personal finance

I just finished reading A Million Bucks By 30:How to Overcome a Crap Job, Stingy Parents, and a Useless Degree to Become a Millionaire Before (or After) Turning Thirty. The author, Alan Corey, was kind enough to send me a review copy. I must say, it’s one of the most interesting personal finance books ever! In fact, its my all time favorite.

A lot of people have complained that Robert Kiyosaki’s Rich Dad, Poor Dad stories sounded insincere and that killed the whole concept for them. If you’re in that camp, then you’ll love Corey’s book. He recounts his days of living in abject poverty until he become a millionaire. Don’t get me wrong, he wasn’t poor – he just lived that way to achieve his dream of becoming a millionaire before his 30th birthday. While his story is quite hilarious, he actually covers all the points of personal finance without actually dwelling too long on them; live on less than you earn, learn about investing, invest for your retirement, delay your gratification, take educated risks, avoid payday loans, make sure your significant other is on the same page or get another significant other. Instead of explicitly mentioning these points, he just shows you how he practiced them on a daily basis.

He was so passionate about living below his means that he moved into the projects (Spanish Harlem) in NY and lived on Ramen noodles for 3 months. He invested 55% of his meager pre-tax salary into stocks, 401k, a Roth IRA and real estate and lived on the rest. By deeply studying the real estate market he was able to recognize changing market conditions and he took a big risk with his investments. But he partnered with the right people and his investments grew exponentially. Coupled with his frugal lifestyle and his book deal, he achieved his goal at the age of 29.

It’s a very enjoyable read. He doesn’t hit you over the head with any lessons and you really feel you’ve gotten to know him by the end of the book. Thanks for the copy Alan!

If anyone else would like me to review their book, you know where to find me!

According to Reuters:

A New York man who discovered that millions of dollars had mysteriously appeared in his bank account, and withdrew more than $2 million, has been arrested on charges of grand larceny, prosecutors said on Wednesday.

Benjamin Lovell, 48, pleaded innocent on Tuesday to charges that he withdrew money from a Commerce Bank account that had been opened by someone with the same name, prosecutors said.

Lovell had just $800 in his own Commerce Bank account when he went to make a deposit, but a teller, mistaking the Woodlawn account for Lovell’s personal account, told him that his account contained more than $5 million, prosecutors said.

Lovell made multiple withdrawals even though he knew that the money was not his, prosecutors said. He used the money to buy jewelry for his girlfriend and to make several investments, they said.

Lovell is being held on $3 million bail. He faces up to 25 years behind bars if convicted, prosecutors said.

If a 48 year old guy only has $800 in his bank account, he’s obviously thinking this is a sign from God. If he’s not going to withdraw and spend it, what else is he going to do? (Apart from the honest thing of informing the bank manager that the money isn’t his?)

But seriously, I think 25 years is too harsh a penalty for this. It’s obviously the bank’s error. He is definitely wrong for spending it, but if I had only $800 to my name and had the chance to make $5 million, I’m pretty sure I’d be tempted to do the wrong thing, even if I knew I might burn in hell for it. He had to have known that he was going to get caught. $5 million doesn’t just disappear without someone realizing its missing.

What would you do if you were in Benjamin’s position? What is a good punishment for greed and stupidity?

Ever wondered if you could retire on $3,000 a month? Well the answer is “Yes!”. Not only that, you might be able to get by on only $2,000 a month!

Of course, you’d have to sell you gas-guzzling Tahoe and move -out from your swanky Downtown condo and move somewhere cheaper. But cheaper doesn’t necessarily mean inferior! A Canadian couple who retired and moved to Mazatlan are actually spending only $2,000/month.

When Anne retired, we sold our house outside of Calgary, which had 10.5 acres of land. With the proceeds from the sale, we paid off the house in Mexico and bought a 14 x 44-ft mobile home in a beautiful RV park south of Calgary. Now we spend November to April in Mexico and the summer months in Canada.

Overall, I’d say living expenses in Mexico are between a third and half of what they are in Canada. The two of us can live very well on about $2,000 a month. When we worked out our monthly expenses, we were paying about $135 a month for shelter, including utilities, property taxes, Internet and telephone.

Some costs seem absurdly low to Canadian eyes. Our property tax, for example, is just 381 pesos per year($40), although we pay an additional bank trust fee of $422 annually because our house is within 50 km of the ocean. Even with air conditioning in the hot months, our electricity costs have averaged $16 a month. Of course, we never have any heating costs. If it gets chilly at night, you just throw on an extra blanket. Fire insurance is not necessary except for contents because all the houses are built of concrete.

