In our industry, it's pretty safe to count the one-person cases as outliers (hit app, etc), however I can attest to a number of people consistently pulling down 7-figure NET incomes from privately-owned small businesses without ever involving VC's or other investors.
If it's a sustainable pace and you don't become so visible as to be a patent or other legal target you can quietly live very well on that or half that, etc.
Bottom line, there are an infinite number of places to end up between being nobody and being a Zuckerberg/Gates/Jobs and really, most of them can provide a good quality of life.
Most of the people I know doing this are involved heavily in local commerce. Think real estate, insurance, construction, and skilled labor companies (plumbing, A/C repair, landscaping).
You aren't going to pull down 7 figures on a one-man AC repair business. In that type of business, you are just renting out your time, and nobody is paying $1,000/hr for an AC repairman's time. You can scale it, definitely, and have an army of repairmen working under you and then make tons of money, but then you're no longer talking about a one-man business.
I don't think grandparent comment was meant to imply 1 person business. (You are correct in your math assumptions). I just think they mean "small business funded organically or built from the ground up". Besides "1 person" can also mean "1 person and subcontractors" so where do you draw the line at "1 person" anyway?
The only thing I would add though is that many of these businesses were not started by the person running them they were passed to a family member who got something that they could expand upon where the risk had already been taken.
One of the things I have noticed is that 'managing' things is a skill unto itself. And some very successful people I know operate by helping people with skills connect with people who need those skills, and then creating a structure where a fair price is paid for the access.
My experience has been around B2B. That's not to say that B2B is better if you're in a consumer market. Usually whatever you're in, the other seems like it would be easier because you haven't hit all the real life details yet. A B2B sale for example is not a trivial dollar amount, so your customer can be more demanding. There will be customers who are perfect, and those that are completely incompetent using exactly the same product.
You can kind of think of it as a small-mid size private contracting/gardening/pool-service shop imo. Some of those companies are well entrenched in their communities and pull down a really healthy amount of revenue reliably every year.
I think about this a lot - I made the jump from salaried worker to self-employed programmer/freelancer/contractor/consultant (depending on how you look at it). But I'm doing enterprise-level architectural programming. It's not very amenable to productizing, so I'm basically stuck being paid for my time.
What that means is that if I want to have a long-term high-security relationship with a couple of key clients, I basically hit a ceiling in hourly rate (a good rate, but slightly below what your general multi-person agency will charge) and I've been at that ceiling for a couple of years now - nowhere close to $250k .
It appears the way to transition out is to bump the rate up significantly so it doesn't appear you're trying to compete with agencies - maybe around $200/hour or 6k-8k/week. But the problem with that is that the long-term relationships can go out the window. They only want to bring you in for shorter periods of time, and you have to hustle more. So the marginal benefit isn't awesome. And I really like my clients and I hate hustling, so I stick with where I'm at. This higher rate I've had for the last 2-3 years is nice and all, but practically what it means is that I'm projected to be able to retire at age 65 instead of age 75. It's not a dramatic difference in lifestyle.
So instead, I've just been trying to amass a larger emergency fund outside of maxing my retirement savings every year. And then I'll do something with it... what, I don't know.
I know, first-world problems, but it seems that now that I finally have a bit of a nest egg, the income-maximizing move would be to use it to invest in one of these other careers the forbes article mentions. But what? Nest egg money isn't really the limiting factor behind a retail operation, it's the actual retail product idea, and I don't really think that way. What's left is real estate, but I'm regularly told I shouldn't even bother if I'm not a fix-it handyman sort, which I'm not. So I'm sort of in this state of perpetual mulling. I wonder if I could just find a talented-but-poor subcontractor, get my own general contractor license, and handle all the business and project management parts (which I love) despite knowing nothing about construction.
As a consultant, there are three ways to raise your income: work more hours, raise your rate, or add leverage (i.e. hire). It pays to take a few walks and think about the structural differences between each option. For instance, working more hours is not sustainable, has a low ceiling, has painful non-monetary costs (especially with a family), and doesn't get easier as you progress in your career. But there may be things you can do to increase your billable hours without increasing your working hours, e.g. by selling retainer or support agreements. Even still, as you approach 100% utilization you're making asymptotic improvements.
