I just read about a woman named Anne Scheiber, a so-called "regular" woman who amassed a fortune through investing.
After retiring in the mid 1940s from the IRS, Anne invested her $5,000 of savings into a portfolio that ended up being worth ~$22 million around her death 50 years later in the mid-1990s. Anne was apparently a recluse - "She lived quietly in her rent-stabilized studio apartment on West 56th Street that was bereft of luxuries: paint was peeling, the furniture was old and dust covered the bookcases. She walked everywhere, often in the same black coat and matronly hat. Ben Clark, her lawyer, said she never had a sweetheart and seldom went out, except to visit her broker." I'm not going to lie - Anne kind of reminds me of myself. I'm not a recluse but I definitely live a very minimalist lifestyle. And I invest like crazy. I'm like one of those people on that TV show Hoarders except instead of hoarding things, I hoard money. I don't even like to travel all that much - I prefer car roadtrips across America instead of international travel. For me, it's the company that matters more than what we're doing. I have no idea if anyone told Anne to live it up. If I knew her, I'd probably tell her that. But I'd tell her to do it in a reasonable manner - maybe upgrade her living space, dine out at nice restaurants, all that. Don't move to Vegas and start dropping $20K every night. I'm glad she was able to donate her fortune to Yeshiva University (after I pass away, my money will be donated to cat shelters and organizations that focus creating bionic eyes) but it would have been great if she had some fun with her money. Maybe she did and we just don't know it! In any case, it's certainly better to be smart with money management than to be mindless about it. If you are, don't forget to have some fun as well. You deserve it!
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Comedian Maria Bamford has an interesting Wealthsimple interview where she talks about making money as a comedian.
Some commenters on Jezebel broke down her numbers and it looks like she earn ~$312K / yr (after taxes and assuming she performs every week). If she is only performing 3/4ths of a year, she earns ~$234K / yr. And that's just from stand-up shows. This doesn't include all her other income streams (voiceover work, TV shows, etc). Not bad for a comedian. Contrast Maria Bamford to the entertainers struggling to make a living detailed in Gaby Dunn's very well-written article "Get rich or die vlogging: The sad economics of internet fame." Having thousands of social media followers or subscribers doesn't necessarily translate to big bucks. Unless you have a trust fund or some other source of income, "being popular" doesn't really pay the bills. And if you can't pay the bills, forget about saving or investing. As I mentioned, I worked in startups before business school and see a lot of similarities between the two industries. There are a few people who really hit it big and cash out. (And Maria Bamford isn't necessarily "cashing out"; she's just doing quite well for an entertainer). The majority don't. I thankfully realized this early on and realized the "slow and steady" approach was much more suited to my temperament. The only advice I can offer to people who want to make it as entertainers is to keep your day job. Having a stable day job is great! You get a steady salary, health insurance, 401k benefits, and more! Save and invest your money. Think carefully about how you want to live your life so that you can achieve financial independence early and THEN possibly pursue becoming an entertainer full-time. I am a big fan of the reddit thread FIRE - Financial Independence, Retire Early. It is an incredibly positive thread with none of the negativity or craziness I see on other message boards.
Just to be clear, before anyone gets the wrong idea, the phrase "Retire Early" does not mean that we will quit our jobs, stay at home, and watch Judge Judy all day. It instead means that we will have enough money where we can do anything we want. Some people really love their jobs and will continue to work, some may move into a different industry, some may decide to travel, some may decide to take time off to figure out the next step they want to take in their life, etc. I have been very aggressive about finding an industry I love and I hope I will be one of those people who likes my job so much I decide to stay in it even after reaching financial independence. I read Reddit FIRE everyday and this particular thread stood out to me - "Who has been your biggest influence for FI?" My answer is: From my work with startups before business school. While I learned a tremendous amount during my time in this space, the most important thing I learned was that working at a startup is not the best financial decision, and that you are MUCH better off working for a large, stable company that pays you a steady paycheck and won't go out of business in six months, offers you great benefits (401K matching, health insurance, etc), and looks good on your resume. Although startups sound sexy and cool, the reality of the situation is that you will get paid far below market rate, your equity will most likely not be worth anything, and if you decide to move into the corporate world, you will have a much harder time doing so because recruiters won't have heard of the startup and will thus not take you seriously. Thankfully, I had the financial safety net offered by my parents the entire time. I don't want to think about what might have happened if that hadn't been there. That experience made me incredibly aggressive about saving and investing. I now prefer the "slow and steady" approach to money management. Everyone has their own approach and even though it took me a few years and several falls on my face to develop mine, I am very happy with it. Making money from writing is a notoriously difficult way to make money.
Elizabeth Gilbert (she of the fabulous books Eat, Pray, Love and Committed) had some interesting thoughts about money and here we focus on Cheryl Strayed (the author of Wild). Cheryl had a very insightful conversation about money in the book Scratch: Writers, Money, and the Art of Making a Living. Vulture synopsizes the interview and here are my favorite parts: "I was paid a $100,000 advance for Torch, my first novel. It was November 2003, and I was at the Virginia Center for the Creative Arts at a residency, and I distinctly remember yelling—shrieking—into the phone to my husband, “A hundred thousand dollars! A hundred thousand dollars!” And we were both just flipping out. We were like, Our life is changed. First of all, you don’t just get a check for $100,000. You get four checks: one on signing, one on delivery—and that’s not just when you finish the draft, but after the editing process, when it’s going to the printer. I learned that lesson the hard way. And then you get another check on publication of the hardcover, and another check on publication of the paperback. So, I sold Torch in 2003. I got that first $25,000. My agent took fifteen percent, and then I had around $21,000. So I sold my book for $100,000, and what I received was a check for about $21,000 a year over the course of four years, and I paid a third of that to the IRS. Don’t get me wrong, the book deal helped a lot—it was like getting a grant every year for four years. But it wasn’t enough to live off. So, I guess it was a humbling lesson! We almost lost our house before I sold Wild. I think we had about $85,000 in credit card debt by the time I sold that book. I can say that now because I don’t have any debt, but I was so ashamed of that. We got into debt because by the time Torch was published, we had two kids under the age of two. So here I was, trying to write my second book with two babies, and we were just busting our asses. During those years we were spending more on childcare than I was making. And we would always be so broke and ashamed and putting things on the credit card. Really getting into trouble. Here’s another thing that’s so interesting about money that people never talk about: there are all these invisible advantages and privileges people have. Parents who help out with a down payment, or a grandparent who takes the kids every Tuesday. Parents who pay for college. We didn’t have any of that. I also had student loan debt from my undergraduate degree that I finally paid off on my forty-fourth birthday, thanks to Wild. I ended up selling Wild for $400,000 .... When I got my first check, and we spent it all on credit card bills ... We celebrated by going out and getting sushi. But our life didn’t change. We only got out of credit card debt. But it changed in that way, trust me. As anyone who’s been in severe credit card debt knows, it was a nightmare. The only thing that’s changed is that I can pay my bills. I can afford to not be desperate anymore. I can buy boots not in thrift stores! But the culture and the community and the things I think about people and the world and the way I feel about myself and my family—none of that has changed one iota." |
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An anthropological look at how people think about money. Created and edited by Star Li. Archives
December 2022
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