“You’re nobody here at $10 million” - Oy!

[ladelfina]

Sounds hellish!
http://www.nytimes.com/2007/08/05/technology/05rich.html

 

[chinaco]

The wages are a little higher on average in that area, but so are expenses. He would be best off if he left that area. His standard of living could increase significantly.


There are quite a few millionaires. If he is in the top 2% then that probably means that there are over $5 million millionaires in the US.


Personally, I do not believe someone hits that point of being wealthy until they hit the somewhere in the 5-10mm range. With 10mm being solidly well off. @ 4% the 10mm portfolio draws about 400k/year. That is a lot of money to spend. 100k/qtr or 33k/month or almost 8k/week.

Heck with that level of money unless one is buying expensive toys and/or very large homes... they are looking for ways to get rid of the money. OF course, at 10mm, one probably paid cash for the 1mm mansion and is driving fairly new luxury automobiles, etc... It probably does not take long to spend money to keep of with the Rich Neighbors.

 

[Lazarus]

It won't matter how much these people have it will never be enough. I would be gone from work long before I had as much as these people do now.

 

[farmerEd]

Yet like other working-class millionaires of Silicon Valley, she harbors anxieties about her financial future. Ms. Baranski — who was briefly worth as much as $200 million in 2000 but cashed out only $1 million before the collapse of the tech bubble — returned to work in March.

Now thats gotta hurt!

 

[Texas Proud]

Yea.... the lady that went from $200 mill to $1 shows how stupid she is not to diversify... and also how much money flows to these startups...

As it said in the article, if they had gone to another building they might have nothing..

Also, it is a fools errand that tries and keep up with the Jones...

It is funny.. but there are enough of these that do cash out that land prices in Oregon has gone up a lot... at least that is what my sister tells me...

 

[Arif]

The tragic flaw of these folks is that they have not mastered the feeling of having enough. While there's nothing wrong with aspiring to acquire tens of millions of dollars there's something wrong with staying at a job working 70 hours a week because you want to teach your kids to have a work ethic. Or even worse to keep up with the Jones. That's just stupid. Even the marketing exec. says he saw his dad working from sun up to sun down with no balance in his life. Now he is repeating the same fate.
One lady even said she didn't know why she doesn't cash it all in and live someplace else with a lowring cost of living.

 

[bssc]

With the exception of perhaps, Slim, Gates and Buffett, there will always people with more than you. I would have left Silicon Valley years before, as I suspect, most of the rest of us would have done (and the lady in the article mentioned).

I suspect that most of them would never leave, which is why they didn't cash out their options. Which is fine with me, more people to support SS and invent fancy gadgets that other people have to buy to pay sales tax on.

 

[dex]

interesting that a couple of people profiled in the piece paid off their mortgage

 

[Olav23]

Yea.... the lady that went from $200 mill to $1 shows how stupid she is not to diversify... and also how much money flows to these startups...

Sometimes it isn't as simple as that. Many people got burned in the .com days due to options lockup periods. You can't just cash in your options during the hot IPO and win the lottery. I've also heard of many people that now owe tons of backtaxes on stock that is now worthless and having to declare bankruptcy, etc.

 

[Helena]

The old saying is still true.

It's not what you earn,
it's what you keep that counts.

Often a person making well into six figures will
call Dave Ramsey lamenting about his huge pile
of debt ! Ramsey tells him the average American
family lives on less than $40,000. I live very nice,
simple, debt free life on a lot less than that.

Life is good.

 

[dex]

A very thought provoking article.
1- It is all a matter of prospective - they feel poor with 3.5 million yet anywhere else in the world they would be kings/queens
2. Group think - they surround themselves with people like themselves with the same goals
3. The Happiness/unhappiness issue - you become accustomed to a certain amount of happiness and then you need more to feel happy
4. They don't have a balanced life - 70 hrs a week of work
5. The USA is great - that average people can obtain so much
6. They are slaves to their fears
7. We need them - they are drivers of our economy
8. They make me feel good about my life.

 

[Texas Proud]

Sometimes it isn't as simple as that. Many people got burned in the .com days due to options lockup periods. You can't just cash in your options during the hot IPO and win the lottery. I've also heard of many people that now owe tons of backtaxes on stock that is now worthless and having to declare bankruptcy, etc.

Yes.. you are right on this... but it seemed to indicate she was an 'executive' and usually they could cash some out when it was issued.. not always, but I did see it on some of the issues...

And IMO if the price drops from $200 mill to $1 mill in the (I believe) 6 months of lockout then you never REALLY had $200 mill did you??

People who still owe on options also did not cash out... they converted all to shares and decided to pay the taxes... a bad decision... to much in one company, but I guess that is why I will never get there...

 

[kramer]

I semi-retired out of Silicon Valley a few months ago. Overall, I didn't see many people putting in these kinds of hours at my large Fortune 500 company. I would say that the average of my co-worker engineer employees at my company was close to 40 hours per week.

The article focuses on a lot of people working at startups which are a minority of workers, although they toil long hours by choice. I do know a lot of folks that are working at other Fortune 500 companies, and many are putting in long hours, maybe 50 hours per week as a long term average (plus long commute for the homeowners).

I always said that my time there was finite -- I knew when I took my first job that I would take my money someday and leave Silicon Valley. But most people there want to stay there. They think there is no better place on the planet to live and would not consider any other place (I used the mildly pejorative term "Bay Area Bigots"). Also, there is nothing wrong with wanting to stay where you spent your adult life.

Costs are not as high as you think if you are modest. At the end I was paying $1000/month for a nice one bedroom apartment in a great downtown area. The biggest excess cost for me compared to other locations, as a single high earner, was California state taxes. But buying a house or condo would have cost me a fortune.

I remember being shocked when some former co-workers of mine (husband and wife) moved from, say, an $800K house which was very nice to a $2M plus house (the same year that their only child went off to a state college). I was thinking to myself -- why did you do this? You both work long hours and both make big salaries (they are mid-40s) and now you will have to continue to do this for a long time . . . I didn't have the heart to ask them why. And they needed even less space with the kid moving out but instead they up-sized, and the commute was longer . . . I just don't think like them, I guess.

Kramer

 

[kcowan]

I think people working on Wall Street get caught up as well. It is the buzz that keeps them going and they forget about themselves.

Even in Silicon Valley, guys like Kramer are the exception IMHO.

 

[mb]

I used the mildly pejorative term "Bay Area Bigots.
Kramer

Hey, that's me!

Today it is 72oF, 48% humidity and sky so blue it looks like a painting and my house is paid for

MB

 

[megacorp-firee]

Wow ... I don't know what to say.
...except it's good [-]to not be them [/-]to be me!
If I had more, I guess I'd find some more toys or do more of what I am doing... but at what cost? Talk about the 'pack mentality'.

A smart man once told me '... even a total failure is useful ... he can always be used as a bad example.' I guess that goes for 'successful' people too.

I repeat, it's good [-]to not be them [/-]to be me!

 

[mb]

Wow ... I don't know what to say.
...except it's good [-]to not be them [/-]to be me!
If I had more, I guess I'd find some more toys or do more of what I am doing... but at what cost? Talk about the 'pack mentality'.

A smart man once told me '... even a total failure is useful ... he can always be used as a bad example.' I guess that goes for 'successful' people too.

I repeat, it's good [-]to not be them [/-]to be me!

Not the chasing the "next big thing" just to keep up with the Larry Ellison's and Steve Job's part.

I live in Silicion Valley and I like it. I don't need any more toys and I don't need to follow any pack

MB

 

[FinanceGeek]

I have always regarded the SF Bay Area, and for that matter most of California, as a sort of "low rise Manhattan". Now that most high tech (and for that matter, most white collar work) can be done anywhere in the world far less expensively I really don't see what attraction the place holds.

The Bay Area strikes me as the kind of place that only people with significant family connections or those fresh out of college "seeking their fortune" would move to. Once one is established and living well in so-called fly-over country (especially if one had children or "only" a couple million dollars), I cannot imagine that the standard of living downgrade required to relocate to the Bay Area, or for that matter any part of California, would be at all appealing.

Not too long ago I saw an interesting article that reported that even illegal immigrants from South and Central America are no longer "automatically" heading to the coastal locales due to the high relative cost of living associated with these destinations, these people strike me as being more highly intelligent in many ways than these neurotic millionaires.

If were a nervous millionaire in the Bay Area, I'd think pretty hard about diversifying my investment portfolio, and improving my lifestyle, by taking my nest egg and leaving.

 

[Khan]

. . . “You look around,” Mr. Barbagallo said, “and the pressures to spend more are everywhere.” Children want the latest fashions their peers are wearing and the most popular high-ticket toys. Furniture does not seem up to snuff once you move into a multimillion-dollar home. Spouses talk, and now that resort in Mexico the family enjoyed so much last winter is not good enough when looking ahead to next year. Summer camp, a full-time housekeeper, vintage wines, country clubs: the cost of living bloats.

This is beyond my comprehension.

I'm sitting here in ~1000 sf house, not running the A/C, wearing cut-off sweat pants and a T-shirt with the sleeves ripped out, looking out the window at the birds and the garden ...

I don't know about him, but I am content.

 

[Peter]

I have always regarded the SF Bay Area, and for that matter most of California, as a sort of "low rise Manhattan". Now that most high tech (and for that matter, most white collar work) can be done anywhere in the world far less expensively I really don't see what attraction the place holds.

Some high tech work, perhaps. But the Bay Area is where you'll find many of the new ideas that the rest of the world follows. It's also where most of the high risk venture capital funding can be found.

So it's an attractive location for someone young, smart, and ambitious, who wants to 'change the world'. You may scorn such naivete, but the guys who started Google, for example, are role models for many at the start of their lives and careers.

Peter

 

[califdreamer]

Oh what the heck. I'll just throw something out and be totally provincial.

If I were in the position these people are in I'd sell the mansion in Hillsborough and buy a plenty nice enough home in the San Diego area for cash. IMO more economical, better climate, less stressful... just perfect for a Type B like me. Of course a Type B like me never would be working those 70 hour work weeks to begin with.

Just give me one weekend with them... beer and fish tacos watching the sun set over the Pacific. They can always fly back north occasionally for fancier grub (hope they don't forget to grab their coat).

 

[haha]

Costs are not as high as you think if you are modest. At the end I was paying $1000/month for a nice one bedroom apartment in a great downtown area.
Kramer

Hey Kramer, downtown San Jose? Downtown Santa Clara? Or SF?

Inquiring minds want to know!

Ha

 

[Dawg52]

not running the A/C, wearing cut-off sweat pants and a T-shirt with the sleeves ripped out,

I don't know about him, but I am content.

You must live in the cool mountains. BTW, I'm content too. But my A/C is running.

 

[Khan]

You must live in the cool mountains. BTW, I'm content too. But my A/C is running.

Mine will be starting tomorrow and for the next week: 90+ and humid.

 

[kramer]

Hey Kramer, downtown San Jose? Downtown Santa Clara? Or SF?

Inquiring minds want to know!

Ha

Hey Ha,

It was San Jose. I actually really liked it there. And it is very safe, too. The winters were a little wet and cold for me there, but you can't have it all Personally, I always despised San Francisco weather, which is cold, damp, cloudy, and just plain yucky most of the year. But San Jose weather is completely different.

However, at my new location in SoCal it was 75 degrees and sunny today

I just got back from a fast-paced 3 mile run in the hills behind my place where all the rich people live. We all wave to each other. Runners add to their atmospherics

Kramer