Derek's writing influenced me quite a bit in the early 2000s. I bootstrapped a software business from zero to near $10m in annualized revenue, and sold it almost half a decade ago. I contributed 100% of my equity into a charitable remainder trust because I learned about that idea from his website.
Since then, I've done a lot of "puttering". I'm teaching myself jazz guitar, and I'm currently enrolled in law school. I have basically unlimited time to read whatever interests me. If I could go back five years and give myself some advice, I would say that "enough" is not durably satisfying. Purpose is durably satisfying. Purpose arises from constraints. Having "enough" means you lack a particular type of constraint. Thus, enough" can get in the way of developing purpose, particularly if you are somewhat undisciplined like me.
(Also, I would abolish charitable remainder trusts from the tax code. I created one for lifestyle reasons not tax reasons, but after experiencing the tax consequences firsthand, I think they are profoundly unfair.)
> I would abolish charitable remainder trusts from the tax code.
They've been reducing the scope of new trusts over time. When I looked into it around 2014, a young person couldn't actually make a lifetime income CRUT because the requirement for 5% distribution, and the low interest rates at the time made the actuarial calculations show a zero balance for the charity at the end, but you need to show at least 10% for the charity at the end. A fixed term just doesn't seem as good.
I ended up just paying federal cap gains and CA income on most of it, but I did donate some of the near $0 basis stock to a DAF, and sold a small portion of the equity after moving to WA. Some of that was QSBS which was nice, but having seen the 2001 stock market, leaving it undiversified to save on taxes didn't seem worth it.
There are so few famous people online that have been so giving with their time, willing to reply to every email.
I think your (public) actions speak volumes about who you are.
Your writing (and also whenever you’re interviewed on a podcast) has had a huge positive impact on me. I appreciate it and you (or at least the public persona of you).
That is why I usually try to avoid advice from people who (explicitly) give advice. It is better to observe what they do than what they say. Even if you wind up not enjoying the wealth, you’ll have understood it yourself and not be cursing yourself for not having tried. Except for life and death situations, and situations involving technical expertise, this applies to everything. Most of the time it is just our laziness selecting for examples of success that allow it to stay while reaping the benefits of working hard. A mind virus discouraging responsibility.
Different advice for different circumstances. Do you get upset when elite athletes talk about the importance of avoiding overtraining, when they have already become elite?
Derek did not became wealthy. He gave the $22 million dollars he got from selling his company to a fund, and gets over $1000 each month, hardly "wealthy".
Derek has worked in a circus and knows how to live cheap enough. He also has lots of friends so he does not need to pay for lots of things.
I know people that earn in excess $10.000/month and spend it all or even get into debts.
Derek and his writing used to be a frequent top page link on HN. When I first started reading them I found them inspirational. As I read more of his writing I got the impression that most of the things he did were presented in the light of “I’m just a simple person that doesn’t need a lot” type of minimalism. However if you look at his “charity” he seems to have just figured out a way to avoid taxation and keep most if not all of his CD Baby exit. Additionally despite using what was the .com boom environment of the late 90s and early 2000s to generate his wealth I believe he has renounced his US citizenship and lives abroad now. I don’t care that he did that really, it just seems that his public persona is a bit of an act and hides a bit of entitlement/petulance.
I'm only going off of what I heard in his interviews, and talks throughout the years, and I admit I'm def a bit of a fanboy of his.
But regarding the charity, from reading your comment I thought maybe this was another case of don't seek your heroes. Here's what he says about it: “Independent Musicians Charitable Remainder Unitrust.” When I die, all of its assets will go to music education. But while I’m alive, it pays out 5% of its value per year to me.
(Note: 5% is the minimum allowed by law. It’s still too much. I would have preferred 1%, but oh well. I’m free to use it to start new businesses to help people, or whatever.)
I really don't see a problem with 400k/year tbh, and if you believe him, 100k a year. And I wouldn't define "giving up the assets on death" as "keeping" either.
The dude says on interviews that he lives in a house with pretty much no furniture, and has an empty fridge. He himself knows it's fucking nuts and doesn't prescribe it to anyone. It's just his weird schtick and it seems to be genuine to me.
Could this be a huge act to play up a persona? Maybe. But the guy's been pretty consistent throughout the years and appears to practice what he preaches. Any interaction I've had with him has been totally consistent as well.
