Mike: Who are you?

Banker: I’m 28 and am a vice president at a large global bank where I’m currently earning about $250,000 a year. I grew up in the South, went to public school, then a private college. I got an internship on Wall Street, and then a full-time job. That was in 2005, and many rounds of layoffs later, I’m still there.

Mike: What did you study as an undergrad?

Banker: Originally, Asian Studies, but then I added on a business program as well.

Mike: What kind of careers were you considering when you were in college?

Banker: Not many! I always thought I would run my own business. I’m very opinionated, and didn’t think I would last long working for someone else. I didn’t know what kind of business—my dad was (is) an entrepreneur. I figured I would jump on the first good idea that I ran across, fail a couple of times, and then find something that worked. When the Wall Street opportunity came up, I thought it would be a good place to learn some business skills, so I jumped at it. I was right, but I overestimated my ability to quit when I came across a good idea.

Mike: What kind of upbringing did you have? I take it that since your father is an entrepreneur, it wasn’t one where you worried about money or bills?

Banker: Correct, although my dad did run a few businesses into the ground, and he had a nightmare divorce that sucked time and money away until I was 16. Money might have been tight once or twice, but it never felt like it when I was a kid.

Mike: Did your parents talk to you about money while you were growing up?

Banker: Oh, god yes.

Mike: Haha—in what ways?

Banker: I mean, I remember teaching my dad how to look up his stock quotes on Prodigy in the early days of the Internet.

Mike: How old were you then?

Banker: I must have been about seven. My dad would teach me about stocks, compound interest, and investing.

Mike: Wow. At seven years old?

Banker: It was the beginning of the Internet bubble, so that had something to do with it. I think if stocks hadn’t been going straight up at the time, I might not have had the same level of exposure. In any case, when I would work summer jobs I would save it and invest it—even if it was only a couple of hundred dollars.

Mike: What kind of summer jobs did you have?

Banker: Well, my first summer job was sewing buttons onto men’s shirts at my dad’s dry cleaning plant. I worked for $5 per hour or something. It was hot—summer in the Deep South surrounded by steam-powered machines. I also worked in restaurants, and later got unpaid (and then paid) internships at financial services firms. I was also a camp counselor, which was maybe the best job I ever had.

Mike: Sewing buttons and working in restaurants—it sounds like your family wanted you to experience good old fashioned manual labor.

Banker: Exactly. My parents always made sure that I knew not to take anything for granted, which is good, because that helped me avoid a lot of the problems that kids run into when they end up in high-paying jobs right out of college.

Mike: What kinds of problems?

Banker: I think most people get these banking or consulting jobs, and when you start out with a base salary of $60,000 or $70,000 right out of college, you probably have more disposable income than at any other point in your life. It’s a shock. All of a sudden your bank account is filling up (unless you moved into a really expensive studio/one-bedroom apartment). So I know many people, especially in 2006-2007, who were spending everything they made, and some were spending more than they made because they were betting on higher future income.

Mike: What are they spending money on? These are 22 and 23-year-olds we’re talking about?

Banker: Yeah, so, clothes, shoes, jewelry and electronics at first, and when you had the newest everything, then it was restaurants and clubs and trips to Vegas.

Mike: You managed to avoid all of that?

Banker: Of course not. =)

Mike: Haha, what does that mean?

Banker: I mean, it doesn’t matter how responsible your upbringing was, there’s still the peer pressure to live extravagantly when you’re surrounded by it. So I would eat out at nice restaurants, and occasionally I would go to a club, but I was never comfortable with the idea of spending $400 on a bottle of vodka. Mostly, I think what helped the most was that I made a decision at the very beginning that I would live on my base salary. So when there were big bonuses, that all went straight to savings.

A lot of that was reinforced during the financial crisis—there would be senior people complaining about how they couldn’t live on a $250,000 to $400,000 base salary, and I never wanted to be in that position.

Mike: Do you think it’s part of the banking culture to spend a lot of money? I imagine if it were me, I wouldn’t want to spend very much money, but I’d also imagine I’d lose out because of it—networking and such.

Banker: There is some of that, but the vast majority of professional connections (up to a certain level) can either be taken care of with $6 beers at the local bar near the office, or with an expense account. This might just be New York.

Mike: So the big spending you’d say is mostly due to having so much disposable income for the first time, and feeling like there so much more money coming your way, so why not?

Banker: Right, also (and I think that this is something that comes across on the site) a lot of people don’t grow up with strong personal finance skills, regardless of background. Did you see the article in The New York Times about vet school this week? I feel like the best evidence that there is a huge group of people who don’t have enough personal finance skills is all the people in graduate programs who are going to find themselves in financial ruin. The return on investment for so many of the programs is negative, and the worst part is that the debt follows you forever. It’s criminal that student loans are the ONLY mainstream type of debt that can’t be cleared by bankruptcy. That was a roundabout way of making the point that you can’t bet on what your income is going to be in 10 to 20 years.

Mike: Can you walk me through your career trajectory? It’d be great to get some insight into how it all works—I’m sure there’s a clear path that you see, and income levels you expect to hit at certain points.

Banker: I’m going to send you a chart.

Mike: Amazing.

Banker: So, I keep a spreadsheet with all of my income, taxes, investment returns, spending.

Mike: You mean, an Excel spreadsheet?

Banker: Yep. Use the tools you know, right? And I use Mint.com to track my spending—that website has changed my life. It’s so great (and they do not pay me to say that!).

Mike: Haha. I track everything in my head. But it works!

Banker: Impressive!

Mike: I also don’t have as much to track as you, so I bet it’s much more helpful.

Banker: The hardest part is keeping track of cash transactions. I lose track of all those and it makes me sad that that data is gone forever.

Mike: Why are the bonuses in years one and two so high?

Banker: Because I was awesome! Just kidding. The first two years were the last two “good years” on Wall Street. The third year is 2009. And in 2010-2011, Wall Street raised everyone’s base salaries to avoid bad “bonus” headlines, which was an incredibly dumb business move. The whole point of having bonuses be a large part of overall compensation is so that you can CUT compensation when times are tough. We learned from Keynesian economics that people get upset if you cut their salaries.

