One star review.
I miss the days when I got to write hospitality riders.
Nothing’s stopping you. Write one up, send it on over in advance, next time you come visit me.
Spaceman digging through records.
In Your Ear
Sept. 12, 2013
photo: Jung Kim
God I miss In Your Ear. And that was a great show.
Freezepop at Rick and Emma’s Wedding - 25 on Flickr.
Aug 17, 2013, Music Hall of Williamsburg, Brooklyn.
I used to be obsessed with these diagrams and the Maginot Line when I was a kid.
Massive Attack v Adam Curtis was phenomenal. (at Park Avenue Armory)
I think it’s time I talked about money for a little bit. This will be slightly awkward but I would like to get it off my chest, because I can often see people wanting to ask me, and some brave souls just go for it. Gotta admire those people. No fear.
I took a timid step at this in the past, answering a question on Quora: "What does it feel like to be financially rich?"
My answer was representative of my thinking at the time, before I’d really taken any action or found a direction to being wealthy:
The one thing I’ve realized is that being rich pretty much amplifies who you already are. As someone who was raised not even close to being rich, and has had a lifelong (irrational) fear of falling into abject poverty, I find that my newly wealthy life is pretty much like it used to be, with some slightly nicer stuff, but by and large most of my efforts are put into protecting and amplifying my wealth and securing that position through rain or shine, for me and my future family. The anxiety I always felt about money is still there. It’s undeniably nice to have no debt, not worry about healthcare costs, etc (I bought a LOT of extra insurance), but by and large it hasn’t changed my life.
They say that when you get rich, you are frozen in age to that year. Who “they” are, I don’t know, though I’ve been hearing it more and more lately. Whether this applies just to tech “dudes” - young men, at a time in their life where they may not be fully matured - or to people of both genders who receive a financial windfall, I’m not sure. In my experience, I’ve seen this to be true with some people, and I’ve seen other people grow up nicely while having become wealthy along the way.
Personally, I believe it’s more about the range of experiences you’ve had in your life - successes and failures, triumphs and hardships. Failures and hardships especially. In our society, there is certainly no shortage of people who have faced hardships while young. It’s a sad fact that there are hundreds of thousands, if not millions, of people out there who have known infinite hardship even before high school. Even more minor setbacks - a parent losing a job and a child going through a couple of years of deep financial uncertainty before the family lands back on its feet, for example - can have a profound effect on the psyche. It’s been my experience that not all people who quickly become wealthy are trapped in their tracks of maturation, but I have definitely found that those who have experienced a bit of hardship before that blessed event tend to manage the whole situation much more effectively.
Now, I should qualify this. One thing I don’t like about talking about wealth in this manner is that it is so pre-determinate. It’s sort of like your friend who keeps asking you if they’re a bad person: it’s like the very act of worrying about it practically negates the possibility that the suboptimal outcome will become true. If you’re worried that newfound wealth is going to turn you into a bad person, it probably won’t. The worry is the evidence.
So, to me, the more salient and relevant issue is, or was, what does one do with their money to ensure they do not become an asshole? How do I ensure this money doesn’t ruin me?
A while back, right around the time I came into a large sum of money through the sale of my company, I read a blog post by Fred Wilson. I can’t find it anymore. He was talking about how much he believed in New York Tech, and the tech sector in general. He spoke of how he put his money where his mouth is not only through Union Square Ventures, but that he and his wife also acted accordingly with their personal finances, not only because they believed in tech, but also because investing in tech put your capital to work investing in jobs.
The timing of finding this blog post was fortuitous, and Fred’s post got me thinking about things in a different way. Now, I wasn’t just preoccupied with making sure my money didn’t change me, I was also preoccupied with what it might be doing in the world.
It stuck with me, and one of the reasons it did is because I had been evaluating all these different investment opportunities, and what I realized, in researching and learning what “rich” people did with their money, that many of the investment opportunities they consider do almost nothing putting that capital back to work in jobs. Simply put, the whole notion that rich people create jobs is pretty much a lie. I’m greatly simplifying, but most of their time, energy and money is spent plotting how to make slightly more time, money and energy, without risking too much of a loss. And rarely, if ever, does job creation enter into it. It is almost NEVER discussed or viewed as a benefit, except when Republicans get on the teevee and tell people about the wealthy creating jobs. It is a flat out lie. I’m telling you, they don’t care, it doesn’t figure into their considerations at all. One or two individual exceptions exist, but they are the exception proving the rule.
