And I'd SERIOUSLY consider at the very least a) setting yourself up a SEP-IRA and b) socking away the maximum in an index fund. It is essentially monopoly money to you anyhow at the moment, right? Trust me, you won't regret having 30 years of appreciation on your monopoly money when you retire. (This will also simplify your tax planning for this year.) Index funds are a no maintenance investment -- as long as you can pretend that the money doesn't exist, you can get by with checking them once a year (or less!)

I do NOT want to invest in the stock market, or invest in anything long term like bonds or property. I want to somehow use the money to make more money quickly (within a 2 year time span).

Excuse me if I'm too harsh, but you should spend some of the money on a membership in Gamblers' Anonymous. Because you talk like a bad gambler. The hallmark of bad gamblers is that, if ever they get ahead, they look desperately around for a way to lose so they can get back to their comfortable status quo: Grifting, in poverty.

If you have money that you don't know what to do with, put it in some diversified investments that will make money over 30 years -- not two -- and forget about it.

The exception I'd make is the one patio11 cites: If investing a portion of your current profits in your current business will pay off, do some of that. But don't invest all your profits in this one basket: One of the most important forms of diversification is to invest in things other than your current project. You don't need another get-rich-quick scheme: You have that, and it even seems to be working. Good for you. Now hedge your bets with a get-rich-slowly-but-safely scheme.

You appear to be using a very roundabout way to say that there is no reasonably safe way to turn tens of thousands of dollars into hundreds of thousands in 2-3 years. If that's what you mean, just say so. Implying that everyone already knows this by insulting the OP doesn't really have the same effect.

Was that tepid enough or should I also insert a series of sleep-inducing legal disclaimers? ;)

The above advice is utterly conventional. Every reputable book on investing says it. Indeed, most books and pamphlets on how to get rich quick say it as well, in the footnotes that nobody reads. The brain slides off such disclaimers like water off a duck.

So one tries to find a more dramatic way to say the same thing.

And while I'm explaining things I thought were obvious: The OP is not a gambler -- or, rather, he has placed an intelligent bet and won: He is now making money hand over fist by building products that sell. Nothing wrong with that. Except that now the OP seems to be having that unnerving feeling -- which everyone gets at least once in their lives -- that he's missing out on something big, some kind of big secret to moneymaking that the cognoscenti know. And, indeed, there are people who make amazing amounts of money in 2-3 years. They do it by gambling -- and when gambling works, it works. It just doesn't work very often, and you rarely hear from the people who place risky bets and fail. One's mind often fails to register those people. Sometimes you have to take deliberate, dramatic steps to make yourself see them.

Time to plug Bernstein again:

http://www.amazon.com/Four-Pillars-Investing-Building-Portfo...

What you don't want to do is spend all your time reading hysterical ravings on the Internet and then somehow conclude that it is actually safer to blow all your money at the track, or on some crazy scheme to "double your money in two years". I don't care how scary the stock market is: It is less scary than whatever you plan to do to double your money in two years.

When the majority of people conclude that the "stock market is too risky", they usually look at the single problem of their investments tanking without looking at the bigger picture... which is:

First, if you invest money without setting a stop limit (rule #1 of investing) then you shouldn't be investing.

Second, if you invest in a quality index fund and you somehow do lose a majority of your investment (>50%), there are much larger problems at hand than just the loss of money. We're talking major economic / political / global unrest.

After witnessing the Sept 11th downfall and the October 2008 crash, I've come to the conclusion that there needs to be some damn serious issues to cause a significant loss in investments... Again, all of which could be avoided through proper diversification and setting financial loss limits.

----

As a side note, I do think many people got lucky taking the "too big to fail" approach with many banks that ultimately received government guarantees. I do believe, however, that the snap-back we experienced in 2009 is NOT going to be the same in 2010. Obama has spent insane levels of money to prop up the economy and this sort of stomach-churning level of gov. spending simply cannot continue. 2010 will be the year for finding individual companies that have survived the recession trimming, but I honestly can't see the DOW/S&P indices going much higher.

Index funds are typically managed (for a very low fee) in such a way that they track the market. That means that to lose all your money the entire market has to completely collapse to $0, which hasn't yet happened and probably won't.

This is different from investing in a single company (or indeed in a house) - single company stocks have frequently reached $0, and houses can get caught up in natural disasters. Gold melts, paper money burns, people die, startups fail... but the weighted average of the market only suffers from a little bit of irrationality every now and again.

