Going from €1.5M/yr to zero and getting back on the horse

Moritz Hofmann was making $1.5M/year before his business went under in 2018. After six years, he’s back in the game, working on three projects. He says business has changed and he’s playing catchup, but he’s committed to making it work — again.

Let’s take a peek at his finances. 👇

Going under

In 2005, Moritz started bootstrapping his previous business. By 2015, he was making $1.5M/yr, with $300k profit. But in 2018, it went under and he ended up selling it to an employee for €50k.

You might be wondering how such a successful business tanked. There were fraud cases against it and the business was banned by a payment provider. The stress of that — plus being at university — got to Moritz. He was diagnosed with bipolar disorder and decided he couldn't do it anymore.

💰 ”I couldn't handle my illness, I couldn't handle working, I couldn't handle my life, I couldn't handle anything.” — Moritz

He says it’s been a six-year battle, but he has finally found the right support and he’s stable again. He has friends. He has a girlfriend. And he remembers his previous success. All of this is bolstering him as he gets back to building.

💰 ”The whole landscape has changed. It's difficult. I was successful almost immediately with my first business. But the business I’ve been working on for the past year hasn’t worked out.” — Moritz

That business is RoboReimburse and he plans to pivot it. But in the meantime, he just launched his B2C project called Always Open. And he's building an AI mental health app as a passion project.

Hard numbers

Let’s take a look at what he’s bringing in:

• Always Open revenue: €80 total

• Robo Reimburse revenue: €0 (he refunded €600 prepayment due to technical difficulties)

• Founder pay: €0

• Entrepreneurship scholarship: €1,000/mo for 12 months

• Personal bank account: €66,519

He’s currently living off of savings from his first business. Here are his business expenses:

• SignRequest: €16/mo

• Calendly: $10/mo

• Laravel Forge: $12/mo

• Hetzner Hosting: €7.52/mo

• Domains: €180/year

• Video editing for social media: €15/video

• Internet and mobile: €89,75/mo

• Gas: €140/mo

• Car insurance: €1000/year

And here are his personal expenses:

• Rent and utilities: €1300/mo

• Health insurance: €226/mo

• Laundry: €270/mo

• Food (including groceries and a chef): €880/mo woman

• House cleaning: €225/mo

• Personal trainer: Up to €675/mo (€50/hour)

Help around the house

💰 ”Money is a tool. Nothing more; nothing less. I like to use money as a lever to improve my life and/or chances of success.” — Moritz

Moritz pays $1375/mo for help around the house. One person washes and irons his clothes. Another buys groceries and prepares all his meals for him. And another cleans his house.

Come to think of it, $1375 is pretty cheap for all that.

Moritz would like to say that the time saved is worth it because it gives him more time to make money, but he admits that his products aren’t keeping him that busy yet. The truth is that he just doesn’t like to cook and clean.

💰"Cooking and cleaning make me feel uneasy. They stress me out and I procrastinate. Thanks to this expense, my head is completely free and that makes it worth it.” — Moritz

He also pays a personal trainer up to €675/mo and says that the motivation he gets from it is completely worth every penny.

💰 ”Investing in things that decrease work and free up your time makes more sense than buying an expensive car or house.” — Moritz

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Save twice

Despite those expenses, Mortiz does like to save money. And he has a method for "saving twice". Here’s an example.

For years, Moritz was working from an IKEA desk chair he picked up for free at a garage sale. That was fine for him until it wasn’t. Then he bought what he believes to be the best of the best: a Herman Miller Embody chair.

It set him back about €1550, and he didn’t stop there. He bought a Montana HiLow 3 desk for €1730 because he liked the feel of it.

💰 "I saved twice: I didn't invest any money for many years, so one could say I saved a bit each year. And now, I have something that should last almost forever, saving me money in the long run. — Moritz

He has no regrets. His back feels good and he doesn’t get tired as easily.

💰 ”If I can work even one hour more per day, it will pay for itself within a few days.” — Moritz

Streaming for focus

Moritz had another big expense lately. He bought a bunch of streaming equipment for $1k, and now he’s streaming his work every day.

💰 ”I always used to get distracted. But with streaming, I feel like people are watching me. Now, I’m laser focused.” — Moritz

It also made him reconsider his need for a local cofounder. He feels okay with remote work when he’s streaming.

Investments and runway

Moritz likes to invest 2/3 of his wealth and income. And he puts it all into iShares MSCI World ETF.

💰 ”Right now my wealth seems to grow on its own despite all of my expenses. I guess the MSCI World is doing well. ” — Moritz

Why the iShares MSCI World ETF? He says that the S&P 500 and MSCI World both outperform other investments, but the MSCI World is less US-reliant.

💰 ”It's a very safe bet — one where I don't get stressed and have to check the numbers daily, weekly, or even quarterly. I can just let my money sit. No headache.” — Moritz

He views this as his retirement plan — he wants to leave it there until he throws in the towel. But he admits that this hope is secondary. He’s willing to dip into it if he uses up his runway.

By Moritz’s math, he technically has about 8.5 years of runway. But he won’t wait that long before getting a job.

💰 ”If my new business doesn’t work for me, I’d be open to getting a job. I think a new job could bring new experiences that could help me start another successful company.” — Moritz

Don’t take out a loan

💰 ”I'm totally against debt. Paying off loans completely stresses people out. It cuts away freedom while the banks profit. I really don't like it.” — Moritz

He doesn’t have any debt, and he intends to keep it that way. He doesn’t even want to buy a house until he can afford to do so without a loan, plus have a good amount left over after the purchase.

Words to live by

💰 ”Save and invest money now. It will help you later. Your business probably won’t last forever.” — Moritz

Moritz gets some of his financial literacy from his grandma, who he greatly respects. He says she received a very small widows pension and somehow saved to the point that she left a considerable amount of money for her children and grandchildren when she passed away.

Her words live on in him:

💰 ”I go outside and look at all the cool stuff that I could buy using my money. But I don't buy anything. It's a fantastic feeling to know that I can afford something, and that satisfies me more than enough." — Moritz’s grandma

Moritz is currently looking for a technical cofounder — for more info, check out his post.

You can find him streaming or on LinkedIn. His businesses are Always Open and RoboReimburse.

Please note that the above are opinions. This is meant for informational purposes only. It is not intended to be financial advice.

And if you'd like to be featured as a guest in a future interview for this series, let me know in the comments!

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