Mike: So, the banks raised salaries to save face?

Banker: Yes. It’s not the first time the industry acted dumb all at the same time.

Mike: What kind of banking do you do?

Banker: I work on the institutional side of an investment bank, in a client-facing role. I’m Dealbreaker’s target audience.

Mike: What’s the end goal for the typical banker?

Banker: Managing Director, or, Partner if you’re at Goldman Sachs. The typical path is: analyst (years 1-3) → associate (years 3-5) → vice president (years 5-7+) and then there are usually one or two more intermediate titles and then you’re finally a Managing Director. I think the youngest MD I’ve known is 31.

Mike: You’re getting there!

Banker: Hah. Yeah, that’s not good! Because if you don’t make MD by your late thirties, you’re usually not going to get it at all.

Mike: But usually that’s because you’re not good at what you do?

Banker: I mean, it’s difficult to make it to MD if you’re not good at what you do. But being good isn’t enough, by any stretch. These are huge bureaucratic institutions with opaque compensation and promotion practices, usually with power concentrated at one or two key individuals. So, in order to get promoted, the most important thing you have to do is not piss off the people above you. I think this is the case in most large organizations, not just banks, and not just for-profit organizations either. Any job with layers of bureaucracy is going to be mostly politics.

Mike: And if you don’t make it to managing director, you’re stuck in purgatory forever?

Banker: Not forever—just until the next round of layoffs.

Mike: Ah, of course. What’s a typical managing director salary?

Banker: $300,000 to 400,000.

Mike: And the bonus on top of that?

Banker: It varies a great deal.

Mike: Throw a range at me.

Banker: Anywhere from $100,000 to $10 million.

Mike: !!!

Banker: There are MD’s in technology and HR who won’t ever get a large bonus. Then there are the “rainmakers” in investment banking who will generate hundreds of millions in revenue for the firm with just a few large deals. They are the highest paid people at banks, outside of the senior executives. Some of the “best” (or luckiest) traders used to make that much, too, but that’s much less common these days.

Mike: So we’re talking about a lot of money here. This means early retirement?

Banker: Depends what kind of lifestyle you have to maintain.

Mike: So what’s that for you?

Banker: Lets take a look at Mint. The goal for me is to be able to be happy with a modest enough lifestyle that when it’s time for me to have kids, I won’t be a slave to the salary.

I spent about $85,000 last year, according to Mint, which doesn’t count charitable contributions.

• ~$31,000 is rent

• $15,000 food and dining

• $10,000 travel

• ~$8,000 bills/utilities

• ~$7,000 shopping (mostly gifts)

• ~$6,500 unallocated cash

Mike: And that cash could also be for anything like food or taxi rides?

Banker: Correct.

Mike: What did you put into savings and retirement last year?

Banker: Good question! I max out my 401(k) every year. Then another $65,000 on top of that—so around $82,000.

Mike: So, that was $17,000 last year in a 401(k). And then $65,000 in a savings account? Or invested in mutual funds?

Banker: Right, the $17,000 goes into a 401(k) with investment choices limited by my employer. That account has about $150,000 in it now. Then the $65,000 goes into a brokerage account. Which is mostly invested into a dozen individual stocks and mutual funds. That’s about another $350,000 total.

Mike: Is this an account you’ve had since you were a kid? Saving money and sewing buttons?

Banker: Ha. I mean, yes, but the vast majority is what I’ve saved since college. I think I had maybe $10,000 when I left college, or something like that. I’ve also invested in a small business started by some friends, which is my largest and riskiest investment.

Mike: Oh, investing in your friends is always a big risk. Putting relationships on the line!

Banker: That is true. But, for me, as long as our incentives are aligned and it’s not so much that if I lose it all, it will ruin my life, it’s ok.

Mike: Is there anything in particular you’re saving for? Do you want you buy an apartment in the city?

Banker: God no. I mean, I would if I thought it was a good investment. But housing in New York is crazy expensive, even for someone who makes a lot of money. I don’t feel secure enough in my income to be able to commit to a mortgage payment. I think a lot of people (even rich people) who lived through the housing bust feel that way. If I moved away from New York to someplace with fewer good rental options and cheaper overall housing, I would buy a place. Or if I found a place where I knew I wanted to be for the next 10 to 20 years (and could afford it even with much less income).

Mike: I’m sure that will also depend on what kind of family you’d like to have. Are you dating?

Banker: Right! I am dating someone. It’s serious. We live together with two cats. So, yes, buying a place would be a longer discussion, but my girlfriend and I have talked about my views on buying a house. And she agrees that it doesn’t make sense in New York. If we moved away, who knows.

Mike: Does your girlfriend earn as much as you do?

Banker: Nope. She earns a more “normal” living—way above the median U.S. income for a single white woman working full-time (which was about $40,000 in 2011), but normal by New York standards.

Mike: How do you navigate money in your household? Do you mostly pay for things?

Banker: I pay more—we split most of the expenses 60/40.

Mike: So when you say you spent $31,000 on rent, that was just your share?

Banker: Yes.

Mike: You must have a nice place!

Banker: Well, now I’m checking again, and that included a broker’s fee. On a straight up rent basis my share would be around $20,000 a year. But yes, we do have a nice place in a nice neighborhood, which is a great luxury. But I pay significantly less rent than most of my work peers.

Mike: What are your work hours like?

Banker: Twelve hours most days—I get in around 8:30 a.m. and am checking my Blackberry until I go to sleep.

Mike: Do you work weekends?

Banker: I usually end up working at least a couple of weekend days per month. The first three years in the job are the most brutal. That was 6:30 a.m. to 10-11 p.m. Monday through Thursday and working pretty much every weekend. I still end up pulling a couple of all-nighters every year.

Mike: What’s your social life like?

Banker: I think its pretty normal—drinks with work people some Thursday or Friday nights, and I go out with non-work friends on the weekends, and I have normal hobbies. It’s not like I’m sitting in a dark room counting my money like Scrooge McDuck.

