How The Rich And Powerful Become More Rich And Powerful

MC Hammer And Mark PincusBy San Francisco standards, I’m just another regular fella who loves to travel and write from everywhere in the world.  Even though there are supposedly half a billion blogs out there, I actually don’t know many people in the off-line world who have a blog let alone make any money from their online endeavors.  So perhaps I’m not so average.

My friend invited me to a party to support our city’s mayor, Ed Lee.  The cost was $500 per person, which is the limit for political contributions per person, per event.  Usually, I would just pass because of my disdain for politicians in general.  However, Ed Lee was the incumbent, and was willing to provide tax breaks for firms like Twitter and Zynga to stay in San Francisco, and therefore keep jobs in San Francisco.

I deliberated for a while and decided, what the hell.  My friend was college classmates with the host, who so happened to be named Marissa Mayer, 37, the first female engineer at Google, and now the CEO of Yahoo.

POWER PLAYERS 

Rose Pak

Fans of Aunty Rose

Marissa hosted the party at one of her penthouses somewhere in San Francisco which I shall not disclose for privacy purposes.  She and her husband were gracious hosts to us all.  At the party, there were only a total of around 70 people, 70 very influential people. Ron Conway, the founding father of Angel Investing rolled in with his dark-rimmed classes and silver hair.  Former SF Mayor Willie Brown was there in his suit and hat.  Rose Pak, “The real Mayor of San Francisco” hobbled in due to a sprained ankle.  Mark Pincus, founder of Zynga, who really is only about 5 feet 6 inches tall, came in a black turtle neck.  And of course, MC Hammer, 1990’s super start rapper and now VC investor joined the party as well.

Funny enough, the people I talked to the most were Hammer for an hour and Rose Pak for about 45 minutes straight.  It was fun to hear Hammer talk about his projects, what his son “Booby” is doing, and how he went back to Japan during the earthquake tsunami tragedy to help out.  He felt a kinship with the Japanese people after having performed at Tokyo Dome five times in his career.  We talked about collaborating on charitable events in the Bay Area as well.  At the end of the night, we traded text messages and promised to keep in touch.

Rose Pak was just as interesting given she was the main reason why Mayor Ed Lee ran for Mayor and got re-elected.  She controls the Chinatown vote, which is one of the most important groups of people in San Francisco given the size of the Chinese population.  Rose provided an inside glimpse into the other candidates and how respect for the community and for one’s elders was tantamount.  About every 5-10 minutes, a couple younger fellas would come by and ask if Rose was alright and whether she needed any food or drinks.  Aunty Rose was the god mother and more important than anybody else in the room.

Ed Lee, Mark Pincus, Marissa Mayer

Mark Pincus Speaking About Ed Lee’s Initiatives To Keep Zynga in SF

ACCESS IS KEY

As I observed the crowd of 70 mingle and exchange stories, I came to the realization that once you are rich and powerful, it’s easier to get that much richer, and that much more powerful.  If you have a promising start-up but face tremendous competition, you likely won’t have a chance to stand out.  But, if you have Ron Conway on speed dial, you are golden because everybody’s ears will perk up and pay attention.

When you’ve got money, you can afford to buy access.  It sounds contrite, but that’s what rich people do.  They are able to participate in fund raisers and charity events to get to know other rich and perhaps famous people who can also afford to attend.  Even though I am financially independent now, $500 is not chump change to me.  It’s how much I gave to the Yakezie Writing Contest and it does affect my budget.  Sometimes the price of admissions is $1,000, or even $38,000 for the party Robert Mailer Anderson hosted for President Obama this past February.

The party was exclusive and to everybody there except for me, $500 was an afterthought.  I just so happened to be a friend of a friend.  If I wanted to join Yahoo now, getting at least an interview might have gotten a little easier.

THE PLAYING FIELD WILL NEVER BE LEVEL SO LET’S HELP!