EDIT: It's also possible that the company managing the tracker could go bust and/or make a huge mistake. That did happened to one UK index fund and cost the participants about 10% of their accumulated capital. Spreading money around is the only way to limit your losses when the universe decides to hand you a truck full of bad luck.

You wouldn't tell this guy to learn to day trade or go into real estate. He's not going to buy savings bonds or open a money market account. He's not going to put it all down on gold.

So what is he going to do with his money?

Seems to me for any kind of investment, there are risks that could destroy it - houses can burn, companies go broke, money can be devalued, and so on. So some diversification is essential.

It's not a '2 year high return' but like some of the other commenters have said, you're not going to find that.

Congrats on the app store success, I'd love to pick your brain. I'm currently working on some games for the app store , what type of apps have your written?

Have you thought about taking some of the income and using it to hire other developers to increase the number of apps that you've got being developed at once? It seems like you know what works and doesn't work on the app store, so it would probably make sense to start trying to make your efforts scale up.

things that i would add:

- consider just sitting on (some/most of) the money for a while. you don't need to make a big hasty plan and execute just because you have some cash to spend right now. thats not to say do nothing. just don't throw all your resources at something immediately just because you have the resources to burn.

- diversify. as you said, the app store won't be forever. try looking into other things that are either just becoming viable for development, or things that are going to be longer-lasting.

- pad your account. no matter what you do, there will be dry times and hard times. make sure you're good to go for that. stash some money away while you have it.

Since I tend to agree with that assessment, I couldn't recommend doubling down on building apps.

There may be other good reasons to consider that, such as moving in another direction (consultancy, which raises the interesting question: is there a such thing as iPhone app consultancy?), but not for that reason alone.

Edit: Google says that there is such a thing. It strikes me as likely that would be more stable long term, and, potentially, even more lucrative.

However, there is still a metric shit-ton of money to be made on the app store. I don't see people leaving it in droves immediately. He knows how to make money in this environment right now, so in my opinion he should spend at least some of the money he wants to invest on something he already knows how to do well.

I just don't see the wisdom in avoiding a marketplace you already know how to make money on; even if it has a chance of going away. Max has already proven that he is able to identify a market and take advantage of it once, who is to say he couldn't take advantage of the "next big thing"?

Then with the last %25, use that to invest in more appstore / development projects.

Why not do more of it? Scale up?

Incorporation is still a good idea, for other reasons (simplified banking, limited liability, etc).

Luckily for the OP he is likely in a relatively safe position. If his app store money fails, he likely has the talent to quickly jump into a development job somewhere else, and not have any capital tied up. So long as he keeps well away from debt, incorporation isn't a big deal. However, as he stated he wants to make more, which tends to incur risk-taking, which limited liability is ideal for.

I've seen several horror stories of genuine hard-working people lose almost everything because they were fully liable. Yet I've seen some very lazy, non-talented people lose virtually nothing because they incorporated. I know of one guy who lost hundreds of thousands, and still managed to retain control of his business after the banks stepped in. They now own ~40% of his company, but he's still earning the same wage.

On reading your blog it looks like you're already going down this road?

You might also use some of your money to pay another guy to polish your writing. Or to compile it into a book.

You invest your current 24,000 and each month you add 20,000 to your investment. Let's further assume that you can achieve an annual return of 3.5% and that return is evenly distributed over the year. In this scenario you'd end up with $520k after two years. You're half way to being a millionaire.

If you instead contributed $25k each month you'd end up with nearly $650k after two years. That's 50k above your contributed principal or an 8.3% return over two years. Further, your risk is significantly reduced over any other get rich quick scheme and this allows you to continue to focus on what you're doing.

As for your problem, do what most people say here: invest in the best asset you know: your business model. If you are very lazy, then just simply figure out how to let someone else do the work.

And I wonder if you meant that question seriously? The wording sounds awfully naive.

Invest the money in yourself. Bank it and use it so that you can ensure that you aren't going to need to spend your time making somebody else money in the future.

Some people have said to invest it in companies...the thing is that you are a company and it sounds like you're a pretty profitable one.

Set yourself up as an _angel investor for iPhone apps_. Like a mini-mini-mini YCombinator.

Based on your experience, you should be very good at evaluating an individual's chances of creating a successful app. Solicit pitches (HN would be a great source) and make 5 small investments of $5k each.

If you make another $25k next month, do another 5 investments. Rinse and repeat.

