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NY Times and Silicon Valley: A Fresh Look?

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Much of the personal finance community is buzzing with about this this NY Times article. The article focuses on those in the Silicon Valley who have $5-10 Million - in particular those who continue to work long hours. These people also noted that all the money doesn't seem like a lot. It's easy for average America to be outraged and enthralled by such a story.

As a resident of Silicon Valley for almost a year now, it got me thinking. How does this make them different from many professional sports players? What about movie stars? Does Winona Ryder really need to be in another movie? For them the money is often about respect amongst their peers. It's a similar thing anywhere you go. If you know your job pays X, you don't want to settle for half of X. It's human nature to want to live in the style of those in your surroundings. I'm wondering what some of the people in the poorer 3rd world countries would say reading of life in America. I imagine they'd think that living with hot showers and enough food to actually have an obesity problem is just as unimaginable.

You can be sure that if we had $5-10 Million dollars, we'd be moving to someplace like Texas or North Carolina where we could live in quite a bit of luxury. I don't understand why more people with million dollar homes don't do that more often.

Posted on August 7, 2007.

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15 Responses to “NY Times and Silicon Valley: A Fresh Look?”

  1. Matt says:

    Interesting post and NYT article. I think you are right that for many the amount of money you have is relative. Also, it is different to have $5M in silicon valley where the cost of living is very expensive.

    I also think, that some people really enjoy there jobs and continue to work long hours because of this enjoyment.

  2. Eric says:

    Yeah but in the valley, is a million dollars really even that much money? I live in Alabama, and that’s some serious money. In AL, your $250,000 house and maybe $750,000 in various investments can support you and make life nice, but you’re still going to have to work a little to cover things. I’m sure in a place where housing is so much more and cost of living is higher, it’s not a lot of money in relation. Of course you’d know better than I do.

  3. Jon says:

    Quite an interesting article about Silicon Valley multi-millionaires. They all want to be able to relax, but don’t want to move? That’s a rat race I don’t want to be a part of. If I had $5 million, I would be moving too. Invest, and then just work where ever I wanted. I noticed the classical “Keeping up with the Joneses” through the entire article. An article about greedy people, pure and simple.

  4. anonymous says:

    A million bucks isn’t that much money anywhere, much less in silicon Valley. A typical middle-aged person worth over $1M probably has an income at least in the low 6 figures.

    $1M doesn’t come close to replacing that income, particularly for a young person, and particularly for someone in Silicon Valley.

  5. guinness416 says:

    I assume you must need a certain personality (which I surely don’t have!) to get to that level of wealth & success. Plus at that level your job isn’t just a job, it must be a passion to some degree? I’m not sure it’s as simple as some may suggest to just turn that off. And it’s all relative of course. As someone pointed out in an interesting metafilter thread on the subject, those of us who make more than $50k a year are in the top 1 per cent of earners in the world, but usually can’t ratchet it down and move to cheaper climes either.

  6. Lazy Man says:

    As some mentioned, a million isn’t what it used to be, but $5-10 Million is still plenty of money – enough for most people to retire on if planned well.

    Jon, I didn’t see it entirely as an article about greedy people, but I also know a lot of people have their friends and family here. Once you plant roots somewhere, it can be difficult to move. Do you want to take your children away from their friends? There’s a lot of value in that.

  7. JadeEJF says:

    Have you looked into lendingclub.com yet? I was just reading an article about it yesterday (which had a link to an interview from you!) on NuWire and it made me curious if you’d tried it out yet. I’m signed up, but haven’t loaned out, because I’m a little nervous about moving beyond Prosper. Thoughts?

  8. Foobarista says:

    I was going to write a long reply, but the “anti-spam” thing ate my post when I forgot it!

    Anyway, we’re probably one of those people: our net worth is about $1M (about $700K without RE), and going up by about $150K/year. Someone going by our net worth statement would guess we’re super-rich, but someone looking at our possessions would probably guess we’re lower middle class, living in a 1300 square foot duplex in Mountain View.

    For us, the reason we don’t leave is the Valley is very interesting, full of brilliant people from all over the world, and is within day-trip driving distance of numerous beautiful places such as Yosemite, Lake Tahoe, and numerous places on the coast. Also, I was born here and some of my extended family is here.

    The pressure that many feel, even if you’ve got decamillions, is because you really want to accomplish something, and you get caught up in the drive to do something new and cool. Also, many people would like to retire here, and not somewhere where one’s social life revolves around Friday high school football and Sunday church.

  9. Brip Blap says:

    I am fairly sure that there is nowhere in the US where $5-$10 million is not sufficient to live off of. It may not be enough for an eight bedroom home in Manhattan, but it’s going to be enough that any reasonably normal spending person could live for the rest of their life without working for money again. That to me is not even a point of debate.

    Now, if your definition of “living” includes “I must have a vacation home in Tahoe” then I retract everything I said. But the point about athletes, etc. is dead on. Some people just like to compete, and for some professionals money is the score. It’s not even about the purchasing power of their earnings, it’s simply knowing that they have the most. I know people like this, and while I couldn’t claim to respect their motivation I do understand it.

  10. RateLadder says:

    I think it is more about drive to create…

    These people could retire and choose not too.

  11. MoneyNing says:

    To hopefully answer your question on why people don’t move. It’s the comfort of staying in the same place + the laziness of people trying something different. It’s a very different life living in North Carolina than in Silicon Valley and not everyone is willing to trade for that even if it means that they can live in a bigger house.

  12. the baglady says:

    What I take away from this is that these people are type A workaholics to begin with. They probably can’t relax even if they tried to. I read a lot of comments on other blogs that people are nauseated by these “whiny millionaires”, but I guess a lot of those people don’t live in San Mateo either.

  13. Tim says:

    the operative quote in the article is “…you are a nobody”. does being a somebody really make life that much more interesting? then again, it really depends on how you define yourself and what being a “somebody” means. Live your life for yourself and your family, not for others.

  14. Foobarista says:

    One irony of the world of wealth: if you have the drive and skill to get to $5M or more, you probably aren’t all that interested in the money by itself. To get to that level, you have to be extremely skilled in what you do and the skill must be worth the income, or possibly you got very lucky. Silicon Valley has lots of both types.

    The grind-it-out “millionaire next door” types exist as well, especially in the vast immigrant business community, but techpreneurs and hotshot VCs aren’t noted for their interest in a quiet life of prosperous anonymity.

  15. thc says:

    We’re not much different than the Stegers in the NYT piece (we’re a couple of years younger, though). We’ve considered selling our 7-figure home and moving back to the Midwest but we kind of like it here–high costs and all. We keep working because we enjoy what we do AND it will take $8-10 million in retirement assets to have the lifestyle that we want.

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