The reason why those with money and power have the responsibility to do good is because the playing field is not level.  If you so happen to be born to a poor single mother who works two jobs to feed you and your brother, it is hard to compete against someone who grows up in a wealthy household.  From tutoring needs, to private school, to having parents as alumni of prestigious universities or who are in senior roles at companies, wealth makes a difference in getting ahead.

Some of us are simply just luckier than others.  It is up to us who are the most lucky to help those less fortunate.  There is a big uproar over Obama saying that “If you’ve got a business – you didn’t build that. Somebody else made that happen.”  That is what we call a political gaffe and downright offensive to small business owners if it wasn’t.

What Obama means to emphasize is, “If you were successful, somebody along the line gave you some help.” It’s not that you didn’t work hard and take risks.  It’s just that if you live in America, you have the infrastructure to help make your dream a reality.  America is the best country where there is the highest correlation with effort and success. I am very thankful for the public school education I received, and the ability to invest my money and work towards entrepreneurship.

Can the government bureacracy improve for small businesses?  Absolutely!  But the point is, there are many qualified individuals who are also smart and hard working, but dont’t succeed.  A lot of success has to do with luck.  Plenty of success also depends on who you know.  For those who are connected and who have luck, don’t forget those who helped bring you there.

LET’S BE CLEAR

Money buys power. And once you’re powerful, you’ll gain even more money if that is what you wish. My fellow partiers weren’t there for either really. We were just there to help keep an incumbent Mayor in office and help keep jobs in San Francisco. But if you listen carefully, you’ll notice the discussions revolve around the charities we support. There weren’t really conversations about business. Dialogues were all about trying to figure out ways to give back to others.

Pity the person who did not have any cause they cared deeply about in which they could speak its merits. That is when you become an outsider because nobody cares how much money you have or who you know at such events.

The net worth in Marissa’s apartment that night was probably close to $4 billion dollars. With this much money comes a tremendous responsibility to help others and that’s exactly what so many of the attendees are doing.

Discussion Questions:

* Does Mayor Ed Lee become more powerful now that Marissa Mayer is CEO of Yahoo with ~14,000 employees?

* Does Marissa Mayer have better access given she helped raise thousands of dollars for Mayor Lee’s campaign?

* Do you think the rich and powerful feel somewhat guilty for being so blessed with fortune?

* Will Mayor Lee do everything he can to take care of Rose Pak’s Chinatown district in terms of economic development?

* Why are there people against rich and powerful people when they donate so much to charity?

* What can we do to even the playing field to give everybody a chance to succeed?

Note: For the record, I think Marissa is going to do fantastic as the new CEO of Yahoo.  She’s got the insight of how Google is run, and has the experience and drive to turn Yahoo around.  Good luck Marissa!  

Primary Photo: Hammer came up to Mark and said, “I’m a big fan!  Can we get a picture together?”  Hammer handed over his black iPhone and asked me to take a shot.  I did, but my finger was in the way, and the flash whited out their faces, so I asked them to pose and took another.

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Regards,

Sam

Updated: 7/21/2014

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

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Comments

  1. Brandy says

    Now that I know that you sbelieve that I don’t work hard for my business, I will no longer read your blog.

    “What he meant to emphasize was, “If you were successful, somebody along the line gave you some help.” BS!!!!! No one gave me help. We had mutual beneficial exchanges. They didn’t just give me money. I worked for that money. They didn’t just give me their time or the mentoring. They wanted a piece of the action or to be paid for their time.

  2. says

    Very interesting Sam! I am glad you got to go and even more important you shared it with us. I wouldn’t have even recognized any of these people but then again I’m not from San Francisco.

    I don’t think they mayor becomes more powerful but I do thing that Marissa has a bit more access now. She at least had access for the event duration.

    I don’t think the rich should feel guilty unless greed is their only driver.

    I’d hope he’d take care of all of his districts but will Chinatown get more help? It is possible.

    I think the disconnect of rich and famous while still giving to charity is the amounts they give to charity sometimes exceeds what normal people make in a given month or year and they get jealous.

    I don’t think the playing field can or should be leveled. If you want to become the rich and famous come up with an idea and network to get to where you want to be.

