Live Rich

Stephen Pollan, Mark Levine

• Publisher: HarperCollins e-books
• Year: 2009
• ISBN:
  9780061865664
• Topic: Personal Development
• Subtopic: Personal Finance

Money can Buy You Happiness

In Die Broke Stephen Pollan introduced a new radical new strategy for spending, saving, and investing money in today's financial market.In Live Rich, he now concentrates on the earning side--with the compelling observation that living rich has less to do with net worth and everything to do with freedom. You can live the life you want by adhering to the four tenets of the Live Rich philosophy:

• Make Money
  Too many of us have been fed the line that "work isn't necessarily about making money." Tell that to Visa next time they send you a bill.
• Don't Grow, Change
  Be ready to change your work paradigm on a moment's notice, to morph from career to career several times as conditions--and you--change.
• Take Charge
  In the twenty-first century, you must become proactive and start taking measured risks.
• Become a Mercenary
  Think for yourself as a free agent, responsible for your own security and always on the lookout for the next great job.
• Live Rich
  With Stephen Pollan's revolutionary workplace ideals, as well as a detailed action plan, you can apply this philosophy to every facet of your life and truly Live Rich.

Part I

The Live Rich Philosophy

1

Buying Your Own Freedom

Live rich. When you come down to it, isn’t that what we all want? To live the life of our dreams?

For some, living rich means owning a magnificent, well-appointed home, perhaps on the beach. For others, it’s being able to buy whatever they want, for themselves or others, without worrying about the price tag. Still others, myself included, think it means traveling the world, first class (at least business class), and staying in four-star hotels. Creative individuals dream of being able to write or sing or paint or sculpt without worrying about paying their rent. The spiritually motivated want to be able to spend time getting closer to God, whether it takes the form of meditative prayer or feeding the hungry. Everyone has a personal vision of what goes into a rich life.

There’s one common element, however: freedom. Look at all the different dreams of a rich life, and you’ll see every single one is based on having the freedom to do whatever you want to do. Living rich is having the freedom to live on the beach, to buy whatever you want, to travel the world, to create art for art’s sake, or to spend your life in service to God. Living rich is also having the freedom to set aside your fears and seize the reins of your life. To live rich is to be free, and to be free is to live rich.

Living rich isn’t the same as being rich. No one whose mind is healthy really equates a rich life with being wealthy. Money in and of itself isn’t what we want. But what we do want may be able to be purchased with money.

Obviously it takes money to buy that house on the beach, to purchase all those lovely things, and to afford first-class travel. But it also takes money to be able to do nonmaterial things, like create art or lead a life of prayer. All of us, even artists and contemplatives, live in a capitalist world. It takes money to obtain the necessities of life—food, clothing, and shelter. That money comes from either our own work or the work of others.

Someone, somewhere—perhaps a spouse or a parent—is working so the idealistic artist can spend time painting. And someone, somewhere—perhaps some wealthy materialist paying $10 for a jar of preserves—is working so the devoted Trappist monk can spend all his waking hours at prayer.

You might not be comfortable acknowledging it, but money plays a big part in whether you’re able to live rich, to be free.

So far, it seems that living rich would be pretty simple. Since you’re the one who decides exactly what living rich means, and since money—in one way or another—is what enables you to pursue that dream, all you need to do is get enough money to fulfill that dream. But if that’s the case, if it’s really that simple, how come so few of us actually live rich?

FROM DIE BROKE TO LIVE RICH

Two years ago I wrote a book called Die Broke. It advocated treating assets as resources to be used, in whatever way you choose, during your lifetime, rather than as treasures to be hoarded and passed on after your death. I wrote it in response to what I saw in my own consulting practice. I’m an lawyer and financial adviser on Manhattan’s Upper East Side. My practice is small, but offers a wide range of services: I help my clients with everything from their personal finances to their careers and businesses. I offer very personalized service. That’s why I was deeply affected by what I saw happening just a few short years ago.

I saw my clients diligently follow all the rules of personal finance they’d been taught (by me as well as by other authors and advisers), yet still find themselves falling short of their goals and dreams. In my search to help them, I discovered it wasn’t my clients who were failing, it was the system. They were simply following a misguided philosophy and outdated rules designed for an economic environment that had disappeared.

After a great deal of thought and research, I came up with what I thought was a new, more workable, more effective philosophy of personal finance, along with a set of simple, pragmatic rules: Quit today, pay cash, don’t retire, and die broke.

The response to Die Broke exceeded my wildest dreams. With all due modesty, I knew my philosophy and advice on personal finance worked. After all, I see the positive results every day in my office. However, I didn’t realize the extent to which my clients’ financial fears and frustrations were echoed in the general public.