“I don’t need a lot” isn’t mutually exclusive with “I don’t want to pay a lot in taxes”. Besides that, he lives in New Zealand where everything costs twice as much. Sounds like your crediting his success solely on being at the right place at the right time. I got news for you - that’s pretty much all success or a component of it. Not to mention, he did build a sustainable business that gave independent artists an outlet to distribute their music. I’d say the guy is a saint.
I remember when I was in college trying to figure out what to shoot for in life, I had the realization that if you shoot for "more" it's a goal you'll never reach. There is no end to it.
But if you shoot for "enough", there is a very definite point between "more than enough" and "not enough".
It's a nice goal to shoot for. When you are above "enough", it means you can relax and enjoy life.
But then you have to answer the question of what makes you happy. For some people buying an ocean front house and fishing or playing golf all day is the answer. But for the successful entrepreneur type that isn't "enough" usually
That #10.5 point really resonates with me. Especially now with all of this isolation, it’s become very apparent that almost all communication on the internet is the screaming from inside the car type instead of the real human connection type. I made https://otherrs.com/ as an experiment to see if I could drum up more of that second type
"I became rich when I earned more than I spent" are words spoken by a rich man with 0 self awareness. I can tell you the second my life became infinitely less stressful: when I paid off my student loans.
I too spent almost no money, went on almost no trips, and lived way, way below my means to make it happen in my 20s. It turns out as my income has increased my happiness has increased - and I'd agree with all the studies of once you cross a certain threshold in the 6-figure range that more money means "less". Generally it just means: I have nicer versions of the same things.
All that is to say: I sure as hell wasn't "rich" when I was making more than I owed each month, not even close. And I don't believe for a SECOND Derek would be happy going back to living in a flat with 3 other people, eating peanut butter sandwiches 3 days a week but "making more than he spends", which is what he implies.
Derek: there are people out there who are in their 50s who would still have to live with 3 other people and eat peanut butter sandwiches 5 days a week to earn more than they spend. THAT'S THE POINT. Maybe if I make $90k/month some day I'll also be blind to the reality of the common man, but I can still see it from this little perch I'm sitting on at the bottom of the mountain.
I think it is noble to preach being rich in the moment. I think for Derek quitting his job in his 20s to play music full time was for sure a mark of affluence in his social circle at the time.
There should be some qualification, like "once you earn above $100,000, then you become rich when you earn more than you spend". Even that wouldn't be quite right for many expensive cities.
Like anything else in life this piece has good parts and not-so-awesome parts.
My opinion: take the good and forget the rest.
If I can draw the line on what is enough for me, I can lead a life that is happier and free of divisive depression that comes from comparing myself to others.
[+] [-] tkiley|5 years ago|reply
Since then, I've done a lot of "puttering". I'm teaching myself jazz guitar, and I'm currently enrolled in law school. I have basically unlimited time to read whatever interests me. If I could go back five years and give myself some advice, I would say that "enough" is not durably satisfying. Purpose is durably satisfying. Purpose arises from constraints. Having "enough" means you lack a particular type of constraint. Thus, enough" can get in the way of developing purpose, particularly if you are somewhat undisciplined like me.
(Also, I would abolish charitable remainder trusts from the tax code. I created one for lifestyle reasons not tax reasons, but after experiencing the tax consequences firsthand, I think they are profoundly unfair.)
[+] [-] skrebbel|5 years ago|reply
[+] [-] toast0|5 years ago|reply
They've been reducing the scope of new trusts over time. When I looked into it around 2014, a young person couldn't actually make a lifetime income CRUT because the requirement for 5% distribution, and the low interest rates at the time made the actuarial calculations show a zero balance for the charity at the end, but you need to show at least 10% for the charity at the end. A fixed term just doesn't seem as good.
I ended up just paying federal cap gains and CA income on most of it, but I did donate some of the near $0 basis stock to a DAF, and sold a small portion of the equity after moving to WA. Some of that was QSBS which was nice, but having seen the 2001 stock market, leaving it undiversified to save on taxes didn't seem worth it.
[+] [-] cheez|5 years ago|reply
[+] [-] sivers|5 years ago|reply
It's weirder to read comments claiming to know about my personal life and motivations, though they're all wrong. (Both the good and the bad.)
The public me is not me - https://sivers.org/publicu - so I don't feel a great need to correct the errors here.