    Our current government is not the way and redistribution of wealth would not help.

    MC Hammer better text you back! I don’t imagine they give out their numbers to just everyone unless they have a different cell phone for each event!

    I would totally need a who’s who list before I went to one of these things. I’d study it all day so I didn’t look like a fool.

    • says

      Hey, you answered all my questions! Nice.

      The rich shouldn’t feel guilty, but trust me when I say that many of them do, and deal with their guilt by giving back as much as possible. Yes, making several million is nice, but when you find yourself making hundreds of millions, you question sometimes whether you deserve it when there is so much suffering in the world.

      I really think it’s important to help those in less fortunate situations. If we don’t, the world will be ruled only by the rich and powerful, and then we will go back to medieval times.

      • says

        I couldn’t agree more. There is much to do in this world and if you have the resources to help while maintaining your wealth then why not? It leads to a better world and a little insurance on your karma, right? ;)

  3. says

    Interesting points you raise Sam. I don’t think any of these people are there strictly to augment their base of power for power’s sake. I do think all of us, whether we are wealthy, middle class, or poor, have a distinct view of the world and how we would like to see it work better. By attaining more access to others with influence, they improve their chances of improving the world through their own lens.

    If you think about it, we all do the same thing. We go to networking events. We go to the company happy hours and golf outings with vendors or customers. It’s all about improving access. When it comes down to it, it is simply investing. Instead of money, it is influence. The compounding effect of interest works with influence too. The more you have invested, the bigger the gains over time.

    • says

      You are right. We all do the same thing. This party just so happened to be a party made up of the top 0.01%.

      We do business and make things happen with people we know. It’s all about relationships.

  4. says

    This reminds me of when I heard Bill Gates speak about that meeting with Warren Buffet, Oprah, Richard Branson, and about a dozen other billionaires.

    News outlets were speculating on the front page, what they were talking about. But Mr. Gates simply said they were discussing ways to help the world, and looking for more people that wanted to help also.

    • says

      Ah, very interesting! Sounds exactly like what this party was about. Michael Kirsch, who sold Bebo for $700 mil was there talking about Charity Water as well. He’s donated some $3 million+ to the cause and won’t stop.

      • says

        MY challenge, when coming to charity, has been that I feel I need to “establish” myself in the world before I can effectively give back to it.

        I mean, I actively look for ways to give back to people, usually through either listening to them (what they’ve wanted to say sometimes for years), and/or educating them (such as through personal finance). But, the limitation of this is it’s very one-on-one. I haven’t been able to mass produce “being of service,” and am looking for ways to actually do this, and figure it will be much easier once I have an 11-figure net worth.

  5. says

    Wasn’t aware that MC Hammer was a silicon valley VC now, I thought he went bankrupt from his post-music days. Are you looking to get into start-up investing Sam?…seems to be a bit out of your risk profile. Thanks for the post…interesting thoughts to ponder.

    • says

      He may have, but he is well connected, and I’m sure he’s doing very well now.

      I’m happy to be an Angel investor in anything I think is a good idea that could work. I allocate about 10% of my Net Worth to higher risk investments. I’ve currently got one that has been alive for the past 6 years. Let’s see what happens!

  6. says

    This is quite a cool experience if you ask me. You got to meet some really neat people.

    I think networking and exposure go a long way so for Marisa this could be a real help.

    I agree with Lance too. You need to earn being rich. Make a contribution first and then get rewarded. It’s the only fair thing.

    • says

      The cool thing is, Marissa isn’t making any money out of the event. She just provided the avenue and the ability for others, and her friends to contribute and help a cause. The money goes directly to Ed Lee’s campaign, and he won.

      Helping support someone’s beliefs goes a lot farther sometimes than directly supporting that person.

  7. says

    Great story Sam. These people sound so interesting. Did you get your picture taken with anyone? At the end of the day these people are still people. But they got out there and made a difference in the world and that’s why they’re successful. Wow, I now know someone who has been to the home of Marissa Mayer. Best of luck to her in her new role.

