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    HomeSuccessYoung Success41-year-old was fired from Facebook in his 20s—now he makes $3.3M/yr running...

    41-year-old was fired from Facebook in his 20s—now he makes $3.3M/yr running his own tech company

    Noah Kagan at all times desired to be wealthy.

    As a school-age kid, he sold Costco pencils at a mark-up to his classmates and as a preteen, he pocketed the cash his mother gave him to spend at his summer camp’s canteen. He tried out the standard carousel of teenage jobs: retail gigs at Macy’s and OfficeMax, counseling at a pc camp, selling popcorn and candy on the baseball field.

    But as a native of Silicon Valley, Kagan knew that the pathway to riches ran through the world of tech. “My dream was Microsoft. If I might be around Bill Gates, who on the time was iconic … that is the path that I desired to follow,” he says.

    Kagan’s parents took him to go to the campus in Redmond, Washington, for his 17th birthday.

    In 2005, at age 23, Kagan found himself working for what would turn out to be one other tech giant with an iconic founder: Facebook. And in a story that everybody in enterprise capital and tech circles has a version of, he might have been very, very wealthy had things worked out. Kagan’s position paid just $65,000, but additionally got here with a 0.1% stake in an organization that is currently value about $947 billion. Do the mathematics.

    Facebook fired Kagan in 2006 after he leaked company information to the press at Coachella.

    “I used to be shocked,” Kagan says. “I’m 24 years old and dealing what I consider is a very powerful thing on the planet. I lived in a house with six other Facebook people a mile away. So it was my entire, frankly, existence.”

    With he good thing about hindsight, though, Kagan, now age 41, admits that the firing was not only justified, but additionally put him on a path to where he ultimately desired to be.

    Noah Kagan, 41, is the founder and CEO of discount software website AppSumo.
    Camila Ortega for CNBC Make It

    “It’s a great experience to get fired and realize, it is advisable to take control of your individual destiny and be an entrepreneur, and you’ve gotten that choice to do what you wish to do,” he says.

    He’d go on to just do that, founding discount software website AppSumo in in 2010. Last yr, the corporate generated about $80 million in revenue. Along with his roughly $200,000 salary, Kagan took in a $3 million share of his company’s profits.

    Add in some real estate income, and Kagan made $3.3 million in 2023. He and his girlfriend, Maria, split their time between her apartment in Barcelona and his house in Austin, Texas. At year-end 2023, Kagan calculates his net value (the worth of his money, investments and real estate holdings minus mortgage, bank card and other debt) at about $36 million.

    In other words, after some ups and downs and trial and error, Noah Kagan is wealthy, and having fun with it.

    “It definitely makes me happier each day,” he says.

    Wanting money, but knowing it could ‘go away’

    Early in his profession, Kagan hoped to make quite a lot of money, but was not overly all in favour of spending it. After graduating from University of California, Berkeley in 2004 with a bachelor’s in economics and business, he took a job at Intel as a supply chain analyst. He was in a position to keep much of his $55,000 salary by living at home and infrequently biking to work.

    “I didn’t work too hard at Intel and I didn’t spend quite a lot of money,” Kagan says. “That gave me quite a lot of time to begin businesses during work, in addition to nights and weekends.”

    It’s an attitude he comes by truthfully. Kagan says his mother and stepfather were frugal and practical when it got here to their funds.

    “For them, having secure jobs, medical health insurance, investing, two vacations a yr was the suitable path that they really worked hard on and showed me [a] good work ethic,” Kagan says.

    Kagan draws a roughly $200,000 annual salary from his company and pays himself a bonus out of the profits. In 2023, he received $3.3 million.
    Camila Ortega for CNBC Make It

    His father, an immigrant from Israel, was more of a hustler, selling copiers door-to-door. “He was just wild,” Kagan says. “He made quite a lot of money. He spent quite a lot of money. He lost all of it. It was an interesting remark of with the ability to generate profits through entrepreneurship, which was appealing, but additionally through a scarcity of discipline, with the ability to have all that go away.”

    Early on, Kagan says he struck a balance of the 2 approaches. He lived frugally, but at all times had his eyes open for the following big thing.

    Venturing into entrepreneurship: ‘How do I prove these people improper?’

