Why do double/triple digit millionaires still work?
Let's assume Joe is 45 and has a net worth of $20 million. He could comfortably live (for the rest of his life) and spend $500k-$750k per year. And this is being pessimistic since it is assuming little to no investment income. That's 10x the salary of the average American worker, so it's not uncomfortable.
Yet we see lots of guys like Joe who show up at the office every day. Why?
Is it simply Joe trying to outdo his neighbor?
Is this marginal income akin to keeping score, not unlike in golf, soccer, etc?
I understand my question is somewhat rhetorical, but it's one that confuses me every now and then. Because money is (essentially) infinite. Time is not.
Interested as well. I always imagined myself making right around "$20mm" (read: whatever low multi-millions is enough for me and family to live well-off). My reasoning is that beyond that, you're talking about flat-out "we don't even need money" wealth, and I'm not sure why I'd want that.
But perhaps this question isn't for us to ponder - if we weren't born wealthy, what would we know about what drives the mind of a truly wealthy person? Someone born into money wouldn't have a clue what it's like to work his way up the social ladder and achieve money only later in life, and as someone born into relative poverty I can attest to the fact that I have no idea what goes on in the minds of people born wealthy. Different lives come with different incentives.
Literally about being the best and nothing less is adequate.
Believe it or not, it is hard to make it to the multimillionaire status if you don't love what you do. A lot of these people just love what they do and all that money is just a nice perk.
But I keep cruising
Can't stop, won't stop grooving
It's like I got this music
In my mind
Saying, "It's gonna be alright."
R u UPENDING the MUSIC induSTRY?
I would personally say, for a few reasons, that they keep working due to either habit or the normal human factor of greed.
It is no surprise that unless you are born rich, a vast majority of those multi-millionaire types have had a sickening work ethic that allows them to achieve such wealth - I assume that if they were to just quit it all they would most likely be bored within a very short period of time.
I guess the famous Wall Street quote of "more." would ring true here as well - why stop when you can always be richer.
Because it's not about the money, it's about the game.
It's probably a hobby at some point. And most of those that rich are likely business owners in some sense, right? The business might be a child to them.
My grandfather was never wealthy, yet he always stressed that retiring was the worst decision he ever made. I don't think he had enough hobbies to keep his day full, so I think he was bored in retirement.
don't know anyone with 9 figures, but work with plenty of 8 figure peeps who could walk away today (and plenty of 7 figure people who could do the same).
it's always interesting meeting with them to tell them "you know you have enough money, right?" or "you know you don't have to work anymore, right?" but we usually get the following responses:
never comfortable. you can tell someone that their money can last 3 generations using the most sophisticated modelling and conservative assumptions and it's still a leap of faith to give up a regular paycheck. that is scary to people, no matter how educated and wealthy
appearances. few people in the high 7-low/mid 8 figures camp want to be known as wealthy. these are the people who have 2 houses in the US and take nice vacations, but they don't have multiple properties across the globe and a private jet. also, these sorts of people don't have enough money to have their kids enjoy that lifestyle without ever working, so these people are usually keen on keeping working. a client I'm thinking of in particular says "I don't want my kids to think we're rich" despite being in the C suite of a major tech company. same goes for keeping up appearances with their friends
challenge. many people who've amassed wealth did so by taking risks in their careers. achieving that success is addictive, so you want to see what your potential is. the challenge may be helping your company's sales grow in a certain way, it may be challenging yourself to see if you can become CEO, it may be the challenge of successfully helping a startup achieve success. this reason is probably the most noticeable, and we'll see people taking more career risks because they don't have the same fear of failure.
boredom/lack of other stuff to do. when you work a lot, are on call all the time, and travel a lot for work, it can be difficult to find things to do if that all of a sudden stops. philanthropy and volunteering can only take up so much time while still being enjoyable, you can only play so much golf, and good luck getting your spouse to spend 100% of their time with you (as a married man, I can attest this is one of the 7 circles of hell).