Re raising your rate, I suspect that once you break through the ceiling for general-purpose skilled developers ($100-150/hr?) into the "specialist" range ($200-500/hr), your billable hours actually drop, because to justify that rate you need to spend more time giving talks, publishing papers, updating/promoting a blog, contributing to open source, prospecting for clients, etc. I'm personally contemplating making the jump to specialist work, but I don't have real experience there.
So I don't know if this helps you, but I feel like we're in a similar situation, and to me this line of thinking at least helps clarify the territory.
Assuming you're American, if you work remotely and have no dependents, you could consider moving abroad to a country with lower cost of living. (Easier to cut expenses than increase revenue.)
You may qualify for the Foreign Earned Income Exclusion (~$96k) if all of your work is performed while you're physically outside the U.S.
I've been researching this topic religiously for the last 9 days and have contacted companies to help me structure everything. I'll write a detailed article when everything is said and done.
As far as Real Estate investing goes, find something that has good bones (layout, HVAC, plumbing, electrical, etc.) and bad aesthetics (overgrown shrubs, needs paint, etc.). Make a low-ball offer, hire someone to fix the aesthetics, and execute a 1031 Exchange to move up the ladder.
Stop charging for your time and start charging for the value you are providing to the business.
If you implement a system that will increase revenues, you should be charging based on that value. Just because you're implementing some back-end system does not mean you're not having an impact on the bottom line. Sounds like you've gotten stuck into thinking your old clients are your friends. Do you not have the confidence to pursue / win new clients if you're 'key' clients disappear?
First of all, f### "first-world problems" when it comes to something like this. It's personal and it's your life. You only get to perceive one run at this one.
I posted a few things in Patrick's thread that I won't repeat here[1] regarding the move from a simple hourly rate to the ~$1m+ range.
The thing I would work on in your case are your basic assumptions. I would try to get past the "long-term high-security relationship."
It's good to have long term relationships but they are never going to be highly secure. Instead, work on maximizing your value and adjust your income accordingly. If you do think of relationships, think of it in terms of your reputation and your network. If you went to a decent school, use the alumni network. If you worked at a company that has a "former employees" network, use that. Keep in touch with people you've worked well with, even if it's just watching them on LinkedIn and congratulating them on a move or helping them find a new job/gig/whatever.
It's something that can be tough to crack the first time, but you're in a good position already. "Enterprise-level architectural programming" is nerdalinga for "Enterprise Architect," "Consulting CTO," etc.
Getting the first big "gig" is usually a matter of timing your availability with opportunities (i.e., what unlucky people call "luck"). Reach out through your network and have people recommend you. The first strategic position you take will probably be similar to what you have now, but at least you can put your shingle out as "Consulting Enterprise Architect".
Then you should work on getting a couple marquee clients to put on your NASCAR slide. They don't have to be massive, but they should be respected companies. I targeted the top of the Internet Retailer 500 and established build, launch, replatforming, infrastructure, scaling, and security relationships with enough > $1b/year sites that new clients ask about what "leaders" do in the industry. Enterprise work is mostly about minimizing perceived risk.
It's good if you can build partnerships with platform vendors. For example, Oracle PS don't really like to touch projects below a certain size, so I get a lot of semi-qualified leads in the ~$1m range that I can knock out in about four months with a few fellow consultants/friends. If you bring in the vendor to one of your clients, they'll usually keep in touch and mention prospective clients even if they're not going to go out on a limb and drop your name on the desk. I wouldn't knock myself out on this, though – just make sure you are the one making the introduction and are present at the pitch meeting.
Also, you'll need to be solid when talking at the C-level. Get your presentation skills down, have a suit or ten made (cough go to Anderson & Sheppard once and Shanghai soon after), and gain confidence that you know what you're doing.
You're going to have to get out of your comfort zone a little bit. I actually loved interviewing (both sides) so the sales process (which is generally just letting someone validate claims made by a referring member of the network) is not unpleasant.
I'll also tell you the biggest secret of "consulting": find out what people are complaining about. Write that down on slide one. Find out (or know) how people resolved the top three problems on that slide and put them on slide two. Make those slides beautiful and extremely succinct, so you're conversing, making eye contact, and reading body language. Make it look easy.
One last thing: You should become aware of the product market in this area. EAI is a massive opportunity and even if you just build a toolset leveraging Mule/Camel/ActiveMQ/etc., that's a product you can license to clients. I don't often advise this, but saying there's no productization opportunity leads me to recommend one of the Enterprise Integration Patterns books.
