To the Extreme: Living a Precarious Life On Purpose

I did a panel talk with my friend Philipp at an investors event back in 2024, where we were explaining how we thought about investing. The conclusion was don’t do what we do. We both have most of our net worth in super risky and super illiquid assets like startups and LP investing in Venture capital funds. 

Yes, venture capital and startups are sexy. But as I said before, they are super illiquid and the likelihood or returns are 12-14 years out. That means our cash is stuck for a long time. The big problem with this portfolio allocation is that there will always be cash flow issues no matter how well you budget or what your cash reserves are. I have different income streams but payments are almost always delayed for whatever reason. Or you get unexpected issues like a bigger than planned tax bill, rental properties repairs or larger expenses than normal, common if you have a family.  Thus, it can be a precarious living and you are always worrying about money, when in theory you shouldn’t really at all at my stage of career and life. 

I’m sure this will work out in the long run but there are many days I wonder why the heck I structured my life this way. I think this is partially due to bad planning, lack of creativity or plain ignorance/ arrogance on my side.

But from a more positive perspective maybe I did this subconsciously. Due to an internal realization that I will become lazy, if I don’t need to worry about money. That I will become inactive and thus irrelevant. That I’ll stop pushing myself and will stop learning. I’ve seen this with many of my peers in VC as well as others who have done very well. They just literally check out and mentally rot. They stop growing. 

This isn’t very different from many of the startups that I see who raise way too much money at whatever stage they are at. They start to get complacent and at the same time, feel compelled to spend money on people and new initiatives. Everything slows down, the clock speed decreases and the complexity and bloat sets in. 

It takes me to Vincent Hanna, played by Al Pacino in classic movie “Heat” where he says you gotta hold onto angst, fear & pain so you can stay “sharp, on the edge, where I gotta be.” This seems to be clearer and clearer to me every day. The edge is where all the growth happens.