You probably can't produce 5 apps per month on your own. But you can use those same skills to invest in 5 apps per month. There is greater risk (you could lose all 5 investments) but also greater reward (each investment could in turn become its own $25k-mo company).

Good luck!

I will fight your link with another link:

http://www.sec.gov/answers/rule504.htm

Given your track record with app development, there would certainly be demand from third party investors for the expertise you bring to the table. Simply offer investors less preferable terms than those you are able get from the app developers that pitch their ideas to you.

Not the easiest approach, but after addressing any regulatory hurdles, lining up investors and getting a system in place, you can focus on investment opportunities and leverage up the capital you are currently earning.

Your passive investors will be more likely to part with their money if you have some skin in the game yourself. This will have the added benefit of allowing you to diversify into a wider range of apps with higher monetary barriers to entry.

For example, if I had an app called "Table Tennis" it will make money. If I had an app called "River" it is less likely to make money, unless strongly externally marketed. First app has search right from release, and everyone gets it instantly. Second app says nothing from the name and nobody searches app store for "river".

You need a constant low source of users for word of mouth to work.

For example, if you carefully built apps and they seem to be selling well hiring a bunch of people to build more apps may not work. The apps may not be of the same quality, you may not be able to communicate your vision adequately to them, and maybe just timing is incorrect now.

Personally I would continue doing everything you are now and completely ignore the money side of things. Pay your taxes and pretend that money doesn't exist. Keep progressing forward and see if you can continue increasing revenue.

Use some money to cut corners if you can, but throwing a bunch of money at a problem doesn't tend to have a good success rate.

edit: Also by looking at your uploaded image - it looks like you half your income this year is from the last month. Try to keep pushing growth forward, whatever you have been doing is working well.

What do I do with the money? How do I invest it in making more money quickly?

Little effort, fast return? Then you need to take high risks. Is that really what you want? Maybe you'd be better off trying to scale your skills (which have gotten you this far) by expanding into other platforms/niches? Contracting out some of the work could help.

As others have pointed out the best asset you have is your ability to crank out mobile apps that people are willing to pay for. Not to burst your bubble, but even $24k a month is nowhere near enough for you to kick back and watch the returns flow in. The investment opportunity you seek--short term, high return, low risk--simply does not exist. If anyone attempts to convince you otherwise, reach for your wallet, because you are being had.

1. Look for a niche that hang around online, but don't know much about web stuff. Mumsy things, crafts... anything that's a tightly knit niche

2. Find their forums/blogs etc, and ask them what would make their lives easier? What would be the one thing that would be awesome that they want.

3. Build it. Possibly hire people to help you

4. Have a free, lightly crippled version (so it's still highly useful and awesome, but clear there's more awesome where that came from if they cough up)

5. Hire (hint hint) an awesome marketer and copywriter to design, write and perform ongoing analysis and optimisation of the sales funnel, traffic generation and site navigation

6. Reinvest the money in entering more niches, and refining the process

You should be able to launch a site a month, with an average sales volume of 7-15k from each site after 6 months or so. 12 months down the line, that should be earning you upwards of 100k p/m sustainably, with a max of 4 employees. I'm fairly sure you can live off that.

Here's something I just tried to see if it might help someone looking for a niche (since almost all are massively saturated, at least at first glance):

Hit Dmoz, control-click five sections on the front page. For each tab that's opened, choose a sub-sub-cat pretty quickly (maybe don't overthink your choices, but don't necessarily go for the largest option). If necessary, choose again on the next level. That should give you five things to look into further. I ended up with:

  http://www.dmoz.org/Home/Family/Runaways/
  http://www.dmoz.org/Reference/Knots/Fishing/
  http://www.dmoz.org/Reference/Education/Instructional_Technology/Organizations/
  http://www.dmoz.org/Health/Senior_Health/Fitness/
  http://www.dmoz.org/Shopping/Food/Smoked/

http://seoblackhat.com/2007/02/21/online-business-niches/

However, they're hardly niches and would be thoroughly dominated by MFA stuff already with little room to drive in a wedge. You could however pick a few of those, do keyword research on each and then pick a three-word keyphrase from that wider list to think about and focus on? I wouldn't bother going after a single keyword or even two-word phrase as the competition will be too fierce.

Happy to trade emails if you want to bounce any ideas off me. Can't promise anything useful or insightful, but hey, it's free to try! My background is 12+ years web development (backend and frontend) with side projects in forum/community, some passive content sites geared around AdSense plus bigger ideas that I struggle to find time to work on.