    • says

      Yes, I’ve got several pictures. It was all casual and fun. It wasn’t like a fan to celebrity type atmosphere at all. You can see Marissa in the third picture standing in the background if you look closely.

  8. says

    Interesting article and as usual it included many thought provoking questions.

    “What he means to emphasize is, “If you were successful, somebody along the line gave you some help.” It’s not that you didn’t work hard and take risks. It’s just that ff you live in America, you have the infrastructure to help make your dream a reality. America is the best country where there is the highest correlation with effort and success. I am very thankful for the public school education I received, and the ability to invest my money and work towards entrepreneurship.”

    I totall agree with this!!!!!

  9. Virginia says

    My brother loves MC Hammer. He actually saw him perform at a Six Flags about a year ago.

    I think there are some people who feel lucky to have gotten to be rich and some people who think they’ve sweat for every penny. Some of the folks who attribute their wealth only to their hard work can be a little frustrating. They sometimes think that they have worked hard to get where they are and everybody else should do the same. I don’t think everyone who is rich has that attitude but there are some.

  10. says

    Thanks for the insight! I will probably never participate in these kind of fundraising events. The phoniness of politics bothers me too much, although your experience sound worthwhile. Do we judge people based on the quality and value of their network? Absolutely! The hostility with the rich is based in envy and jealousy. The rich do not think much about what other people think very often. I think most rich people do not seek publicity or want to be the center of attention. No matter what we do or want to do to make things more level, it cannot be done. The rich and powerful have something we wish we had, access to other rich and powerful people. It is like having the keys to the kingdom!

    • says

      There definitely is easy access to “the kingdom” if you are rich and powerful. There’s no way our mayor will ignore Marissa’s call for example, even though he governs over almost a million people. And why should he? We don’t ignore our friends.

      • says

        Very true! If I were the Mayor, I think it would be very tricky because you need the fundraising,b ut you do not want to be bought. I wonder what it will be like the next time she calls and it goes against his principles or values. Do you stay true or sell out!

  11. says

    What an awesome event! I do believe money buys access. It is interesting how indirect some of the benefits networking can be. Sometimes just being a part of certain circles means that you hear something years before it becomes common knowledge. I am not even talking about anything unethical, just industry-specific. I hope MC will text you back.

    Good luck to Marissa. She caused quite an uproar this week by suggesting that she will not miss much time from the “struggling” Yahoo due to her pregnancy/upcoming baby.

    • says

      I wish her luck too. And I applaud her for being driven and hiring help. Women shouldn’t feel they have to drop everything just because they are giving birth and that’s what society “expects” them to do. There are more and more dads becoming stay at home parents and there are tons of full time working moms out there. She and her husband will find ways to make things work and I think she’s exactly the type of person who has the momentum and motivation to hit the ground running at Yahoo and in her personal life as a new mom.

  12. says

    That must have been one incredible night! I think it’s very exciting to see what’s going happen with Mayer’s new venture while also being a first time mom. If she pulls this off it’s going to inspire women everywhere. I’m actually already inspired even though she hasn’t been there long enough to really make any big changes yet.

    I think networking is much more powerful for the rich because they tend to be surrounded by highly successful people whether it’s their colleagues, neighbors, family, or friends. It isn’t to say they only hang out with rich folks though, they just tend to be in circles with other rich and powerful people.

    On a side note I do wonder if the Chinatown rail station they’re building in SF wouldn’t have been started if Lee wasn’t in office. It’s insane how much they are tearing up the downtown streets in order to make the build out. Good for construction jobs though, and freeing up the bus madness in Chinatown.

    • says

      The odds are against her since she is the 7th CEO in several years I believe, but I’m rooting for her. Her success will be good for:

      * Women
      * People who might be discriminated against due to their youth.
      * Fans of education.
      * Fans of loyalty.

      It’s obviously easier to care for a family when you can afford help. I’m sure others will attack this angle. But, overall, her success brings much more success than criticism.