I think thebrofessor has a lot of it right as it concerns first-generation money. Oddly, I know more 9- and 10-figure net worth people than 7- or 8-figure types, and the mindset is different between earned and inherited wealth. I used to live with a friend whose grandfather was worth 11 figures. whose mother was worth 10 figures, and who just inherited 10 figures himself. He's a writer. He's very well educated, but he's a journalist (mostly).
I have another friend who inherited 10 figures when she was in her early 30s. Once again, very well educated, but she doesn't 'work', per se. Her family has enormous inter-generational wealth, and have for 200-300 years, I guess. They have enormous art collections, and she has her own gallery (though it's not in her name).
The other trust fund kids I know generally fall into two categories:
For the people I know who actually made their own money, they have a fundamentally different mindset than the ultra-rich, especially those who inherited wealth. I guess they're like mountain climbers at the last base camp before the summit. I mean--wouldn't you at least try for the peak?
Based on the 10 figure individuals you've interacted with, how many billionaires do you think are not listed on forbes? Credit Suisse estimates 560 billionaires and 70,000 ultra high net worth individuals in the united states.
I imagine those people want the next 10 generations to be rich and/or just love what they do.
It baffles me how people smart enough to become rich aren't smart enough to realize what depriving their kids of the opportunity to overcome adversity and build a life for themselves will do.
Because some people actually enjoy their work past the "making money" part...I'm confused as to what there is to be confused about. Maybe for many people, including many users on here, a job is simply a way to make money, but some people actually get to enjoy what they do for a living...retiring is boring, if your work is truly special, why would you give that up.
Probably blasphemous to say this here, but I don't think any job in financial services is "truly special". It's just a means to an end, however prosperous it may be.
Then again, I'm the guy who looks at astronauts and deep sea divers Lots of people are rich, but very few get to live in outer space or experience the ocean trenches.
I actually asked a friend of a friend with extreme wealth why he was still involved in his industry, and he admitted point blank that he doesn't really work all that hard anymore-he has trusted people do all the heavy lifting and drudge work, so he gets to act mainly as decisionmaker and high level strategist. He also doesn't adhere to a strict schedule so he's never bored or "stuck". If he were to just ride off into the sunset, he wouldn't get to do much of the fun stuff he does now-meeting w/ celebrities/"important" people, attending banquets, keeping his name in the paper, interviews on CNBC, etc.
Unless you're deeply involved in day-to-day operations, once you clear a certain wealth hurdle the pressure on you minimizes so you may actually get to enjoy the job even more.
I completely agree and think this has a lot to do with it. Some of the top people I used to work with at my first CRE gig (investment sales brokerage team) were definitely wealthy enough to retire, but at that point I think they were having too much fun/were deal junkies. When you don't have to worry as much about grinding/working long hours, drumming up business or winning deals, it becomes a lot of fun as that stage of the job is all about wining and dining clients, hosting/going to fun events, traveling, etc.
This is it right here.
If you strip out the inane bullshit tasks and lack of control of your schedule, work become i) a way to stay socially connected with smart, interesting people who aren't just schmoozing you for your money, and ii) an interesting real-time strategy game. If you ever 'wasted' days/weeks/months playing online strategy games or team sports when you were a kid (e.g. when you had zero obligation to do anything), it should make sense why you would want to keep working even once you had fuck you money.
They don't go sit in a cubicle doing bullshit for 8 hours and eat Panda for lunch. They're building businesses, doing deals, etc. It's fucking exciting.
Not to mention the retired life of sitting by the pool actually can get pretty boring after a little while. Typically successful people are "Type A" people who value themselves on how productive they are with their time. Even I get bored on the last days of a vacation. I enjoy my job and can totally see how people who are at the highest levels in this industry look forward to it.
It's an uphill battle to get rich without doing what you love, and if you love doing it you won't want to quit.
Two distant uncles of mine are billionaires listed on Forbes. Why do they do it?