  "Never give financial advice for free: 
  if it is good advice, you won't get credit, 
  and if it is bad advice -- you'll get the blame".

tl;dr - If anyone knew of a way to turn 24k into millions, why would they say how to do it for free?

Because people are social creatures and often take great pleasure in talking about something they know a lot about and may have difficulty finding many people that really want to listen/discuss it. Besides, as gets stated here often, a great idea isn't worth much. You still have to put in the time and effort to get any payoff. So it's not much of a threat, really.

He's asking, in essence, how to get rich quick. If i have a grq idea, i'm either already doing it and getting rich, or planning on doing it (raising capital, finding co-founders, et al).

That still won't prevent some folks from wanting to discuss it just because that's the kind of thing that floats their boat. Maybe you aren't that type. Some people aren't. But some people just like talking about stuff. <shrug>

Build a site where the only goal is to serve ads and get visitors. Give away N of your ad revenue to a random visitor. Write viral hooks into it to propagate it faster. Of course it won't work for long - someone will eventually try to increase their chances by registering thousands of accounts - but while it works you could probably make a ton of cash.

Edit: perhaps with his appstore experience he could do this on the iphone - figure out a way to make it cost prohibitive to register thousands of accounts by tying accounts to a phone number?

In addition to your concerns, I will add that people seem to typically get rich pursuing a niche market which is a good fit for them as an individual. Which means a potential billion dollar idea is only a billion dollar idea for some people and not just anyone....um, which comes back to "execution", I think. :)

Nice chatting with you. I should probably shut up now and let people carry on with discussing what this individual might want to do with their money.

If you are an expert in making money there, ride that wave -- looking for something comparably-lucrative-but-different is a distraction. Optimize the hell out of your current flows -- find ways that spending $1 in marketing makes you >$1, create small variants, port to other platforms, outsource -- with careful metrics so you detect early when your strategies are played out.

Meanwhile, on the side, sock some away in a completely safe non-distracting portfolio. When it makes sense to turn your attention elsewhere -- either out of the app store opportunity ending, or a desire for something new -- then that safe cache of money will help. But at this point, you've already got a lucrative place to spend your attention -- why dilute it with other plans?

If you have not bought a house yet then I would look into doing that and taking advantage of the 8k tax break for first time home buyers. Sounds like you have enough down payment to cover 20% and get out of the PMI insurance.

You might use that money to hire another developer you can train and crank out more apps, and hit the android market as well.

Once it expires there should be a large influx of new homes for sale which will drive prices down. It's a game of buying now for the tax credit and 'saving' $8,000 or waiting a few months and possibly saving $20,000 because home prices have dropped.

Assuming you can pinpoint some of the secrets to your success (or, more importantly, things that sound like they will help people succeed), you can write a book, start a subscription website, etc selling those tips. Saying "I'm making $24k from a wide variety of apps, and it's just me in my free time" is a pretty good selling point.

First: I echo the previous posters urging you to reconsider the stock market. It's low maintenance and is a nice way to diversify away from your business if you feel it's not sustainable.

I just reread your post and noticed the implication of "I do not want to invest...long term like bonds or property". If you plan to need/use the money within, say, 5 years (preferably longer) the stock market isn't for you--so you're doing something right there by not wanting to go with stocks. I just think that people are urging you to think long term

That said, you want to make money fast short term. I will add to those pointing out that this is generally difficult. However, you do have at least one good idea proven to work at the moment: your success in the app store. Your best bet to make more money quickly in the short term is to attempt to scale what you're already doing. Note: this may not be possible. I still think it's your best bet given the constraints you give. You're worried about time investment, but that's nothing that hiring someone can't alleviate (but not remove).

Finally, care to answer a few questions about your success? I imagine you're hesitant to share more identifying info, but how about things like what you do for marketing? Or how much time it took to get to this level, how many apps, and how much time it takes?

So start paying up your debts. Did you say you don't have any? that's a lie: you owe yourself some (a lot) working hours for programming, distributing, promoting the app.

Also, you had to buy a mac which is also an expense, an iphone or ipod touch, etc...

Step one: sum all that money. Put it wherever you like and feel free to spend it: It's your delayed salary.

The next step is trying to figure out how much money you need to "forget" about getting money everyday.

Maybe 10k/month or 20k/month to cover all your living expenses and get all (physical) things you want without having to worry about money. Let's suppose you're happy with $20k/month (tax free, of course).

