Slash Boxes
NOTE: use Perl; is on undef hiatus. You can read content, but you can't post it. More info will be forthcoming forthcomingly.

All the Perl that's Practical to Extract and Report

use Perl Log In

Log In

[ Create a new account ]

chromatic (983)

  (email not shown publicly)

Blog Information [] Profile for chr0matic []

Journal of chromatic (983)

Sunday December 07, 2008
02:54 PM

Back of the Envelope Hazy Cold Medicine Math

[ #38046 ]

I have a degree in music, so obviously I like numbers. (What? Music is math.)

Suppose you had ten million dollars. Suppose you invested that ten million dollars in such a way that you could guarantee a return of ten percent per year. That's a reasonable rate of return, producing a million dollars, before taxes.

Let's take off 40% for taxes. Now you have $600,000 coming in every year.

Suppose you hired 5 programmers at $90k annually. They can work from home, so $90k is a solid developer salary in the US for anywhere but Silicon Valley or New York City. Suppose you spent the other $30k for administrative expenses, including insurance and 401(k).

What could you do with five full-time developers? (That's an order of magnitude more paid full-time developers than Parrot and Perl 6 have, combined.)

The Fine Print: The following comments are owned by whoever posted them. We are not responsible for them in any way.
More | Login | Reply
Loading... please wait.
  • Well, I didn't major in music, but I do work in finance. Realistically, if you have $10,000,000 and want to preserve it, a safe withdrawal rate is probably under 4% a year. Even if you have a higher rate of return on average, you need to bank it in the good years so that you don't eat into principal in the bad years (like we're having now). Spending $1,000,000 in a year when you already lost 20 - 30% on your $10,000,000 leaves you with a lot less to grow back when the market recovers. (And a 33% drop re

    • I'm considering a moderate rate of return averaged over a seven to ten year span. My personal finances follow that pretty well, though I do practice dollar-cost averaging (which really helps). I also estimated the tax burden higher than I think it will actually be; there should be ways to reduce that for producing free software.

      • It all depends on what time period you want the income to last and what your risk tolerance is for running out prior to the end of the period. (This is equivalent to the question faced by retirees -- how much can I spend to last me X years?) If you're only thinking the money needs to last for 7 to 10 years, then a higher withdrawal rate is feasible.

        Google for "sustainable withdrawal rate" or "portfolio success rate" and you'll find articles like these: