It’s that time of year. And living in the Bay Area means there’s a strong possibility of attending a start-up’s holiday party, which I did recently. Having just secured a new round of funding, this budding company at just thirty employees (comprised mostly of engineers, a small sales department, and an intrepid and charismatic leadership team) is garnering the attention of many in the business and tech realm.
The venue was a posh restaurant led by a star chef and attendees included heavyweights like an iconic linebacker from the San Francisco 49ers. There were other major players, not all of the sports variety. One, for instance, was a representative of the venture capital firm that’s infused substantial amounts of dough into this new enterprise. For anyone new to what VC’s do, they cut checks so that CEOs can cut their checks. They’re the bosses of the bosses. They’re not rich, they’re wealthy. In fact, make your eyes really big and say the word ‘wealthy’ very slowly… w-e-a-l-t-h-y. That’s how wealthy they are.
Given the portrayal of moneyed people on television – Paris Hilton, The Bachelor, and Housewives – one might figure all affluent folks to be blinged out, self-involved crackpots. Not so. Everyone I met this evening had very pleasant and generous dispositions. And the man who might arguably be the most well-off wasn’t draped in gold. He was an older guy, ordinarily dressed, wearing a simple tee and warm-up jacket. This got me thinking deeply about assumptions and appearances.
I remember watching Donald Trump on a talk show when The Don was asked jokingly if he shops for toothpaste and does price comparisons between the different brands. He doesn’t. He’s got someone stocking up those items for him. But he did say, even so, that bargains are very important to him. *Ding!* It was another one of those real light bulb moments for me. Millionaires don’t get to be millionaires because they play loose with their money. They want the best deal for their dollar, whether it’s to construct a building or to clean their teeth.
Similarly, Reid Hoffman of Paypal and LinkedIn fame, after scoring big, had a chance to treat himself to a pimpin’ ride. His colleague bought a Ferrari. And Hoffman? He bought an Acura. “I started to think about the value of money,” he says in a New York Times interview. “I thought if I only had $75,000, would I rather invest in a luxury car or make a play in changing the world?” He chose to put the money into a solar technology company that has since become a multibillion-dollar enterprise.
People with mountains of cash are exceptional money managers, meaning they’re especially frugal and calculated, not flashy and impulsive. Yet people on check-to-check incomes sometimes spend to the limit to merely look and feel like they’re loaded, like they’re in control – all the while, getting enslaved by stuff and even worse, debt. Backwards, no? It’s the classic adolescent dilemma: it’s smart vs. cool, the tortoise vs. the hare, except we’re adults here. Which makes the stakes significantly higher monetarily. It’s not just a hundred bucks here and there on sneakers. Now, it’s credit cards and loans – multiple – with damaging interest rates, and no cushion for error. It’s like we’re junkies in denial and we’re perpetually one bad caper away from getting popped. Or as author MJ DeMarco puts it, two paychecks from broke. To quote music group, The Fugees:
“Everybody wears a mask but how long will it last?”
How did we let ourselves get this way? Are we dumb? Are we victims of the “system”? Are we bad people? No, of course not! None of the above. It’s possible we were just fast asleep. We just didn’t know, and fortunately, not knowing doesn’t last – not as a state of being and not as an excuse to keep on once you do know.
Genuine wealth cannot be measured by what you can buy. Currently, anyone can buy anything! That’s the problem. It should be defined by your ability to stay above water and make moves. What kind of moves? Well, that is open to very personal interpretation. What do you value? For some, it’s taking care of their family. For others, it’s taking a trip. Maybe it’s a passion project. Maybe it’s a good meal. Or it could be some gadget or name brand purse after all. That’s not the point. Like I said, it’s personal. What matters is that you act consciously and do so without sinking further into the debt trap.
Look, I’m a “marketing” guy. And I’m a Leo! I get it. Image has impact, no doubt. However, let me say this loud and clear: You are not your purchases. I’ve even met supposed anti-capitalists that are particularly married to their facades, and it shocks the living heck out of me. I rarely get duped by appearances these days. What people typically see as signifiers of wealth, I see as likely signifiers of money owed. If you’re going to act rich, do so like the real rich, not like the TV rich. Go ahead and partake in some downright unsexy – but true baller status – behavior. Spend less, make more, reduce your debt, increase your savings, start a business, stop the madness, and oh yeah, read books!
Hey, I’m working on my finances too. I appreciate you understanding the meaning of this post and taking responsibility and action to improve. We’re in this together. Keep on keeping on. As always, feel free to repost or comment. Your thoughtfulness is appreciated. (Video: Paid In Full by Eric B. & Rakim)
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