Damn, this is really good advice. I find that as I get more senior, I have less immediate peers that set an example of what sort of next steps are possible, so these are good bits of advice to read.
Yes, the last year has included a lot of prototype experimentation with stuff like EIP (spring integration), amqp (rabbit), jax-ws (cxf mostly), Drools. I can see how pulling the thread on these could eventually turn into a product, but in the meantime it's really just been more about making the recommendation and then doing the implementation. I feel like I'd need a handful of more successful implementations before I can call myself the Consulting Enterprise Architect, but it's getting there.
Real estate is a good way for lay people to gain wealth with not much effort. You don't need to be a handy man to get into the game, but it helps if you can do the repair work if needed. At the very least know what it takes to get things done and repaired so that when you hire people to do the work, you know the ballpark figure and the amount of work involved.
Real estate investment is good to get into because its cycle is long and very predictable. Just follow the trend. Once the housing price goes one way, it takes huge amount of effort for the market to turn it around. We are just bottoming out and starting on a upward trend now.
Read up on the topics and take some classes if needed. Community colleges have night classes that cover lots of topics. You don't need to agent related topics, just the economics and investment parts.
Real estate investment is a leverage game and as such, it's advisable to be well capitalized so that you can weather the up and down of the market. A down market can last 6 to 8 years.
Why not simply keep doing what you are doing and buy dividend stocks with your savings? There is no rule that you have to start your own business to become a business owner...
Yeah, that's in the mix - it just feels like a mental leap, as for years my only savings have been in retirement funds, where I've focused on mutual funds. Plus I have a bit of a problem with the market just because it seems like however deep you get into the abyss of researching stocks, behaviors, fundamentals, etc - there will always be the finance firms who will have access to better information.
On top of that, the media is full of inaccurate stats of how good an investment the stock market is, long-term. They'll say things like 8% net (after inflation is accounted for). I did my own study(1) and over my investing lifetime it's been around 3.5 - 4%. That makes a huge difference in all the sample spreadsheets out there - for someone who maxes out on the Roth since age 18, that's basically the difference between being able to retire at 62 with $2 million, and having to continue working at age 62 with savings of $500k. I guess it seems like there's more control in investing it in my own business.
(1) - Looked at dates/amounts of my entire retirement contribution history, pretended I bought S&P-500 index fund each of those dates, backtested using Yahoo's "Adjusted Close", ran an APY/XIRR calculation, subtracted avg yearly inflation over same rough time period.
The 8% real return is the arithmetic average over the last 80+ years. It's somewhat useful for predicting the expected return over a one-year period. However, what you need for retirement planning and what the IRR formula gives you is the geometric average, which takes into account compounding. The historical real return was only about 6% measured as a geometric average, and there are some reasons to think that it will be lower in the future.
When you say better information, what do you mean? The actual basic fundamentals of each company are publicly available and required to be accurate. There's a lot in the interpretation, but at least on that front your actual information is on a reasonably level playing field.
I agree that getting into technical / behavior based trading is a much bigger hurdle due to all the specialized data and algorithms that go into it.
A lot of the really attractive dividend stocks have become substantially less attractive over the last 6 months due to the market rally. There were quite a few stocks giving 5-6% with good prospects of increasing in value as well 6 months ago, but I can't say the same now.
"What's left is real estate, but I'm regularly told I shouldn't even bother if I'm not a fix-it handyman sort, which I'm not."
You don't need to do the fixing yourself... My advice would be to read 3+1 Plan book (http://en.wikipedia.org/wiki/The_3%2B1_Plan). You can get it for free in PDF from the author if you sing up for one of his websites.
Looks like the 3+1 Plan is basically to buy a property, pay interest only, wait for it to appreciate, remortgage, use proceeds to buy another property.
I think I'm looking for more detail from a hacker perspective - how to get access to RMLS systems, mine the data, what kind of criteria to look for for best arbitrage, what kind of moves you can make if you have $x in capital, etc.
Here's my experience. If you don't have a lot time and not into construction and not a lot of money, don't bother going into foreclosure, flipping, or short term project. People going to court house auction bring in a million dollar cash to bid on foreclosures. They can keep bidding a house up until you run out of your reserve. It's very difficult to outbid them and still make a profitable flip.
