Rich Are Not So Rich in Silicon Valley

Gary Kremen, a 43-year-old resident in Silicon Valley, California and the founder of Match.com, an online dating service, is rich by any measure with a personal net fortune of $10 million. However, that does not stop him from working 60 to 80 hours a week to become wealthier.

New York Times reported on Friday under the headline: “In Silicon Valley, Millionaires Who Don’t Feel Rich” that although many in Silicon Valley are millionaires by any definition, most of them are just as hard working as any other worker. They are sometimes referred as “working-class millionaires” since they work day and night.

Hal Steger, 51, a marketing executive for an IT company, is a typical “working-class millionaire.” His financial assets are worth $2 million and his house overlooking the Pacific Ocean is valued at $1.3 million. Yet Steger leaves home for work everyday at 7:00 a.m. He works an average of 70 hours a week.

Why don’t they feel rich? Answer: The definition of “being rich” has evolved as Silicon Valley has became crowded with millionaires. Kremen said, “$10 million is nothing special in Silicon Valley. I still have a long road ahead of me.”

The expensive living expenses in Silicon Valley are another factor at play in making millionaires insecure. The average price of a house in Silicon Valley in the first quarter of this year, $788,000, is four times higher than the nationwide average of $212,300. In addition, residents in rich towns tend to spend more on housing, shopping and education. Unless you are mega rich in the Valley, there is no such thing as enough.

The story certainly applies to Tony Barbagallo, 44, who earned about $3.6 million over the last 20 years. With $2.2 million after taxes, he recently bought a house for $750,000 and used $350,000 for remodeling. In the end, he was only left with $1.2 million. Barbagallo continues to work more than 70 hours a week.

Another reason that keeps millionaires in their desks is the instinctive craving for wealth many share. Eager to emulate richer “role models” in the valley, millionaires in the valley set their goals high and only look forward to more wealth in the future. Retirement is out of the question for these hard working aspirants.

kong@donga.com