Now, this is sort of distressing, because it’s the whole reason it’s supposed to be okay to be rich, it’s the whole reason we go lightly on their taxes. It’s probably not the sole reason we don’t take most of their money away from them, but it’s a big part of it. They’re supposed to be efficient allocators of capital. And they are definitely efficient, but only efficient at generating personal returns. The assumption that that process will also yield jobs is false. Honestly, in my 20 years of reading about economics, I’ve not seen a single modern empirical study finding that the rich are efficient allocators of capital towards job creation. In fact, all evidence I’ve read is to the contrary. Most of the jobs are created by the government and small businesses that grow.
So, now I had two concerns. First, I don’t want to end up a rich dbag who spends too much time in night clubs (or, god forbid, buys one), trying to pick up people too young for me. Secondly, the money should be doing something good.
Next, let’s pile on top of that a third worry. In a relatively short time, I found myself becoming completely preoccupied with protecting my money. I didn’t grow up uncomfortable, I was solidly middle class in the way a teacher and a fireman could barely pull off if they tried in the 21st century, but in labor union-protected Alaska in the 70’s, it was just fine. My poverty came later, after school. I came into my wealth older than many of my peers, so I had plenty of time in adulthood prior to that to learn what it’s like to not be able to pay rent for months on end and live off of $2 a day. I am by no means complaining, I consider that period one of the happiest in my life, and it’s a straight up representation of the traditional lifetime earnings curve of an individual - we are supposed to start out poor. But at least I knew its taste before becoming wealthy. I value that experience.
But the newfound experience of being wealthy made me neurotic. It’s weird. Even though I was never particularly unhappy when I was poor, or not any MORE unhappy, I suddenly became completely afraid of ever going back. I still am, in a way. God knows why. It is something I am still working on. But once I had money, that fear manifested itself in me making every effort under the sun to protect my money, save it, keep it, never lose it. This had some good sides - it made me acutely aware of whenever I was spending more than I was making. But it also had some downsides - I was investing it purely from the point of view of how to not lose any of it. In the economic times of the last 3-4 years, that was a more difficult proposition than one might think.
It pretty much drives ALL your investment decisions (which, at the time, I was doing alongside a very good investment advisor). And any high-minded thinking about whether your capital is going to job creation goes right out the window, I can tell you that.
So. Now. Here I am. I am neurotic about losing my wealth. Neurotic about turning into a rich d-bag. And I know, dimly, I am doing nothing interesting with my money. Nothing I am doing helps to create jobs. And very little of my newfound wealth actually contributes to the things I wanted to acquire money in the first place. The whole point of getting the money, of doing all that work, was so that I could do interesting things with it. And that wasn’t happening.
So, what to do, what to do.
When I was younger I was a giant Dave Eggers fan. I felt like we had a lot in common back in the old days. I read A Heartbreaking Work of Staggering Genius with a mix of jealousy, respect and familiarity. I should really re-read it. But the thing he did that I most respected more than anything was, weirdly enough, the copyright notice for the first issue of McSweeney’s Quarterly Concern, his literary journal. It really was a great little work of literature in and of itself. It laid out every expense for the journal. It laid out where all the money Dave Eggers had made up until that point. It was incredibly detailed and transparent. It kept him honest.
I’ve always admired that, so I figure it’s time I just tell you what I did with my money. First there were the taxes. I didn’t do anything clever, I lived in New York, I paid them all at the highest rate. 30% or so in capital gains across Federal, State and City. Of the rest, I gave some to charity - I gave 10% of it or so away. Maybe 20. I’m not sure. I wasn’t keeping track, and I didn’t collect most of the tax deductions (stupid, I know). I spent 10% of it getting the Secret Clubhouse up and running. I kept 10% of it in the bank for a rainy day. Then there was the “mad money.” I bought a table (WITH LIONS ON IT), a new car (a Mazda 3) that now belongs to my parents, some rare books, a nice new adult grownup New Yorker jacket, and a new computer. This all comprised, combined, about 5% of it. Of note are some of the things I didn’t buy: I didn’t buy a new tv, a new couch, a new bed, a new girlfriend.
But the rest of it - the vast majority of it - I invested in tech startups. A lot of tech startups.
So why did I do this?
First, as Fred Wilson pointed out, they directly create jobs. I love it. You see a presentation, they say what they’re going to do with the money, and the first thing on every one of their lists is that they’re going to hire a bunch of people. In a world of 9% unemployment (as it was then), how can you not feel good about it?
Secondly, I love tech. Well, right now I am a bit of an old curmudgeon on privacy and things like Facebook and Google Glass, but in general, I love tech. I do share Peter Theil’s view that the we wanted Mars and we got the Internet, and I’m psyched those dudes are trying to bring us electric cars and space rockets, but I don’t have anywhere near enough capital to play in that world, and while I did grow up on Arthur C Clarke and Ray Bradbury, I also grew up on William Gibson and Julian Barnes’ Staring at the Sun (a book that doesn’t get near enough credit on pre-conceiving the modern internet, by the way). The internet is awesome, and I love it. No apologies there.