Step 2: How much money do you need to have to get $20k in interest ? Figure out that sum. Remember that next year today's $20k will be something like $19,002 or something like that.

First: Keep making money (selling your app, and building one or two more).

Second: Invest in something like bonds (us, corporate bonds, etc...) with good credit rating. You may earn between 1.5% - 8% yearly (if you can buy bonds at discount, better).

Third: Invest in stock, funds, etc... just follow the tide: don't try to outsmart the market because you will fail.

Fourth: When you have time, start looking at derivates. Then, build your own guaranteed-credit deposit with options and swaps. Beat next year inflation (mostly on autopilot).

Five: Enjoy !

And no, don't pay your taxes YET. I would actually invest in hiring some artists and developing even MORE apps. Maybe just outsource their development. It can be a lot of headaches but if you were able to code the apps yourself then likely you can extract decent work out of shitty Indian or Chinese consultants.

Or, find some people here in the states and convince them to work for you.

Keep growing your business. Become a player.

Or, retire to a cheap country and fuck girls and and enjoy life.

That's my advice.

-Calin

Also keep in mind that was during the holidays it seems or maybe after a few game launches that did well. You won't see the same level of revenue steadily unless you keep releasing and have good pricing strategies.

My advice, save it up or use it to reinvest in your own company for now.

Consider:

Sole Propietorship: taxable income is equal to whichever is lower, gross income minus expenses or gross income minus the standard deduction.

S Corp: you subtract expenses from the corp's income, and pay your self, say, 60% of the remainder as salary, which is subjected to payroll tax. However, you calculate your taxable income by subtracting the standard deduction from your taxable income. The corp then pays its half of payroll tax, but you can take the remaining income (not paid to you as salary or used for expenses) as a profit distribution, which is only taxed at capital gains rate.

So all in all it can save a lot of money, particularly if you have business expenses (which in a sole proprietorship are eaten up by the standard deduction)...

Note: You have to do payroll every month for it to be legit with the IRS, and you need to file taxes once you create the corporation, even if your situation changes and you don't use the corporation for anything. You also have to pay yourself a reasonable salary. If you're a single employee S Corp then it may be wise to pay yourself > 50% of the corp's gross income as salary, to avoid arousing suspicion that you're doing the s-corp purely as a tax shelter.

SE tax rate. The self-employment tax rate is 15.3%. The rate consists of two parts: 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance).

http://www.irs.gov/businesses/small/article/0,,id=98846,00.h...

When I contract, sell products etc. I expect to get about 55% of the revenue after taxes. That is actually a bit low but it is a good number to use to make sure you are charging enough. So if you work for $70/hr you are actually working for about $40/hr and so on.

Get a basic plan together on how you are going to grow the business, then take it out and talk to a) companies in the same space, and b) VCs. Get feedback and adjust accordingly to what feels right. If growing the business takes outside capital, raise it. If it doesn't, then start down the path of growing the business (according to your new plan).

I think investing in other startups is bad advice. You aren't making that much net right now - maybe on the order of $14K net a month past taxes. It's a good living, but if your sales are dependent on continued development/advertising/luck/whim of Apple, I'd be REALLY careful about expanding spend to fill the income.

Out of curiosity, which apps did you do?

With the whole financial meltdown, the stock market tanked, and there was no doubt they'd go back up. A year ago, even though I was 15, only had a grand or so, and needed the money a year and a half from then for college, I considered the stock market because I knew they were going to shoot back up (and they did).

So if it were a year ago, I would be screaming stock market at you. But now the Dow is back over 10k, so I see it as a much more risky move. That seems pretty high considering the current state of the economy.

But if you see it fall back down toward 8k, I would buy, as one can be pretty certain that it will be back around 10k sometime in the next 2 years. Also, right now, interest rates are in the toilet, but stock dividends from most companies are actually paying decent rates.

Note: not saying it's a bad idea, but he's asking for something to quickly make a LOT more money. Your advice, while likely sound, isn't going to accomplish that, unless he can pick one of those lucky stocks (like Akamai was at one point) that goes up 33x in a year.

Second note: What he is asking for is a pipe dream. If it was that easy to turn 24k into millions, there'd be a hell of a lot more people doing it. 24k isn't really that much.

What do I do with the money?

Invest it in stocks or bonds.

How do I invest it in making more money quickly?

You don't. That's the problem: there is no way to reliably do this. In fact, there's probably no way to _unreliably_ do this either. At the moment, bank savings accounts and CDs are paying next to nothing.

