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May 3, 2002 Print this article Send to a friend
| FEATURES | Ryan D�Agostino |
How Much Scratch is Enough?: The $1,000,000 Question
What happens when you�ve made all the money you ever thought you�d want? Do you retire? Change careers? Or change yourself?
Okay, let�s see. Say I give myself eight years�no, better make it ten. Just to be safe. I figure I�ll definitely want a great apartment in Manhattan. Near Central Park. Plus a summer house in, say, the Carolinas. Nothing too big, but nice. Also, enough to put a couple of kids through college. Prep school too. Oh, and Colorado. A condo, on the slopes. Gotta have a nice set of wheels�Beemer�and an SUV (to get around Colorado). Then maybe I�ll open up a little cafe somewhere, or get a boat. Yeah, a boat would be cool. Ten years. Figure $15 million. I think I can do it. But then I�m out. Definitely. Out for good. Just sailing around on my boat.

This is how it starts: with a pledge. A promise to yourself that you will make a certain amount of money�that you will hit your number�by a certain age, and that you will, upon reaching that carefully calculated goal, get out. Go sail your boat. Or open your bookstore or your bed and breakfast, or be a philanthropist or whatever. You won�t have to worry about money. You�ll invest a big, juicy nugget and live off the interest, which will be more than enough.

For some people, though, that word becomes a stumbling block: enough. It makes the calculations tricky, and sometimes, it changes the plan. Enough creeps slowly but steadily upward, like ivy spreading imperceptibly over an entire side of a house, and once it does you can�t picture what the house looked like before. At first, you aim high�way into the millions�and while part of you knows that chances are you won�t really end up with that much, part of you knows there�s a chance you will. You see the number in big, block numerals in your mind, and the corners of your mouth curl up into a little smile, just for a second, when you picture yourself hitting the mark.

Over time, as you gain loftier titles and heftier bonuses and meatier stock packages, you realize that the number that once seemed like all you could ever need is actually within reach. You�re thrilled that you�re going to hit it. But what about your pledge? You might decide not to make good on the pledge just yet, nudging your number higher�because if it�s a number you can actually hit, it must not be enough. Or you might abandon your highly remunerative profession for one that�s rewarding in other ways. Either way, you probably won�t just go sailing. We asked three successful, wealthy people with three decidedly different weltanschauungs what they did when they hit their numbers. Each of them has wrestled with thoughts about the cycle of getting and spending. Their millions have caused them to feel at times guilty, relieved, uncertain, proud, jealous, elated, and confused. Throughout their working lives, money has caused them to do some hard-core introspection. Here�s what they saw.

�I had a fascinating conversation recently with Jann Wenner, the founder of Rolling Stone,� says the Chaser. �Here�s a guy who�s probably got three or four hundred million dollars�he�s got a Gulfstream II and a house here and a house there, and you can�t imagine what trappings he could want from the next level. But he�s got this gleam in his eye because he�s telling me about how he spent the weekend with Paul Allen. He said that Paul Allen didn�t have a GII, he had two 757s. They flew over to, like, Nice, and then they got into Paul�s helicopter, which took them to Paul�s boat, which stays sort of off the coast of southern France. And I could tell that Jann was picturing himself at the next level�the multi-billionaire. And I was fascinated by that because, holy shit, if that�s not enough for Jann, why do I think I�m going to be able to get off the conveyor belt? What makes me so different that I�m going to be the one who won�t succumb to the next whatever? And I think it�s rational to fear that.�

The Chaser is 39. He grew up in middle class New Hampshire and went to boarding school. His first job was as an advertising account executive with a salary of $17,000. Today he�s the president of a New York City ad agency. He lives in Westchester County, one of the wealthiest suburban areas in the country. He and his family belong to a jacket-required country club. They vacation on Martha�s Vineyard during the summer, in Vermont in the winter.

The Chaser says that the way he looks at wealth is informed by the way in which he was introduced to wealth. He dated a girl in high school who neglected to mention that her father happened to be the eleventh- or twelfth-richest person in the country. One year, the Chaser went to her enormous house for Thanksgiving. �It was like, what are they ringing that bell for? What does that one mean? Do I have to take my shoes off?� From then on, his understanding of what a house could be was irreversibly altered.

�When I got out of college, my goals were things like a beautiful home, a couple of great cars. The normal stuff. I spent a summer on Martha�s Vineyard when I was in college, and I said to myself, �I gotta have a house here.� But the house you think you want in the summer of 1981 is so fundamentally different from the house you want now.�

A few years ago, the Chaser and his family rented a house on the island. He splurged on a beautiful place, right on the water. What the hell, he figured, it�s only a week. The problem, though, was that after renting a house he couldn�t afford to buy, there was no going back. When he considered purchasing a place of his own, his wallet could not match his dreams. �You convince yourself that what you have is pretty cool�until you have the next thing. Once you book in first class, the idea of flying coach is cataclysmic. Every time your surroundings change, your perspective changes. I�m probably no closer to my actual goal than I was five years ago, because your goals change. And they don�t change down.�

The Chaser arrives in his office early each morning and works hard enough that he is notoriously difficult to reach. He�s still relatively young, but he speaks of the future wearily. He quotes Larry Bird, the basketball legend who retired from playing at age 35. Bird said, �It�s not the years, it�s the miles.� The Chaser is well over the million-mile mark on one airline, and he�s getting close on another. When will he get off the airplane? Tough to say. �You decide to do this, and one thing leads to another, and there you go.�

In the 1950s, the psychologist Abraham Maslow developed a theory called the hierarchy of needs. Arranged in a pyramid, the model was designed to explain what humans need and want by examining their pursuits of everything from sex to money. At the bottom of the pyramid are the basic needs, what people need to survive. At the top is what Maslow called self-actualization�the complete fulfillment, in one�s own mind, of one�s potential. �People go through this construct,� says the Achiever, invoking Maslow�s theory. �I did, because I was looking for not only financial remuneration but also recognition of my competence. But I did have a vivid feeling that I wanted to go to business school, and I really wanted to make money.�

The Achiever hoped to amass a million dollars in savings and become a partner in a business by the time she was 30. Not many women were getting their MBAs in the late �60s, but she enrolled at Harvard Business School, which had only begun admitting women a few years before. She left Boston with her degree and her number: one million dollars. It may not seem like a stratospheric target, but for the 24-year-old daughter of two non-college-graduates from Kansas City, heading to Wall Street at a time when she wasn�t even permitted to join the Harvard Club, it was a lofty goal indeed.

The Achiever got a job in real estate investment banking. She made her million before she turned 30. She made vice president. Mission accomplished. She stuck with the firm for a few more years and then decided that with her two major goals behind her, what she wanted most was not to stop working�which she certainly could have done, at least for a while�but to apply her business skills to endeavors that were more meaningful, both to her and to society. She had grown tired of a gig that did more for her pocket than for her soul. �In investment banking, you�re really an adviser, and I wanted to become involved in managing a group of people. It was a change of content that I wanted.�

Hitting her number, in other words, had afforded her the freedom to do whatever work she wished. The Achiever gravitated toward jobs that would put her at the helm of groups of energetic people. She ran subsidiaries of a billion-dollar real estate company. She was tapped by the government to take on the Herculean task of handling assets from failed federal savings and loans in the mid-1980s, a job that appealed to her sense of civic duty. She became involved with her undergraduate alma mater�s business school, developing a program to help young women take advantage of the same opportunities in business that she�d had the gumption and intelligence to seek out for herself.

�It�s a privilege, being able to do these things,� she says. �You may have something that you really care about, but you can�t put the energy into it that I�m able to, mainly because of age and, really, money. I like to think that my financial background and my business background can make an improvement to the way we live, an improvement to society.�

In 1978, the Achiever had a child. Five years later, she had another. They mean more to her than anything else, but still she kept her business skills warm. Many successful businesspeople do buy sailboats and bed and breakfasts and bookstores, and they�re perfectly happy living what most would consider lives of privilege. For the Achiever, though, it�s her career that makes her feel privileged.

The Giver was the first person in his family to attend college. He grew up in a modest home in a small town; his father worked in the textile industry. The Giver graduated in 1985, when Wall Street was on a hiring spree, and took a job at a commercial bank for $30,000 a year. Four years later, he landed a position at one of the best banks on the Street. He started making good money in 1996, and �very good money,� he says, in 1999. He hit his number in 2000. He now lives in one of Manhattan�s most expensive and most famous apartment buildings. Five years ago, he established a charitable foundation that donates heavily to children�s health organizations, to which he gives more than six figures a year. �For me, the only reason to go on earning lots more money is to give it away,� he says.

Before he hit his number, though, the reason was to buy a sense of serenity. �When you�re younger, you set these goals and numbers as a measurement of the milestones of success in your career,� he says. �As you get older, they transform into something you can get peace of mind out of. Then it becomes a bit of a crutch. It�s easier to work another year or two, because you already have the peace of mind and it�s really just the numbers for numbers� sake. Going from making a hundred thousand a year to four hundred thousand was tough, because I really had to work hard and be under some guy�s thumb for a while. But going from a million to�whatever the numbers are�gets easier. You�re senior and you�re in this groove, and then you feel guilty. Because you see other people struggling.�

Take the moment in the late �90s when the Giver and his wife sat down with a calculator and realized that he was going to have an extremely good year. Over-the-top good. Peace of mind good. How good, exactly? �If you can earn a five percent after-tax return on your liquid assets, and that cash flow alone can cover your annual expenses�schooling for the kids, mortgage, two great vacations a year�and those expenses amount to about two to three hundred thousand dollars a year, that�s a good way to think about it,� he says.

They celebrated, to be sure. But the prevailing emotion he felt was relief. �It was very calming,� he says. With his number behind him, he suddenly had the freedom to pursue . . . well, pretty much whatever he wanted. Not that he seized it right away�just knowing the freedom is there has sustained him for a while. But he soon will set himself free, he says. �Every three months, the feeling that maybe I should get out and stop the gerbil spinning the wheel intensifies. It�s not like I�m going to retire, but if I�m bored with tracking down why this stock is up two or down two, I�ll be able to stop.�

But the Giver is still showing up every day, scouring the financial pages and studying stock prices. Well, not every day. He�s been easing off on his hours, spending time with his newborn child. He�s teaching a few college classes to relax and expand his intellectual horizons. He wonders sometimes if he would be happier teaching all the time. He�s still trying to make money, but maybe not as much. �When you�re in the wealth accumulation phase�between 35 and 45�you�re also in the conspicuous consumption phase. I�m 40, and I don�t feel the need to conspicuously consume. I have a car, I own a place to live, and in my view the real enjoyment out of life is the freedom to spend more time with your family, spend more time learning things that you don�t know anything about, spend more time being charitable and all that stuff. But people are very different. I work with a couple of guys who think that what I think is idiotic.�

This article originally appeared in the May 2002 issue of MBA Jungle.
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