and now you're stuck cuz if you respond to me, well is it jut an inferiority complex, need to be right?
- nonethewiser 11mo agoI think I already provided that context. I dont understand why someone would talk this way because it feels like something that would satisfy the ego of a toddler. And be ingratiating at best to a well-adjusted adult. I would feel similarly if someone pinched my cheeks and said "aw arent you just a wittle cutesy-wootsy." Yet I see it used without any meaning of offense. Is it a need to be special? Do you get this overly flattering language in cultures where individualism isnt so pronounced?
- SappingTillion3 11mo agowhy do people feel like they need the last word? it feels like something that would satisfy the ego of a toddler.
- nonethewiser 11mo agoIm responding to his question. Now I'm responding to your question. It's not fair to characterize that as "getting the last word." Don't you think?
- apsurd 11mo agoAfter thinking about it charitably, it seems like you're asking "why are people different?" Are they being different because they want to convey "being different". Maybe. But also, people are different because people are different. There's variance. Variance in the Universe is a good thing. I'm no physicist so I'm going to get this some degree of wrong but I'm pretty sure variance (of time/space) is pretty much the definition of reality. The language topic is good too. English does have a ton of words and so it's baked in the language to be flowery, "extra" if you will. Yeah, different languages, also cool.
- GCA10 11mo agoThere's a crucial extra factor that isn't in the original article, but ought to be: Money's ability to buy great experiences decreases as you get older. I've seen this with beach vacations, road trips to see a favorite band, fast cars, ski trips, etc. Seize the moment, friend! What you can do NOW with that 10% slice will never exactly be on your possibilities map again.
- SoftTalker 11mo agoExperiences are overrated.
- RandomBacon 11mo agoThen how do you rate 'experiences'?
- jimkleiber 11mo agoI think you're hitting on something that very rarely gets discussed, at least in the US and maybe some other Western societies. I wonder if it's just simple depreciation or compound depreciation (or whatever the opposite of compound interest would be). Me finding the money to climb Kilimanjaro at 23 is different than me having the money at 40 but worse knees. Thank you for pointing this out and I hope someone formalizes it more.
- jonathan_h 11mo agoDie With Zero by Bill Perkins talks at length about this concept (it's a nonfiction book, so suffice to say it could've been an essay.)
- deleted 11mo ago[deleted]
- dkural 11mo agoAs someone who is not so young anymore, but also not old, I think it is compound depreciation.
- qoez 11mo agoThink of it this way: Given any company in the world to invest that money, do you think it's best invested in your company or some other? Because if there's another one (eg nvidia, apple etc) then you should take the money out and move it into stocks in that one
- throw0101c 11mo agoI participate in a personal finance sub-reddit, and there is often a question of whether someone should pay off their mortgage (completely, or make some lump sum payments). The mathematical answer is that if your interest rate is lower than the expected returns of some kind of portfolio you have, than you'll make more money investing. But I like to bring up what Morgan Housel, author of the book The Psychology of Money, said on paying down his mortgage: > It just increased our independence, even if it made no sense on paper. So that's another element of debt that I think goes misunderstood. And a lot of that for both of those points is this idea that people don't make financial decisions on a spreadsheet. They don't make them in Excel. They make financial decisions at the dinner table. That's where they're talking about their goals and their own different personalities and their own unique fears and their own unique skills and whatnot. So that's why I kind of push people to say like, it's okay to make financial decisions that don't make any sense on paper if they work for you, if they check the boxes of your psychology and your goals that makes sense for you. And for me, extreme aversion, what looks like an irrational aversion today, and I would say is an irrational aversion to debt, is what works for me and what makes me happy, so that's why I've done it. * https://rationalreminder.ca/podcast/128 https://rationalreminder.ca/podcast/128 * https://www.youtube.com/watch?v=NSaRb-iFwPA&t=12m48s https://www.youtube.com/watch?v=NSaRb-iFwPA&t=12m48s
- gbriel 11mo agoIf you have a 2.6% mortgage which is less than inflation, then you are making money from the bank. Paying that off would be ridiculous.
- creakingstairs 11mo agoI mean there are other factors right? How long the rate is fixed for, penalty for paying off early, what you think the rate will be after term is over, you and your family's circumstances etc.
