What It Feels Like to Be Rich

http://www.jamesaltucher.com/?p=828

by jaltucher • 15 years ago

103 101 15 years ago

jamesaltucher.com

bauderjoshua• 15 years ago

Amazing article I think a lot of people have a misconception of what it means to rich.

dtby2• 15 years ago

I suspect that if you think this article was "amazing" you still have a huge misconception of what it means to be rich.

michaelcampbell• 15 years ago

I have no conception of it, and after having read this article, even less. Not sure what that says about me.

rradu• 15 years ago

> My feelings of safety and immortality quickly gave way to scarcity. After all, I thought, if I could make 10 million dollars then it must be too easy. In fact, I honestly thought, everyone else had probably already made 11 million dollars. So then I felt poor again. I now needed 100 million dollars to be happy.

Reminds me of this article - http://economix.blogs.nytimes.com/2011/01/11/why-so-many-ric...

acangiano• 15 years ago

James, in my head I read all your articles in Ted Mosby's voice. On a more serious note, I think that safety, among with freedom, is the number one reason I'd like to increase my income by an order of magnitude. And by safety I mean the safety net that money can provide. It doesn't make you immortal or immune to disease, but it can help in several ways. If you are in any type of legal trouble, you can hire an awesome lawyer who'll increase your chances of remaining free. If you are sick and need a surgery right away, you can go to the States and pay for it, and so on.

ry0ohki• 15 years ago

A common theme seems to be that monetary safety comes at a price of psychological safety (ie rich people worry constantly about getting robbed, losing all their money, getting cancer etc...). I think we've evolved to never feel completely secure.

jaltucher3• 15 years ago

thats right. the challenge is to find the right balance of health, money, work, that allows you to focus on the nuances of happiness (emotional health, spiritual health, simplicity, etc) and not constantly be driven with a desire for warning More.

nazgulnarsil3• 15 years ago

as karl pilkington would put it, we all have a problem hole. gotta put something in it, and whatever you put in will expand to the same size.

brianobush• 15 years ago

you can get safety by just setting aside an emergency fund for 6 months of expenses. it works.

mberning2• 15 years ago

That's what I do. I think it's also good to remind yourself of the difference between what you need to survive, and what you simply enjoy. I feel so fortunate to enjoy so many luxuries, but I also know that I can (and did) live without them.

michaelochurch5• 15 years ago

Safety has degrees. In functioning economies, a competent person will pretty much never be involuntarily unemployed for more than 6 months, but the 2008 financial crisis almost got us into long-lasting economic dysfunction. That mess could have been a lot worse and lasted a lot longer, and because of the lax regulation and immense corruption (I know it's fashionable on HN to focus on a tiny corner of capitalism where people are decent and things actually work, but trust me that there's a lot of incompetence and malevolence out there) the next recession is likely to be worse. So, while 6 months of savings might be enough to handle sudden job loss in 2007 or 2011, I can't guarantee the same about, say, 2018.

Six months of savings means you're okay as long as (1) the economy doesn't utterly tank, which it almost did in 2008 and probably will do before 2020 because of the assholes running it, and (2) you don't have any major health problems. It means that as long as the option for talented people people to reliably sell labor to the market at a fair price exists, and as long as you don't develop health problems that render you unable to make this exchange (i.e. hold down a job) then you don't need to worry about events like layoffs. Fair, I'll grant you that, but there's a great deal of difference between the single-9 security offered by being smart and prudent while having an emergency fund and the triple-9 security offered by millions of dollars and elite social connections.

jacoblyles5• 15 years ago

My father is a physical laborer (the kind that loses body parts over the years) and he is getting quite old. If I become rich the most important benefit to me is to be able to guarantee him a comfortable life in his old age. That is the kind of security that a 6 month rainy day fund cannot provide.

I've yet to meet an anti-materialist from a poor family or a third world country. Such worldviews are a luxury for the children of the rich.

Eliezer2• 15 years ago

Er, actually money sort of does make you immortal if you've got the right sort of attitude toward cheating at reality. http://wiki.lesswrong.com/wiki/Cryonics.