Mike: You do consider yourself “rich” though, yes? Especially if you continue on and become a managing director.

Banker: Yes, I do consider myself rich, even if I don’t make it to managing director. Mostly that’s not about my income, but about the nest egg I’ve been able to save. So, some stats:

• Only 5% of white males age 25-29 earned more than $100,000 in 2011

• The median net worth of a head of household under 35 years old is $12,000

Mike: Well, I’m glad you have some perspective.

Banker: There was a great article I read: “Straight White Male: The Lowest Difficulty Setting There Is”

I was very lucky growing up—financially and emotionally stable parents. Being lucky can’t be the answer though. It’s not helpful. That’s why it’s sooooo important to have as even a playing field as is possible.

Mike: And how do you think we can even the playing field?

Banker: Good public schools help. If people believe the system is fair, and you give them the tools and opportunity to learn a skill, the rest will usually work itself out. But having a fair system is crucial. There’s a book called Animal Spirits by George Akerlof and Robert Shiller that provides a great overview of the financial crisis and how it created more unfairness in our economic system.

Mike: Does this mean you’re happy to pay your taxes?

Banker: Well, no. I don’t think anyone is happy to pay their taxes. But yes, I do believe in a progressive wealth redistribution system. I think consumption taxes would work better than income taxes, and I think we need an aggressive carbon tax. So: I’m not a Republican!

Mike: So, when you first got in touch with me, you told me you were going to inherit some money.

Banker: Right, so to me, inheriting money is the most unfair way to “win” the little game we call capitalism. The idea that money (and therefore power) can be freely given to someone undeserving is the opposite of fair. I mean, winning the lottery is so much more fair, because at least that’s random. And the best way to avoid an aristocratic layer of society is to have a high (close to 100%) inheritance tax. So you can imagine my dismay when my parents recently told me that I’m probably going to inherit some money. I’m grateful that they didn’t ever tell me when I was younger. Anyway, more rich people problems, right?

Mike: It seems like your parents did a good job of trying to let you see the value of hard work, and provide you with some perspective. Can you say how much you’ll be inheriting?

Banker: I don’t know!

Mike: But you think it’s quite a bit.

Banker: Not enough to retire on. But probably a couple of years of living expenses, if I ever need it. It’s amazing what kind of breathing room having a cushion like that can bring. Putting aside the issue of inheritance—just knowing that you’ll be ok for a year or two if you lose a job…now that I have that peace of mind, I can’t imagine living paycheck to paycheck. And I know that the vast majority of people who do get laid off every year don’t have that flexibility.

Mike: That’s one less thing to worry about, for sure.

Banker: When it comes to money, I have less to worry about than 99% of the people out there, but that doesn’t mean I don’t worry about the future. If I didn’t have anything to worry about, would I work 12 hour days? Probably not. Being so close to the financial markets when everything was going to hell, I don’t think I’ll ever feel truly “safe.”

Mike: The Queen of Versailles.

Banker: Right. Another reason to live more modestly than you need to!

Mike: Is there anything we haven’t talked about that you think we should cover?

Banker: Probably. I could spend another two and half hours talking about investing.

Mike: Haha. Let’s save that conversation for another time.

Previously: A Friendly Chat With a Rich Person (Household Income: $360,000)

Questions? Interested in talking to us about your money? Send an email.

Mike: Why don’t you start by introducing yourself?

Rich Person: I am 31, and my husband is 33. We have been married for three and a half years. I am a statistician and I work for a hospital in the research department. He has an MBA in finance and works for a bank. You can guess where the money comes from!

Mike: Your husband?

Rich Person: Indeed.

Mike: Can you tell us what your household income is?

Rich Person: Yeah, so this year we’re going to make about $360,000 total.

Mike: And you consider yourself “rich”, yes?

Rich Person: Absolutely, although it feels really weird to say that, and I have a lot of guilt about it.

Mike: Oh, interesting. Why is that?

Rich Person: Probably because neither of us grew up with any money at all. He was raised by a single mother who did her best, but had pretty bad financial habits; I had two parents and a stepparent who were all frugal but since nothing was ever frankly discussed, I didn’t learn much about money growing up.

We had everything we needed, but rarely what we wanted, if that makes sense. We both also spent most of our adult lives (which so far have been spent in college) really scraping by—we both had to live independently so we worked through undergrad and grad and got no help from our families.

Mike: Where did you and your husband go to college?

Rich Person: We both went to public state schools near our homes (we grew up in different cities). I got Pell grants and scholarships for undergrad, but it still didn’t cover everything so I have about $80,000 in student loans, mostly from grad school. He didn’t get as much help and a MBA is more expensive than an MS, so he has about $120,000 in student loans. When I think about $200K in student loans, my head spins. But then I think about our annual income and it seems proportional.

Mike: But your husband also knew he’d be pursuing a high-paid career too, right? So there was a plan of some kind—a vision that the debt would be manageable?

Rich Person: Yes, and actually we don’t regret the loans at all. We both like our jobs very much, and there’s no way we could be where we are without them.

Mike: So tell me about how you guys became “rich.” Was it gradual, or sudden?

Rich Person: Well, as you know, starting out a career in banking in 2008 was not the most confidence-inspiring prospect. His salary was $58,000 but we had no confidence in the stability of his job. My salary at the hospital right out of school was $48,000. Before we were married that felt tough (separate rent, bills, groceries, etc.) although a lot of that is because both of us reacted to growing up poor pretty badly—as soon as we had a few extra bucks we were buying rounds and ordering the filet.

Mike: This was in the middle of the recession, right? Maybe you were trying to jumpstart the economy?

Rich Person: We were dumb, and we both did stuff like that even when we were in school and struggling. I liked to treat my friends and would do so down to my last dollar, but thankfully I didn’t turn to credit cards. He had quite a bit of consumer debt when we got married from overspending that we paid off the first year we were both working our “real” jobs. He’s great with other people’s money, but his money is very much an emotional thing. We gradually got raises over the next couple of years, and then in 2011 he got his first real bonus, which just sent us over the moon. That was $65,000, which ended up being about $38,000 after taxes.