One of them is upending the retail and real estate industry in my backwater homeland. He barely made it out of college. The other is upending healthcare in not one but two major emerging markets. He used to borrow desk calendars and old electronics from my Dad's office.
I never asked them this question even though we meet relatively frequently because the answer is always simple - it's for the challenge, and it's for the legacy. If your descendants can build a big business empire and honor your memory, why count on them when you can do it yourself? When you've got the time and energy and passion to do so?
There's that word again: Passion
"I intend to leave a legacy, the standard of which was set by God when he created the earth, and man in his own image. Anything else is not worth mentioning."
Honestly, those that have an attitude geared towards working so they don't have to work another day in their life aren't the people who become double/triple digit millionaires. Those people love working. They would be bored if they stopped.
probably because they are used to working or worked hard for what they have so don't want to stop. I know people that have retired at age 65+ and still want work
I know a guy who has more than enough to retire but keeps working so he doesn't have to hang out with his wife all day.
Do we work together? You just described my boss.
From my experience working at an HF with several people in this category, there are three explanations I have found (in no particular order or level of significance):
As someone said above, you dont generally become wealthy unless there is some passion/interest there. Also a bit more practically, not having any structure for a lot of people isnt as fun as it sounds.
For a lot of these guys, being a top HF guy is a big part of their identity and social circle, its not easy to give that up.
It seems crazy looking upwards, but the envy of the person above you never really stops. The VP with the nice car and flat is envious of the MD with a huge house in the country, the MD with the huge house is envious of the partner with the private jet, the partner is envious of his billionaire friend and on and on. It seems a bit sad but at the end of the day its human nature. And having $20m of net worth loses its status as fck you money when you have got 3 kids in private school, have 2 houses to upkeep, 2 luxury cars, fly first class everywhere, stay in 5 star hotels with 3 kids etc etc.
This amount of insecurity is just depressing. Thank God I'm not in this boat.
A few years ago I met a monk in Tibet who said, roughly translating, that humility is the fastest path to wealth.
This all applies to physical commodities trading to a degree. The envy factor is almost less about the money than the scope of the deals sometimes ("you just can't do a deal like that now a days blablabla..."). Plus the Glencore IPO set this sort of insane expectation that no one outside of the CEOs of the top oil trading firms will hit ever.
They enjoy their jobs enough to want to keep working and also want to pass as much as possible to their kids or charity after they die.
Personally, I do not see why you would stop working at that point. You are making a killing and your families needs are already met. You are at a spot where you have established wealth for upcoming generations, assuming your kids aren't retarded with money and work hard as well. Honestly, I would work until I thought I was getting close to a heart attack and then retire.
Some rich people have literally worked since they were kids, and it's all they know. I know many workaholics, and it doesn't mater whether they are rich or just well off, they love to work. The get bored and restless if they're not doing anything productive.
Getting rich is merely a side-effect of their work ethics and pure drive.
If I had unlimited wealth and no job I would give myself like 6 weeks to live, tops.
it's about purpose in life. whatever their role was that made them wealthy wasn't just a job to them. it was their purpose in life/mission. Ingrained in their core. that's what made them successful. so imagine waking up one day without a purpose in life to pursue...you'd be lost and bored out of your mind. its a mentality like this that keeps them in the game.
I would play a fuckload of golf. just sayin'
One of our MDs said he played over 150 rounds last year...
Wait a minute, if you're worth $100 million who gives a shit about "connections"? I mean, aren't the connections supposed to help you get rich... you're already filthy rich. Why should I care about hanging out with Justin Trudeau or Elon Musk versus hanging out with my actual friends? Just trying to understand the thought process here. Why would it be a thrill for me to have lunch with Indra Nooyi?
I would say a good deal have healthy egos and the appreciation for the power afforded to them by running companies with billions in resources. I've had bosses who I know come to work every day so they can boss people around, lol.
Where is the 500-750K coming from?
Why not just ask heister ?
DickFuld thoughts?
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