And third, because the puritan in me couldn’t just blow the money. Investing at least promised the potential of a return. Early stage tech investing is a wonderful, fascinating industry, and it’s super fun for me, because it’s my kind of investing. Data is used, but it can only take you so far. Some subjectivity is necessary, some instinct and experience. It doesn’t just involve calculations, it involves sizing up entrepreneurs, getting to know them, and sizing up entire hypothetical, future industries that may not currently exist. It’s not something that can easily be taught in business school or through a blog (though some people like Marc Andreesen have done great work in deriving formulae for valuations of early stage companies). Other aspects of money, business and economics come into play. Being more widely read, and not just having the standard MBA brain dump is a virtue.
The last reason I did this – and this may be most important – is because I now have no fucking clue at all what I’ll be worth in the future. It has forced me to not rely on the money for anything. I’m exactly the right age to have lived through the first dot com boom and know all too well that non liquid tech stocks on paper mean nothing for your real net worth. I had friends worth hundreds of millions of dollars that lost it all without ever seeing it. I like this. I might be worth a fortune, I might be worth just what I have left in the bank (and those lovely books I bought. Ironically, some are appreciating quite nicely). I can’t rely on it, and I can’t get lazy because of it.
This is so great. I mean, it was a bitch to do. It was kind of terrifying. There are days when I think “oh god, why do I have to work?” I’ve retained a decent cushion enough to take some time to try and do what I love in life, but that’s about it. I have to work. And I didn’t have to before.
It was very much like breaking up with someone you love that you know is not right for either one of you. It hurts, it’s a terribly painful thing to do, but once you do it, you feel so, so much better.
So where does this put me? The vast majority of my net worth is now allocated to an array of tech startups. On paper, I am up a good amount. But again, god knows. It’s always funny when I get listed on one of those best NY angels lists, because, well, until companies have exited, no one really knows, do they? A few have folded. A few are hanging on by a thread. A few are killing it and blowing away all my expectations. Most are doing just fine. But most importantly, all that money is going to creating jobs. All of that money is going into an industry I love, from the startups to this wonderful coworking space I work out of in Williamsburg now. I have a decent amount for a rainy day, though jesus, given our current health system, a couple days in the hospital could eat it all up.
Writing all this is terrifying and weird. First of course because I know, I know, I’m still doing just fine and most people in America don’t have a cushion, and I am an incredibly lucky individual. I don’t dispute that. Talking about money is insanely gauche in the US, and it’s nearly impossible to do in a way that doesn’t piss a bunch of people off. I’ve actually been working on a chapter on my book on this topic, explaining to people who want to get rich the pros and cons and the reality of the situation, and detailing what studies have found about happiness and wealth. This article in The Atlantic is actually super interesting about these things. People are generally terrified to talk about it. To be brutally frank, I think in my case, here, it’s made easier by the fact that I’m telling you I got rid of most of it. I know who my friends are already (the best friends I had stayed exactly the same), and the risk of people coming to me for money is actually lessened, now, by me telling you I basically already gave it away.
At the same time, I feel like it’s important to think and talk about these things. There have been a few recent exists in New York where some of us have talked about how it’s interesting that money didn’t come back into NY tech via angel investments. This is something I’d like to see New York be better about doing as we get more exits. Giving back is important, yes. But so is retaining your soul. Also, if you think you’re such a genius, prove it to us and do it again from scratch, again. This is why I respect Kevin Ryan and Ken Lerer so much (not that I’ve ever met them).
I know a fair number of wealthy people, but more to the point, I know a ton of people who I believe will be wealthy one day. Think about it now. Think about what you will do with that money. Think about how it could change you.
At Quotidian Ventures, we are making a bet on entrepreneurs who know their industry, but don’t necessarily know the rules of the startup game or how to code. If you have a great business idea, but don’t know jack about the startup world and want to hear from some of the people who have made the transition, you should seriously consider attending this one day conference. It will be a good time.
Popular vote: 58,541,130(R) vs. 60,252,696 (D)
Percentage: 46.9% (R) vs. 48.3% (D)
Seats won: 234 (R) vs. 201 (D)”
Democrats won 48.3% of the popular vote in house of representatives elections vs. 46.9% for Republicans.
A full 1.7 million more people voted for Democrats than Republicans in house elections across the country.
Yet republicans won 234 seats to 201.
2012 was a “big win” year for the Republicans for the house. And they still garnered 1.7 million fewer votes than Democrats.
It’s a myth that they even won a majority in the house elections.
It’s a myth there are as many Republicans as Democrats.