Why So Many Rich People Don’t Feel Very Rich

One reason I can imagine that you wouldn't feel rich: because it feels unstable. If you're afraid you're going to lose it all at any moment, you just feel momentarily lucky.

That list might be how people assume it happens, but it doesn't reflect reality.

Most early employees never make it anywhere near management if they weren't management employees to begin with (and with venture-funded companies, those usually get replaced; Steve Blank wrote about this I think). Ditto for getting your company acquired (how many acquired YC alumni ended up quitting right after acquisition? something like 99%?). Meeting the right people also doesn't have as much to do with it as you'd suspect - a lot of CxOs are found through searches, and may come from companies in a completely different sector of the economy. As for entrepreneurial drive, that's the reason we're all here reading HN instead of being content with working for an "entrepreneurial" manager.

I recommend reading Sharon Voros' The Road to CEO - it describes the typical public company's executive officers' background pretty well. The basic idea is you have to work your way up the management chain of command and build up a solid resume (spending time at a prominent business consulting shop apparently can act as a short-cut for this). Personal qualities related to making good first impressions seem really important at the high level - the author spends a couple of chapters on things related to grooming and appearance. I don't run in CxO circles, but that seems an accurate impression from the senior management people I've encountered.

Bottom line seems to be you need to get into management and work and charm your way up.

This topic always brings me back to the same place: As a culture, when it comes to the "rich" and the "wealthy" we tend to focus almost exclusively on revenue (income) and assets (stuff). Anyone who looks at a simple income statement and balance sheet knows that there is a lot more to the equation.

If someone makes $500k and spends $500k, not only is their net income $0, they have added nothing to their net worth. Conversely, someone who makes $75k and spends $30k has a positive net income of $45k and adds $45k to their net worth. However, because we don't have nearly as much insight into the income statements and balance sheets of our neighbor, we compare our "income" and "stuff" to their "income" and "stuff" (as opposed to what we really should be comparing which is net income and net worth).

I'm also reminded of a great book by P.T. Barnum called The Art of Money Getting (http://manybooks.net/titles/barnumptetext05barnm10.html). It was published in 1880, but it's amazing how relevant it still is. He tells some great stories about life, money, and wealth. This is one of my favorites:

"I know a gentleman of fortune who says, that when he first began to prosper, his wife would have a new and elegant sofa. "That sofa," he says, "cost me thirty thousand dollars!" When the sofa reached the house, it was found necessary to get chairs to match; then side-boards, carpets and tables "to correspond" with them, and so on through the entire stock of furniture.

When at last it was found that the house itself was quite too small and old-fashioned for the furniture, and a new one was built to correspond with the new purchases; "thus," added my friend, "summing up an outlay of thirty thousand dollars, caused by that single sofa, and saddling on me, in the shape of servants, equipage, and the necessary expenses attendant upon keeping up a fine ’establishment,’ a yearly outlay of eleven thousand dollars, and a tight pinch at that: whereas, ten years ago, we lived with much more real comfort, because with much less care, on as many hundreds.

The truth is," he continued, "that sofa would have brought me to inevitable bankruptcy, had not a most unexampled title to prosperity kept me above it, and had I not checked the natural desire to ’cut a dash’."

Yes, in the financial context they have a low risk profession. They can have greater than 90% confidence that if they do the same thing they did the previous year (likely, working very hard at a task they are very skilled in), that they will earn about the same amount they earned that year, usually adjusted up for inflation. Do you disagree, or are you using some other definition of risk?

Personal risk, yes. Malpractice is covered by insurance. Bankers risk their clients' money, not their own (for the most part). As long as they perform their job competently, there is little risk compared to an entrepreneur who has had to quit their job and invest their personal funds into their venture.