Mike: That’s somebody’s salary!

Rich Person: His bonus in 2012 was $85,000, and this year it will be $100,000. And the big, big change is that his base salary went from $65,000 last year to $160,000 this year.

Mike: How did that happen?

Rich Person: He got a new job with a major jump in title and responsibility. He’s the vice president of corporate finance at this new bank.

Mike: So we hear titles like that often. But what does that mean he does?

Rich Person: It means that now he has a fresh MBA to boss around! No, kidding. Sorta. He does manage someone now, and the department is brand new so with any luck he’ll be managing more soon. So corporate finance basically means they give and manage and split up loans to businesses. His new bank is relatively small so the businesses also tend to be small.

He also works 80 to 100 hours a week. Otherwise you’d be talking to him! He basically is home to sleep. He does usually get at least one full weekend day, though. And I work from home now so I’m always here. So, now with his basically $260,000 plus a $35,000 signing bonus and my $65,000 salary, our combined income is $360,000.

Mike: Your salary is much lower than your husband’s. Does that feel funny to you? Or it doesn’t matter because you’re married?

Rich Person: It doesn’t feel weird. We recently moved across the country for his new job, so rather than lose me my company decided to let me try working remotely. I used to have a nice big office while he had a cube, so that was pretty great. And honestly, it sounds kind of whiny to say it, but I often feel like a housewife with a full-time job.

Mike: Because you’re at home and your husband makes so much more?

Rich Person: Since he’s not able to spend a lot of time at home and he makes the big bucks, we’ve got a setup where I basically do all the house stuff, financial stuff, grocery shopping, pet care, and home decor decisions. We are both fine with that, and he does help out whenever he can. We’re in constant communication about things and neither of us feels bitter about our lot.

Mike: When you say financial stuff, does that mean: He basically hands over his paycheck to you and you figure out where it should go?

Rich Person: Yup. I pay the bills, I manage the budget, and since he’s pretty spendy-spendy, I give him an allowance!

Mike: How did you determine what that allowance would be? Can you talk about how much you decide goes into savings, or other accounts?

Rich Person: Sure. And this is where the irresponsibility remains. We have a great cash budget with wiggle room built in, and yet we blow it pretty much every month. We have it in a Google spreadsheet. We budget $400 per month “free cash” for each of us. In January he spent about $800 and I spent about $600. But I have a hard time being strict about this because we aren’t going into any debt for it.

Mike: What happens when you go over that “free cash” allowance? I mean, where are you dipping from?

Rich Person: There is a line item in the budget called “Excess cash flow” and for February, that is $6,202. So I mean, so what if I get dinner from the Whole Foods deli for $41? I have a hard time not doing stuff like that.

Mike: Is this excess cash supposed to go somewhere if you’re not spending it? Like a savings account? Or an investment account?

Rich Person: Well yes, we do have about $93,000 in a savings account and it’s basically an emergency account. We have about an equal amount split between a 401(k) and a Roth IRA.

We aren’t really saving for anything, though. We own a home in our old city that is small and has a $1,000/month mortgage. A family member is going through a rough time, so she is actually living there rent-free right now. We feel awesome that we can afford to help in that way, plus we know our house is being taken care of.

Mike: That’s really terrific.

Rich Person: I guess if we decided to buy another house in our new city we would get more focused about saving toward a down payment.

Mike: Did you buy the house after you moved, and your husband got his big job?

Rich Person: No, we bought it in 2010 when we were making a combined $110,000 a year. The house cost $108,000, and even though the bank kind of pushed us to borrow more, we wanted something we could afford on one income in case he lost his job.

Mike: That was very smart!

Rich Person: That’s one financial move that I am proud of! Plus the retirement savings, that makes me happy.

Mike: How much do you guys have in retirement so far?

Rich Person: About $92,000. He actually hasn’t set up his 401(k) with the new job yet, but we are putting $600 per month of my paycheck into mine.

Mike: So I think we all have different ideas of what it means to be rich. You and your husband went from growing up in families with little money. What did you imagine it would be like to be rich, and now that you are rich, does it live up to what you imagined?

Rich Person: I imagined being rich meant you no longer had any problems and were always happy. As a kid, I was always pretty embarrassed and grumpy about our trips to Goodwill for back-to-school clothes, and I used to daydream about going to the Gap (the Gap!) and buying whatever I wanted.

What I now realize is that the world around me is exactly the same as it was before. I still have to clean up after myself because I’m not butler-and-mansion rich, there are still potholes in the road, there are still ugly, desolate parts of town to drive through—it’s not like everything is perfect and rosy now.

Now, I do tend to walk into the Gap and buy stuff without looking at the price tag, and that gives me a little bit of a thrill and a sense of freedom. But I don’t do that at Nordstrom.

Mike: I think one of the reasons people stay rich is because they do look at price tags! Unlike all these pro-athletes we hear about who spend it all and then have nothing when they’re done with the game.

Rich Person: Exactly. I’m afraid of that happening! This could all be gone so quickly and easily. I didn’t look at price tags once at Macy’s, and ended up spending $1,000 on bedding! I paid it because I was too mortified to put most of it back, but I did go and return it the next day.

Mike: That must have been some good bedding.

Rich Person: I kept the sheets—high thread count is super worth it.

Mike: So, your husband’s big bump in pay is relatively new. When that happened, what were your initial thoughts about what you’d do with the increase in income?

Rich Person: The two dumb things we did in celebration of the new job were to buy an Audi, and rent a huge, expensive apartment. We are planners and budgeters (aspirational, mostly) so we had the monthly income figured out before he took the job.

Mike: Do you both still have student loans? Did you consider using your husband’s raise to pay those off?

Rich Person: We do, and that is our plan for his next bonus. I consolidated my loans at a dumb time because I didn’t know any better, so I have about $80K at 7 percent! His loans are more substantial, about $120K, but at 2.5%. Our minimum student loan payments are about $1,000/month.