As The Millionaire Next Door shows, most people who we might think of as "rich" don't actually get that way by being sports stars, or inheriting money, or TV, or whatever: they get that way by spending less than they make and saving as much as they can, usually in the form of investing in index funds.

- Hire a few contractors to grow your stable of apps. You seem to know what works. Expand on what you're doing so you can do more of the same.

- Build your brand, that way you can use the market you've built to transfer interest from one app to other apps, (as you've been doing on line with your excellent blog posts).

- Figure out a way to diversify your revenue stream. You're already concerned about the app store closing or changing. Hire someone to port the apps to Android. I think that's a long term play, but if Android takes off, I think there's a large upside potential.

Here are the questions I'd try and answer first:

1) What sort of life do I want for myself? Do I want to keep programming cool stuff as ecosystems come along? Do I want to manage programmers? Do I want to run a business, become an internet marketing guru, based on my experience, or try and live off of passive income?

The answers to those questions will shape your decisions, whether or not you're thinking about them. If you do think about them, you'll have a better shot at structuring a good outcome for yourself.

Based on your post, it sounds like you currently want to double down your current income on the hopes of getting 'rich'.

Here's what I'd guess: I'd guess this is your first 'business' venture. It's gone really well. You are used to seeing such rapid returns in business because it's all you know. You are now trying to invest more money than you previously have (since your time was not previously worth $24k / month), and trying to get the same rate of return.

You will do yourself a huge favor if you give up on this plan. It is incredibly unlikely to happen. I'll be clear: my guess is that you are currently experiencing the best ROI you will get in your entire life. Never again will you see these sort of _percentage_ returns on your money.

That's of course very different from what sort of _dollar_ returns you may see.

If you're able to give up on your high ROI dreams, you'll be doing yourself and your family someday a giant favor.

Now, if you're still on board with me, you're wanting to invest this money, but you understand you need to follow the basic rules of capital, make sure you can preserve your capital at all costs, and need some way to deal with your total incompetence in the area of financial investment, while learning, and without losing your nest egg.

Simplest advice here is to 1) choose some areas you're interested in, 2) give yourself a couple _years_ to fully deploy the capital in those areas of interest, 3) keep 3 to 6 months liquid assets in case your business blows up.

If I knew no more about you, I'd probably go with some average of the advice here:

Split up your money into

a) reinvestment, become an app store publisher or app store angel investor with 33% of your money. Stick with what you know here, and it will magically become investing rather than 'gambling'.

b) cash -- 33% toward high liquidity cash alternatives until you've got 6 months or so set aside

c) long term investment -- 33% into index funds, split up between national and international super low load index funds

Don't forget to hold onto .3-to.4x of (Revenue minus a) for taxes, or .4xRevenue depending on how you structure your investments.

So that would equal like:

$24k

- 3k living expenses

- 7k deductible investment (a-la signing up apps to publish them)

- 7k taxes

- 3k cash

- 4k long term investments

----------------------------

super-smart young business person.

That's not quite what my upper paragraph math was, obviously the more you can put into the deductible column, the more efficient you'll be. You could rebalance it to like 4.5/4/5 or so with the balance going to taxes, if my back of the envelope calcs are accurate.

given that, two approaches make sense to me:

1 - treat it as a lucky break and consider how best to make it last over the long term, as a one-off. but you say you don't want to do this in your question.

2 - try to somehow increase the odds of getting lucky again. you can use money to improve your chances in various ways: by improving your skill set; by allowing you to fail more often before you starve; by out-sourcing work not associated with "taking a chance" to someone else; by entering a market with a higher barrier to entry (where you need to invest more up-front) but with, hopefully, less competition.

perhaps the best approach is to see (1) as yet another way to do (2). in other words: invest the money so that you have a small but reliable income over as long a period as possible (a ramen fund, if you like), so that you can keep trying new ideas.

ps i think the biggest argument against the "luck" hypothesis is that very rich people tend to get richer. but i suspect that's because they exploit information available only to people in their position; $24k doesn't buy your way into that.

which suggests another approach is to use the money to find ways to extend how long this can last. for example, by porting to android.

Thanks!

Also, read this, http://blogmaverick.com/2006/01/02/my-investment-advice-for-... & this http://blogmaverick.com/2008/10/04/how-to-get-rich/

There's no way to multiply that little money in just few years by investing it without jeopardizing it all. You won't even qualify as a professional investor as you don't have enough money for it, so your options would be limited anyway.