Food is cheap. You might pay $2 for a 1.9-litre bottle of milk, 43 cents for a kilo of tomatoes and $2.50 for enough large fresh shrimp for a meal. Services cost even less. You can visit the dentist for $20 to $30, hire a cleaning lady for the day for $10, have your hair cut for $4, and get your laundry done for about $4.50 for three kilos.

We don’t need a car — the bus system is great and the local bus costs 4 pesos(41 cents Cdn.), or you can pay 8 pesos for the air-conditioned bus, which is mostly for tourists. That means we can afford to dine out often. On Valentine’s Day we went all out and had dinner at a Mexican-Greek restaurant. We had a large margarita, a bottle of wine, a delicious meal, a dessert flambé and cappuccino for about $50 including tip. Normally, we don’t spend that much. There are many places where the two of us can get a simple meal for $10.

Another advantage to being in Mexico, as opposed to, say Thailand or Costa Rica, or some of the other places where Canadians can live cheaply during retirement, is that it’s fairly close to home. The flight to Calgary costs us about $700 so if we need to go back to see the kids, it’s not a problem.

On the flip side, if your house is paid off, you probably might be able to live on $2,000/mo in San Diego! You might have more fun in Mazatlan, but if you’re retired, your partying days are probably older, and you’d more than likely enjoy the quiet company of your friends and relatives. Having spent so much of my life moving between very different places, I probably wouldn’t mind. But the average person might not want to suddenly move to new country when he or she is 60-65.

Anyway, its a different perspective on adjusting your means to fulfill your living!

You can read the rest of their story here.

A few of my friends who own homes got into the habit of getting interest-only loans and refinancing them every year. Apparently there was some math that “made it cheaper” to refinance every year. Starting every year with a new loan didn’t seem like a good investment but I’d never really understood the math. Of course, with the drop in home values, LTV ratios decreasing and the drying up of liquidity, this fad has disappeared, but I always wondered how the math worked. I was too lazy to actually do it since I knew intuitively that it must be wrong.

Fortunately ace mortgage broker, Randy Johnson, send me an email with the math.

many homeowners will never burn their mortgages because they make poor choices, like continually refinancing into 30-year mortgages.

Assume that a homeowner started out with a $100,000 loan at 6.5% and that he has been in his home for 5 years. He refinances the existing balance to a new loan at 5.5%. If he is like most Americans, he looks just at how much he saves per month. He gets modest interest savings, $14,265, less if you deduct the costs, which I will ignore. But in choosing to make the new lower payment, he goes out to the lousy end of the amortization curve again. He actually adds 10 months to the total time payments are made, a total of 370 months. That’s why it never gets paid off.

It is much smarter to make the old payment he was paying. He afforded it for five years and he can keep affording it. This converts his interest saving into principal reductions. It shortens the remaining repayment time from 300 to 249 months and doubles his interest savings compared with the first option. Now he saves $32,377.

The most valuable opportunity, however, is to get a 15 year loan which also carries a lower interest rate, 5% today. The payment is about equal to the original payment plus $100. That reduces the remaining payback time to 180 months. The interest during this 15 year period drops by over 60% from what it would have been had no refinance taken place.

To summarize

Interest due in remaining 25 yrs without refinance $96,009

Interest if refinance and make lower payment $81,743

Interest if keep payment the same $63,632

Interest if move to a 15 year loan $39,690

The cost of refinancing is usually never zero. Even if you don’t pay for it, its somehow baked into the loan.

I strongly recommend Randy Johnson’s stellar book How to Save Thousands of Dollars on Your Home Mortgage. If you don’t know what Yield Spread Premium (YSP) or Paid Out of Closing (POC) means on a HUD-1 you definitely should read this book. If you own a home and don’t know a HUD-1 is then get your spouse to smack you and then go buy the book! I promise you’ll save thousands of dollars on your mortgage.

Once again, Thanksgiving is upon us. A day of gluttony, friends and family. And even better is the fact that its followed by Black Friday, named because its the day that retailers finally show a profit for the year (or so the story goes).

Once again, I’ll be hounded by friends to replace my perfectly good 19″ TV with a new-fangled 46″ Plasma Hi-Definition TV. (Of course, most of them are too dumb to realize that they need HD cable in order to get the best picture so instead they’ve spent $1500+ on a TV with worse clarity than my 10 year old analog TV).