The last two years we poured his bonus into the house because it was a fixer-upper, but it’s now in great shape, so we can shift those windfalls into getting out from this debt.

Mike: And you typically pay more than that, or are you waiting for the bonus to tackle it all?

Rich Person: We are currently paying the minimum, because when we moved we left almost everything behind. We had to buy all new furniture. But we’ll be done with that by next month, and if his bonus doesn’t cover my loans (it probably won’t because of taxes) we will put my entire paycheck each month toward the loans. There’s definitely lifestyle creep going on with the furniture, by the way.

Mike: Do describe!

Rich Person: So our old house was pretty much entirely by Ikea, and our couch was so bad, one of the legs was broken so if you moved it at all it would collapse. I got a chip on my shoulder about that couch and I’ve always wanted a sectional with a chaise, so I decided to go for it. It was $4,500. But god, it’s beautiful and comfortable and it’s microfiber so the cats can’t destroy it.

We got a $1,000 desk and two $150 barstools, and we’re shopping for a new bedroom set. The bedroom set isn’t entirely necessary since the one piece of furniture we brought was our bed, but he wants a solid headboard—ours is, like, iron bars. Seems like a silly reason to get a new bed, but I like furniture shopping!

Mike: And you can afford it now! What other kinds of things do you and your husband do now that you didn’t do pre-wealth?

Rich Person: Oh and I got an Aeron chair.

Mike: I don’t know what that is.

Rich Person: It is a $1,000 office chair by Steelcase and it feels like sitting on clouds.

Mike: I see! The chair has its own Wikipedia page!

Rich Person: Ha! Although, humblebrag, the one I got is too big for me so I need to go switch it for a smaller one. The damn seat goes too far out even when it’s all the way back. Anyway. So we both care about food a lot and we like to cook, so we get much better quality groceries now: organic as much as possible, local as much as possible, etc.

We upgraded the cat and dog food, and are helicopter parents to them—we take them to the vet at the slightest provocation now rather than worry about them. One had a stomach bug a few months ago and I was worried about an obstruction and of course it was Friday night, so we took him to the emergency vet and it cost $500 and I didn’t care.

Last year we decided on a Monday that we would be going to Europe that Friday for three weeks. We were lucky to have a cat sitter we trusted and made sure she was available, checked that our regular dog sitter could accommodate our dog in her house for that long, and bought the tickets. It was such a thrill to be able to take such a substantial trip on our own dime. Any previous vacations had been with our parents, so it was really satisfying to be on our own. Kinda felt like the first time you get a legal drink in a bar—like, “I shouldn’t be allowed to do this! Why is the bartender acting like this is normal? This is awesome!”

We drive around in an Audi, that is ba-nuts. I got a new car too, although it is not that fancy and I was going to get it even before he got the new job. It’s a Honda CRV and I love it very much even if it doesn’t talk to me or warm my butt.

Mike: Does the Audi talk and warm your butt?

Rich Person: Oh yeah—you can talk to it to make it do almost everything except steer for you and the passenger and driver seats have their own climate zones. If he wants to be 68 degrees and I want to be 70 degrees, the Audi lady will do that.

Mike: WOW.

Rich Person: Yeah. I bought some “just for his car” sunglasses the other day that match the paint job. I am so dumb. Bleh, it feels silly and wasteful!

Mike: But you also give to charity?

Rich Person: Yes. There is an organization that takes care of stray dogs in our home city—feeds them and builds dog houses for them, and we have always given to them but now we give a lot more. There is a group I recently found out about called Atheists Helping the Homeless in Dallas, and I just wrote them a check and will be writing more. And Planned Parenthood, love them. I’d have 10 kids if it weren’t for PP.

Mike: Do you and your husband want children?

Rich Person: I don’t think so; it’s not anything that interests either of us. Plus I’d basically be a single parent since he’s always at work! He doesn’t want to be an absentee father. If we change our minds about kids we’ll have to restructure our lifestyle and cut his hours down. We have nieces and nephews who scratch any itch we have to be around kids and we have college funds started for each of them.

Mike: That’s really nice.

Rich Person: They are quite young so they’re small accounts, but instead of buying them stuff for birthdays and Christmas we deposit into those. (Although I can’t help it, I still buy them presents.)

Mike: I think Logan had a post about that—about saving for her nephew rather than buying him stuff he won’t care about.

Rich Person: Since we both struggled so much in college and ended up so in debt, we would like to keep them from having to go through the same. My husband feels really strongly about that. They don’t need another piece of plastic junk lying around, but they do need an education. I think they can have a little of both! Oh, and they are the kind of funds where if the kid decides not to go to college they can use it for trade school or I think they can actually just use it for whatever, but if it’s not school then there are tax penalties. I don’t think that every single person must or should necessarily go to a four-year university so I made sure that they can make whatever choice they feel best suits them when they’re 18.

There’s only three of them so it’s not like this will be a billion dollar undertaking, but we like the idea of being the rich/crazy aunt and uncle and helping them out when needed. But to do that without making our siblings grouchy, is the thing.

Mike: Sort of like Rory’s grandparents in Gilmore Girls.

Rich Person: Haha. We shall not spoil them nor undermine their parents’ wills.

Mike: You will make them attend Friday Night Dinners, in exchange for free tuition.

Rich Person: Absolutely. Nah, I don’t like strings-attached gifts. That’s bull—All I want is for them to do their best and be happy, and we’ll try to set it up so they don’t have huge obstacles to overcome in order to do what they want in life.

Mike: So your husband works in finance, but do you guys have a financial planner?

Rich Person: We do, actually. She is the best. She helps us with choosing the right levels of insurance (auto, life, home, umbrella) and the right health insurance plan from work. She set up my Roth IRA, which I rolled over from my old job’s 403(b).

And we have some friends who use her, so when we put money into that friend’s kid’s college fund, she deals with it (college fund college fund college fund!). She also picks out and lords over all our savings accounts, basically – she finds ones with good interest rates and makes sure we don’t drain them to buy a boat without talking to her about it first. This was a rule we set up when we first started working together because we were honest with her about our past financial dumbness. We have not yet hired an accountant, but will be seeing one next week for the first time.

