Former SpaceX engineer on divesting a windfall

When I'm tackling a problem in private wealth, I'm thinking about how risk morphs.

I'm thinking about cash flows and I'm thinking about taxation.

And like those three elements are all interrelated.

But the systems that we're talking about are just complex.

And there are lots of, like you said, knobs.

you know, that you can turn to affect different outcomes.

And like, oftentimes, I'm just building that stuff from scratch.

I'm trying to understand how these elements change over time.

There's a saying in engineering, all models are wrong, some are useful.

I like to make high conviction, weak statements, right? Where like, I'm certain that this general trend is true.

Like understanding the shape of the domain, right? Like, is this a wide...

shallow peak where like, hey, as long as I have the settings somewhat within this regime, it's not actively dumb and all of them are probably about right? Or is this like a very gnarly kind of jagged domain where like, oh man, if I get this a little bit wrong, that leads to ruin, right? So I like to understand the shape of those different things.

I like building models and then asking questions of it, right? So once I have the basic mechanics in, it's about plugging in other strategies and letting it rip and seeing how it comes out on a probabilistic basic.

Basically, the main machine or the way I think about this is I convert everything to an iso-risk surface.

So I adjust.

I have some basic primitives there.

that are saying like, here's the strategies, here's the liquidity waterfall, here's the if-then rules, now go, right? And there's usually at least one knob of like, say, withdrawal or like some net worth in which you pivot hard.

And you basically adjust those live knobs such that all of these strategies and like all of these slightly different settings then technically have the same quote unquote risk of ruin.

I like to say where it's like, okay, you've reduced your spending to the amount that you are as likely to go bankrupt with this strategy as this strategy.

And then the metric of merit that you can look at between them is like, okay, what sort of withdrawal could you withstand? Like what sort of terminal net worth did you end up with? And that way you can really kind of, it's about taking things which are very, um, And honestly, that's the thing is I don't know how anyone else could have an intellectually honest opinion on which of these is better absent that level of rigor, because it kind of takes that right.

And yes, that's an extremely quantitative solution, but it's also a very quantitative problem.

And like, besides that, you're left

with effectively vibes.

Tons of vibe.

I mean, so, so, I mean, like some of my work in this space is like, is quantifying as much as possible.

When I'm tackling a problem in private wealth, I'm thinking about how risk morphs.

I'm thinking about cash flows and I'm thinking about taxation.

And like those three elements are all interrelated.

But the systems that we're talking about are just complex.

And there are lots of, like you said, knobs.

you know, that you can turn to affect different outcomes.

And like, oftentimes, I'm just building that stuff from scratch.

I'm trying to understand how these elements change over time.

There's a saying in engineering, all models are wrong, some are useful.

I like to make high conviction, weak statements, right? Where like, I'm certain that this general trend is true.

Like understanding the shape of the domain, right? Like, is this a wide...

shallow peak where like, hey, as long as I have the settings somewhat within this regime, it's not actively dumb and all of them are probably about right? Or is this like a very gnarly kind of jagged domain where like, oh man, if I get this a little bit wrong, that leads to ruin, right? So I like to understand the shape of those different things.

I like building models and then asking questions of it, right? So once I have the basic mechanics in, it's about plugging in other strategies and letting it rip and seeing how it comes out on a probabilistic basic.

Basically, the main machine or the way I think about this is I convert everything to an iso-risk surface.

So I adjust.

I have some basic primitives there.

that are saying like, here's the strategies, here's the liquidity waterfall, here's the if-then rules, now go, right? And there's usually at least one knob of like, say, withdrawal or like some net worth in which you pivot hard.

And you basically adjust those live knobs such that all of these strategies and like all of these slightly different settings then technically have the same quote unquote risk of ruin.

I like to say where it's like, okay, you've reduced your spending to the amount that you are as likely to go bankrupt with this strategy as this strategy.

And then the metric of merit that you can look at between them is like, okay, what sort of withdrawal could you withstand? Like what sort of terminal net worth did you end up with? And that way you can really kind of, it's about taking things which are very, um, And honestly, that's the thing is I don't know how anyone else could have an intellectually honest opinion on which of these is better absent that level of rigor, because it kind of takes that right.

And yes, that's an extremely quantitative solution, but it's also a very quantitative problem.

And like, besides that, you're left

with effectively vibes.

Tons of vibe.

I mean, so, so, I mean, like some of my work in this space is like, is quantifying as much as possible.