But thanks (tw04, lukego, marcinzm, s_a_p) for the reminder that anything I do can be spun negative.
[+] [-] jraby3|5 years ago|reply
I think your (public) actions speak volumes about who you are.
Your writing (and also whenever you’re interviewed on a podcast) has had a huge positive impact on me. I appreciate it and you (or at least the public persona of you).
[+] [-] unknown|5 years ago|reply
[deleted]
[+] [-] chrisblackwell|5 years ago|reply
[+] [-] raghuveerdotnet|5 years ago|reply
[+] [-] antisocial|5 years ago|reply
[+] [-] richajak|5 years ago|reply
For mortals like us, we have to be smart, work hard, persevere, etc. Life is a journey that I must do to my best ability.
[+] [-] cheez|5 years ago|reply
https://sivers.org/richand
[+] [-] ip26|5 years ago|reply
[+] [-] coldtea|5 years ago|reply
(Yeah, I'm joking)
[+] [-] pritovido|5 years ago|reply
Derek has worked in a circus and knows how to live cheap enough. He also has lots of friends so he does not need to pay for lots of things.
I know people that earn in excess $10.000/month and spend it all or even get into debts.
[+] [-] S_A_P|5 years ago|reply
[+] [-] onemiketwelve|5 years ago|reply
But regarding the charity, from reading your comment I thought maybe this was another case of don't seek your heroes. Here's what he says about it: “Independent Musicians Charitable Remainder Unitrust.” When I die, all of its assets will go to music education. But while I’m alive, it pays out 5% of its value per year to me.
(Note: 5% is the minimum allowed by law. It’s still too much. I would have preferred 1%, but oh well. I’m free to use it to start new businesses to help people, or whatever.)
The trust has 8.8M in assets. http://www.nonprofitfacts.com/WA/Independent-Musicians-Chari...
I really don't see a problem with 400k/year tbh, and if you believe him, 100k a year. And I wouldn't define "giving up the assets on death" as "keeping" either.
The dude says on interviews that he lives in a house with pretty much no furniture, and has an empty fridge. He himself knows it's fucking nuts and doesn't prescribe it to anyone. It's just his weird schtick and it seems to be genuine to me.
Could this be a huge act to play up a persona? Maybe. But the guy's been pretty consistent throughout the years and appears to practice what he preaches. Any interaction I've had with him has been totally consistent as well.
[+] [-] johnwheeler|5 years ago|reply
[+] [-] war1025|5 years ago|reply
But if you shoot for "enough", there is a very definite point between "more than enough" and "not enough".
It's a nice goal to shoot for. When you are above "enough", it means you can relax and enjoy life.
[+] [-] bob33212|5 years ago|reply
[+] [-] mcaswell|5 years ago|reply
[+] [-] tw04|5 years ago|reply
I too spent almost no money, went on almost no trips, and lived way, way below my means to make it happen in my 20s. It turns out as my income has increased my happiness has increased - and I'd agree with all the studies of once you cross a certain threshold in the 6-figure range that more money means "less". Generally it just means: I have nicer versions of the same things.
All that is to say: I sure as hell wasn't "rich" when I was making more than I owed each month, not even close. And I don't believe for a SECOND Derek would be happy going back to living in a flat with 3 other people, eating peanut butter sandwiches 3 days a week but "making more than he spends", which is what he implies.
Derek: there are people out there who are in their 50s who would still have to live with 3 other people and eat peanut butter sandwiches 5 days a week to earn more than they spend. THAT'S THE POINT. Maybe if I make $90k/month some day I'll also be blind to the reality of the common man, but I can still see it from this little perch I'm sitting on at the bottom of the mountain.
[+] [-] johnpaulkiser|5 years ago|reply
[+] [-] gamechangr|5 years ago|reply
[+] [-] simonebrunozzi|5 years ago|reply
Derek does not live in New Zealand anymore. He moved to England some time ago (perhaps 1 or 1.5 years ago?)
[+] [-] loktarogar|5 years ago|reply
[+] [-] pricci|5 years ago|reply
#88 Derek Sivers: Innovation Versus Imitation
[+] [-] tradewarsonlyn|5 years ago|reply
My opinion: take the good and forget the rest.
If I can draw the line on what is enough for me, I can lead a life that is happier and free of divisive depression that comes from comparing myself to others.
[+] [-] GoodJokes|5 years ago|reply
[deleted]