If I was you, I would try to milk the app store as long as it's good and network like crazy while doing so. Focus on quality, not quantity - find out the guys who actually get top-notch shit done. Get yourself known, you should be able to build some steady secondary income by telling how you did it and how iPhone apps should be done.

When your app store income is drying up, you should already have $100+k in the bank. Go through your network and find some other overachievers who are bootstrapping a startup with a solid business plan and who need your skills. Apply some of your capital as a seed money to get leverage. Work your ass off for a while. Profit. Retire or repeat.

You say you don't want to invest, but since California is in the first stages of being hit by an epic storm system that will play out over the next 2 weeks, civil engineering businesses on the west coast are about to be handed as much work as they can handle.

Or talk to pg about putting some into ycombinator. With the relatively small investment to each selectee, you don't need massive amounts of capital. You could even stage your own little competition on HN and offer $500 or $1000 plus your (probably more valuable) management guidance to three worthy candidates whose apps impress you in exchange for a share of their revenue.

Is ycombinator taking investment? I thought it was closed.

As life continues, you'll find yourself with increasingly more disposable money (hopefully), and directly investing in yourself doesn't scale (either it's too risky or you can't use it to make yourself more productive).

Sadly, eventually you have to invest in other countries, companies, assets, or people; in short, invest in something you wish you could control more.

It's a good yet stressful problem to have, but maybe the most comforting tidbit in your case is I doubt the windfall you earned is a one-time thing. The lottery winner or not-so-bright heir to a sizable inheritance is in worse shape.

>I want other type of things that do not require much time investment, but give as good returns as that.

Why do you not have time? I presume you are referring to the time required to, say, manage rental properties? You've already proven that you're very good at creating software users want to BUY(!), so why not take some of the time that this money affords you (pay a maid, etc.) and figure out something more substantial to build while you're still able to milk the app store cow every morning?

I tend to lean towards our current irrational spending/printing resulting in hyper-inflation (or at least inflation) though plenty of smart people support deflation, too. If you buy the inflation arguments, don't keep your money liquid. i.e. If you buy a $500k house and inflation drives it (any everything else) up 10x to $5m, you bought a $5m house for a song. If you keep $500k in the bank and there is 10x inflation... Ouch.

The U.S dollar will stay weak because this promotes manufacturing, which is what the U.S needs to be doing right now. But it will not weaken much more.

The one thing you can use to measure the long term financial stability of a country is its infrastructure, and when you start seeing roads decaying then start expecting inflation in a year or two. Till then, things are fine.

http://en.wikipedia.org/wiki/Inflation http://en.wikipedia.org/wiki/Deflation

Kudos on the success, though.

This type of strategy leverages your experience & diversifies your revenue streams w/ very little capital requirements....to make serious income you want to move beyond just creating apps which may have very short life spans. Good luck

One can never know if everything will fall perfectly in place the next time.

If you’re looking for investment tips, I recommend the book A Random Walk Down Wall Street.

If you’re looking at the broader question “what should I do with all this free cash flow”, hiring someone else (as many others have suggested) isn’t a bad idea, as long as you think that the time freed up by delegating work to someone else will free you up to work on your next money-making project.

Invest in startups - You might see amazing returns in ~2-5 years, but the risk is very high.

High risk hedgefunds - All equity/bond/commodity investment doesn't have to be slow. It can be risky and full of high returns/loses.

My favorite idea... Expand what you're doing: Use your proven track record and revenues to bank roll your own app store based startup/shop. Hire some people, branch out a bit and look into the android platform. You can avoid the need to take money from outside investors, and multiply your money that way.

With the kind of money he has: Costa Rica, South of France, Tahiti, [insert sunny place]. Mojito Island

Here's an idea: have your cousin in the Illinois state legislature throw you some lucrative contracts. That's the kind of get rich quick scheme that works. Don't have a cousin in the Illinois state legislature? Then you'll have to do something that requires more time investment if you want both a reasonable chance of success and a high, rapid ROI.

Downside - this can be an ethically-challenged business. But so are most 'make money fast' schemes.

Just about any other business you'd name is also risky. (and if folks in HN know about something, you know you'll have competition). So no matter what else you do, keep a cushion. There's story everyday about formerly successful entrepreneurs who lived beyond their means and wound-up broke. Don't be them.

Cash is very useful. Do not downplay that.

Start thinking about having a family. Save money for your kids education. Save money for your parents. Save money for yourself for the old age (retirement plans [whatever the shape and form is], hospital bills, traveling).

