Summer YOLO Fund: Permission To Spend More and Save Less

In anticipation of investing in some YC Demo Day startups, I transferred $50,000 from my Fidelity brokerage account to my Citibank checking account. This was right after I'd already wired $56,100 to meet a capital call for a new traditional venture capital fund I committed to.

In a previous post, I wrote about the difficulty of committing to a new venture fund vintage as you get older. In the end, I decided to max out my friends and family allocation anyway at 49 years old. Even though I'll have to wait roughly 10 years to get my money back, and even though the fees are high, it's a tier 1 firm.

In other words, I was loaded up, locked in, and ready to deploy. The capital was sitting there with one job: go find the next great company.

What I underestimated was that writing the check is the easy part. Getting into the YC companies I actually wanted, at a reasonable valuation, turned out to be the hard part.

I'd planned to write a $25,000 check into one company and another $25,000 into a second. But the round had effectively filled up with the first, and the second was raising at a $40 million cap. So I trimmed my investment to $10,000.

Add it up and I suddenly had $40,000 in cash, fully liberated, with nowhere to go.

And what better time to be sitting on a pile of unexpected cash than summer? Hence the birth of the Summer YOLO Fund.

FIRE Requires Constant Delayed Gratification

After decades of saving and investing most of my income on autopilot, having the permission to spend is a gift.

To understand why $40,000 in unspent cash is such a psychological event for me, you have to understand how I got here.

I wanted to FIRE by 40 within the first three months of starting work in banking back in 1999. I knew I couldn't sustain a 40-year career rolling in by 5:30 am and leaving after 7:00 pm every weekday, plus grinding several hours each weekend. So I decided to save and invest as much as humanly possible and buy my freedom early.

Since 1999, I've saved 50% to 80% of my income every single year. Not because I'm a masochist, but because I always had a specific goal in front of me. Freedom by 40. Buy a house. Help my wife engineer her own escape. Have kids. Be stay-at-home parents for the first five years of each child's life. Help pay for my parents' eldercare. And so on.

Life, it turns out, is just one financial quest after another. You clear one boss level and the next one loads. So stepping off the investing gas becomes almost an impossible task.

The problem is that I'm well into middle age with most of the big quests already completed. And when I can't deploy capital into the startups I want at the prices I want, the money just sits there, asking what its purpose is.

For the first time in several years, the answer is: live a little.

Angel Investing Is Like Fancy YOLOing

Let's be honest about what angel investing actually is. It's YOLOing your money away with extra steps and a nicer deck.

You spread dozens of small bets across early-stage companies knowing full well that ~90% of them will not produce a positive return. Most will go straight to zero. As an LP in various traditional venture funds for ~20 years, I've watched this power law play out again and again. A fund backs 60 startups, and 3 to maybe 5 of them generate 95% of the returns. The rest are bagels or zombies with no exits.

I've carved out $150,000 a year for this kind of high-risk, high-reward gambling dressed up in business casual. Part of the reason I'm still driving my 11-year-old car instead of splurging $100,000 on a new one is precisely so I can keep funding these bets.

But here's the irony. When my plan to deploy into startups didn't come together this round, the money didn't disappear. It just changed jobs. It went from “maybe fund a generational company” to “definitely fund mango season with my kids.”

One of those bets has a guaranteed positive return.

Why It's So Damn Hard To Spend Money After Decades Of Saving

It is shockingly, almost comically, hard to spend money after you've spent decades training yourself not to.

After 27 years of saving 50%+ of my income, this habit has become part of my identity. You don't switch off an identity because a spreadsheet tells you to start decumulating your wealth. Every dollar I spend on something that doesn't compound triggers a tiny internal alarm that took decades to install and apparently has no off switch.

I've written before about the curious inability to spend money on yourself, and how investing is more alluring than spending. The math brain wins almost every time. A $40,000 angel check feels productive. A $40,000 summer of mangoes and massages feels reckless.

That's the trap. The very discipline that gets you to financial independence is the same discipline that prevents you from enjoying it. We optimize ourselves into a corner.

And the cost of staying in that corner is real. The worst financial outcome isn't running out of money. It's dying with way too much of it, because that means you traded years of your life, your stress, and your energy for a number on a screen that you never converted into a single good memory.

Must Purposefully Change Your Spending Habits As You Age

The cruel joke of frugality is that it can quietly curdle into lifestyle deflation. You make more, your net worth climbs, and your spending stays frozen in the mindset of a nervous 32-year-old who just watched the dot-com bubble pop.That feeling of doom in 2009 has never fully left me.

This is why you should consider entering a decumulation phase after you turn 45. We bought a house we didn't strictly need in 2023. We send both kids to independent schools when public will do just fine. And we've chosen not to work full-time jobs. But those are easy to justify. We have to live somewhere. We highly value learning a second language. And we're healthy when we're not beholden to someone else's schedule.