Money also buys happiness if you know the right things about hedonic psychology - that owning a possession isn't as exciting as the moment of first acquiring it which is what you anchor on when thinking of its value, and that the trick is to buy happy memories, and that you should ask "What experiences would excite me?" instead of "What static qualities would make me happy?", etcetera.

It's bleeping amazing what you can do with money and knowledge.

dr_• 15 years ago

This from a person who questions climate change and is an advocate of insider trading.

jsn• 15 years ago

That alone doesn't mean the person is smart and rational, but I'd say it's a good start.

andreaja• 15 years ago

Could you explain how this affects your view of the reflections in the article?

I found the article held some bittersweet sentiments on what it was like to have (a good deal of) money. To the point of the title he spoke of a false sense of security and casual arrogance. Both of which I find reasonable, but not universally applicable.

I don't see how the positions you list alter this interpretation, but I'd be very interested in hearing how they altered yours.

laut• 15 years ago

Is there something wrong with questioning scientific theories? Except that it's not PC.

shiven2• 15 years ago

Except that it's not PC.

My beef is not with it being PC or nPC.

It is about questioning the theorie(s) in a scientific manner with rigorously formulated and educated questions. Otherwise, it is merely politics/BS/political-BS.

gnaritas6• 15 years ago

> Is there something wrong with questioning scientific theories?

Not if you're actually qualified to question them; if on the other hand you're not a specialist in the field and you're claiming all those who are haven't a clue what they're talking about, then yes, there's something wrong with it and you're very likely both wrong and a quack.

rick888• 15 years ago

"questions climate change"

I know! All these pesky facts backed up with data get in the way.

nickpinkston6• 15 years ago

Can you give a good defense of why you're not for insider trading?

nostrademons8• 15 years ago

Because I'm an outsider and all those pesky crooks steal my money. Duh.

ericb3• 15 years ago

If he can't, I can. Insiders with knowledge are often insiders with control. If I have control, I ruin a quarter while shorting the stock and then, by pushing the earnings into the following quarter, I can go long on our "earnings surprise." At this point I have not done anything to further the interest of the company or influence actual profitability. Instead I have merely made me, and perhaps my friends, a killing at the expense of investors. Now, because investors realize that insider trading, now legal, causes earnings to often be gamed, they are reluctant to invest in honest companies too.

Suddenly capital costs are higher for everyone, and my dishonesty creates a drag on the creation of startups, and expansion of successful enterprises.

mseebach• 15 years ago

How the hell does an unmitigated ad hominem attack get that many upvotes?

jacoblyles5• 15 years ago

The faithful love an impromptu "amen" chorus.

chopsueyar2• 15 years ago

"What It Feels Like to Have to Read this Drivel"

jimboyoungblood• 15 years ago

I can't empathize with anything in this article. Guess I must not be rich.

mberning2• 15 years ago

Same here. The 'I don't really have a need or use for money' theme comes up often. I don't know if there is a singular and/or correct definition of a 'healthy relationship with money', but it does seem that the rich often have an unhealthy relationship with it.

chopsueyar2• 15 years ago

My friend and I sat there while Shlomo (not his real name, but you get the drift)

WTF?

http://bostonreview.net/BR34.3/malhotra_margalit.php

joshu7• 15 years ago

He left out that people will ask you for money all the time.

rokhayakebe2• 15 years ago

And they feel entitled to it. My friend usually tells me if I ever earn millions I would morally owe him 7 digits because, well, he has been my friend for years. The guy is dead serious too.

PonyGumbo• 15 years ago

I would reevaluate that friendship.

joshu7• 15 years ago

One of the things I like about this ecosystem (hackers and entrepreneurs and whatnot) is that people tend to evaluate you based on your skills and knowledge and not your purse.

I guess entrepreneurs ask for money (as funding) but at least they are offering you a piece of themselves in return, so it doesn't feel nearly as bad.

georgieporgie• 15 years ago

Your 'friend' seems to imply that the favor of being your 'friend' is so difficult that he deserves monetary compensation. Perhaps you should relieve him of the tremendous hardship you have so obviously imposed upon him.

jpr• 15 years ago

You have a strange definition of "friend".

michaeldhopkins• 15 years ago

I'm guessing he isn't dead serious or he means it in a mutual way.

nostrademons8• 15 years ago

I wonder how feasible it is to completely keep your wealth a secret, just start working for the acquirer, and never let anyone (even family members) know that you have a few million in the bank? Is there a cap on the amount of money you can earn and still not have anyone know that you've earned it?