The only problem I have with buying such an expensive TV is that I’ll be forced to watch the the damn thing. Right now I have more important things to do and its so easy to get sucked into wasting your whole evening veggetating (or rather rotting) in front of the telly.

I got suckered into a Russ Whitney seminar many years ago. The only thing I learnt from it was that broke people always have “big-ass TVs with all the channels”. Best $4,950 I ever spent. Ahem.

I went to meet one of my tenants two years ago. I had been renting out the place for a year and had never seen it. (mainly because it was about 970 miles away). He had 2 nice new cars parked out front. My rental looked like a model home with luxurious furniture, and paintings and candles in the bathrooms. He also had a HUGE TV. It was at least 6 ft wide. Damn, the dude lived so much better than I did (and do). But he also couldn’t afford to buy the $180,000 house he was living in, despite making more than his landlord (thats yours truly). And he never got around to figuring out how he could save thousands in taxes and rent by owning instead of renting. He just lived paycheck to paycheck, until he fell behind and I had to evict him. (Actually I very nicely told him to move out, and for once, it was a painless eviction).

But getting back to the story, the fancier the TV, the more you’re inclined to make use of it. And it results in you spending less time living life and more time watching someone else live it for you. Not only that, but you’re bombarded with ads every 5 minutes trying to sell you crap you don’t need. (Or atleast you thought you didn’t need until you were exposed to it repeatedly during the evening). I once calculated that ads account for about a third of all viewing time, so thats another huge drain on your time.

And right now they’re showing ads for day-after-thanksgiving sales that start at fricking 4 am. Who in their right mind would get up on a cold autumn/winter day to buy the same crap they can buy 3 hours later? I know that with the economy contracting, retailers are hurting, but do they think that if the stores are open twice as long, sales will actually double? I think the morons who came up with that idea should be flogged. Twice. Once before thanksgiving and once the day after.

Doesn’t mean I won’t be buying my fair share of crap on Friday. (hey, someone needs to fuel our consumer-spending-driven economy). But it’ll probably be more of the essentials that I’ve been putting off getting so I can get them at a discount. I might even get a Wii, if I can get it under $150. But I’ll probably leave the big-screen TV off my list until Feb 2009.

Ok, thats enough rant for this evening. Happy Thanksgiving everyone!

Welcome to the 35th edition of the Carnival of Money Stories. This edition is pretty big with 50 entries, so pour yourself an extra-large cup of hot cocoa and sit down for some serious reading.

Debt

Reggie presents Why Money is Debt – Part 1 posted at Reggie, the black kid with good credit.

Millionaire Mommy Next Door presents What Would You Do? saying “Sleepless in Seattle” and her husband have acquired a substantial debt load and are considering whether or not to sell their home, pay off their debt and rent. They love their house, but they are tired of living on the edge financially. She asks, “what would you do?” .

Ted at Campus Grotto provides a Student Loan Consolidation FAQ saying I just recently consolidated my student loans. Here is what you need to know to ensure you don’t get scammed.
Eric at A Penny Closer laments Ahh, How I’ve Missed Consumerism…

James at Payday Loan Cheapskate presents How to Escape the Payday Loan Debt Cycle.

Linsey Knerl presents Confessions of a Former Payday Loan Junkie posted at Wise Bread.

Investing

Living Off Dividends presents Why Low Interest Rates Are Bad For You, while wondering If Its A Good Time To Invest In Milk!

Thomas Humes presents Simple Habits That Lead To Wealth posted at Wealth Building World saying Wealth creation is a combination of rules and habits. Here’s the number one rule, if you want to be wealthy, its not how much money you earn, its not how many cars you drive, it is how much you can save and invest and that’s the key.

The Dividend Guy presents 5 Things Dividend Investors Should Do To Make It Through Volatile Markets posted at The Dividend Guy Blog.

Matthew Paulson presents How to Plan for Retirement If You Don’t Get a 401(k) or a 403(b) at Work posted at American Consumer News.

Market Poetry presents Ode to All Struggling Value Investors posted at Market Poetry.

The Skilled Investor presents Where’s Waldo? – The illusion of superior professional mutual fund manager performance, saying The effort to find those few supposedly superior money managers willing to sell their services sufficiently cheaply is a costly, time consuming, and futile, “Where’s Waldo?,” searching exercise for the individual investor. Many money managers will claim to be superior and few or none actually will be. If such superior money managers did exist, then there should be dozens or hundreds of them who prove their superiority year after year after year. Unfortunately, the scientific finance literature indicates that this is not the case. This year’s star money manager tends to be next year’s average or laggard money manager.

