Friday, September 16, 2005

The Wright Exit Strategy

This is a great antidote to The Millionaire Next Door. If you recall, Millionaire Next Door is about how wealthy people got that way by clipping coupons and not spending money. The study was flawed with all sorts of the kind of errors described in Fooled by Randomness. However, even more distasteful to me was all these people with millions of dollars who spent their lives staying home, clipping coupons, and not actually doing anything with their money like travelling, enjoying hobbies, or doing anything for the greater society. In fact, most of them answered the question, "What is your favorite charity?" with the answer, "Myself."

OK, enough about the Millionaire Next Door. The Wright Exit Strategy reverses the question by asking you what your goals in life are. If you could have any calendar you want, and could fill it only with stuff you enjoyed doing, how would you fill it? From there, Wright gets into the details of how to hire the correct estate planning agent, how uncomplicated financial strategy actually is, and how to get over the barriers to being able to do what you truly want to do, whether it's the fear of selling your family business, or selling your highly appreciated company stock, or actually starting to give money away.

Note the the book does not at all describe how you should get that wealthy. Presumably, you do that with a combination of luck and business saavy. Naturally, most of the concerns he has (like dodging capital gains taxes or estate planning) really only apply to the ultra-rich (well above the $3 million you actually need to get a $100,000 a year income), but in any case, if you're the kind of person who's described by The Millionaire Next Door, you need to read this book so you can get a life and do what you really want to do.

There's a poignant story in this book about a successful condominium developer who had already made $20 million and was now having an aggravating time getting new real estate developed because everyone was getting on his case (environmentalists, etc, etc). After talking to him, Wright pointed out that this guy was really into it for the thrill of the hunt, but had never considered that he could get his thrills any other way, despite the ulcers and other bodily pain he was suffering from his job. Unfortunately, the guy died of a heart attack before Wright's advice could do any good. Read this book, Mr. Millionaire, and take notes!

(Though I'm fond of saying: Wealth is wasted on the wealthy!)
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