Definitely disagree, there IS a difference between $10 - $20 Mil and $1 - $1.2 Bil

Probably, but I doubt you as a founder would get $1-1.2 Bil from a deal that was only $3b.

On a much larger note, I don't feel like there's a big difference beyond $20 Mil if your goal is to continue living the life you're living now, but with total financial security. I know that given the chance, that's all I'd really ask for. Anything beyond that, and the only thing I can think of to spend the money on is philanthropy.

However, I'll bet other people have different aspirations, so I guess I can't really speak on the subject.

... why am I writing this comment ...

I think the cutoff point is more like 100 million. With 20 million you're still having second thoughts about your NetJets use or the size of your yacht.

The point was: There is a difference between being broke ($0) and having $20 million in the bank.

That's a huge difference.

At $20 million, there is nothing you can't do. At that point, with some wise long term investments, you wouldn't need to worry about finances.

With $20MM in the bank, there is plenty you cannot buy and subsequently maintain for very long: a shiny new Bombardier jet, a motor yacht, more than one vintage racing Ferrari... even blowing $5MM on a substantial estate would be highly ill-advised. But at this point, one becomes acquainted with people who can afford to keep such things, so it might start to seem less like "wealth" and more like "security" depending on one's desires and insecurities.

Consumption of ultra-luxury items is one way to look at the difference, but another is your progeny. $20M, if spent frugally and invested well, could certainly ensure the well-being of your immediate children and probably grandchildren as well (not if you blow it on vintage sports cars and jets, though). But a billion or two could keep your family out of work for many, many generations

Why is keeping your family out of work for many generations a good thing?

It's not: http://www.theatlantic.com/magazine/print/2011/04/secret-fea...

I wish my grandparents had left me a few million dollars.

Keeping your family out of work is not the same as giving them the option of not working.

If you put it in a mattress, sure.

But most (all?) people invest their money at a far higher rate of return than inflation.

Not for a decade or more has this been true. Inflation in the UK is 2.2%. You would be lucky to get that without venturing into equities (which to be fair have done well this year) or property. But energy is up 8%, travel 9%, food 12%, etc. Real inflation is hard to outrun. And markets are prone to bubbles...

My intent was to put $20MM or so in perspective: yes, prudent investment could put such an amount to good, long-term use, but it is not so much money that it would be challenging to spend it all within a decade or so. $1Bn is something else entirely, and would require a very concerted effort to squander quickly.

You could pay for your $5 million estate in cash with the dividends from a 'boring' investment in AT&T's stock (5.1% dividend) after six years, while never touching the principle.

20$ million is barely anything if you want to actually make a difference, as opposed to just surviving without having to work.

massive difference. decent retirement money versus 'do whatever you want for the rest of your life' money

uh, pretty sure 10-20 million is in fact "do whatever you want for the rest of your life" money. Certainly do anything normal that you want. perhaps you can't buy a jet. damn.

10million * 3% dividend stocks = 300k per year just having it sit there. Maybe not entirely risk free, but not too risky either.

Exactly. I could never bring myself to use billions on super luxury stuff anyway and would wind up donating most of that money to a good cause (I wonder if the Gates foundation accepts donations?).

Lets say you want to get into automotive racing. Assuming you want to race in professional series such as ALMS or similar you could easily burn 5M a year.

20M is plenty to live a very well off life, but its not "do anything you want for the rest of your life" money. Look at how many professional athletes/musicians manage to blow many multiples of that amount.

I included the caveat of "normal". Obviously that amount of money is "spendable." 300k a year though will service a very nice lifestyle though. You can live an upper class lifestyle most places in the world without doing anything.

Also, perhaps I'm naive, but I expect tech startup founders to be better with their money than professional athletes. Yes, you could be an idiot, but that doesn't mean 10 mil isn't FU money. It is if you have even a little bit of a brain. You can spend nearly any amount of money, but that's not really the point. You can put your 3 billion all on red and dammit if it didn't come up black. Doesn't make it not FU money. (No casino in the world will take that bet, but you know what I mean).

Well you might want to start another business and in that case, the more money you have in the back, the better.

>> Mind you, I'm really racking my brain on how this isn't all totally insane.

That's the best I have come up with too.

Is $10 million, before taxes and expenses, really fuck-you money these days? Having maybe $ $6 or $7 million in the bank certainly wouldn't inspire me to turn down $3 billion for a flash-in-the-pan type of business.

If you can sustain 5% interest, that's $500k a year taxed at 15%. That might not be fuck-you but it's certainly good enough for pretty much anything you might want to reasonably do with the rest of your life. (Barring ultra luxury of course.)

Interest is taxed at marginal rates, not capital gains rates. (You may be thinking of dividends.) Moreover, at $500k/year, you would be subject to the new higher capital gains rate of 20%...

I think we are getting a bit pedantic here. You can get by just fine on 500k a year, even if taxed at top rates.

Invest in municipal bonds. Interest is not subject to federal income tax.

There are plenty of high quality bond funds I can invest in with 5% return where the returns are taxed as dividends and not interest.

When we talk about "interest" here, I think its defined as passive low-risk investment income that is able to be taxed at a lower capital gains rate.

Exactly. If you have anything more than $10m in the bank and are still not 30, you'll be too naive NOT to take more risks (considering you don't plan to touch the $10m in the bank).

$10–$20 million is nothing to sneeze at, and certainly enough to fund a more-than-comfortable lifestyle if that's what you want to do. But if you have money in the billions, that will literally open the door to anybody in the world that you want to talk to, and you will be taken seriously.