Living Off Dividends wonders whether the fact that Even Supermodels Don’t Want Dollars is an indicator that The US’s Economic Strength Is In Permanent Decline?

Retirement

Phil presents I moved to Indianapolis for the money! posted at Queercents, saying One day, Phil and his partner went to Indianapolis to look at some properties and it dawned on them. Indy was a lot less expensive than Chicago. Could they live here? .

My Wealth Builder presents Our Journey To Financial Freedom #7 – How Luck Played A Role.

General

Christine presents GoogleAds, Keywords and Website Content: Making Money Online Using Web Content, Keywords and GoogleAds posted at Me, My Kid and Life: An American Single Mom Living in France.

Mr Credit Card presents Digital SLR Camera Shopping with Reward Points (Ask Mr Credit Card’s Blog) posted at Ask Mr Credit Card’s Blog.

Doris Chua presents Are Loans Good or Bad? posted at Home Office Women.

Kyle James presents Frugal or Cheap? – When To Spend The Extra Money posted at Rather-Be-Shopping.com Blog discussing the things in life that are worth spending a little extra money on in order to save money and time in the long run.

Wealthy_1 presents Bill Me Later posted at collectingmycash.

FIRE Finance presents FREE Land & Handsome Living Allowances! posted at FIRE Finance.

Pinyo presents I Just Saved A Bunch Of Money On My Insurance posted at Moolanomy explaining how he saved money on my home and car insurance by switching.

Paidtwice presents Experiments in Frugality: Disaster Number 2 posted at I’ve Paid For This Twice Already….

FMF presents Internships are Great for Your Career/Life posted at Free Money Finance.

Nivek presents FSA End Of The Year Spending Spree posted at Money Clipped.

Ashley presents Graduating Without a Full-time Job Lined Up posted at College of Cash.

Mark Runta presents Open A Door posted at Smart Investing & Money Management saying Switch off the TV, get off the couch and do it.

The BagLady presents My First Holiday with a Huge Family posted at the baglady.

Stephanie presents They’re Out to Sabotage My Plan posted at Stop the Ride!.

Glblguy presents 1 Year Ago Today – 10 things we’ve done to regain financial control posted at Gather Little By Little.

Cashmoneylife presents I Bought a New Car, and Why it Was Good Idea For Me posted at Cash Money Life.

Kevin at Satellite TV Guru presents How to Get Satellite TV if You Have Bad Credit.

The Digerati Life presents The Financial Task I Dread The Most.

Raymond at Money Blue Book warns about How I Got Scammed By a Seller On Alibaba.

The Happy Rock wonders when Do We Earn The Right Not To Budget?

Becoming & Staying Debt Free presents How to Become a Stress-Free Shopper, saying Have you ever gone into a store with the intention of only buying one (1) item and you walked out with several bags full of stuff? I can remember one time back in about 1990, I carried a cart load of groceries for a customer. Her husband and kids were waiting in the car. The first comment that was made when the door was opened was, “I was going to say, if you had to milk that cow.” It is a comment I have heard my own dad say when I was younger to. I knew instantly, that she had said she was just going to grab a gallon of milk. Instead she did her weekly grocery shopping.

Christine at Me, My Kid and Life presents Film vs TV, Why We Opted to Turn the TV Off, plus Frugal Tips for Movie Buffs, France on the Cheap: Traveling in France for less than $200 per day for Two – Traveling Cheap in Europe, and The Exchange Rate – The Euro vs The Dollar – The Declining Dollar.

The Dough Roller presents How To Find Healing From A Deep Financial Wound, saying Many of us have been hurt over money. Here’s my story and how I’ve coped for the past 30 years.

Jason at A Bankruptcy Lawyer’s Blog presents Five Top Alternatives To Personal Bankruptcy, saying If you are considering filing for personal bankruptcy, stop, think and consider the following.

Allen at Investing World Today presents Business Investment Strategies That Work Every Time : The secret to investment success is the consistent application of time-proven strategies, not the use of complex, hard-to-understand investment vehicles created by investment bankers out to take your money!

Madison at My Dollar Plan presents My Personal Story: Background, Taxes, First IRA : My introduction to money, working, taxes, and retirement accounts has all influenced where we are today and how I handle money.

