The Comfortable Lifestyle Business or The Big Payout?

Contemplating the Lifestyle Business In HawaiiOver poker one night, we got to talking about what we always talk about: entrepreneurship.   Out of a table of 10, four work at start-ups, three are at Google, one is a high-tech lawyer, one works as a medical correspondent for CNN, and then there’s me, a hybrid.  I had just got done working on for three hours after working an 11 hour day, and needless to say, I was a little bit tired.

I love going to Friday night poker mainly because I get to bounce ideas off of really smart and incredibly hard working people.  When I hear stories of one start-up player working from 7am to 3am every night for two weeks straight to launch a product offering, I get pumped.  When the Venture Capitalist player recounts his firm rejecting a pitch by Tim Westergren, Pandora’s founder in 2008, I wince, but daydream in amazement.


Down about $185 for the evening, I started lamenting what the money will cost in side hustling.  A couple hours of work at least, I thought.  How depressing, thanks to my opponent’s King on the river against my pocket Queens!  I quickly shifted to more pleasant thoughts about the future of start-ups and posed this question in between hands to my fellow sharks:

Would you rather make $15-000-$30,000 a month and “work” only 2-4 hours a day?  Or, would you rather make minimum wage working 12-18 hours a day for two years with a 25% chance of selling your business for $100 million dollars and netting yourself a cool $25 million?  If you don’t, all you are left with are your experiences.

I purposefully left the question open-ended to see what the various responses would be.  Already, one was doing math equations of what the capitalized value of $15,000-$30,000 a month would be based on an expected life expectancy compared to the expected value of the big payout.  After all, we calculate expected value all the time in poker.  Instead, I encouraged my fellow players to stop calculating and go with their gut.

Surprisingly, or perhaps not to be unexpected, every single one of them chose option 2: the big potential payout.  A couple of the entrepreneurs have a $100 million dollar buyout goal in mind, which I find somewhat delusional, but maybe not with Zynga, Youtube, and a host of other companies getting valued in the billions!

As the night wore on, I finally heard someone take the other side after losing $690 in a $2,600 4-way pot when his straight got flushed out.

“Well, $30,000 a month for working only a couple hours a day isn’t so bad.  I think I’ll go with that.”


It’s been over six years since I started Financial Samurai and I’m actually earning a good passive and active income stream online now. The top 1% of all posts on Financial Samurai generates 31% of all traffic. In other words, after putting in the hours to write some very meaty content over the years, 10 posts consistently generate a monthly recurring income stream that’s completely passive.

I never thought I’d be able to quit my job in 2012 just three years after starting Financial Samurai. But by starting one financial crisis day in 2009, Financial Samurai actually makes more than my entire passive income total that took 15 years to build. If you enjoy writing, creating, connecting with people online, and enjoying more freedom, see how you can set up a WordPress blog in 15 minutes with Bluehost

You never know where the journey might take you! I spent four weeks traveling to Cambodia, Taiwan, Korea, Vietnam, and Malaysia while working on my business in 2015 and plan to work overseas again in 2016. The freedom and reward for creating something on your own truly is priceless.

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Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship. Sam focuses on helping readers build more income in real estate, investing, entrepreneurship, and alternative investments in order to achieve financial independence sooner, rather than later.

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  1. says

    Interesting dilemma, Sam!

    I would go for the option 1, considering that even your estimated money income for maximum happiness is $200.000 , and $30.000 a month is more than that $200.000 a year, as you wrote in your post .
    If we consider that with working only 2 hours a day, I will have enough time for living with maximum happiness level and enjoy the things I want. Why would I sweat and handle all that stress, if I am happy and can do anything I want? Why would I spend so many hours working? It makes no sense then.

    • says

      It’s true, after $200,000, you really aren’t much happier. You save more, but other than that, it’s all about the same.

      Beyond $200,000… or $360,000 for this matter…. it’s about creation and a challenge b/c you’ve discovered that making money is pretty easy.

  2. says

    Interesting. Because of your sample set though, they were probably already making close to that so the prospect of making $360K per year isn’t that appealling. I think most of your readers would take option 1. Here’s why. Option 1 is guaranteed and you could always turn some of that money into a big biz sale anyway. Option 2 is a “chance” and we all have that chance now, but those chances are 1 in a million even if you call it 1/4 here. You’re talking about a disruptive new biz like Digg or something. Not many of us will create anything like that realistically.

    But I’ll take either one :>

    • says

      I would say half make over 360k and half make much less like 125k or less.

      25% is 25% chance for $100 mil sale as like u said, it’s probably closer to a 0.1% chance for any entrepreneur to get to that level of success!

