An Ex-Goldman Banker Explains What It Really Means To Be Wealthy

Bankers Anonymous; Michael writes: Back when I worked on the bond sales desk at Goldman, many of us talked about what our “Number“ was – the “Number” obviously representing “F*ck You Money.” “F*ck You Money”, if you haven’t worked on Wall Street, represents the amount of money you’d need in order to professionally disregard anybody else’s needs.  In other words, the amount you need to walk away from your desk, go out the door, and never look back. Wealthy.

....19th Century English authors Jane Austen and Anthony Trollope tell me a great deal about how to understand wealth, and, in particular, the role of passive income.  At that time in England, the landed gentry earned passive income from family-owned real estate, real estate which would never be willingly sold.

......One meaning of wealthy that exists in our popular culture is that if you are wealthy you never need to work again, like landed gentry.  Every hero and heroine of Austen and Trollope novels has an income, known to all polite society and expressed in thousands of pounds per year;  their “Number” follows them around as they seek appropriate romantic matches.  Because 19th Century landed gentry did not work for a living, I like the analogy between the “Number” associated with every Austen and Trollope character, and “The Number” that we think makes us wealthy today. 

.....The best way of knowing whether you’re wealthy, by this analogy, is to compare the passive income you derive from your assets on an annual basis with your yearly lifestyle expense.  If your passive income exceeds your expenses for the rest of your life, guess what?  You’re wealthy! 

  

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