- tonyedgecombe 11mo agoPaying your mortgage off comes with no risk, it’s not going to come back again. Meanwhile your investments could collapse tomorrow.
- eweise 11mo agoIMO always take the money. Money to me is like water. If you're dying of thirst, that first glass of water is extremely important, the 100th, not so much. You really only need enough money to do the things you want, raise your kids, and retire. The money after that isn't going to bring nearly as much happiness as that first bit.
- pyrolistical 11mo agoAnother way to think about it is, take the dollar amount if you sold it all. Then consider it as an offer to buy into the startup at the same dollar amount. Would you invest? Not selling is the same as investing in the startup. This same logic applies to stocks you are holding.
- reducesuffering 11mo ago"Jim Bennett: I've been up two and a half million dollars. Frank: What you got on you? Jim Bennett: Nothing. Frank: What you put away? Jim Bennett: Nothing. Frank: You get up two and a half million dollars, any asshole in the world knows what to do: you get a house with a 25 year roof, an indestructible Jap-economy shitbox, you put the rest into the system at three to five percent to pay your taxes and that's your base, get me? That's your fortress of fucking solitude. That puts you, for the rest of your life, at a level of fuck you. Somebody wants you to do something, fuck you. Boss pisses you off, fuck you! Own your house. Have a couple bucks in the bank. Don't drink. That's all I have to say to anybody on any social level. Did your grandfather take risks? Jim Bennett: Yes. Frank: I guarantee he did it from a position of fuck you. A wise man's life is based around fuck you. The United States of America is based on fuck you. You're a king? You have an army? Greatest navy in the history of the world? Fuck you! Blow me. We'll fuck it up ourselves." https://www.youtube.com/watch?v=XamC7-Pt8N0 https://www.youtube.com/watch?v=XamC7-Pt8N0
- garspin 11mo ago1) Making money & keeping money are 2 different skillsets. You've made some $$$, now learn how to keep it. 2) Time is far more valuable than money. If you can take life-changing $$$ off the table in exchange for time, do so. The 2nd $1M buys you a tiny proportion of the benefits that the first $1M did. 3) You have a v. high risk concentrated portfolio that is aligned with your income. That's massive risk. 4) Taking it now buys you time & optionality. Leaving some still buys you blue sky. Best of both worlds.
- renewiltord 11mo agoTake the money. These things are 10x bets. You won't be sad that you got 7.5x instead of 10x (which is what happens if you take the 25% of your stake off the table). If you flip it, you'd have 10x instead of 7.5x. It's not meaningful. Each time you get money you get to deploy that elsewhere. If you have super risk tolerance, push $25k cheques as seed.
- lostlogin 11mo agoFor those like me that had never heard of of Zenefits. https://en.wikipedia.org/wiki/TriNet_Zenefits https://en.wikipedia.org/wiki/TriNet_Zenefits
- scoofy 11mo agoI would recommend Taleb's book Skin In the Game for this type of question. The best choices are highly dependent on the individual's preference for risk and whether or not they count their existing stock as "extra" or as "income." https://en.wikipedia.org/wiki/Skin_in_the_Game_(book) https://en.wikipedia.org/wiki/Skin_in_the_Game_(book)
- jongjong 11mo agoIn my 15 year software engineering career, the most money I could have cashed out was around $110k in crypto space; that was the value my crypto peaked at but it would have required unlocking my tokens which would have lost me my forging position and the $4k per month which came with it... I ended up not selling and earning about $20k to $50k per year for 4 years so it has been a good decision... Also, it was not possible to unlock my tokens without a 1 month delay and token prices were fluctuating wildly... Moreover, due to my public position on the project, and the public nature of Blockchains, my unlocking of tokens would have been seen by community and possibly triggered a project-ending sell-off. So basically the only time I had the opportunity to theoretically earn $110k, at the peak of my 15 year career after working insanely hard including nights and weekends, was not even feasible in practice and it turned out that I earned more money holding and forging over the following 4 years than I would have gotten for selling. But damn, when I see some of these corporate 9-to-5'ers sitting on $1 million+ which they got after only 5 years or so and they're not selling because they think they deserve more. It seems insane to me. It's a lot of money, they can sell anytime, probably still keep their job. As they say in crypto, I would dump the shit.