  3. says

    $690 loss!!! That’s what i earn some months. I’m a $5 pot poker player (although not played for a few years).

    Well I always say it’s the journey not the destination but I can’t actually answer this Q. $30k a month would be more than adequate for what I want out of life and I don’t mind working.

  4. says

    I’d go with option 1 for sure. I’m going to be working on *something* anyway, just because I always have a zillion ideas to try out. I may as well make $30K per month while I’m at it, and have a life in the process!

  5. says

    I would go with path #1 and learn to save/invest as much of that money as possible. Working only a few hours a day would also improve my quality of life because I would have more time for the activities that I enjoy. A potential ridiculous payout after working so hard for no money doesn’t seem worth it.

  6. says

    I would definitely take option #1 and then build a business with all the extra money and free time I have. And if that’s “against the rules” then that’s fine. I would be making over $300k a year and could invest that money wisely and essentially afford everything I would ever want, including funding a business for personal reasons (even if I’m not “allowed” to make money off selling it).

  7. says

    I’d go with option 1, simply because it would make such a huge and immediate difference to my life and allow me to get out of the rat race, irregardless if the second option has a mathematically higher numerical value. People’s subjective value scales aren’t linear; I know that mine isn’t. I would be very happy already with just $30k a month for 2 hours of work a day, if I knew that it was fairly sustainable. In that sense, my life EV would be higher by going with option 1.

    • says

      It seems like most of the audience would choose option 1 . I would like to hear some arguments why would the option 2 be better choice, because $30.000 a month with 2 hours of work … wow that is amazing

  8. says

    Option 1 popped into my head immediately. I don’t even know what I would do with $100,000,000, and working 2-4 hours a day for decent cash isn’t bad at all. I could save so much of it and guarantee (pretty much) a nice retirement. Maybe I would get a ‘second job’ and double my monthly income to 60k!

  9. says

    My gut say option 2 while I’m young.
    If you are young, there is no contest. I know people who choose option 1 and some who choose option 2 when they got out of college, not to the extreme in your example of course. People with option 2 grew a lot more. Those option 2 people can always go back to option 1 or more often they go on to another option 2.

  10. says

    I’d roll with option #1… The idea of $30,000 a month and only working 2-4 hours a day would leave me a lot of free time to start other ventures.

    With that $30,000 a month I might even be lucky enough to start a business where I work long hours but after a few years I’ll be able to sell my side business for $100 million dollars and net myself a cool $25 million.

    Just an idea though ;)

  11. says

    It’s an interesting dilemma, if you think that choosing between a Maybach and a BMW is a “dilemma.”

    I gotta say, Sam, I don’t play many poker games with my friends with a $2400 pot, nor do I hang out with any high-tech lawyers. If anything, your article is a beautiful illustration of the perspective of money and wealth. Personally, I wouldn’t know how to spend $15,000 a month, let alone $25 million.

    How much money does a person really need, anyway? After all, anyone who washes their car with drinking water is already “rich” when it comes to the global standard of living. Even if the car you’re washing isn’t a BMW.

    • says

      Yep, but we are not all rich as some may expect. Some prob are worth several mil, but others like he startup guys are just everyday guys who love to play poker.

      This blog really is about providing perspective. Hopefully a different one from others. At some point, it’s not about the money, but about the challenge of creationand competition. Cheers

      • says

        Your post started a lively conversation here in the CoupSmart office, Sam, so thanks! :)

        Just to be clear, the question is a fascinating one and I think the answers you received shows the true entrepreneurial spirit of your friends. There certainly is a lot of merit with toughing it out for the big pay, but as you probably know, the best (and most successful) entrepreneurs are the ones who put their sweat, tears and passion into their business regardless of that “transparent, dangling carrot.”

        Of course, the payoff always helps, too. ;)

        Keep up the great posts!

        • says

          It’s great that you are working at a startup as well. I’ve always wanted to see what it was like ever since the dotcom boom days in 1999. Alas, it l took the traditional route but with this site and things we have planned for, I’m goig your route and t sure is a lot of fun!

          You guys having fun or what?

  12. says

    The 25% probability is just too low. If it was 50% then I would do it. Give me the $15,000 to $30,000 for 2 to 4 hours a day. I would use the rest of to build my fortune!

    P.S. How do I get a seat at the poker table with all of you multimillionaires? LOL.

    • says

      Who says we are all Multi millionaires? The two guys at startups are probably only makig 70-100k/yr and busting their balls to try and make it big! They all are going with option # 2, but are making morethan min wage. One probably makes nothing and is just living off savings or funding and not drawing much.