  13. says

    Sounds like you’ve mapped out your safety net in case if you get bored with the sabbatical, Sam! Yaaahooo! That’ s the best $500 investment you can make for sure. :)

  14. Bret @ Hope to Prosper says

    “If you’ve got a business – you didn’t build that. Somebody else made that happen.”

    I think it was much more than a political gaffe. I honestly believe it’s how the President thinks about business owners. He regards them as over-priviliged and under-taxed. Most likely, because he has never run a small busines. Sure, they have a huge advantage of environment and infrastructure here in the U.S. But, they have paid for much of that with their taxes.

    This comment has been blown way out of proportion and used by the Romney campaign for political posturing. But, it certainly hasn’t endeared the President to small business owners, many of whom are struggling. It also isn’t likely to help small businesses create jobs and reduce unemployment, knowing he wants to raise their taxes.

    • says

      The red tape small business owners have to go through, and the amount of forms and taxes here in California is SHOCKING! Makes many small business owners want to just give up. Hopefully our mayor is doing some streamling for us. $850 in an annual franchise board tax for example is taking advantage of small business owners, for example.

      If you and SBOs hate taxes, why don’t all Americans vote against politicians who raise taxes? Or, do we only complain when we are affected, and don’t care about other’s people’s taxes getting raised if ours isn’t?

    • Janna says

      @Bret: Whether you like Obama or not, it is silly to deliberately take him out of context. Romney should criticize him for real things, not fake things. Obama said “Somebody invested in roads and bridges. If you’ve got a business, you didn’t build that. ” THAT obviously referred to the roads and bridges (i.e. infrastructure)

      For Romney to come back with “To say what he said is to say that Steve Jobs didn’t build Apple Computer…” makes him a liar and untrustworthy.

      • says

        Janna,

        Whether you like Mitt Romney or not, calling him a liar seems silly. I’m not a big Romney fan myself, but I think you could make your point without sinking down to name calling.

        I didn’t vote for President Obama and I don’t agree with many of the things he does. I have both praised him and taken him to task on my blog a couple of times. One thing I have always been is respectful of any standing President, whether I agree with them or not. Another thing I don’t do is take someone out of context. We are all aware of the entire conversation, which I addressed in my comment. As I stated above, I honestly believe the President feels that way about small businesses, or I wouldn’t have said it.

        Two of my brothers have small businesses in our town and they have a fair amount of employees. Both are very concerned about the future, which has put a damper on hiring. They are the most concerned about their healthcare costs rising drastically. This is one reason why unemployment remains so high. Business owners are afraid to hire in this climate. They definitely pay their fair share of taxes, which helps pay for the roads and bridges they use. They both believe less government is preferable to higher taxes. I tend to agree with them.

        • Janna says

          I agree with you that we need to give small business owners who are creating jobs a big break. I think we should be doing that and not giving tax breaks to businesses who are sending jobs out of this country. I’m sorry if you were offended by my calling Romney a liar. When I saw that quote of context yet again I had to say something. I’m sure there are many who still haven’t heard or understood the entire context.

        • says

          Janna,

          I was not offended whatsoever by your Romney comment.

          I am not thrilled with either cadidate and wish we had better choices.

          Thanks for the lively debate and for respecting my views and opinions.

          Bret

  15. says

    Powerful people are not always affluent. The power you describe is wholly materialistic – the kind that’s not humble or enlightening. Politicians are responsible for turning the world into a powerful mess! I wouldn’t call these people powerful as I am so often disturbed about what lies beneath the numbers! Powerful people do not enjoy parading themselves, they are quiet leaders and work on enhancing their intellectual property portfolio over bricks and mortar.

    • says

      How is being the CEO of 14,000 people at Yahoo materialistic? How is being the Mayor of SF materialistic? These folks in my post aren’t parading themselves to the public at all.

      Help me understand your anger and what is bothering you in your personal situation?

  16. Darwin's Money says

    It took me a while to really believe, but outside of routinely collecting a paycheck (although office politics are tough to ignore), networking is how you make things happen. You can be the smartest guy around, have the best ideas or have a lot of money to put to work, but if you don’t connect with the right people, your chances of making something big happen are quite limited.