I've met millionaires who were quiet about their money...actually, I think that probably describes most of the millionaires I've met...but people still knew they were millionaires. Mostly because there's some press release about them selling a company lying around the web, or people know they were Google employee #50, or something like that. I'm wondering if it's possible to make lots of money and not have that Google-trail around.

Then again, if I knew anyone like that, I wouldn't know they were a millionaire, after all...

HSO• 15 years ago

I recently watched an old documentary about Warren Buffett. His daughter mentioned that even as a teenager, she thought "securities analyst" meant her father was checking on alarm systems.

JonnieCache• 15 years ago

My feelings of safety and immortality quickly gave way to scarcity. After all, I thought, if I could make 10 million dollars then it must be too easy. In fact, I honestly thought, everyone else had probably already made 11 million dollars. So then I felt poor again. I now needed 100 million dollars to be happy. I drove in a car with a friend of mine and his wife. I said, “everyone has 10 million dollars now.” She quickly said, “not everyone”.

If you need to pay someone to explain this shit to you, well... words fail me. Jesus.

This is why it's important to leave the ivory tower occasionally guys. Or in some cases, at all.

EDIT: In retrospect this is unnecessarily vitriolic. I obviously wish you the best, and I recognise that unhappiness is relative. Those were just my honest first thoughts on reading the article.

16s• 15 years ago

If I were rich, the only thing I would do differently is to tell people what I really think (when asked for an opinion) rather than tell them what I think they want to hear.

bmelton3• 15 years ago

What exactly stops you from doing that now?

Eliezer2• 15 years ago

The reality of being dependent on other people. It's not cowardice if that's where your next meal comes from. Try a bit of sympathy here?

rauljara• 15 years ago

The piece of insight that I think was missing from the post is this: If you can get to $10 million and still not feel secure, there's something very wrong with the way you are living your life. $10 million, with a 1% annual return on investment will give you an income of $100,000. There are people earning far, far less than that who are doing just fine in terms of security / contentedness. At a certain point, you have to cut back on your idea of how much money your should have. Your income will always be limited by the world you live in, but your idea of how much you should have isn't so firmly held back by reality. If you always feel like you should have more, then you will always feel like you should have more, no matter how many billions you acquire.

He almost gets there, but he closes by saying he didn't appreciate money enough. That wasn't the problem. I wonder what stops him from connecting the dots.

joshu7• 15 years ago

There is a big desire to pursue better returns, which means you need much more stomach for drops. Sounds like he didn't have enough purse forth risk profile he wanted to adopt. Nothing wrong with that but it is certainly possible to take a middle ground.

michaelochurch5• 15 years ago

Money has a sort of Maslovian pyramid: Survival, Leisure, Comfort, Status, then Power. Most middle-class Americans are in the second level (Leisure) while the Koch brothers' ambitions exemplify the fifth (Power). Most upper-class people are in the fourth (Status). A lot of people think they'll "get off" at the Comfort level, but few people do.

The Survival level is met when one's basic needs are met. This doesn't mean the risk of insulting inconveniences (such as having to move under adverse conditions) go away, but one isn't at risk of starvation or homelessness once it is achieved. Leisure is the level of most middle-class people: buying TVs, going on longer and nicer vacations. Comfort is having cleaning services and getting to fly business or first class when traveling: essentially having a life with as few annoyances as possible.