Admittedly, my client base isn’t a cross section of the American population. While my clients come from a variety of ethnic, social, cultural, and religious backgrounds, most are middle- and upper-income New Yorkers between the ages of twenty-five and fifty. I didn’t know so many people of other ages and from other places would find the Die Broke philosophy helpful in eliminating the frustrations they felt with their personal finances. I suppose, whatever else you can say, positive or negative, about New York baby boomers, one thing is clear: They are on the cutting edge of social and financial trends. The success of Die Broke and the realization that my clients’ fears and hopes were no different from those of the rest of the population has led me to offer the advice from the other part of my consulting practice.

I take, for lack of a better word, a comprehensive approach to my clients’ financial lives. As I mentioned, I get very involved in their world. Rather than working with them on just one element, say their investments, I treat their money and their circumstances as a mosaic of various pieces that make up what I call the business of living. Die Broke dealt with one half of the business of living: spending money. This book, Live Rich, deals with the other half of the business of living: earning money.

THE STORY OF EDDIE ZOLLMAN

The first time I met Eddie and Anita Zollman* he was a nervous wreck and she was very pregnant. Eddie, a forty-two-year-old Alan Alda look-alike, was a political reporter at one of New York City’s daily newspapers. Anita was a thirty-six-year-old art teacher, then on maternity leave while expecting the birth of their first child. They had come to me for help in finding a new apartment. At the time, they were renting a one-bedroom apartment in Brooklyn. It was cramped for the two of them; it would be impossible for three.

The first thing I did was ask Eddie and Anita about their income. Anita had been earning approximately $40,000 a year as a teacher. But it was clear after just a few minutes of discussion that she had no intention of going back to work until the baby they were expecting was in elementary school. That meant they’d need to rely on Eddie’s salary for at least five years. He was earning $50,000 a year. That was more than Eddie said he’d ever dreamed he’d make. Back when he was a cub reporter fresh out of Syracuse University’s journalism school, he was earning $12,000 covering suburban zoning board meetings. When he and Anita had two incomes and no children, a combined $90,000 income was fine. Granted, they didn’t save anything, but they lived quite well, thank you. Now, however, $50,000 didn’t look like it would be enough for them to keep a roof over their heads, and the head of their baby, let alone buy a larger place.

I started quizzing Eddie about this job. He was very well known in journalism circles. A serious, sober, hardworking reporter, he was (and is) respected for his ability to both dig up and write stories. Newspaper journalism isn’t a high-paying field, and Eddie’s attitude didn’t help matters. He had never gone in and asked for a raise. Instead he simply counted on getting an annual 3 to 4 percent increase on the anniversary of his being hired. When I broached the idea of pushing for more, he said, “That just isn’t done.” Newspapers in New York City weren’t “making money,” he stressed. He was “lucky just to have this job.”

“I guess you must really like what you’re doing,” I said.

“Actually,” he responded, “I hate my job.”

“I HATE MY JOB”

I hear those four words, or their entrepreneurial equivalent (“I hate what I do”) at least once a week. They come from clients of all ages and economic levels—the established single professional woman earning $200,000 plus, the married middle manager in his prime earning between $50,000 and $100,000, and the young ad agency staffer earning between $25,000 and $50,000. All of them, despite their admitted hatred for their job, career, or business, are working harder than they’ve ever worked in their lives. They’re starting earlier and working later than ever before. There isn’t a weekend when they’re not taking work home. Even when they’re on “vacation” they stay in touch with the office. Their families and social lives are playing second fiddle to their work lives. They’re devoting almost all their time and energy to something they say they hate.

Saying “I hate my job” or “I hate what I do” is like saying “I’m fine” when someone asks how you’re doing. It’s a reflexive phrase that’s so general it’s meaningless. If you were at a party and casually said to someone you’d just met, “I hate my job,” he’d rhetorically ask, “Who doesn’t.” Then he’d either walk away, looking for someone more interesting, or immediately steer the conversation to El Niño. Since my clients are paying me for my time and advice I’m not so quick to walk away when faced with such innocuous statements. And the weather is a serious subject for me—I have one of those digital weather stations at home. So instead of shrugging off the remark, I probe for specifics. I ask, “Why do you hate your job?” or “Why do you hate what you do?” And after a bit of lawyerly pressure I usually get to the heart of the matter.

Many clients reveal they’re “not making enough money.” Those who are employees often admit to feelings of insecurity and vulnerability—“I could be let go tomorrow”—or a sense that they have no future—“I’m stuck on the corporate ladder.” Entrepreneurs, on the other hand, often say the business has lost its appeal: “The business isn’t working for me, I’m working for it.” Nearly all, regardless of whom they work for, say, “I don’t love what I’m doing” or “My work just isn’t rewarding.”

Of course, there are some people who come to see me who don’t hate their jobs. In fact, these clients generally say they “love” their work. While there may be things about their company or business they find annoying and frustrating—perhaps the office politics or the lack of financial reward—they find the work they’re doing emotionally, even spiritually, rewarding. These clients usually come to me thinking they just need a “tune-up” rather than a total overhaul. They’re wrong.

