I’ve been listening to the Moneywise Podcast where the host interviews high-net worth CEOs/founders of companies to discuss personal finance, business finance, starting/running businesses, and reaching milestone levels of wealth from $10-$50M+.
The primary host is a former startup founder who sold his startup for $30M when he was 30 years old. He then started this podcast and a networking group for former founders who are wealthy. The guests are surprisingly open about their personal finances, childhoods, earnings, spending habits, values and net wealth. Most of the guests’ net worth falls between $30M – $200M.
Many of them grew up in lower or middle class families and worked their up to wealth. I found their discussions of spending habits and lifestyles interesting. Here are some of my take-aways:
- Their spending habits are not that different than normal middle class spending. They spend an order of magnitude more (up to 10x) on luxury items, homes, cars, vacations and services than normal people do but essentially they are purchasing the same type of stuff.
- Very few discussed charitable giving. Only one guest was motivated to build a successful business to generate wealth so he could make large charitable donations regularly. For the rest, it either wasn’t mentioned or was a small afterthought. A few mentioned “getting around to it eventually”.
- Many were now focused on starting another business, growing their wealth and growing their investments. This is a money-motivated group.
- Many had been chasing money since being kids. Quite a few had started side-businesses in their teens.
- At least half of them are “retired” and now run coaching businesses to advise/mentor startup founders and executives. They have podcasts, write books and the self-help/guru/mentor/public speaker thing. (Bleh).
Regarding spending, It was remarkably consistent across most of the guests.
- They all bought mansions – most often building a custom mansion and/or vacation home in a highly desirable area. The price range was generally $3M-$15M for homes of 8,000-10,000 sq. feet.
- They all went on multiple expensive, month long vacations with their families several times a year.
- As I mentioned earlier, although most did not highlight charitable contributions, many bought a home for their parents, paid for extended family to join them on vacations, paid for college for extended family members and, of course, financially assisted their kids and grandkids.
- Almost all upgraded their flying habits to first class, business class, private and charter. They all discussed how expensive it was but acknowledged how much they despised flying “coach” and all that comes with it.
- Very few bought private jets. None bought yachts. All bought nicer cars.
- Many hired au pairs, nannies, personal chefs, house managers and personal assistants to take care of their everyday needs ranging from childcare to shopping to chores and maintenance.
- They all seemed a little embarrassed that they now regularly pay for “VIP experiences” like backstage concert packages, Disney VIP tours, 5 Star Hotels, etc.
- Several mentioned using concierge medical services and paying cash for medical care vs purchasing medical insurance.
- All of them read the same books, listen to the same podcasts, quote the same people and watch the same shows that the rest of us do. Every reference to business, finance, self-improvement, entrepreneurship and psychology was familiar to me. Most were from best sellers and popular authors/influencers from the past 5-10 years. There was very little insight I learned from listening to their philosophical approach to life or “newly discovered” enlightenment. It was just the usual lessons we all learn as we grow older and gain more experience.
- Interestingly, aside from occasional large one-off purchases for houses, jets, business expenses or acquisitions, almost all of them had personal spending of $30K-$50K per month. $500k to $600K annually was typical with a few spending closer to $1M annually. Almost none exceeded that.
A lot of these people got lucky. They were in the right place, at the right time with the right combination of product, money and luck. The ease at which they grew their businesses and the speed to cash out (often within a few years) makes me envious. Quite a few became fabulously wealthy in their early 30s.
I wish I had been that fortunate.
After listening to a few dozen episodes, I realized that although I made much less money at a much later age than all of these entrepreneurs, we are not so different.
Obviously, they have no money worries and I must live quote frugally to stretch my money. They can afford VIP services, luxury purchases and spending without budgeting. I cannot. This gives them more flexibility, convenience and security than I have.
When it comes to life satisfaction, getting meaning from work, the challenge of striving for financial & business success then walking away from it, the search for meaning & purpose, and the mixed emotions that come with being early-retired are all quite similar.
Regardless of how much money they have, these existential questions seem to follow them just like they follow me and others I have heard who have retired with much less wealth.
