Sunday, January 31, 2010

Wealth Obsessions



Money makes a lot of things possible.  That’s how I perceive it anyways.

Maternal grandfather, Cecil, made a killing in figuring out a niche for use cotton waste.  He realized that there were a lot of companies that could use the cotton that was being disposed of after making high quality clothing and bedding.  He found that companies making items such as car seats and insides of sofas could use it.  He would visit factories all over the world and make bids on cotton waste.  Then, he would find a way to get it over to the buyers as inexpensively as possible for a profit.  He made a lot of money and had a seat on the New York Stock Exchange for a time.  My mother says that her father came home one day and said, “Marcia, today was a very important day.  Over 1 million trades were made on the New York Stock Exchange.  That’s never happened before!”  Today, we can get upwards of 2 Billion trades in a day.  The assets that my mother and her two sisters have is still mostly comprised of money they inherited from him.

My paternal great uncle, they called him “Beansy,” made a huge amount of money in commodities, mostly in beans as you can imagine.  He visited farms and ranches around the United States and would bid for companies on crops and animals before they had been harvested using his knowledge of climate, weather and the demand in the market place.  My mother still has a huge rock of a diamond ring stored away that was passed down from my dad’s aunt to my father as a gift.  His aunt always wore expensive fur coats in all of the pictures I have seen.

With anecdotes such as these in my family and having seen the residue of these people’s fortunes made, I was taught at an early age that having money meant having contentment of home and excitement in travel.  I also realized that not everyone had the time nor the means for these things luxuries.

However, that having been said, neither of my parents were very big risk-takers.  They enjoyed the benefits of having their money traveling to Nepal, Egypt, Peru, most of Asia, India, Africa, and living in a nice community, but they didn’t generate their own wealth in any big way; their money invested compounding to their favor.

My father worked in Public Relations at an aerospace company and my mother worked most of her life as a Child Development Specialist consulting for a nominal fee, or working as a volunteer.  This was always troubling to me to some degree because, though I had been exposed to the benefits of having money, I never felt that I was ever taught how to generate big ideas for income and entrepreneurship. The reason for this is that my parents really never knew themselves how to generate wealth.  Yet, I’ve always felt the desire to create it. 

As a result, I never sensed that I could really put a value on my own work.  Susie Orman says, “Don’t put yourself on sale,” meaning, charge people for what you really feel your worth.  And this somehow wasn’t instilled in me and is something I really have to be aware of and get comfortable with going forward.

Instead, my mother fostered my artistic abilities.  I am not sorry for this.  In fact, I’m very thankful because it’s always given me a channel for my emotions.  But it would seem from our no-so-distant family history that I was destined to continue the line of big ideas.  I certainly have the mind and creativity for it.  I’ve been teaching myself for the past few years about investing, business and finance and have been looking for a way to combine my creativity with business.

Money allows for a person to have time to try things they couldn’t otherwise; I don’t put stock in anyone who says otherwise.  Both of my parents are aged and have forms of dementia.  I decided several years ago to leave the iron clutches of two major movie studios to try something more entrepreneurial and I went into real estate.  The market tanked and is still tanking further, and after three years of not making much money, I am still digging deep to examine the interests I have that I can foster into a pleasurable career for myself.  It’s been a hard few years.

So how would I define being “wealthy?”  I supposed it would be a point where I would have enough principle money to really just be living off of the dividends, cash flow and interest being made by the principle.  Bob Brinker, the financial guru, calls it the “Land of Critical Mass.”  I think somewhere between six to eight million dollars might do it.   How is that for a number?  It would mean that I could wake up, decide to take my wife on a plane to Martha’s Vinyard for a few days in the middle of the week, or pick up and go to a bed and breakfast and read near a warm fireplace watching snow fall through the window.  It would mean having my home base being a wonderful house in Manhattan Beach or Malibu and knowing we have that to come back to when we’re finished with our excursions.  It would mean getting up and going for a run and not having any anxiety of what I “should” be doing instead.

Now all of this could be done without a huge amount of money by saving, investing, and carving out bits of vacation time.  But with seemingly unlimited resources, I have a feeling that it would feel like a whole different world.  Money means to me luxury, time, safety, exploration, excitement and spontaneity, and a bit of sleeping in now and then.  Or at least that’s my fantasy…