Are they? 300,000 units * $30 = $9M - 30% Steam tax = $6.3M in a single year take out federal taxes (just gonna call it 36% and ignore SFJ/MFJ), leaves them about $2M each. I'm sure they're some sort of a legal entity in WA state and will owe the b&o tax too.
They deserve it absolutely but $2M each does not put them in a position of "fuck you" [1].
$2m in the bank is enough to easily draw $100k/yr from interest, which fits the GP’s “set for life if we make wise choices” IMO. That is way above median income in wealthy countries. Assuming you don’t try to live in SF!
Even in the US, $100K/yr puts you comfortably above median income. If I had $100K/yr of GUARANTEED income, I would stop working for money and do whatever I felt like for the rest of my life.
A 4 or even 3 percent withdrawal rate is more likely to be sustainable. Those are also rates I see suggested more commonly on retirement planning sites.
LOL. Who is getting 5% risk free interest rate on USD? No one. I guess 1% after taxes is a more reasonable expected return. Remember that interest rates on retail deposits were pretty much zero for last 10 years. So, 20K USD per year. But if they can keep it up for next 5 years, then yeah, pretty much can retire on 1% interest rate forever.
> 2m in the bank is enough to easily draw $100k/yr from interest
5% interest hasn’t been avail from a bank in a couple of decades, and the fact that we’re close to it again doesn’t mean it will stay that way…
You just can’t get a guaranteed risk-free return of that range indefinitely, which is why a lot of people shoot for 3-4% when they don’t have more capital to invest in riskier but higher return investments.
The article also mentioned money going to other people working on the game. Unclear how's much that is though.
Edit: this also touches on a grievance I have with progressive taxation and annualized retirement savings. These guys might have been in a Lowe tax bracket for many years and be back in a low tax bracket depending on how sales go over the years. The one time they hit it home they are in the top tax bracket and can only max out tax advantages from retirement contributions for that one year. They'd be in a much better position in this regard of their income was spread out. The entire system is build assuming people earn pretty much the same year to year. Same for other self-funded founders with exits.
They could easily set up a corporation and pay themselves over 10-20 years to avoid a windfall (and max out tax advantages over multiple years) if that’s the goal…
Would be nice if you earned a 401(k) credit/allowance each year so when you do hit it big you can rapidly play catch-up on the past 20 years or whatever.
That's 300 000 units in 7 days since launch if I understand it correctly. Even if we consider (I don't know if that's true or not), that theses 7 days are going to be the best ever for them that's still only 7 days.
They'll get a sale from me here before too long. I just know I don't have time for another addiction right now, at least not until the new year. Probably quite a few people being more frugal now because of the holidays that will buy it shortly after. Wouldn't be surprised if it's 500k+ sales by the end of January.
If they’re smart they hopefully have incorporated and will only need to take money out of the corporation to pay themselves to cover their expenses. So they won’t pay tax on the full amount up front and will have most of the money pretax for future business expenses
That's not how corporate income tax works though; the company pays taxes on all that sales income less expenses, and then they would likely take dividends at a preferential tax rate and pay yet some more tax. I doubt they've been carrying much of a loss over the past 20+ years to offset this.
If it’s a C-corp, then the corporation will have to pay income tax on its profit. If it’s an S-corp, then the owners will have to pay income tax of the corporate profits even if they do stay in the corporate coffers.
I also read, though who knows whether the source was at all accurate, that after the Steam cut, Kitfox takes a goodly chunk (north of 50% IIRC) out until their own expenses for development are paid, and then their cut ratchets down to 20% or so.
Oh, I didn't realize they had a publisher involved too. Yeah, this is a nice payday but it's just a start before it's life-changing for these two hackers. Let's see another 300k in sales!
2m each is not "Fuck you" money perhaps but it is enough to comfortably retire to the original post point. It depends on lifestyle you desire but if I could retire tomorrow, I would make that lifestyle work.
> 2m each is not "Fuck you" money perhaps but it is enough to comfortably retire
That is exactly what "fuck you" money means. It's not about having so much money you couldn't possibly want for anything. People will always want. It's about having enough that you're not beholden to anyone for your basic needs.
theptip|3 years ago
guhidalg|3 years ago
thomaslangston|3 years ago
A 4 or even 3 percent withdrawal rate is more likely to be sustainable. Those are also rates I see suggested more commonly on retirement planning sites.
throwaway2037|3 years ago
happyopossum|3 years ago
5% interest hasn’t been avail from a bank in a couple of decades, and the fact that we’re close to it again doesn’t mean it will stay that way…
You just can’t get a guaranteed risk-free return of that range indefinitely, which is why a lot of people shoot for 3-4% when they don’t have more capital to invest in riskier but higher return investments.
ajmurmann|3 years ago
Edit: this also touches on a grievance I have with progressive taxation and annualized retirement savings. These guys might have been in a Lowe tax bracket for many years and be back in a low tax bracket depending on how sales go over the years. The one time they hit it home they are in the top tax bracket and can only max out tax advantages from retirement contributions for that one year. They'd be in a much better position in this regard of their income was spread out. The entire system is build assuming people earn pretty much the same year to year. Same for other self-funded founders with exits.
happyopossum|3 years ago
datalopers|3 years ago
TacticalCoder|3 years ago
cableshaft|3 years ago
datalopers|3 years ago
[1] https://newsletter.gamediscover.co/p/steam-the-state-of-long...
ericd|3 years ago
stock_toaster|3 years ago
gscott|3 years ago
opportune|3 years ago
wintogreen74|3 years ago
repiret|3 years ago
Unless there’s another way you hand in mind?
count|3 years ago
Arrath|3 years ago
datalopers|3 years ago
NikolaNovak|3 years ago
travisjungroth|3 years ago
That is exactly what "fuck you" money means. It's not about having so much money you couldn't possibly want for anything. People will always want. It's about having enough that you're not beholden to anyone for your basic needs.
https://www.youtube.com/watch?v=rJjKP8vYjpQ&ab_channel=Youtu...
unknown|3 years ago
[deleted]
krzyk|3 years ago
bulbosaur123|3 years ago