Taking money off the table
98 comments
·October 30, 2025GCA10
jimkleiber
I 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.
dkural
As someone who is not so young anymore, but also not old, I think it is compound depreciation.
lostlogin
But… you can pay someone to carry your pack, and lie in a comfortably bed at night (you won’t sleep though, that ability vanishes at 40).
The shiite travel arrangements young people will tolerate are truly hilarious.
jonathan_h
Die 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.)
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MarcelOlsz
This is why I love old tech like my 40 year old car (bmw e30 325is) and analog camera and whatnot. You have way more control because of less external dependencies and simplicity, and the prices are still decent compared to what you'd get now for vastly more money. $70k dogshit unwrenchable SUV or $10k 80's car that works like a dream and is built like a thinkpad? It's so relaxing working with older things. Hearing old peoples stories are wild, like just crossing the border with a 6 pack of beer no passport no nothing and having a good time on the weekend. Now my asshole is getting scanned down to the submillimeter and sitting in a palantir database just so I can go on a vacation.
LightBug1
Fuckin A
pjmorris
We were in our 20's when my friend said 'A day in your 20's is worth a year in your 30's, a day in your 30's is worth a year in your 40's, etc...' Now in our 60's we're a little less adamant - every day is worth something.- but it has been a useful perspective.
SoftTalker
A day in my 20s was worth nothing. I went and flipped burgers for $4/hr, then probably went out for beers at a dive bar that night. Just living day to day.
RandomBacon
I imagine your 70 or 80 year-old self would think that a day like that in your 20s is worth the moon.
hshdhdhehd
Also you might get sick. Getting sick is like going 30 to 80 in 60 seconds.
AnimalMuppet
> Money's ability to buy great experiences decreases as you get older.
Excellent point. You may have just talked me into retiring.
> What you can do NOW with that 10% slice will never exactly be on your possibilities map again.
Maybe not... but "once in a lifetime chances" come around more often than you think. You don't have to take every one right now. (As you get older, options narrow, as you said.)
acemarke
That's one of the main theses of the book "Die with Zero":
- https://www.diewithzerobook.com/welcome
Read it earlier this year and it definitely changed some of my thinking along those same lines.
My loose summary of the book:
"Any money left in the bank when you die is essentially wasted - you could have used it to have experiences when you were alive, or given it to family / charity earlier when it would have had more benefit. Figure out what major experiences and memories you want to have in life, plan to do them earlier when you have health and time, and build up memories for later in life."
I didn't find the discussions of how to plan out retirement savings very useful - there's a lot better info on withdrawal approaches in various FIRE-related groups.
But the "be willing to spend now on activities you might not be able to do later / don't hold off on 'living' until you're retired" argument made a _lot_ of sense to me for a variety of reasons, and it was a major factor in researching early retirement a few months later (and deciding to make that a new goal. along with taking more vacations before then).
jocaal
I don't agree. How can wasting your money in your twenties and thirties be more valuable than saving for an early retirement. Imagine being able to retire at 40 and do whatever you want. If you weren't stupid, your health should be good enough. Why prolong the time you have to do stupid chores for other people when you can be strategic and opt out as early as possible.
gwbas1c
You can take once-in-a-lifetime experiences in your 20s and still save for retirement. I went to Burning Man and traveled to Amsterdam in my 20s and that didn't impact my savings.
I should point out that it's cheaper to travel when young: Back then I stayed in a tent in the desert and in a friend's room near Amsterdam. If I did the same trip today, I'd have my family in tow, and would need more comfortable accommodations.
I should also point out that startup equity is not retirement savings. Selling 10% of your equity, investing most of it, and then doing something that you won't be able to do when you're old is a very wise and mature decision.
dkural
Taking some time off to travel when you're young is much more than a beach vacation. You meet people (sometimes you meet your future wife), that can become lifelong friends. You learn what you like and don't like; and that the world is infinitely more complicated and beautiful than what you could imagine through books and watching youtube.
After 40 you've already made many of your major life decisions - career, partner, education, kids etc. There's less room for new experiences to alter that trajectory meaningfully.