Also, there are bond ETFs/funds that are very liquid. I am a big fan of the JNK ETF (~11% interest).

2. Then, I'd personally either invest in gold or silver 1 oz bullion. Apmex.com is a great site to buy from. Chances are extremely slim that you'd lose the cash your making, if you convert to gold.

3. Keep some in a money market account, like EmigrantDirect.

EDIT: Plus by starting a company you'll immediately promote yourself to CEO. If you ever get a job again in the future, it'll be at a higher level, more pay, etc.

Congrats by the way!

The turn around is probably longer than 2 years though.

Can you do the same thing with the Android store?

What would you do if you had already made yourself rich? What would you spend your time on?

Why not start doing that right now? Why do you need to "make yourself rich" before you can do it?

But as long as you're having fun finding ways to make more money, there's really not that much wrong with playing the money game. Just don't care too much about money :).

But if not, an ING direct savings account is a good start.

And talk to rich people, to see what they are doing.

But I agree: I doubt Max has as much of an advantage in evaluating promising targets for microloans than he has building software.

Max out your IRA, Roth, etc to take advantage of your (I'm assuming) youth and the magic of compound returns.

You really don't need a lot of money to invest. Just look at the HN model. As an angel all you need is 25K to get into most early rounds.

But at an angel level he probably only has enough to invest in 1-3, even fairly small rounds. So it's not too unlikely that all 3 of those companies fail and he loses it all.

High-risk bets, even those with high expected values, are bad if you can't afford to make the same bet enough times.

You've already proven that you are capable of doing great things. Work to increase your capabilities.

To generate wealth, in my opinion it's best to do things that are aligned with what you are interested in. Since you have demonstrated ability with business and technology, and some capital, start with that.

One way to generate wealth is to start a company, then sell it. There are many skills necessary, but the essential one you already have - being able to just plunge in and do it.

I'd say, dive in and see if you can learn to build a small company by bootstrapping it - without taking investment money or going into debt... take it slow and incremental, not going into debt or taking investment unless you think you have a winning team and product. Usually at that point you don't really need investment, but can use it to expand a lot.

These days, software development done by yourself or a few friends and servers in the cloud are so cheap that you can build whole software or software-as-a-service companies with your existing cash flow. Learn the technical and business skills you need. Plan experiments that help you learn - that won't kill you if you fail. You can learn much more from failure than success, so make mistakes as fast as you can.

Oh yeah, and find a good accountant and make sure you pay your taxes.

Here's some resources:

Cheat sheet on how to get people to change - and buy your products. The best summary I've read:

http://www.chrisoleary.com/projects/TheParadoxOfPain/Documen...

. . . .

My bible on how to learn customer problems and turn them into money. Also has a great annotated bibliography of other good books to read, and a methodology for becoming a self-taught entrepreneur. The author founded 5 well-known tech companies that did IPOs, generating a great deal of wealth, and now teaches at Stanford business school. I can't say enough good things about this book:

The Four Steps to the Epiphany - Steve Blank http://www.amazon.com/Four-Steps-Epiphany-Steven-Blank/dp/09...

. . . .

The inside story on nitty-gritty details of how to start a start up, do the legal work necessary to create the machinery for wealth generation. Written from the perspective of helping tech entrepreneurs protect themselves. If I would have had this book when I was starting out, I'd have held on to much more of my wealth:

High Tech Start Up - John L. Nesheim http://www.amazon.com/High-Tech-Start-Revised-Updated/dp/068...

. . . .

Last but not least, a very important short text on how money works. Written by the founder of MasterCard. Extremely helpful in thinking about money, how to work with it and think about it, what it's good for, not good for, and its capabilities and place in ones' life:

http://www.amazon.com/Seven-Money-Shambhala-Pocket-Classics/...

Bonus text - the classic manual on leadership - really helpful instructions on gracefully working with others. How to lead effectively and with a minimum of muss and fuss. This is my favorite translation.

Tao Te Ching - Lao Tzu, translated by Stephen Mitchell http://www.amazon.com/Tao-Te-Ching-Stephen-Mitchell/dp/00608...

- a serial entrepreneur

2) I'd talk to financial professionals to figure out how to structure things for maximum gain (e.g. what can you legally write off? can you create retirement programs for yourself? etc.)

3) I'd take classes in my areas of weakness, so I'm better prepared for the Next Big Thing.

Or your could simply re-invest in yourself. Could you scale what you're doing with more resources?

Jesus I wish I was in your shoes.