They’re lucky to have found work that’s emotionally rewarding. I know that because I share their luck. I find my own work very gratifying. However, loving your work isn’t a blessing; actually it’s a trap. Love truly is blind. People who feel strongly about their work often fail to see dangers or problems with their jobs or businesses because they’re infatuated with their work. Unfortunately, love of work is always unrequited. No company and no business has the capacity to love you back, no matter how devoted you are to what you’re doing. Having crushed your illusions, let me give you a chance to recover by returning to Eddie Zollman.

Eddie Zollman combined both problems. While he loved his work he hated his job. He was scared of being laid off and thought that, despite his being respected in the field, his future wasn’t secure. Eddie was a political reporter, but not an office politician, and therefore didn’t see himself moving up to a management position at the paper. He was also burned out. Most important, however, he felt he simply wasn’t making enough money. Yet he didn’t see how he could get any more. “There just isn’t any money in journalism,” he said, “but at my age, I can’t afford to shift professions. I’m stuck.”

Once I get a specific answer, even one as pessimistic as Eddie’s, I offer the client my congratulations. Most clients think I’m being facetious, but I’m not. I can be a wise guy with my friends but I’m never facetious with clients. I offer my congratulations because often the hardest part of solving overwhelming problems is specifically defining what’s wrong. Once that’s done, finding a solution is easy: You just have to update your attitude toward work to reflect the current environment, and learn some simple new survival rules.

TRULY WORK FOR YOURSELF

For all intents and purposes we have been in the twenty-first century for years. (Just as an aside, I think when historians look back on our times they’ll cite the invention and proliferation of the personal computer as the point when the twentieth century ended and the twenty-first began.) Despite our living in a new world, our attitudes toward work are based on twentieth-century, and in some cases nineteenth-century, principles.

I’ll get into all this in greater detail throughout this book, but for now let me just say that the assumptions and expectations most of us bring to our work lives are outdated and self-defeating.

(This shouldn’t be news to readers of Die Broke, who learned that most common attitudes toward personal finance are similarly based on outdated twentieth-century principles and rules that need to be replaced with updated twenty-first-century attitudes and maxims.)

Most of us have been taught and encouraged to believe that:

If you do your work you’ll keep your job.

If you do your work well you’ll be promoted.

If you keep your job you’ll get regular pay raises.

If you get promoted you’ll get a sizable pay raise.

If you’re loyal to the company the company will be loyal to you.

An entrepreneur’s success is directly tied to his company’s success.

For you to be happy your work must be meaningful.

In fact, none of these assumptions is true. There’s no justice in the workplace…and there never was.

People can’t count on paternalistic employers…and they never could.

The days of automatic pay raises are gone…in part because they were never here.

There’s no such thing as corporate loyalty…and there never was.

The interests of a business and its owner are not identical…and they never should have been.

And, while deriving self-actualization from work is wonderful, it is less likely than ever before—it was always a long shot. Pursuing it, or trying to maintain it, at the expense of more basic needs is dangerous.

To many of my clients, and probably to you, the first five points aren’t news. Tens of thousands of layoffs have lifted the scales from your eyes. The final two points, on the other hand, usually come as a shock and are greeted with resistance and denial. But give me a chance. By the end of the first part of this book I think you’ll be convinced, just as clients are convinced after an hour or two in my office.

I believe we need to abandon these assumptions and expectations and adopt a new attitude toward work. We need to truly work for ourselves. That sounds simpler than it is.

Just because you’re self-employed doesn’t mean you’re working for yourself. Far from it. Few entrepreneurs really work for themselves. Deep down, most work for someone or something else, whether it’s their company, their employees, their parents, or their spouse and children.

I know this firsthand, not just by learning it from my entrepreneur clients, but because, even though I’ve been self-employed most of my adult life, I’ve only recently truly started working for myself.

While I’ll be using examples drawn from my clients’ lives throughout this book, as I did in Die Broke, I think it’s only fair to also talk about my own life. After all, I’ll be asking you, as I ask my clients, to explore your psyche to determine your own needs. You have a right, therefore, to hear the results of my own exploration.

I became a lawyer not because I loved the law, but because I wanted to please my parents. I grew up in a solidly middle-class Jewish home in the Bronx. My father sold milk and eggs and my mother worked at home, raising me and my two siblings. My parents (both of whom are still alive, by the way) wanted their children to do better than they had done. They encouraged us to “succeed.” A newspaper of the time—I forget which one it was—used to run a small daily profile of a “successful man.” My father used to cut that item out of the newspaper every single morning and put it on my pillow at night so I would read it before I went to bed. I was a good student, and after a couple of years of college I was offered a scholarship to law school. In my parents’ eyes (and admittedly mine at the time) there was no question about what to do. I left college, took the scholarship, and became a lawyer. (It took another forty years for me to finally go back and get that bachelor’s degree I had tossed aside.)

When I graduated law school, rather than entering a firm, I struck out on my own. Partly that was because of my own innate entrepreneurial streak, but it was also because I wanted to make as much money as I could as quickly as I could. Why? To prove myself to my in-laws, particularly my father-in-law. He was a very wealthy, successful man who, I felt, looked down on me ...