    • says

      Who says we are all Multi millionaires? The two guys at startups are probably only making 70-100k/yr and busting their balls to try and make it big! They all are going with option # 2, but are making morethan min wage. One probably makes nothing and is just living off savings or funding and not drawing much.

        • says

          I never understood why people at startups didn’t sell their shares after a few years when the valuations were so high. How many years was the holding period at each startup?

  13. says

    I’d take the lifestyle business all day, every day. I’m not willing to work 15 hour days for any amount of money – much less minimum wage with a chance at a lot of money.

  14. says

    Without a doubt, I’d take the $30,000 per month. 2-4 hours a day?? This is clearly my dream job. What are you trying to get super rich for? So you can work less than 2 hours a day??

  15. says

    Just going on gut feeling it is that 30K/month + the freedom associated with that choice. The other time could be used to pursue another income stream , vacation, or a smaller company (lets say in the range of $20mil lol).

    I wonder what people would say if you made the numbers a little bit less extreme. Make 10K/month for 20 hour/week work vs working for 5K/month for 80hours/week with a chance of pay out of 3 mil….

    • Investor Junkie says

      I shoot for $30k I’m not looking at $15k :-) Still for 2-4 hours daily that’s not bad.

      That’s at minimum $125/hour.

      That’s much higher than the approx $20/hour the average person white collar
      worker makes (I always use that
      number as a method to determine if a project is worth taking on)

  16. says

    I already do the former, so I’ll stick with that thanks!

    I am not into big payouts, and I don’t mind working for a steady income knowing I can save so much more on the type of lifestyle I live.

    I don’t exactly work only 2-4 hours a day, but if you average out the hours into a year, that sounds about right, although the money average per month goes down.

    This year I worked about 9 months, making $20k/month, working 6 hours a day.

    I got 3 months off to chill out.

    • says

      I’m old now and no longer have the energy to work consecutive 14+ hour days for so long. But, if I was in my 20s, I’d go option #2 all day long. However, come to think of it, I think I already work 16 hours a day Mon-Fri, so maybe I will just go with option #2 because I’m less worried about money anymore, and happy to create something!

  17. says

    Sam, I’m for a combo of both. Bust your but out of college and then hopefully get to a point where you can make a decent chunk of change working a moderate amount (but not killing yourself) WHILE shooting for the big 100 mil payout. I totally think this is achievable with the right combintation of hustles and side-hustles…but only if you do what you love.

  18. says

    With a family to support, I’d have to go with option 1.

    But if I were 18 or 21 again (or younger), I’d go with option 2. In fact, once my son is that age, I would recommend him going that route too if the opportunity were available to him…

    Sounds like a great game of poker, I haven’t played in years now! :(

  19. says

    I’ll go for option 1 too. A $15,000-$30,000 monthly income for a month is highly enough to support my family and me and give them the comfort of life and 25% of chance to get a $100M and 75% chance are highly risky.

  20. says

    Man, that’s a tough one. I lean towards option 1 just because it leaves so much free time to work on other projects, possibly start other entrepreneurial ventures, and volunteering my time for causes I find worthwhile. Who says you can’t do both! earn 30k/month on the one venture and then work the other hours on your possible jackpot job!

  21. says

    I would’ve picked option #1 because that’s most likely the happiest choice, but only if it’s 100% guaranteed, which in reality is impossible.

    However, when you are making $10,000, you will want $15,000 and when you hit $20,000, you will want $30,000. When you get there, then either out of fear of losing $30,000 in the long run or the greed of more, you work more hours. Pretty soon, you are working towards a $100 million goal anyway.

    So really, option one has money in the meantime while you work towards the 25% $100 million goal, while option number two means bleeding money all the way and have the same chances. Which one would you pick then?

    But btw Sam, in reality, do the owners typically still have 25% of the company by the time they sell it for $100+ million? I’d think that unless it’s those instant successes like admob, if the start up is not making money (as most big ideas seem to be for a while), it’s hard to not sell shares to investors continuously to keep the thing afloat for the years that it’s propping up the economy.

    • says

      There’s definitely a lot of dilution in startups due to capital raising. However, a 25% ownership for the original founder is quite common, if not conservative.

      If I’m making $15-30,000 online every month working only 2-4 hours Mon-Fri, I’m pretty happy and won’t feel the need to work 4 more hours a day to try and double it to $30-60,000/month. It doesn’t mean much after $200,000/yr if all ones debts are gone.

      • says

        Thanks for the insight on the start ups. I always wonder about this when I heard of those $200 million paydays! :)

        You say you are happy with $15k – 30k a month, but you opted for #2. It sounds like that when you are actually only working 2 hours a day, you’ll want more, because by then, you already have option #1 and it would tilt your desires towards option #2 even more.

