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Location: Formerly Pleasanton Ca, now in Marietta Ga
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Quote:
Originally Posted by ohio_peasant
Your situation is unusual. More normally, whether one has $1M, $2M, $4M, $8M, $16M or whatever, there won’t be any magic doors opening. Having more money means cheaper stock-trades and a “personal advisor” at one’s brokerage. One gains access to funds that are “closed” to normal investors. But no special phone will ring, apprising one of some fantastic deal. There won’t be free tickets to the opera or a private viewing at the art-gallery or a black-tie dinner with some political candidate (well, unless you pay $5000/plate out of pocket).
A person gets hassled by the NYPD, frisked by the TSA, stared in vitriol by the bus-driver, blocked-in by the garbage truck, and otherwise importuned and disrespected by society, whether one is worth 8 figures in US dollars, or a thin wad of Venezuelan Bolvars. Money doesn’t buy access, special treatment or respect.
Thus my "fairy godmother" anecdotes about said fairy dropping $80M onto your pillow. Before that drop, I'd be a benighted dumb hick in a threadbare shack. After the drop, I'd be a benighted dumb hick in a threadbare shack with an $80M account at Fidelity... who suddenly can't sleep anymore, because he's mortified over how to properly shepherd and grow that $80M.
And worse yet, if your net worth is two old Buicks and an heirloom armoire, you can grow your net worth appreciably by accepting more overtime or replacing tonight's chicken-dinner with rice and beans. But post-fairy, not even a vice-presidency at Golman Sachs would make much of a difference.
Money can and does buy access, special treatment, and respect.
There are investments only qualified investors with a certain net worth or income can access.
Pull up in a Ferrari to any business and see how you are treated vs the old Buick. Network with your ferrari buddies and see what business opportunities come up versus your Buick buddies.
I very much remember a couple colleagues who made major money when the company went public ($35+ million) getting entree to early investment opps from some venture cap guys in Menlo Park. This was around 1998 and the venture money was flowing bigtime and they were part of some early rounds. I think they did angel investing after vesting into all their shares, selling, and retiring.
The same holds if you're a flat-broke PhD student in electrical engineering, whose professor launches a start-up and appoints you CTO.
Money exponentiates (positively) when deployed in a clever, aggressive venture. Having nothing to lose, one can abide (and even embrace) such aggression. But the only sort of "partner" who'd cold-call a "wealthy" isolated hick in the countryside is an annuity-salesman or a Nigerian 419 scam. The Ashkenazy Group won't come calling, offering partial stakes in their latest deal, just because they like your writing on C-D... even if you yourself are of Ashkenazi Jewish ethnicity.
For the rest of us, it's index-funds, and watching (or ignoring?) the latest gyration in the S&P 500 and the latest decline in the FTSE and DAX.
Yes, I was giving a rough figure. But with dividends, it could be a lot more.
Anyway, the reality is that in late 2008/early 2009, most people were very freaked out by the stock market. A lot of people sold on the way down or they vowed that they would never invest in the stock market again. Such is human psychology.
then those same people jumped back in when the market topped 27K.... such is life.
The same holds if you're a flat-broke PhD student in electrical engineering, whose professor launches a start-up and appoints you CTO.
Not quite.
Menlo Park VCs aren't going to be calling the flat broke engineers to offer them access to special funding rounds. It takes $$$$$$$$ to be on their radar. (I heard some of the conversations directly when I was stationed in one of the VC offices on Sand Hill Rd for several months, working for a new venture the VC was funding at the time).
Money doesn’t buy access, special treatment or respect.
If money can buy me a sizable home in a good school district of my city, I think I am good to go for now. Plus, some additional things like my childrens' future college tuition and my retirement nest egg would be very helpful, of course.
I don't need "special treatment" or "respect." Those are nebulous words whose definitions differ quite a bit based on who you're asking.
A: There was approximately $1.70 trillion in circulation as of January 31, 2019. This figure includes Federal Reserve notes ($1,655.2 billion), U.S. notes ($0.2 billion), currency no longer issued ($0.2 billion), and coins outstanding ($47.2 billion).
U.S. Population = 329,217,343
Estimated $5,042.26 per capita in circulation
When the music stops, good luck in "cashing out." Better still, a "dollar bill" has no par value and is not a "dollar" as defined by the Coinage Act of 1792.
Been reading John Birch society literature lately?
