The variety of wealth that exists in the world is incredible. I’ve always been fascinated with how individuals acquire money on a large scale. Usually, we think about wealth that is generated in a “lump sum” due to the stories that circulate on the news. This could include:
1. Sale of an asset (or ownership in an asset): Examples: sale of a business, real estate, precious works of art, ownership in a business (stock), debt (bonds), land, etc.
2. Inheritance: You got your money from your parents or a relative.
3. Game-related activities: Examples: gambling, speculation, the lottery.
4. Contract/Salary: This would be if a singer, movie star, or comedian instantly came into fame, and their paychecks increased significantly. Think of the movie star being paid millions per movie or the TV actor being paid millions per episode because they suddenly became a breakout star.
There are also individuals who acquire riches over a lifetime. An example of this would be investing and re-investing. Think of Warren Buffet, who went from 0 to a millionaire by age 30 and eventually became a billionaire.
The variety of backgrounds that people who go through these paths come from is incredible. For example, the stereotypical Wallstreet type is likely to tell you that they only care about money and want to make it as fast as possible. They want to have enough money to invest, not have to work, and also to be able to throw money around.
Ironically, this love of money is the exact opposite feeling that their bosses have. No, not their bosses in their organization, I mean the people who are undergoing an IPO and need an underwriter for their securities.
Whether it’s Facebook’s Mark Zuckerbergs or Apple’s Steve Jobs, tech entrepreneurs tend to come from the other end of the spectrum. They value money second and changing the world first. Of course, they enjoy the security and independence that money brings, but being the richest man in the cemetery is not their end goal.
You have oil moguls like John D. Rockefeller (the richest man in his time), who believed that earning money was a way to praise god and who had a deep-seated religious reverence. At the same time, his organization committed atrocious acts that unfairly snuffed out competition and put people out of work. Still, he rationalized to himself that he was bringing an affordable source of energy to the masses and doing the lord’s work.
You have people who worked for a lifetime to be worth hundreds of millions of dollars like JayZ or Birdman and you have people who make that much in one lump sum from a tech company acquisition after a few short years. If it was around the time of the tech bubble, it’s likely the acquiring company did not get a good ROI on their investment and the company was overvalued.
Is it fair that a set of individuals can take advantage of the “dotcom” time in history to acquire wealth on a scale that others, who have been working their entire lives, have not been able to do? Absolutely. This is capitalism.
You have individuals on the internet who are revered for making $60,000 per month online, but could never sell their business for eight figures. Then you have people who make those numbers sound like like peanuts with the sale of their iPhone/Android app.
In the same span of time that a software entrepreneur spending is his entire night coding, there is hardware entrepreneur working on building the next smartwatch.
How cool is that!
What I’ve come to realize is that each generation plays musical chairs. At some point in time, all the people that occupy chairs now will get up and it will be time for the next generation to have their chance.
The questions is – where will you fall? Where will you aspire to be? I’m still figuring that out myself and I can’t thank the people who came before us enough for making that opportunity possible.