How Noah Kagan spends and invests his $1M+ annual income

Executive overview

Most people think earning more solves their money problems. Lifestyle inflation quietly absorbs the gains — the real challenge is keeping overhead low while deploying income into assets.

Noah Kagan, founder of AppSumo, breaks down his actual monthly spend and investment allocation. The framework: distinguish spending mode from investing mode, automate savings, and measure everything against an hourly rate for your time.

Money doesn't create happiness — it buys time, which is the only resource that actually matters.

Monthly spending breakdown

• $23,000/month on a Malibu rental; $3,000/month mortgage on an 800 sq ft Austin house he owns
• ~$3,600 credit card bill: ~$1,000 food, ~$1,000 activities, ~$500 utilities/subscriptions
• $4,000/month on coaches: chess, Hebrew, relationship, business, and health
• $100/month umbrella insurance — essential once net worth exceeds a few million
• Two personal assistants: one remote (scheduling, bookings), one local (pickups, errands)
• Business expenses a significant portion of day-to-day costs via AppSumo LLC

Investing mode vs spending mode

• Reframe high costs as investments: a $1,500 coaching session is cheap if it generates a $50K idea
• Ask "what would I do differently if my time was worth $2,000/hour?" — then act on the answer
• Automate savings: $4,000/month goes automatically into a Schwab index fund account
• Use a wealth manager to pick funds if you're not good at stocks — remove the decision
• Track all allocations in a spreadsheet or tool like Personal Capital; attention directs growth

Investment allocation

• 48% cash — high by conventional standards, but kept liquid to focus mental energy on the business
• 26% stocks — index funds plus a few individual positions; managed automatically
• 21% real estate — five Austin properties; also uses PeerStreet for diversified exposure
• 5% risky — crypto, a bar (lost everything), a church (lost half), and three tech startups (Teachable, Buffer, Huckberry)

How to evaluate risky bets

• Risky capital should target either a 10x–100x return or access to people worth learning from
• Investing alongside someone is a fast way to learn their model (e.g. co-investing with a landlord to learn real estate)
• Don't invest in something just because it's available — ask if it expands your network or skills

Daily structure and lifestyle

• Morning routine Monday–Friday: journaling, push-ups, reading ("maker morning")
• Deep creative/production work: 11am–2pm ("purple productivity time")
• Afternoons: interviews, team check-ins; evenings kept flexible
• Still asks for discounts and does the "coffee challenge" — the habit of negotiating is part of what built the wealth
• Travels affordably; flies first class on points; no private jets at current wealth level

What money actually provides

• Time — the ability to choose how you spend your days
• Freedom to work on things you genuinely want to do
• Ability to outsource anything that someone else can do better or faster
• The real question isn't "how much do I need to be rich?" — it's "how much do I need to live the life I want?" (usually far less than assumed)