  17. Money Beagle says

    I read the Obama comments as saying that successful business owners had help along the way, whether it was employees that took a chance, family that supported them, new customers that took a leap of faith…I think what he said was probably worded poorly but also got taken out of context.

  18. says

    Wow, sounds like you had a great night. I hope Marissa is successful too. I have always liked Yahoo! and it’s too bad they have been on the slide lately. One of my friend works there and he likes it.
    I don’t think rich people should feel guilty at all. I assume they worked hard to get there or at least worked to maintain their wealth. Hopefully they’ll manage to give others a hand, but that’s their prerogative.

  19. says

    Sam, I am always with the rich helping the poor and in fact anyone helping anyone and totally back your call to arms (if you can call it that).

    If I ever receive an email asking for help I try my utmost to point that person in the right direction and give encouragement. I don’t have vast amounts of money to help with right now but it isn’t always about that is it!

    I think after a terrible career revival attempt Hammer is doing the right thing and pursuing business. He has a personality that people still like and seems to have a keen interest in tech. Would be cool to collaborate with him I imagine as long as he is in it for the right reasons.

    • says

      You’ve always been very helpful Forest! I appreciate it. You and others who don’t live in the US must find us a very contentious bunch between the left and the right yeah?

      • says

        Thanks Sam :). It is interesting watching America and seeing it’s beliefs compared to what I grew up believing was right or wrong or how things just should be! Of course it has opened my eyes up and helped me grow as a person too. Not everything is black and white and in some ways no one view is right or wrong.

  20. Charles says

    Congrats on your success.

    I wonder if the guilt they may feel is the result of the intuitive calculation that many people on many levels sacrificed to enable their road to success? One thing I am trying to wrap my meager neurons around right now is how the system subsidizes the wealthy by basically allowing them to write off their bad investing bets. If you made money on a particular investment transaction, good for you. Pay taxes on it. If you lose money on an investment transaction, should you really expect the government to bail you out and allow you to write it off against income you earned that year? How much revenue is lost each year because the IRS allows people to write off their bad debts?

  21. says

    The group dynamics of large net worth groups is absolutely fascinating to me.

    Put a high net worth person in a “cocktail party” environment with low or no net worth people and you’ll often notice their body language, speech patterns and conversation style change completely.

    The same is often true when you put a low net worth person in a group of high net worth individuals- there is an obvious change in their behavior.

    Did you notice any awkward interactions? Or was everyone, for the most part, a member of the in-group?

  22. says

    Nice party! It’s always great to hear stories about celebs who aren’t always marketing themselves are have a “I own the world” attitude. Usually those are the ones who get all the press, and it’s ridiculous. I love giving, and it’s even cooler that these folks can give on such a HUGE level. I’ve always said, if I come into money, I won’t retire, I’ll just hire myself as a full-time philanthropist! And I’m sure Hammer will text you back, why not? Seems like a legit guy.

    Great article Sam.

  23. says

    Interesting… Your post reminded me of that Clint Eastwood movie, “In The Line of Fire”. John Malkovich’s assassin character bought himself access to a presidential fundraiser with a couple of multiple-zeros checks to the National Party Committee (I forget whether it was D or R — doesn’t matter). Enough money, judiciously donated, buys all kinds of opportunities.

  24. Lawrence says

    Thank you for this. For me the most important thing you shared was about foundations and causes. Thank you for making that connection.

    Overall, well said.

  25. says

    What I don’t get about all is…why feel guilty for having money? Its not dirty or immoral to be rich. There seems to be this idea floating around society these days that having money is something to be ashamed of. Its not, there is no reason to be ashamed of your success.

    • says

      It’s hard to explain, but you’ll know more about the guilty feeling once you get to $3+ million I think. You’ll start asking yourself how could you have so much when so many others have so little.

      And this post isn’t about the guilt. It’s about going defensive and blending in because you want to avoid the attacks.

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