Thomas at Wealth Building World presents Money Doesn’t Grow On Trees, saying How is your money flowing? How are you feeling about money? What do want in relation to money? Do you think about how much you have, or don’t have, often? What kind of statements were made about money while you were growing up? Why is it that people who have a lot of money can make it so easily and those who don’t have it, continue to go without?

Matt at How I Will Be Rich offers advice for increasing your pay at Make More Money at Your Day Job.

The Frugal Duchess presents How I’m Conquering My Bag Lady Fears: My 10-Step Program saying, What keeps me up late at night? In addition to worrying about past mistakes and my kids and my work, I worry about becoming a bag lady. And I have plenty of company; a lot of women (and I imagine some men also) have secret fears about living on the streets without money or sanity. Even Oprah and other successful women have ‘fessed up to bag lady fears.

Did you know that you Money Market Account could have sub-prime mortgage exposure and thus you could your principle? Did you know that they are also not FDIC insured? Its true, MMA’s invest in RMBS (Real estate Mortgage-Backed Securities) and other SIVs (Structured Investment Vehicles). Both RBMS and SIVs can be used to invest in sub-prime or alt-A mortgages, both of which are a risky proposition right now. Maybe even prime mortgages are risky too. With such lax underwriting standards the past few years, it really isn’t a surprise that there are so many defaults occurring.

Another thing to consider is that MMAs are not covered by FDIC.

The fact that FDIC may not even have enough money to pay out all the investors if several banks go under is a separate discussion.

Also, stay away from savings accounts with banks that have significant mortgage exposure. If you have less than the FDIC limit of $100,000 you’ll get your money back, eventually, but its still a hassle.

Banks like Countrywide, which is facing HUGE mortgage-related losses, could fold and unnecessarily tie up your money for several months. Much better to spread your risk around.

I do not have a money market account. And I have my savings spread out between Bank of America, ING Direct, Commerce Bank and Capital One Bank. Maybe I’m being paranoid, but based on the impossible black-swan events that keep occuring in the financial markets, I’d rather be safe than sorry.

In fact, I think keep my cash in a brokerage account with no exposure to mortgage-backed securities may not be a bad idea. Most brokerages are covered by SIPC rules which extend to $500,000. And buying Treasuries, Munis or even Senior Income Trusts like VVR may not be a bad idea!

Slacker
Offers free streaming music to your desktop or hand-held slacker device. Quite a large of music and no annoying ads interspersed between tracks unlike Yahoo!’s Launch player. You can also add your favorite artists to your station and customize to your tastes.

Spiralfrog.com
Spiralfrog offers free music downloads from a large library, in exchange for clicking through a certain number of ads per month.

Amie Street
Offers music downloads with a very innovative fee structure – tracks start out free, and the price scales with the number of people who download them, capped at 98 cents. There is even the possibility of making money – if you recommend a track before it rockets up in price, you are rewarded with store credit. Has a large and growing selection, including the Barenaked Ladies, Tiesto, Jonathon Coulton, etc. Also recently announced a large amount of funding from Amazon.

Lala.com
Lala.com launched in June 2006 as a membership service that facilitated CD swaps. The site lets music fans list the CDs they own and the CDs they want, and then it arranges trades. Each transaction costs $1.75, which pays for a nifty Netflix-like envelope, 75 cents in shipping, a roughly 20-cent honorarium deposited into a trust fund for artists, and, of course, a fee for the middleman. Lala.com’s founder, Bill Nguyen says a portion of this fee goes to the performers. This may also temporary assuage the suit-happy RIAA. The arrangement exploits a loophole in copyright law: While distributing duplicates is verboten, it’s perfectly legal to trade your own property. (And there’s nothing to prevent Lala users from ripping a copy of a disc before they send the original off to someone else.) In February 2007, Lala added CD sales to its offerings.

Starting in November, Lala will offer unlimited on-demand streams of music from two of the four major labels (the company’s still negotiating with the other two) using the internet radio station that Lala.com owns, WOXY. Users can immediately buy any track they hear on WOXY.

Last.fm
Last.fm is a social music site that allows users to subscribe to radio stations based on their tastes and favourite artists. It is possible to use the service from within popular music players on Windows, Linux or OS X, though it does rely on having a decent internet connection with no caps or limits. The range of music available is very good, and the intention behind the site is to expose listeners to stuff they may not have experienced. Major label artists are well represented, but it’s also pretty simple to add and tag your own content to the site if you’re a producer.
Deezer.com
A free radio site, with excellent selection.

If you’re okay with downloading music illegally, bittorrent and limewire are two popular peer-to-peer softwares that facilitate this. But be careful. The RIAA is cracking down heavily on music pirates. Or you can just buy your tracks from Amazon’s Music Store.