Most normal, man-on-the-street types will admit they want to be rich enough to max out the Comfort level, while frowning upon those who care about Status and Power. The problem is that one doesn't max out the Comfort level until over $500,000 per year. Most people think they'd be happy to "get off" at that point, but it's really hard to keep that kind of income, steadily, unless either (1) you have $30 million net worth or so, and most people at that point feel like they're entitled to more than a lower-upper-income lifestyle, or (2) more commonly, you get some sort of job paying that much income. You simply don't get the latter unless you convince people that you're "special". This is what draws rich people into the idiotic status obsessions-- the need to socially climb in order to continually prove themselves to be worth those kinds of salaries and favors-- and that game is pretty much never-ending. It's gambling: spending money in ways that seem ludicrous on high-end art, real estate, club memberships, and alcoholic beverages simply because they are exclusive and expensive in the hope of improving one's social status and, therefore, future income. As with any gamble, some people lose everything. Rich people are no exception.

rskar• 15 years ago

Up-voting this because I learned about the Maslovian pyramid; and otherwise it has a ring of truth. Thanks for an idea to think about!

jaltucher3• 15 years ago

Just out of curiousity: why do you think that was missing from the post? I thought it was very much there by the end.

freshfunk• 15 years ago

Recently I had a physical with a doctor in the area (bay area) who said he knew the personal doctors of senior management at Google. Apparently, many of them are "hypochondriacs." I guess it makes sense that once you no longer worry about money, you worry about your health obsessively.

Gibbon• 15 years ago

This is also relevant: Fears of the Super Rich: http://www.theatlantic.com/magazine/archive/2011/04/secret-f...

michaelochurch5• 15 years ago

Interesting article. I'm basically a socialist and see everything through a Marxist lens, but it seems like everyone loses-- rich and poor-- when money is such a dominating factor in peoples' lives. Living in a stratified, money-centered society sucks no matter who or where you are.

What we should do is make society more like college, where people have a lot of choice in what they work on, and where successful people help the less successful people but one's level of success isn't seen as an important thing about oneself. I was "successful" in college (3.9 math major) and it wouldn't have been weird or awkward to sit at the same table as someone with a 2.7. I didn't even know what my friends' GPAs were, and I didn't care when I did know. Yet we live in a world where most people don't even have a single friend outside of their social class.

michaelochurch5• 15 years ago

What would appeal to me about being rich is unconditional autonomy regarding work: being able to work when I want, on what I choose. In other words, having the right to decide the best use of my talents instead of having it decided "for" (against?) me. Even founders of some small companies I know ended up as clients' bitches and lost autonomy, because they knew a single client could sink them. It's also pretty much impossible to bring your A game if you feel like a subordinate. That doesn't mean you can't be a subordinate in title and have a boss and still do great work, but once a person loses a sense of autonomy, the quality of work goes to zero. When you're rich, you can avoid this situation completely and, as soon as you lose autonomy or the ability to excel, move on.

People romanticize the "starving artist" whose work becomes famous after his death, but I'd wager that 4/5 of the people who really moved humanity forward were wealthy people, not because they're any better (they aren't) but because they had the time and autonomy to follow their interests. Sociologically, the most effective people tend to come from the fringes of the elite (cf. Jobs, Gates): people who don't have their life and work clogged up by common burdens (distractions, stress and fear, subordination) but who also aren't in the "golden prison"-- the elite's conservative, status-obsessed core-- which is just as disabling a place to be, for a person wanting to do something good with his life, as reeking poverty.

My guess at how I would react if I suddenly became rich is that I'd have an hour of euphoria, then 3 days of anxiety, then 6 months of a "this is nice" celebratory mood, and then spend the rest of my life marginally happier but a lot more productive than I'd otherwise be. What appeals to me most about making lots of money isn't some false promise about being super-happy (that'll wear off) but the thought of actually being able to contribute to this world, and maybe make it better so that when I pass on into whatever comes after this place, I do so with a sense of completion and good karma.

nostrademons8• 15 years ago

This is perhaps one of the best things you learn by founding a startup, whether it succeeds or not. You have this freedom. You don't need to be rich to get it. You just need to be willing to go without income until you can find your next source of income.

Say my boss really hated me and fired me. So what? I would be in exactly the same place as when I took the job, except with several thousand dollars more in the bank, a lot more useful skills, and a few tangible accomplishments that I could use to get my next clients. I've been meaning to found another startup for a while now; this would be just the kick in the pants needed to actually make it happen.

After all, I went without an income for a year the last time I founded a startup, and nothing bad happened. There were plenty of jobs waiting when I folded it up (even though it was the dark days of late 2008 when everybody thought the economy was ending), I didn't go bankrupt or have to pay back massive debts, and people didn't look at me like a failure.