Mike: So your friends use her too, does this mean your friends are also wealthy? And if not, I’d love to hear how you navigate those relationships.

Rich Person: That particular friend is a work friend who is in a similar position as my husband, so yes. His other work friends are generally as rich or much richer than us. But our non-work friends are decidedly not rich. And that can get interesting.

So, example: Over the summer I was hanging out with two friends I’ve known for years and years, and we were outside just drinking and talking (drinking is probably an important thing to stress here). And one of them asked me how much money we make. Since my inhibitions were down, I said, “Oh yeah, totally! I don’t know why people are so weird about saying actual dollar figures anyway! Who cares?!” and I told him.

And then he basically spit it back at me five or six times that evening. That was pre-new job, so I think I said in the range of $200K, and he kept referring to me as “200,000 Dollars.” And it sucks, because I really like this person. I still do, and I chalk it up to drinking and me being dumb.

That is one bad example. Generally with the rest of our friends, everything is cool. We don’t invite them out if we know we’re going to spend $300 on dinner, because we don’t want to put them in a weird spot. When we hang out we go to regular places for dinner or drinks and we all pay our own bills, so that’s fine.

Mike: So that friend who knows, does he treat you guys differently now?

Rich Person: The next time we hung out I felt a little bitterness from him, but every other time after that it’s been okay. I don’t talk about money with my friends (anymore), and I try really hard to not sound like Lucille from Arrested Development when I’m talking about mundane things.

Like, I don’t bring up stuff that happened at the country club. Yes we had to join a club. And I say “had to” because it’s very much a work/network-y thing.

Mike: Oh, that’s definitely a rich person thing.

Rich Person: I feel much more comfortable with my non-moneyed friends. I don’t really enjoy the club socializing because it feels like work to me, if that makes sense.

Except the club itself is kind of cool because the food is really good, and if you buy a wine locker and store your wine there they bring you a giant spread of snacks that never stops all night. But I have to be a nice polite lady with social graces and conversation skills, which naturally I am not. I can’t wear my pajamas there, which is lame. I had to up my wardrobe game because it has a dress code.

Mike: Yes, I imagine it does. And lots of ladies lunching.

Rich Person: Yup. I don’t think I’ll ever be that? I don’t know. I’m more comfortable drinking at home than judging people over some white zin. I feel like a fraud sometimes when I’m there because I’m not highborn like a lot of them.

Mike: So we talked about your friends. But what about your families? You guys didn’t have much growing up, and now that you do, do they ask you for money? I mean, you are already allowing one of them to stay in your house rent-free for now.

Rich Person: Nobody has asked us for anything. I think they’re all curious about how much we make and I haven’t really told them. Before we moved, my little nephew asked “Are you guys rich now?”

And I didn’t really know what to say, so I told him that relative to the rest of the world we are all already very wealthy, but that we will have a little bit of extra money now. He was cool with that answer. I guess I would have to take any requests on a case-by-case basis. I feel like we shouldn’t loan any money that we aren’t comfortable with never seeing again, you know? Like, set it up as a loan, but be totally okay with it never being paid back.

Mike: I think that’s the right way to think about. Especially when it comes to family.

Rich Person: Yeah, I don’t want to fight about money. That’s uncomfortable for everyone.

My parents are in much better spots financially now than when we were growing up, so I don’t think it will come up with them. With his mother, given her history with money, I’ll never be surprised if she asks and we will probably always say yes.

He has tried managing her money for her and it gets weird because the parent-child role switches, so that doesn’t work. At this stage in her life we think it’s unlikely she’ll completely overhaul her attitudes toward money, so I think we will be taking care of her in some capacity for quite a while.

Mike: Yes, I understand a lot of how that is as someone who will be financially supporting my parents in their old age.

Rich Person: She did a great job raising a great son, she still works, she is a sweet and loving person, she just can’t manage money worth a damn. Even if we were strapped for cash we would always help her.

Mike: I think we covered quite a bit today! Anything else we should talk about that I haven’t brought up? What do rich people dream about?

Rich Person: Hahahaha. Let me think. A few nights ago I dreamt about a kitten who fell into a storm drain and so we put a lifejacket on one of our cats and sent her in after him. There was a helicopter search at night and everything. My husband thinks if you remember your dreams you aren’t getting quality sleep, so he never tells me his dreams.

I guess to sum things up I pretty much feel like the same person I always was, just with a lot more ability to do what I want. It’s true that money doesn’t make you happy, but it sure gives you a certain kind of freedom.

Previously: A Friendly Chat With A Rich Person ($140,000)

This Rich Person moved to the south and doesn’t even need a butt warmer.

Have questions you’d like this Rich Person to answer? Email Mike with “Question for a Rich Person” in the subject line.

Logan Sachon: You are a young person who makes a lot of money: TRUE OR FALSE.

Rich Person: TRUE! I mean, you know, for certain definitions of “a lot”?? I do not have a yacht, and I live in an apartment. But yes I actually was looking through tax paperwork this morning and last year I made something around $140,000. Which is a very large looking number, if you ask me.

LS: Yes. To me you are basically a billionaire. I cannot distinguish between you and Warren Buffett.

RP: Yes I mean this is how I feel too! It is A LOT OF MONEY for a person of my relative youth and charm. (26, Super Charming.)

LS: SO YOUNG. SO CHARMING And so much money. How much money is in your checking account right now?

RP: My personal checking account, which is for day-to-day shit like “eating out” and “buying drinks” has $1,045.27. The joint account, which I share with my wife, that all my checks get deposited in is at $76,707.42. The joint savings account is $32,477. Our plan is to shift a lot of that out to, like, CDs or whatever, for mid-term savings once we meet with the CPA.

LS: So tell me. How did you get to a place where you were making this amount of money?