The genuinely hard spending is the spending with no justification beyond joy. A car nicer than we need. Food that makes our bellies grow. Massages that temporarily feel good. These are the expenses that have zero return on investment and 100% return on life, and they are precisely the ones my brain refuses to approve without a fight.

So this summer, I'm picking the fight. And I intend to win it.

Summer FIRE Session In Full Swing

For the entire month of July, I'm reducing my social media usage even further, taking zero consulting sessions, and holding no business-related meetings. I'll still be writing regularly because writing isn't work to me, it's oxygen. But otherwise I'm going into full traditional-retirement mode. Eating, beaching, hiking, swimming, and relaxing. The way I imagined FIRE was supposed to feel before I left work.

It's been tricky to spend more money in Hawaii because we stay at my childhood home. And when you go “home,” you never quite shift into vacation mode the way you do at a resort. But after my parents, my sister, and I split a $41,000 remodel of the two-bedroom in-law unit, we finally have enough separation to feel like guests rather than family labor. And since the lodging is effectively “free,” we've got far more disposable income to actually enjoy.

Combine that free lodging with an accidental $40,000 Summer YOLO Fund, and we've got serious firepower to deploy on memories instead of metrics.

The Spending Plan For The Summer YOLO Fund

Here's how I envision the fund possibly getting spent.

• $2,000: Roughly 350 local Hawaiian mangoes to feed six. Local Hawaiian mangoes are my favorite fruit. Even better than lychees off the tree in Taiwan. I plan to eat two or three a day and try valiantly not to get hefty.
• $6,000: Dinners out and takeout for four to six people. Korean BBQ, the finest pōkē, plus a few resort restaurants overlooking the water. It's the simplest, fastest way to trick your brain into feeling like you're truly on vacation.
• $2,500: Amusement parks and shows with the family. Sea Life Park, Wet ‘n' Wild, a magic show, and maybe a luau since the kids have never experienced one.
• $1,000: Massages and spa treatments for my wife and me. Massages are good for your health.
• $500: Gas and other transportation.
• $500: Shoes and souvenirs for the kids and family.
• $2,500: A new 15-inch MacBook Pro, up from my 13-inch. Honolulu's sales tax is about 45% lower than San Francisco's, so my frugal brain gets to feel like it won something. Wait a minute, this isn't a YOLO fund expense as it's a tool for work.
• $5,000: New blinds or drapes for the living room of the in-law unit. We already redid the bedrooms and laundry room, so this finishes the job. This is also not a fun expense!

That gets us to $20,000 of relatively easy, justifiable spending. But $7,500 on a new computer and blinds is actually not vacation spending at all. So how the heck am I supposed to spend the other $20,000 – $27,500?

A fancy car rental so we don't have to putt around in my dad's 28-year-old Toyota with dying AC, no bluetooth, and a driver's window that doesn't roll down? A private sunset catamaran charter for the family? A fun but potentially dangerous helicopter tour of the island? Or maybe a professional photographer to capture our moments on the islands?

Nah. I'm iPhone photography certified and can shoot great videos and pictures for free.

Turning Investment Money Into Life Money

This whole exercise has been a fun lesson in repositioning. The same $40,000 that was destined to become an illiquid bet on someone else's dream for 10 years is now funding my own family's present-tense life. That's the real trade-off every time we angel invest or become an LP in a venture fund.

Call it consumption smoothing, call it revenge spending, call it whatever gets you to actually do it. The goal is to convert some of your hard-won capital back into the thing you were chasing all along, which was a good life, not more money you don't need.

After 27 years of delayed gratification, I'm finally trying to gratify a little on schedule. The startup capital will get deployed eventually, when the right deal comes along at the right price. Until then, I'm treating this unspent cash for what it really is: permission to spend, at exactly the right time of year, with exactly the right people.

Time for some fun.

Readers, for those of you pursuing or living FIRE, how hard is it for you to actually spend your money? What's the most “unjustifiable” purchase you've made recently that turned out to be 100% worth it? And if you suddenly had $40,000 freed up with no obligations, would you invest it or YOLO it on experiences?

A Simple Way To Invest In Real Estate Passively

If you, like me, want real estate exposure without dealing with tenants, toilets, or a six-figure down payment, take a look at Fundrise. It's one of the largest private real estate platforms in the country, with a diversified portfolio of residential and industrial properties, much of it in lower-cost, higher-growth regions where yields tend to beat expensive coastal cities like San Francisco.

It's how I get passive real estate exposure without the legwork. The minimum is just $10, the funds are open to everyone, and you can dollar-cost average over time instead of trying to time one big purchase.

Financial Samurai is an investor in and a long-time partner of Fundrise. This relationship helps support the free content on this site.

To get my best content straight to your inbox, join 60,000+ readers and sign up for my free weekly newsletter here. I'll show you how to build more wealth than 99% of people and break free sooner. And once you're free, I'll help you with the surprisingly hard part: actually enjoying it.