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Monday, March 07, 2011

What to do when you're wealthy

A soon-to-be-fabulously-wealthy Facebook engineer recently asked on a mailing list what he should consider changing in his life now that he's going to be fabulously wealthy. My response seemed to be received well, so I'm re-purposing it as a blog post:

For practical advice, I refer you to John Reed's Sensible Shopping List for the Rich. Obviously, I don't agree with all of what he says, but it's a good starting point for many people who forget the boring stuff like adequate insurance.

For me, personally, the biggest thing was getting a house-keeper. The realization that I'd never have to clean a toilet if I don't want to was a great feeling and has never gone away. It also eliminated all sorts of conflicts with my significant other, and any time you can throw money at the sort of problem you should never hesitate to do so.

For travel, my travel style is very different than most. (See my bicycle touring pages for a few examples) I agree with what someone else said about getting lost on your own. When you have money and that can bail you out of any mistakes (especially in places like Japan, where you won't make any dangerous ones), it's a great safety net that should enable you to do more, not less. The reality for me is that I have done the luxury travel thing and the budget travel thing, and I have way more fun doing the budget travel thing: I meet more interesting people, and have more exciting experiences, but I understand that's not for everyone.

Finally, I'll submit to you that the biggest thing wealth buys is freedom. That means the freedom to say, "I don't like this place, let's change plane tickets and bail", or "I really wish I could stay longer, let us change our itinerary completely and not worry about the
money." That also includes the "I can't stand another cycle of perf anymore, let me rearrange my life so I never have to do another."


Amy said...

I look forward to having to make such decisions ;-) The housekeeper thing applies before you're actually wealthy, though, I think - the domestic strife reduction is a huge win, and if your hourly rate is higher than a housekeeper's and you don't enjoy cleaning, spend the time working instead of cleaning and it's a win.

pawliger said...

My spouse and I were raised in environments with frugal mindsets. Now we are saddled with that, yet with the means to go beyond that when needed. I call that 'spending well'. Yet the mindset acts as brakes such that even when things are well within the bounds of what would be insignificant to spend, we hold back. What was your decision process to decide when something was worth doing?

Piaw Na said...

The decision process basically goes as follows:

1. If it's something you will use every day, then it's worth the money to get something good.
2. If it's an experience, it's worth paying for. (Vacations, etc...)
3. Objects that are just nice to have are not worth paying for. Rent if possible if you will not use often.
4. Protection is worth paying for (insurance, better construction materials on your house, etc)