Immigrants have this same advantage, as long as they have that green card. If someone fires them, then they end up without a job, possibly without money, without anything but the skills in their head - which is generally exactly how they came to this country. If they made it before, they can make it again. The only problem is that many immigrants don't have that green card, so getting fired means getting deported, which sets them back all the way past their start point.

BobKabob2• 15 years ago

Anybody losing $1M PER WEEK makes you question how the fool and his money got together in the first place.

Good to see at least a little justice in this world. I wouldn't wish bad things to happen to anybody, but if it has to happen to someone, well, the guy who is so foolish with his money would be tops on my list.

thrill• 15 years ago

Why?

BobKabob2• 15 years ago

I think there's a Biblical parable that probably fits here - the one with the "talents".

I just believe that those who are blessed in life shouldn't flush it down the toilet. A million dollars a week? Think of how many people could have been fed, or how many jobs could have been created!

dools• 15 years ago

"Everyone has 10 million dollars"

I got a good idea of what it feels like to be rich by going to a third world country. Even though I'm just barely scraping in at average in Australia, I was seriously freaking loaded by an order of magnitude compared to most people in Ghana and could afford to take the nicest cars (taxis) buy beer regularly and eat at "real" restaurants rather than roadside vendors. I was able to buy 5 or 10 dollar mobile recharge cards whilst most of the population purchased their recharges in 50 cent increments from street vendors.

I'm sad to say that my biggest reaction was frustration. Everyone I met was trying to get my money somehow. It seemed like every conversation would turn into some sort of scam opportunity or even just wanting to get my help somehow.

I thought "I can't help you people! I'm just normal, I don't have that much money!". It wasn't until I was actually on the plane home that I realised that I'd just experienced being rich. It seems as though it's all relative - that the "rich folks" don't see themselves as rich because when you're rich, you just get bigger expenses.

Of course your standard of living improves, but it must be hard to ever feel so rich that you're happy just giving money away to everyone who asks (and I'm sure that you get asked a LOT).

joshu7• 15 years ago

For some people, it's not enough to win. Others must lose.

davidmathers• 15 years ago

Apropos:

The saying "It is not sufficient that I succeed. Everyone else must fail" has been associated with Larry Ellison so often that most people think it originated with him.

Actually, it came centuries ago with Genghis Khan. Ellison has referred to the quote in conversations, then laughed rather unconvincingly and tried to distance himself from the sentiment. But it sticks nonetheless.

http://www.forbes.com/2003/11/26/1126southwick.html

joshu7• 15 years ago

Another one: It's very hard to resist the urge to spend Way Too Much on something you already liked. Like spending $100k on a Crestron control system for your A/V network if you like gaming and media. Or a Ferrari if you like cars.

If you fail to resist, you end up on the hedonic treadmill pretty quickly.

(My vice: investing in startups. I guess that's better for the ecosystem, at least.)

joshu7• 15 years ago

Another one he forgot: you can use Rich Guy solutions to problems that wouldn't normally be available.

Hiring a personal assistant, maid service, hiring people to do work for you directly, having a lawyer on retainer, that sort of thing. (Now I know why rich people are always threatening to sue.) Chartering jets, too.

My favorite Rich Guy solution: Throw away all your mismatched socks, buy all identical tube socks from Walmart, and never spend time pairing your socks again. This actually only costs like $30.

nostrademons8• 15 years ago

Yeah, a bunch of those are very much accessible to middle-class people. I think I stopped worrying about mismatched socks and just went all-white when I was around 6. A bunch of Googlers (even ordinary SWEs hired post-IPO) use maid services, because their time is worth more than the money it costs to hire them. A few even frequent outsourcing websites for personal-assistant sort of things like researching major purchases.

joshu7• 15 years ago

I find it easier to just laze out of major purchases entirely.

nazgulnarsil3• 15 years ago

everyone underestimates cleaning service, laundry service, grocery service, and disposable flatware in freeing your life of stress. and all much cheaper than most realize.

nazgulnarsil3• 15 years ago

I just want enough money that I can sleep when I feel tired. :/

What It Feels Like to Be Rich

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