[Picture of 1 Oz Silver Eagle]
I recently mentioned that I made $500 dollars last month from online advertising. Rather than use that money to expand or improve my lifestyle (also knows as “buying crap”), I decided to invest it in something that has intrinsic value.

The US Dollar has losing value over the past 2 years. Just today the Dollar index dropped to its lowest recorded value of 77 and I think its going to keep on dropping. Typically precious metals like Gold, Silver and Platinum do well in times of a weak currecny.

Why do I think the Dollar will continue to weaken?
Because the economy sucks and is being manipulated in wierd ways. To quote someone quoting the late Dr. Richebacher, a smart and wealthy economist,

“All this emphasis on statistics and calculations.,” he went on, rapping his silver-handled cane on the table for emphasis, “without a proper theory, it is all nonsense. And your economists seem to have no theory at all.they just think they can manipulate the system in order to get whatever outcome they want. They think economic growth comes from consumer spending and that they can control consumer spending by adjusting lending rates. It is unbelievable that anyone takes this seriously. It is capital formation that really matters. A rich society is one with a great stock of capital. One that builds capital and puts it to work to create more capital. A rich society is not one where people consume. Just the opposite. It is not what is consumed that creates wealth; it is what is NOT consumed. Yet, all the Anglo-Saxons focus on motivating consumers to consume. And now they are consuming more than they make. I tell you, in 70 years of studying economics, I have never seen such nonsense.”

[Picture of 1 Oz Silver Peace Dollar]

And in order to “save the economy” the FED is going to cut the interest rates, which will increase inflation and weaken the dollar. Even the Governor of the Bank of England, Gov. King said yesterday that “If central banks cut interest rates in the current environment, they run the moral risk of rekindling speculative risk-seeking, i.e. supporting the very behavior that caused the current market crisis, namely the underestimation of risk.”

A country’s currency is an indicator of its economy. If the country has a good balance sheet, positive flow of funds, a good business plan, strong leadership the currency will be strong. Right now the US has none of those qualities.

Anyway, I spent the $500 on some silver coins. Regular readers already know I like buying gold and silver coins. I bought about a dozen each of the perth mint silver tigers, 1920s Peace silver dollars & 2007 silver eagles. They’re beautiful coins, make good gifts and hopefully will continue to appreciate as the Dollar keeps losing value.
[Picture of 1 Oz Perth Mint Silver Tiger]

The New York Times has an article about “poor” millionaires in Silicon Valley, working 70 hrs a week, just to get by.

Some of them having networths ranging from $5 million to $10 million, but are still working 60+ hrs a week.

Silicon Valley is thick with those who might be called working-class millionaires — nose-to-the-grindstone people like Mr. Steger who, much to their surprise, are still working as hard as ever even as they find themselves among the fortunate few.

Mr. Kremen estimated his net worth at $10 million. That puts him firmly in the top half of 1 percent among Americans, according to wealth data from the Federal Reserve, but barely in the top echelons in affluent towns like Palo Alto, Menlo Park and Atherton. So he logs 60- to 80-hour workweeks because, he said, he does not think he has nearly enough money to ease up.

“You’re nobody here at $10 million,” Mr. Kremen said earnestly over a glass of pinot noir at an upscale wine bar here.

“People around here, if they have 2 or 3 million dollars, they don’t feel secure,” said David W. Hettig, an estate planner based in Menlo Park who has advised Silicon Valley’s wealthy for two decades.

“You look around,” Mr. Barbagallo said, “and the pressures to spend more are everywhere.” Children want the latest fashions their peers are wearing and the most popular high-ticket toys. Furniture does not seem up to snuff once you move into a multimillion-dollar home. Spouses talk, and now that resort in Mexico the family enjoyed so much last winter is not good enough when looking ahead to next year. Summer camp, a full-time housekeeper, vintage wines, country clubs: the cost of living bloats.

To Mr. Milletti, it all looks like a marathon with no finish line.

“Here, the top 1 percent chases the top one-tenth of 1 percent, and the top one-tenth of 1 percent chases the top one-one-hundredth of 1 percent,” he said.

“You try not to get caught up in it,” he added, “but it’s hard not to.”

At what point is your wealth enough? Seems pretty sad to be worth $10 million and not being able to feel you’ll achieved a right to take some time off!

Is the purpose of life to keep working and keep accumulating more toys until you just drop dead?