For casual investor, the best approach is just buy and hold from the regular market, utilizing long term leverage to gain the profit. You want to buy into a trend and RE has very long trend. A rising tide lifts all boats. Doesn't matter which house you buy. It will go up in price in a uptrend. Also established neighborhood is easier to predict up and down. The whole neighborhood will go up in union. New development might turn out good or might turn out bad, depending on the people moving in.
For RMLS, the regular listings have a lot of information. The regular websites like Trulia or Ziprealty are good. Insider knowledge will not give much advantage because RE is a heavily regulated industry and once a house is listed, the agent has a duty to get the best price.
You're thinking about a scenario where you are carrying a hammer, and your looking for nails.
Real Estate is all about information. That information isn't in the MLS system.
Examples: How long is the old farmer by the interstate going to be around? What neighborhoods have weak neighborhood associations who won't protest my hacking a 2 family into a 4 family to maximize section-8 revenue?
my friend has been doing this for a few years but he's saying that opportunities are drying up with the housing recovery. Also he is a handiman so his margins are higher than the average person yet he's still seeing fewer opportunities.
Also keep in mind that brokers take ~6% on both the purchase and the sale of a property, which means that the property has to increases in value substantially for you to be able to effectively "flip" it. (rates are negotiable obviously, and I think you can get a certification to be able to handle some things yourself instead of getting outside service)
It sounds like you see yourself limited by time, not ability or even money. Since you're a programmer you probably have the intuition to seek out other good programmers. So what you can do is search for a technical partner to create some type of lifestyle business where you can split the profits. I'm sure with all your client relationships you might be able to come up with a few good ideas that solve some niche problems, and you'll even have a starting base of customers if your solution caters to their problems. From my own perspective, I would love to work with someone technical albeit with little time to jump on a side project with me. Even if I was the primary contributor, knowing that my partner can bring money, connections, and technical ability is an enticing proposition.
> Many institutions in our society are still structured in such a way that W2 employees are considered the norm, and it is hard for even well-off people who are self employed to, for instance, get a mortgage without intense paperwork hassles.
It was refreshing to read that. Even for an apartment it's almost foreign to most building managers when you say you are self-employed (they might even have an unwritten rule that this means unemployed lol). Even after showing a good transaction history your chances are still pretty slim, it's almost as if they have never heard about anything other than W2 and pay stubs.
Even worse for me is that my clients have been in the US and I am in Germany. The landlords here would rather give an apartment to somebody who is on welfare. Seriously.
I'm considering incorporating and granting myself a EUR salary just so there is a steady pay stub.
Which is ironic since the top category in many of the revenue brackets was "real estate/rental and leasing firms". The building manager might get an old-school W2, but the agent who hooked you two up is likely self-employed.
I get around this a few ways. If they require it, you can show them your savings account that shows you can pay a year's rent in cash. But maintaining a good credit rating is often good enough. I thought I'd have to show bank records, but instead the property manager said I had a credit rating "like a bank" and that was good enough.
But the best advice I can give is to rent from an individual. You get so much more for less, because a lot of private party landlords just need to cover a very low mortgage from 10+ years ago, and getting peace of mind by renting to a professional is a good trade-off for below market rent.
This became an issue when I applied for a mortgage recently. I needed my father to cosign to make it go through. I make more than him, and I currently have 3 paying clients so I can't be more than 1/3 fired at a time, but apparently I am greater risk.
My dad started three small businesses on his own over the period of 20 years: a restaurant, an upholstery business, and a long line commercial fishing boat. First, let me just point out that sales (or revenue) does NOT equal profit. I'm pretty sure everyone here knows that. If you count just sales, then the upholstery business marked with inflation would probably be doing $150-200k a year in sales/revenue for a single sole proprietorship. However, count in rent, materials, utilities, etc... my family was probably making about 70k a year in today's dollars. The fishing boat, though, is another story.
Although the fishing boat was incorporated as an S-corp with just my dad as the sole owner and 100% owner of stock, he did employ a crew of people. I mean, there was a boat captain, and at any given time, 7 to 8 guys on board. We had fuel expenses, salaries (which were a portion of the catch), food expenses. If you looked strictly at our sales, which I used to do the bookkeeping for, we would easily net 500k to a million a year in today's dollars. After all expenses were paid and done, my dad would make about $100-120k a year on a decent year.
Since we're using accounting terms-of-art, you almost certainly don't mean that you would "net 500k", you mean gross 500k, right?