One thing I've also realized through being lucky enough to enjoy some "semi-retirement" between work is having a healthy balance makes me appreciate both work and "leisure" more. It gets pretty boring to go to the beach every day, it turns out. I was itching to get back to building something by the end.
FanaHOVA
> Imagine being able to retire at 40 and do whatever you want. If you weren't stupid, your health should be good enough.
Do you really believe people who have health issues at an early age are simply stupid?
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lostlogin
There is probably a stronger argument that health issues later in life a due to being ‘stupid’.
servercobra
I don't think it's an either or proposition. You can both retire early AND take a nice vacation. Sure it delays your retirement date by a couple of days, but I think that's a good tradeoff generally. I'm approaching 40 and even now, the vacations I took when I was 10 years younger were different than now, I could cram more in, do more things without being as sore the next day, etc. And I haven't had kids yet, that would definitely change vacations.
IrishTechie
Kids is one big reason. You can have totally different experiences before you have kids, once they arrive your outlook on life changes, risk tolerance changes etc.
If you can retire at 40 having lived your 20s/30s to the fullest then game on, but it would be crazy to sacrifice that time when you are so free and full of energy otherwise IMHO.
FWIW I am fortunate enough to have really enjoyed by earlier years and be mostly retired in my early 40s.
mason55
A 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.
collinmcnulty
Growing up around people who lost everything, job and savings, working at Enron, you should take all the money they’ll let you. You are structurally long your company already, because if they struggle you could lose your job. Diversify your wealth away from that concentrated position as much as possible if you’re offered a fair price.
saulpw
I disagree. The answer for me is always half. And then next time, half again. Always take some out and leave some in, and an easy way to hedge your bets is to make both amounts half.
hshdhdhehd
https://en.wikipedia.org/wiki/Kelly_criterion
Obviously you are guessing probabilities to plug in but they can be based on other exits etc. Someone in the know on startup equity could offer this as a consultation service.
vlucas
100% 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
Indeed; 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
> 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
fencepost
Another voice in favor of "money today good" (though not from personal experience).
I'd even go so far as to recommend putting that money specifically into things that promote your long-term economic stability, e.g. is it enough to let you buy a home that's going to have monthly expenses below what you're paying in rent? There's plenty of economic uncertainty out there right now, but I feel confident in one thing: Even if the entire economy goes into the crapper rent will not go down. In addition the real estate market is pretty soft right now because of uncertainty, so if you're in a position to purchase that may let you basically lock in your monthly housing costs for a decade or more.
toomuchtodo
https://www.youtube.com/watch?v=XamC7-Pt8N0 (NSFW language, first 45 seconds is the relevant part)
noir_lord
> 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
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throw0101c
I 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.
gbriel
If 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.
lostlogin
The point being made is good though.
Owing no one anything is incredibly liberating. It changes how you behave and what you are risking.
Sure, I’d be richer on paper if I had kept the first house and rented it out, buying the second house with debt. But the worry and hassle and was my concern and I’m far happier. Perhaps 20 years from now my position would be different.
tonyedgecombe
Paying your mortgage off comes with no risk, it’s not going to come back again. Meanwhile your investments could collapse tomorrow.
creakingstairs
I 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.
abuani
Just to reiterate the point the person above you made, but in far simpler terms: independence can be far greater return on your personal well-being then maximizing gains. I'm willing to "lose" out on $50-$100k over the lifetime of my mortgage in exchange for never needing to make a payment on the house again
jstanley
> 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.
You maximise expected value not by putting everything into the single highest-EV bet, but by sizing your bets according to https://en.wikipedia.org/wiki/Kelly_criterion
fencepost
Paying off if possible, but I'd not put everything into paying it down. Pay a chunk of it down for comfort, and put some into emergency reserves with some reasonable level of return that could be accessed in the future in case of need. Early payments don't really matter that much if you have a period of unemployment/underemployment before it's fully paid off.
eweise
IMO 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.
qoez
Think 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
scoofy
I 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."
garspin
1) 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.
lostlogin
For those like me that had never heard of of Zenefits.
bryanlarsen
You 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.
thomas_witt
That 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.
pyrolistical
Another 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.
jongjong
In 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.
There'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.