    Following his firing from Facebook, Kagan ran conferences for aspiring entrepreneurs (a hustle he had began while at Intel), taught English in South Korea and picked up consulting work for Silicon Valley tech firms.

    “For the following few years, frankly, I just tried so many alternative things to determine, ‘How do I prove these people improper?'” Kagan says.

    He picked up a job as marketing director at budgeting firm Mint in 2007 while working on a brand new side hustle constructing games for Facebook users. After noticing that a soccer-themed game had taken off on the platform, Kagan hired a developer to make the same hockey app.

    “You could possibly put your hockey logo in your profile, after which below it I had a link to that hockey team’s Amazon page where I got a bit cut of the sales,” Kagan says. “I built that with a developer within the Philippines, perhaps in a day or two. After which immediately, no joke, we had like 10,000 people using it. After which inside every week, we had about 1,000,000 people using it.”

    Along with founding multiple businesses, Kagan had early-career stints at Intel, Facebook and budgeting firm Mint.
    Camila Ortega for CNBC Make It

    When Kagan and Mint parted ways in 2008, he thought this was it: his probability to present full-time entrepreneurship a shot. That yr, Kagan moved to Argentina and pulled in $42,000 while sleeping on his friends’ floors.

    In 2009, he and his business partners shifted their business to give attention to a payment platform for Facebook games. Kagan made $75,000.

    By 2010, though, Kagan was getting bored with the Facebook stuff. He flew back to Austin and rented a room. He and his partners spent six months and greater than $100,000 attempting to construct a sports betting website. “Nobody got here,” Kagan says.

    That yr, the Facebook gaming company netted Kagan $350,000, but he was miserable. His business partners didn’t like him and the betting idea hadn’t worked.  

    “So I actually quit that company and gave it to my two partners, and went off to determine something else that was higher.”

    Founding AppSumo in a weekend for $60: ‘People immediately began buying it’

    Kagan founded AppSumo that very same yr. It only took a few days for the plan to come back together, a process Kagan details in his upcoming book, “Million Dollar Weekend.”

    The short version: Kagan had the thought to repeat MacHeist — a site that gives discounted software bundles for Apple users — and make the same service available for PC. Kagan emailed the founding father of Imgur, an image-sharing service popular on Reddit, and offered to advertise a reduced version of the software in exchange for a percentage of what he sold. Then he met with Reddit’s founding engineer to ask without spending a dime promoting.

    “Why not?” Kagan recalls hearing. “Our users love Imgur. They’ll be thrilled to get a reduction.”

    He paid a developer in Pakistan $48 to construct a web site with a PayPal button.

    “I spent $12 on AppSumo.com and put it on Reddit, and immediately people began buying it,” Kagan says.

    Kagan founded AppSumo over a weekend in 2010, spending $60 on a developer and a site name. In 2023 the corporate had $80 million in sales.
    Camila Ortega for CNBC Make It

    The remaining, as they are saying, is history. Last yr, AppSumo, which Kagan describes as a “Groupon for software,” took in about $80 million in gross revenue and reported greater than $7 million in profit.

    However the road from the primary sale to the corporate’s best yr ever was hardly smooth.

    “We have had 3 times where everyone’s quit or most individuals we have needed to let go,” Kagan says. That features a cull two years in when the staff shrunk from 20 people to 4, and a pandemic-era exodus that slashed the workforce from 130 to 70. Nowadays, AppSumo has about 100 employees.

    Kagan didn’t pay himself in the primary yr in charge and cut himself a $42,000 check in yr two. In yr three he made $75,000, and paid himself $120,000 in each of the following two years.

    Once the corporate began to really flourish, Kagan began taking a portion of the profits as an annual bonus.

    “That is provided that he have a profit. We take [our employees] on an all-expenses paid vacation … we be certain that everyone has what they should live their very own great life,” Kagan says. “Then, after that, I get my very own distribution of what profit is on the market.”

    How he spends his money

    Here’s how Kagan spent his money in December 2023.