Money can and does buy access, special treatment, and respect.
There are investments only qualified investors with a certain net worth or income can access.
Pull up in a Ferrari to any business and see how you are treated vs the old Buick. Network with your ferrari buddies and see what business opportunities come up versus your Buick buddies.
If I can afford 100 Ferraris, but instead drive a clapped-out Buick, wearing torn overalls and shoes with delaminating soles, the "Ferrari buddies" would dismiss me as a pathetic caricature of reverse-pretense. Whereas the fellow who does pull up in a Ferrari, may be renting or leasing it. It's not the wealth that makes the impression, but the capacity to deploy it, in sufficiently flamboyant (without, let's stipulate, being garish) ways.
In my village, there are no Ferraris, and if I were to drive one around town, likely I'd be pelted with eggs.
Quote:
Originally Posted by lottamoxie
Menlo Park VCs aren't going to be calling the flat broke engineers to offer them access to special funding rounds. It takes $$$$$$$$ to be on their radar. (I heard some of the conversations directly when I was stationed in one of the VC offices on Sand Hill Rd for several months, working for a new venture the VC was funding at the time).
The professor with the gravitas to launch the start-up will attract VC funding because he sits on the right committees, serves as subject-matter-expert for “due diligence” for the very same VC firms regarding other start-ups (this business is highly incestuous), and so forth. The VC firm’s interest is piqued not because the students or the professor are wealthy, but because of reputation, and running with the right crowd. As an aside, that’s one of the benefits of going to grad-school at a Stanford or a Caltech, vs. the University of Dayton.
It isn’t wealth itself that opens doors… it’s a combination of verve and connections. A diffident, unimaginative and solitary person, who accumulates lots of money through sedulous savings and patient investment in the stock market, won’t suddenly become surrounded by other wealthy people offering investment opportunities. There is no “club” that one is offered to join, upon reaching some dollar-threshold at Vanguard or Fidelity. Flagship Select might sound prestigious. But it doesn’t mean that suddenly you get to skip the line at the downtown night-club’s front door, or receive an ingratiating smile from the otherwise surly bouncer.
And it's not 1999 anymore. VC has moved well beyond Sand Hill Road (but not yet into Ohio).
Quote:
Originally Posted by BigCityDreamer
If money can buy me a sizable home in a good school district of my city, I think I am good to go for now. Plus, some additional things like my childrens' future college tuition and my retirement nest egg would be very helpful, of course.
I don't need "special treatment" or "respect." Those are nebulous words whose definitions differ quite a bit based on who you're asking.
If your objectives are those of a consumer, then indeed, money fulfills your aims, especially if you’re willing to expend the money to make your purchases.
I have no children, and take no particular pleasure in a commodious house or a tony neighborhood. Though making no spiritual claims, I keep the company of harlots and publicans. They may have been promised much, but inheriting Central Park condos wasn’t included.
The professor with the gravitas to launch the start-up will attract VC funding because he sits on the right committees, serves as subject-matter-expert for “due diligence” for the very same VC firms regarding other start-ups (this business is highly incestuous), and so forth. The VC firm’s interest is piqued not because the students or the professor are wealthy, but because of reputation, and running with the right crowd. As an aside, that’s one of the benefits of going to grad-school at a Stanford or a Caltech, vs. the University of Dayton.
For years I worked right alongside people who graduated from top tier schools. It was exceedingly common for folks from Cal or SGSB to start companies and bring in their buddies. It is indeed incestuous (or at least was when I worked in that environment in the late 90s and early '00s). Money attracts money, always has, always will. Someone's always selling, someone's always buying.
But,until someone has money the doors aren't opening in quite the same ways as it does for someone who has multiple millions. I saw this personally. The balance of power shifts and options and access to another level of investing is open to those who have $$$$$$$. You can't ask the poor professor to invest in some other startup or incubate multiple startup companies, simply because he can't (yet). Example: Andreesen when Netscape was being formed and Andreesen after Netscape went public had "slightly" different realities, to put it mildly.
At the same time (back to the subject of this thread), it doesn't take many multiples of millions (say that 10 times fast) to have a good life. It really doesn't. Most people will not have that level of wealth, but they can still have a wonderful and fulfilling life. And as I've said before, there is no amount of money, no amount of wealth, that can buy more time. Time is the common denominator and the great equalizer. Everyone gets the same 24 hrs in a day and when it's gone, it's gone.
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