<regular posting anonymously> Through joining a firm at the right time, and paranoid saving thanks to growing up poor, I've ended up with $400k in savings and no plans for kids.

It's way better than being poor, doesn't even compare, but I'm completely unprepared. I left bigco last year and have been self-funding a startup, but the security of having those savings to fall back on has been a curse. I still freak out about not having a salary, even though that's not logical, but at the same time I've been able to procrastinate on compromising my grand vision to achieve revenue without the company dying.

Anyway, world's tiniest violin, most of my life I'd never even have dreamt of having 'problems' this good, but I wish I could get some good advice on how not to screw it up.

I can somewhat relate to your remarks.

I have a boatload of financial problems, which I do fret about constantly, but my debts have bought me and my sons good health. Most folks with the diagnosis I and my oldest son have are also drowning, financially, and getting nothing but sicker. In contrast, we are on an upward trend (both financially and health-wise). The amount I owe is the equivalent of one or two hospital stays for this condition. It's a drop in the bucket. So I kept doing what I was doing, in spite of going wildly deeply in debt at a fast pace, because it wasn't simply my best hope, it was my only hope. It was clear to me that getting well was the only hope I had of ever getting my finances straightened out. Whenever I feel like I just can't keep going, I inevitably wind up talking with someone who is also under enormous financial stress but for whom there is no fix because the financial problems are rooted in their health problems and they can't fix the health problems.

I can relate to your remarks in that as long as I had more income, I kept making some of the same choices. I don't regret that because it was making me well, but when I hit a wall financially I gave up my car (which has been a wonderful experience and something I always wanted to do but wouldn't have done without a financial crisis to motivate it). And I have had other occasions where excellent solutions that resulted in overall improvements in how we did things grew out of the fact that I simply lacked the money to do what I had been doing for x issue so I had to think up something workable but cheaper.

So maybe you could find some means to get perspective on your worries so you can fret less? Perhaps doing a couple of hours a week of volunteer work at a homeless shelter or some such? And perhaps you can work on the issue of "not compromising your grand vision" so you can try to get out of a rut and make it profitable BEFORE the money runs out and financial catastrophe finally motivates you to do something else? Since this is a known issue, perhaps working on some "creativity" things (workshops, reading books on the topic, etc) and re-examining the idea with an eye towards keeping its soul but also making it profitable so you don't have to go back to bigco? If you haven't done so already, maybe you need to crunch the numbers and figure out when the money is likely to run out so you have some idea of what your timeline is for making this work? Maybe that would help make it less nebulous?

I started some websites and didn't want them to "be commercial". Then noticed that a) some of the webmasters I knew who were similarly idealistic were bitter as hell about the time and energy they put into their websites and the fact that they weren't getting the recognition and money they wanted and b) other webmasters who started similarly idealistic sites later turned their sites into an ad for a paid service because it was popular and they couldn't do this for free anymore. I ultimately decided that I wanted to keep my sites "free to the public" but also make money. I added ads, donate buttons, and have joined a few affiliates. I am not making much money but it at least pays for costs of webhosting and domain names, something that came out of my own pocket for years. It shows promise for doing more than that. So I decided that the "soul" of my idealistic ideas was keeping the information free to the public and I began looking at models which achieved that but also adequately monetized the work for the person behind it. It is clear to me that the bitter webmasters I know are causing the problem themselves. One individual has forum members practically begging for the chance to give him money and all he does is spit in their faces and turn them down while at the same time whining about the site not making enough money. He has a strangle-hold on the income-potential of the site and won't loosen his grip. And no one can tell him anything. So, in short, I would suggest you work on YOU -- your attitudes, your mental models, your stumbling blocks in terms of feeling like making money would somehow compromise your vision.

Good luck with this.

I'm getting very fond of Mr Rao. I had some (mild) economic good fortune recently and to my great surprise, after a protracted period of being broke it made me uncomfortable because it was simply too big to handle. My entire attitude about how to spend it and use it has changed - as he says, largely because I've never had to make these sort of decisions before.

So this thinking tool has come along at just the right time for me. Do HNers have any other suggestions for ways to think about using capital?

Rao is proving to be a treasure of a mind. I hope this new fame doesn't make him churn out wisdom for the blog-post assembly line.

A rule of thumb I have read somewhere is to put it into some savings vehicle that you can't touch for six months and use that time to think about what to do with it so it doesn't get blown on the first impulse.

This article is full of words, but he doesn't really get to the point.

What I got out of it: stop dealing with your money passively and take control; reduce your expenses; act like you're super poor; and never stop thinking of ways to save. Note: I am a starving college student, so maybe it's just me.

I have spent a long time in that position and entirely get where you're coming from. Having recently experienced a change in circumstances, though, I have to side with the author - my previous frugal mindset has left me unprepared to manage larger resources.

If you'd asked me 3 months ago what I'd do with a windfall, I'd have said something like 'enjoy 10%, share 10%, use 30% for a project, put the other 50% in some savings vehicle, then get back to work'. In actuality I've got option paralysis because the consequences of such decisions loom larger than I'm used to.

> One guy goes to work straight out of college, saves strategically, quits and starts his own SAP consultancy in 5 years, and is worth a few million by age 30.

I guess this is me. I fit this rubric, and now I deal with $100k+ sums on a quarterly basis. On an annual level it goes into the hundreds of thousands. I'm by no means wealthy (I do not own significant amounts of property, for example) but I am capable of fundamentally understanding large sums of money on a personal and professional level.

Dealing with money is definitely a skill that is taught. If you don't have parents or a business partner or someone else in your life that teaches you the old-fashioned way (through unflinching and strict discipline and what borders on verbal abuse when you fuck up), you're never going to learn. The credit card companies and banks are not this person/entity.

Chris Rock had a great ilne about being wealthy versus rich. One-hit-wonder rappers are rich. The people who sign their checks are wealthy.

You have the means to generate money, both in your self-discipline and experience, so in the Chris Rock dichotomy you're a wealthy person.

Might want to add that I pay myself about 50 grand a year beyond business expenses (which admittedly covers my "luxuries" - mostly my auto lease and eating out). Without leveraged overhead (mortgage, student loans, business loans, credit card, etc) it's surprising how little money I need to live a comfortable life.