    • Discretionary: $13,429 on a house sauna, charitable donations, payments to a money manager and baby supplies, amongst other expenses
    • Gifts: $11,600 on Rolex watches
    • Housing and utilities: $8,701 on mortgage and utility payments, homeowners insurance, housekeeping, pool cleansing and lawn care
    • Transportation: $1,564 on bike and scooter repairs, Tesla charging, ridesharing and parking
    • Entertainment: $1,772 for tickets and concessions, plane storage and maintenance
    • Travel: $1,042 on a flight to go to family and a company retreat
    • Insurance: $525 for vehicle, health, dental, vision and umbrella liability coverage
    • Subscriptions: $233 including subscriptions to Peloton, Spotify and YouTube Premium
    • Phone: $85

    Bringing in a high salary allows Kagan to live lavishly, but wasn’t at all times the case — even when he had loads of money.

    “I never felt worthy of getting really fancy things. I grew up in pretty basic, middle-class lifestyle. I did have some money, I never really enjoyed it,” Kagan says. “And so when Covid happened, quite a lot of the Airbnbs were really low cost. So I rented really fancy houses to see what that will feel like. And thru that and therapy and a number of other things, I began feeling more worthy.”

    Kagan’s biggest regular expense is housing, which costs him about $8,700 a month between his mortgage, homeowners insurance, utilities and paying staff for upkeep. He also owes $41,000 in property taxes on his primary residence for 2023, a sum he’ll pay down in April.

    His sizeable income leaves room in his budget for large irregular expenses, too. His December charges include $10,548 for a sauna he installed in his home and $11,600 at a jewellery store — he gifted Rolexes to some friends.

    Along with working on AppSumo, Kagan manages rental properties and creates content for his YouTube and social media channels.
    Camila Ortega for CNBC Make It

    Expenses that will feel major in most budgets — $1,000 on travel, $1,500 on bike and scooter repairs (he has a Tesla and Mazda Miata as well, which he pays to insure), $350 monthly to store, maintain and insure the plane he flies recreationally — don’t really move the needle.

    And that each one allows Kagan to live an awfully comfortable life, whether he’s staying at his own residence or at his girlfriend’s apartment in Barcelona.

    On a typical day — when he is not working on a special project, like, say, a book — he might stand up and skim, ride his bike after which hit the sauna. After that, if he appears like it, he makes content for his YouTube channel or social media accounts. AppSumo work doesn’t start until 12.

    “Among the finest parts of being an entrepreneur is that you simply haven’t got to wake as much as an alarm,” Kagan says.

    Looking ahead: ‘I hope I never retire’

    None of that’s to say Kagan is able to rest on his laurels any time soon. Along with his AppSumo business and his book, Kagan operates a YouTube channel and manages five rental properties. His content creation business, which he pays people to assist operate, netted a modest loss in 2023.

    His income properties, two of which he rents to long-term tenants, two as Airbnbs and one he leases to AppSumo, turned a comparatively small profit, but sucked up quite a lot of Kagan’s time. “It makes little or no money relative to the quantity of effort it takes,” he says.

    It’s value noting that Kagan spends a major sum of money every month on each his properties and his YouTube channel. For the needs of giving a transparent picture of his budget, we considered these business relatively than personal expenses.

    All in all, Kagan’s real estate holdings make up about 30% of his investment portfolio. He allocates 20% to money and one other 30% to stocks, which he holds across a wide range of accounts including a 401(k), a SEP IRA and a taxable brokerage account. The last 15% of his investments go into what he calls the “dangerous” bucket, which incorporates cryptocurrency and direct investments in small businesses.

    Kagan spends half his yr in Austin, Texas, and the opposite at his girlfriend’s apartment in Barcelona. The couple expect their first child later this yr.
    Camila Ortega for CNBC Make It

    Despite his diligent saving, Kagan is not hoping for a standard retirement.

    “Make enough money that you simply haven’t got to fret about retirement and discover a job you never need to retire from,” Kagan says. “I get to make content, have a book, help people be entrepreneurs, promote software deals on AppSumo and live in cool places? I hope I never retire.”

    Reasonably than how much money he could have in the long run, Kagan is enthusiastic about what his money can purchase him now. Namely, it is time to be present — something that has turn out to be a priority since Kagan learned that he and his partner Maria expect a toddler in July.

    “Nevertheless it’s really shifted like, ‘How do I be certain that that I’m present for my partner and the whole lot she needs and be available for my child?'” Kagan says. “In order that is more what I have been enthusiastic about when it comes to time as a substitute of cash.’

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