RP: So I am lucky, which is something successful people like to say about themselves if they’re not assholes (I heard that in an audiobook my dad was listening to), but is also very true. I am a contractor in the entertainment industry, and I make animated logos, commercial graphics, what have you, for film and TV. I used to want to be a video game programmer, then I learned I don’t actually enjoy programming things, I’m just good at it. So I changed to computer game ARTIST, which I spent a long time trying to get good at.

In high school, basically, I was self-teaching myself 3d animation programs, and I was soooo baaaad at it, but I was also dumb enough to not realize this, so I slowly got better and better until I was able to get an unpaid internship (!) the summer before college working at a company that did graphic animation stuff for television. They basically took advantage of me, but also taught me to use more animation tools. So I was able to keep doing work with them, and then other tv animation companies, while I was doing school. So school became, like, my day job, and then I got my actual education at night, working for these companies.

LS: When did you start getting paid?

RP: Let’s see … sophomore year of college I talked them into upgrading me to a paid intern, which meant I was getting paid literally minimum wage to do complicated animation things. It was such, SUCH a scam. I now know that the work I was doing was worth about 300 dollars a day in NY or LA, or maybe 200 if I was worse than I remember, but they were literally giving me 7 dollars an hour or whatever. But then on the flip side, I learned SO MUCH. All of my book-learnin’ college education was just, like, art history and context, but I learned all of my actual day-to-day skills on the job. Which I think is how it is for a lot of people? College gives you a foundation but the actual day to day skills are learned in an office.

LS: Yeah but not generally while you’re still in college! Did you know how lucrative this career could be eventually? Were you tempted to drop out and just get to work?

RP: I had no idea. I graduated in 2008 and was offered two jobs in the same state I was in school in: one at a game company, one at a smallish animation studio. Both encouraged me to drop out to work for them, both offered me around 50,000 or something like that, which straight out of college is a good deal! But I decided to move to LA, instead, where I got a job making I think it was 65,000, as a staff animator. Good money! Great money! Only later did I realize how low that is relative to what contractors make in this field. At every step I just felt lucky to have found a field I was good at, and that I enjoyed doing. Making money was, you know, a broad goal, but it’s not like I was my buddy who went to pharmacy school to get rich.

LS: What were your other friends doing during this time?

RP: Right after college I had one go to work at a defense contractor, making more than I was out of school… a bunch of art types went to grad school. Oh gosh, they ALL went to grad school. Imagine Ginsberg’s “Howl,” but about grad school. I know so many artists who decided that they weren’t gonna get work and went to get an MFA instead.

LS: Did you have loans from school to pay off?

RP: I did not, thankfully—I am, as I said, extraordinarily lucky. I went to a small state school nobody’s heard of, who paid me to keep my GPA over 3.25, and let me double major in what I wanted. So I treated them as, like, my 9-5 office job, while I was working on the side. I mean, also, I was crazy.

LS: Where did that work ethic come from? It just seems so wild to be in college and working that much, if you didn’t have to.

RP: I did about six years of school work in four years. I have no idea! I’m very lazy or I should say I’m very lazy, unless there’s a sort of systemic motivation. So in college, I was on a full ride scholarship that ran out after four years, so it was in my interest to milk that dry for four years and then leave. I took on these internships and low-paying side jobs because I knew I wouldn’t teach myself anything on my own, but if I had a company I owed work to, I’d do it for them. Basically I leveraged my worst psychological traits (anxiety, guilt) and used them to force me to work harder.

LS: Wow. That’s just really really smart reasoning for a college kid. Are your parents really hard workers?

RP: Yes. They are both management-types and both very successful. I grew up outside DC, where the assumption is you WILL be a successful meritocracy type person—lawyer/doctor/politician. So there was just a lot of hard work around me. Now I’m in LA and it’s hard for me to get used to the different expectations of what “hard work” means.

LS: So it sounds maybe like you found a thing you liked and were good and it was just lucky it wasn’t like … abstract painting. That the fact that it was also lucrative was a happy accident?

RP: Yeah, although on the flip side I put a ton of work into figuring out how to make a career out of what I liked. Like up until I graduated, I was thinking I might still do programming stuff, because I was gonna have a degree in it and I was good at it. So if it looked like I’d be scraping by not making money I don’t know if I’d have stuck with it.

The other thing is what I do is not really comparable to abstract painting—like I COULD use the skills I have to make animated shorts and try and get NEA grants and make little art pieces, but instead, I do commercial art. Because at the end of the day I like doing both of these things, but one of them will make money, too. I totally get that a lot of people won’t like the feeling of “selling out,” but for me that’s not really a problem. So I channeled my creative energy into a way to use the things I liked doing to get paid, too.

LS: I’m really interested in your peers, your friends, and how or if your success/their going to grad school changed things in your relationships.

RP: It’s funny, it did to an extent. I’ve found the people I knew in college who didn’t have a solid idea of what they were doing next tended to drift away from me a bit more. I mean part of it is how I moved so far away, too, but I’ve found the people I keep in touch with on the east coast all tend to have, at least somewhat, an idea of what they’re gonna do—whether that be teaching, or working in games, or whatever, they have a plan beyond “get an MFA.” I dunno if that’s a self-selection thing, or just coincidence, but that’s how it’s played out.

In LA it’s a little different. I didn’t know anybody here, and had to make a ton of friends out of nowhere, so there’s a big range of like… position-in-career. I have friends who are in the same field as me, and friends who are struggling writers, and friends who don’t really have a plan beyond paying rent. And it can be awkward.

LS: Let’s talk about THAT.

RP: Let’s! I mean if nothing else, in LA in your 20-something crowd you’ll have people making anywhere from $15,000 a year to, I guess, $140,000 a year in my case, so finding things to do that won’t be awkwardly expensive, finding ways to buy rounds without getting weird about it, it’s all gotta get navigated.

My wife and I have taken to hiring our friends to catsit for us and, like, it is a valuable service we are paying for, but I get awkward about how much they feel like they’re becoming our SERVANTS because we’re paying them, and we make enough money that I’d be so uncomfortable NOT paying them.

LS: Do you feel like there’s an expectation from your friends that you’ll buy dinner or drinks or whatever when you go out?