        When your online ventures hit its stride, don’t say I didn’t tell you so :) We can talk more about this then!

        • says

          Cool. I just think that making money is pretty straight forward. I really enjoy staying under the radar and having little to no one know my business. It is the greatest achievement if after all this time, people think I haven’t hit any stride and am stuck in neutral.

          If you need any non online income advice, let me know!

  22. says

    My first inclination was to go for the “security” of Option 1. It seemed comfortable, easy, and a nice way to make a living while having time for so many other family-related things I would want to do.

    Then, my brain took over. Looking at a 25% chance of $25 million profit with the other 75% chance being I would have toilled at minimum wage for 2 years – that’s a pretty good expected value.

    I just might take Option 2, with that much on the line. Work like heck for 2 years, and if it fails, you capture all the learnings you can from the experience. If it succeeds, it’s a game changer for your life and your family’s security, and some real aspirational lifestyle dreams.

    All hypothetical, and I would have to have the guts to pull the trigger on doing it, but I like the EV and upside of Option 2.

    • says

      It REALLY is a game changer. Two years is NOT a lot of time to work hard. It perplexes me why so many blogs fade after 1 year for example. Why do anything, if one doesn’t spend AT LEAST two years? I don’t go into anything without expectations of working on it for less than 5 years. Maybe as a result, I don’t feel like I’m ever really in a rush. That’s good and bad.

      Option #2 baby!

  23. Mike Hunt says

    One more thing…

    In the big hand you mentioned there were four players. The flush took it down, the straight was in second… what were the other two players holding as they went into showdown? My guess would be pocket aces and someone else made a set with a pocket pair…?


  24. Mike Hunt says

    I find it interesting that you mentioned the range to be $15-30K a month working for 2-4 hours. Most responders took the high end of both ranges (working 2 hours and making $30k a month). Says something about people selectively hearing what they would like…

    With regard to option 2, what is the certainty that the start up will better humanity? There are plenty of businesses that make big bucks (high frequency trading bots) that don’t necessarily do much to help people. I would consider putting Farmville into that category as well.


    • says

      It is interesting how nobody wrote 4 hours a day and $15K a month huh? Option 2 doesn’t necessarily have to save humanity, it just has to provide some type of value, but it world peace stage or simple entertainment.

  25. says

    I would definitely go with option 1. $250k – $360k per year or $100 million over my lifetime, both will give me everything I need in life, Sam.

    All the best,

    Len Penzo dot Com

    • says

      But, how long do you know how long you will have to live? If you are say, 40 right now, are you sure $250-360K = $100 million over your lifetime?? The $25 million in 2 years could be sweet!

  26. says

    2-4 hours a day for 30K a month sounds great. But I can’t imagine myself only working those hours. I think I’d go for the 25% chance for millions. Because I’d continue to improve my skills while working for minimum wage and even if I didn’t get the millions, I’d feel comfortable I could make up the lost ground.

  27. says

    without even reading the comments i guessed most readers of this blog would opt for #1, as would i. such is the group that gravitates to blogging type activities (and the internet).

    CNN published a recent study where the BE number to happiness was not 200k, it was actually 75k believe it or not. this number varies for every individual IMO.

    for me, using money to live the life i want is the name of the game. there is no value i can place to my time spent on activities i enjoy with the people that are near and dear to me the most. building several streams of passive income over the years has helped me live the life i want, and i wouldn’t trade it for anything…

    • says

      Yep, we all know about the widely quoted 75K figure for happiness, which is why I wrote this post, b/c I am here to say it is untrue and selling yourself too short. $200,000 is that magic number!

  28. says

    Option 1 for me as well. I went in early in a startup once 10 years ago but not early enough to cash in big. I than said no to 3 startups since then (none of them have cashed in yet). The economics have a very thin line of working out and require constant soul pouring into the business. It also take on average 4 years to build up the business and than you are on the hook for 3 or 4 years to really cash in.

    I have to admit that I am always thinking of a business plan to start my own in the background. If someone comes along and it clicks … I may take the leap of faith :) So far, the offers I get for startup are from very good pitches and you have to look through that to see what’s really behind and how much it’s really worth.

  29. Briana Ford says

    I would choose the first option. I would love to spend time with my family and enjoy that money as opposed to slaving for a POSSIBILITY of hitting it big.

  30. says

    It’s all about lifestyle for me, Sam! I would definitely choose option #1, but not for the security of knowing that the money would be there as opposed to hitting the jackpot later on, but for the lifestyle aspect. I’d much rather work only a few hours and enjoy this life, my family and friends than work my butt off and miss out on life, just for additional money.
    Great post by the way.


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