The popular culture seems to use net to mean "total in the income category", but in accounting it generally means EBITDA, i.e. your dad would gross $1m and net $100k.
It's nice to see coverage of an exciting trend (of which I'm happy to be a part), but it always cracks me up when financial publications classify companies based on sales rather than profits. Defining a "million dollar company" as a company with a million dollars in annual sales is absurd.
This. If your company clears one million in yearly sales and spends $980,000 to make that happen--you are running a $20,000 per year company. There is nothing wrong with this, but I hate when these metrics get thrown around without context. There are $1M companies that make less profit than a hot dog cart (which subsequently, in the right location is a damn good business).
One thing I will add to the discussion of someone running a 1 man "type" business (which would include both 1 man and 1 man plus some helpers part time, sub contractors, 1099's whatever) is that while the upside is capped the downside is also clipped.
If you have a 15 to 40 person business with lots of overhead and you have a few bad years you can lose lots of money. Because of that overhead.
But if you are running a small operation out of a small office (or even your house) you might not have a big top end potential but you also aren't going to lose much either.
A bad year might mean breaking even or making very little but your probably not going to lose your shirt (at least in 1 or 2 years if you have built up a reserve).
Plenty of 1-man "professional services" businesses are functioning as middlemen between big companies, or big companies and government. They have low overhead, but usually have a fixed, immovable deadline for paying their downstream companies. As long as the good times roll and the customers pay in time, life is grand.
Interesting breakdown, though the title is a bit misleading. The numbers do show a 5% annual increase in single person companies making $1MM+ in 2011, but it's difficult to know whether that reflects a true rise without comparing against historical data.
It's interesting that many of these businesses are basically real estate holding companies. I wonder how many of these businesses are just tax-minimization or financing schemes used by larger companies for things like deferred compensation?
From what I understand the main purpose is liability shielding. Each property is run as its own LLC, and management is done via a centralized management company. If a person gets injured on the property, the liability effectively gets capped at the liquidation value of the building.
>I’m not sure that these are all truly one-person businesses. In my reporting, I often come across firms with a regular team of 7 or 10 people, but only one or two classified as W2 employees and the rest working as contractors.
I have to agree, since I find it mind boggling that one-man construction firms are making millions.
I have to agree, since I find it mind boggling that one-man construction firms are making millions.
That's not that uncommon for a general contractor: you do project management and client relations, sub-contractors hire the people who string wires and swing hammers.
It would be interesting to get some data on typical profit margins among these firms. The few I know have quite low profit margins overall. An uncle of mine until recently ran a distribution business sourcing gift-shop items and selling them to gift shops, which would fall into the $1m-$2.5m-revenue category this article discusses. But his profit margins were typically ~5-10%, so he was basically netting a middle-class salary.
These numbers seem pretty misleading. What we're interested in are businesses that are started from scratch and derive their income through their own brand identity. What we're reading about are people who pass their consulting pay through an LLC for accounting reasons, or people who own income generating property through a holding company. This is more about how successful people are structuring their finances than about how people are achieving high incomes in the first place.
There isn't anything related to farming on there. Seems odd, especially when they're just talking about revenue and with how much money is in that sector right now.
At 6.60 / bushel corn @ 200 bushels per acre, it "only" takes 760 acres of corn to break the $1M revenue barrier. 760 acres isn't necessarily a lot and can be definitely run by one person, especially with some contractor help.
It probably has something to do with what's classified as a Non-Employer, but it just seems like it should be there.
It's interesting that technology businesses didn't appear in any of the top grossing slots. I suspect this could be because they get lumped into professional / scientific.
As a percentage of the US GDP, small tech businesses aren't much of a blip. Just think of all of those real estate brokers and investors, day traders, hair salon owners, construction contractors that churn through 1M annually in revenue. Every small town across the US has a pile of millionaires like this.
Yeah, the only reason I even clicked on the link is because I just assumed the majority would be tech businesses, eg mobile app developers. Guess im guilty of living in a bit of a bubble.
Which technology business model scales that way? Back in the days you could probably keep a 1-person business with shareware or packaged software sales, today with SaaS model one would be pushed into hiring support people rather soon.
26,744 had sales between $1 million and $2.49 million (up from 24,945 in 2010)
It's a 7% rise, in a year. Those who are in the $100k-$250k range, rose by 6%; not much of a difference.