RP: Sometimes! Not always, and not in a way I’m uncomfortable with.

LS: I have a few friends who make A Lot More Money Than Me and I do find myself falling into that expectation sometimes, just feeling .. um this person will probably be getting the check and then being kind of surprised if we split it. NEVER OUT LOUD. But like I said, six figures to me sounds like INFINITE MONEY.

RP: Listen I make six figures and it FEELS like infinite money…until it’s all gone. Like, yes, everyone knows we make more money! And I would rather pay for a friend than have them not come to an event. But, also, obviously this doesn’t apply to EVERYTHING, right? A friend just had her car break down, and part of me was like “We could just… pay for that! Right now! Out of the checking account!” But then where does “giving your friends money” stop? I do not know!

LS: Yeah! That actually seems to me to be a stressful situation to be in actually.

RP: It can be! I got married last year, and my wife is in grad school and is way, way, way better at not-spending-money than I am. She was able to save more money than me while making 1/3rd as much before we got married. So as a result, we did a big Finances Unifying thing, and now I have a monthly budget. Which is usable for, like, personal things, which includes buying people drinks and paying for meals. And that new budget is a tiny fraction of what I actually make per month. Soo as a result now I feel like I’m spending less on friends than I did, but also saving a lot of money to use for things like “maybe buying a house” or “not starving to death if I run out of contract work.”

LS: Do you friends make rich people jokes to your face? Do they constantly describe themselves as poor?

RP: Some friends are always describing themselves as poor, but I’ve also basically learned to never trust someone’s “emotional description” of how wealthy they feel. Everyone feels poor sometimes, and unless you know why they feel that way it doesn’t mean much! I don’t really get many rich people jokes, but that’s probably more because I am in an apartment and I just have one practical car. I know guys in my field that drive crazy-ass Audis and they definitely get a lot of “rich white dude” jokes.

LS: Do you think having money made you more mature? It seems like maybe not since you were so mature before. But … do you feel like you’re more mature than your friends without money? And is it the money that made you mature? Or are you more mature by nature and and … therefore have money? Can one be poor and mature?

RP: I am really hesitant to answer this just because, you know, what is maturity? But I guess I can say: I feel like everyone kind of has an “internal age” of what their brain acts like, and mine is definitely something around 32 years old. Has been for years! That said, if I lost my money tomorrow I think I’d still be mature, just way more stressed and worried and anxious, all of which acts to keep you from acting maximumly mature.

LS: Were you a rich person when you met your wife? Is your wife a rich person? I guess you are, collectively, now Rich People.

RP: She has basically seen a broad arc of my career. We started dating before I came to LA, so she saw me making no money on internships, then making a good amount and then in the last two years, when I went freelance, making A Lot Of Money.

LS: Can you talk about that transition? Was the money the reason?

RP: In part! There was a lot of shaking up at the company I was at. A lot of people leaving. The work wasn’t as satisfying as it had been when I started, and I had this buddy who was a contractor who kept saying he was making $600/day. Which I literally did not believe, but now, being out in the contractor world, is completely reasonable (“reasonable”). So to compare I was making… $78,000, I think, when I quit. I immediately jumped from that to six figures aaand have been raising my rate since.

LS: What small things changed when you hit six figures—anything? Did you upgrade to $20 bottles of wine instead of $10 or $15? Do you shop at J.Crew now instead of the Gap?

RP: My wife’s spending increased tremendously—she’s in grad school, so having disposable income changed her life a lot, in terms of material goods. For me, I mostly stopped caring about how much I spent on things like eating lunch out, or buying books and video games, or whatever. Furniture got a big upgrade, too, just cause all my stuff was Ikea moving-to-a-new-state stuff from four years ago. Switched up to Room and Board instead. (Privileged people sentences.) I also started spending money on fine liquors, and throwing parties for friends, because I like hosting and it’s a lot easier to do that when you can just buy $200 in alcohol without it being a big deal. Now I find I’m trying to ratchet myself back down to my sub-rich-dude spending so I can work on paying for a house eventually.

LS: Did you become a republican?

RP: NOPE. I’m proud to pay taxes. I am firmly of the… “jesus, that is a lot of money, who cares if the government takes some” family. And also, when you aren’t doing W2s, you start to realize how many things are actually luxuries that you can choose to spend money on or not, like, knowing what I spend on my vacation days, or being able to just take a month off if I like.

I might technically make “less money” doing that, but it is still a thing that has value, you know? There is more to being successful than the biggest paycheck. Ironically, getting a bigger paycheck is making me realize this.

LS: Do you describe yourself as middle class?

RP: NO NO NO NO NO. I AM RICH and I don’t LIKE having to say it, because this is AMERICA but I am definitely rich and that’s ok and maybe if I remember how lucky and good I have it I’ll be able to help other people more than pretending that I am just an average joe.

LS: Do you consider yourself part of the 99 percent? OR THE ONE PERCENT.

RP: I mean I feel like socioeconomically, I’m really in the one percent, but that if you are even willing to consider this, then maybe you can avoid the gross trappings of one-percent-ness? E.g. spending all your money on sending your kids to private school and then acting like this is a BASELINE NECESSITY, and thus calling yourself middle class?

LS: Do you do stocks and stuff? (“stocks and stuff”)

RP: My favorite big box retailer! We have money in retirement funds (Roth IRAs) and we have index funds. I know a lot of the guys I work with are stock jockeys. They do day trading shit and get real intense about like 2-hour get-rich-quick things in the markets. III… don’t. I’m young! I can make money over a long period of time. That said, we’re gonna be meeting with an accountant tomorrow to talk about incorporating. So maybe he’ll be like “go buy every stock” “build yourself a throne out of stock certificates”

LS: “Just buy the stock. All of it”

RP: “BUY! BUY!” he’ll shout.

LS: Is there anything else you have to say about being rich?

RP: Just that… if any of YOU dear readers become rich, work really really hard to remember that you are rich. Also, buy higher thread count sheets. They are WORTH IT.

This Particular Rich Person lives in Los Angeles.