When we talk (or at least from my perspective) about the rise of a group or minority, it means their growth is much faster than the average and they are probably doing some kind of disruption.
- Point 2
The author talks about the revenue. The revenue means little. Some solo-entrepreneur are selling their craft. A Software developer working remotely has almost no costs. Some are trading stuff. So their revenues are high, but not really their profit.
I know the IRS 15-A rules have a carve out for "computer programmers, etc" that limits how such employees can function as 1-person LLC's for the purpose of 1099 employment with a corporation. (That is, the IRS says in such cases we're employees and a 1-man business won't save you from that, so we should be W2'd). But that doesn't affect double taxation?
LLCs pass through the tax burden to the individual partner so whether that's RE or software engineering, there won't be double taxation on the partnerships profits.
In the 1980s we had a time when people in finance could bring their companies millions of dollars without creating much palpable value. We certainly have a new bread of Masters of the Universe.
The details behind the article show a less appealing reality than what we might hope for. Yeoman capitalism hasn't killed off VC-istan just yet. A lot of these $1M/year businesses are for, say, independent real estate brokers. Yes, there are people who get very rich in that game. There are others who fail horribly. I think we're quite a way from a society where talented people can find their way to, if not $1M per year, a reasonable approximation of their actual worth to society. (Fuck, I'd be happy with a regular upper-middle-class income if freed from subordination and its attendant mind-rot.)
Let's stop talking about revenues and figures of "$1 million per year" (because there are a variety of context factors-- geography, profit vs. revenue-- that make us question what that really means) and instead talk about growth. This is where it gets interesting. We can look at the growth/risk spectrum between gambler's ruin (take all nonnegative-expectancy risks; thus take over the world economy or die) and non-participation (take no risks; no growth above the risk-free rate-- minus management fees, of course). Most business activity is between those two extremes, but the very middle of that spectrum is underfunded and undersubscribed.
If you want to push for 150-percent-annual-growth-or-sudden-death outcomes like a sociopath gambling with others' money, ambitions, careers and dreams, then there are VCs will fund you, your pathological gambling, and (in most cases) your shitty personality cult. (That's the high-risk, high-growth route.)
If you want to work for some horrible, authoritarian corporation doing shit-ass-boring mediocre work and growing your salary at 7% per year (mostly, a reward for getting older because you're so disconnected from the real work that no one knows what you're worth) then... good news, that is available too. (That's the low-risk, low-growth route... except the long-term existential risks are pretty disgusting because a career of mediocrity, coupled with age, makes one untouchable. See: what fucking academia does to those who don't make it.)
What no one is talking about is the mid-risk/mid-growth range... 20 to 40 percent annual growth with some volatility, but not likely to ruin lives en masse. (You might have a thin year, but your average outcome is strong if you work hard, have the talent, and do the right thing. You just need discipline in your strong years.) The problem is that no one is funding that region of the spectrum. But that's the natural home for technology, research, science, as well as the yeoman capitalism that most of us would find much more rewarding (and scalable, and beneficial to society) than this VC-istan, Hollywood-for-ugly-people, bullshit.
You can get jobs at stagnant corporations and jobs (probably not founder jobs, unless you have the connections to partake in Stanford Welfare, but jobs with "equity") in the high-risk VC-istan space. No one seems to have any clue how to fund the mid-risk/mid-growth space, but that's where the future actually lives. See: http://michaelochurch.wordpress.com/2013/03/26/gervais-macle...
One of the key's to high incomes is personal spending habits. Spend 105% what you make and your stuck on debts treadmill. Spend less than 70% of what you make and not only do you have a cushion that lasts longer, but you can take a significant pay cut without issue. Now let's say you have a great idea, if your over 25 then scraping together 6 months living expenses pluss a little working capital is easy, by 30 taking 2 years off is not that risky. After that you can start looking into angle type investing. Granted, the risks are still there but being able to take more of them greatly increases your long term chances.
Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
The "barbell" strategy (avoiding the middle in favor of a linear combination of the extremes) is just such an effective model for society. And the medium risk space is perceived to be a sucker's game that combines the worst of both worlds (huge measurement errors of risk without the chance of outsize returns).
If it's a sustainable pace and you don't become so visible as to be a patent or other legal target you can quietly live very well on that or half that, etc.
Bottom line, there are an infinite number of places to end up between being nobody and being a Zuckerberg/Gates/Jobs and really, most of them can provide a good quality of life.