Derek did not became wealthy. He gave the $22 million dollars he got from selling his company to a fund, and gets over $1000 each month, hardly "wealthy".
Derek has worked in a circus and knows how to live cheap enough. He also has lots of friends so he does not need to pay for lots of things.
I know people that earn in excess $10.000/month and spend it all or even get into debts.
>Derek Sivers transferred ownership of his company to a charitable remainder unitrust for music education, and had the trust sell it to Disc Makers. This agreement requires the trust to pay Sivers 5% of the trust's value annually (hypothetically $1,100,000 pretax, based on a sale price of $22 million as reported by Sivers)[4] until death, while upon death the remainder will ultimately go to charity.
So he actually earns around $90k per month. The foundation was also probably a tax dodge more than some altruistic thing.
He also acquired a second nationality, renounced US citizenship, and moved to a country that doesn't tax foreign sourced passive income. It's the most extreme example I've seen of planning your whole life around tax optimization.
Understandable though if you've read his book because he's had big problems with the IRS in the past and probably really wanted to show them his "FU money."
(I'd just like to acknowledge that my parent comment is pretty lousy. I don't know Derek and I'm making assumptions about his motives. I feel like it's fair game after his article "Why I gave my company to charity [1]" but I'm not proud of casting aspersions on internet celebrities. I have a jaded view of philanthropy and philanthropists that may be totally off in this case.)
It doesn't but all that means is the form for renouncing has a checkbox asking "are you doing this for tax reasons"? And you check "no". Then during the consular interview you spew some line about how you no longer have attachments to the US -- "I haven't been back in over 3 years, own no property, let my driver's license expire" and you do have attachments in your new country "All my friends are here and I even spend Christmas here!"
It is more of a retroactive "if we find out later you lied we now have a legal basis to add extra penalties" but in practice nobody is really checking or cares. The underfunded IRS doesn't care about the tiny number renouncing and the consular officials doing the interview certainly don't care.
Even if the reality is in the middle, the likely difference between 1k a month claimed and 90k a month claimed surely puts him in the very wealthy category.
I agree with other posters, it’s a little annoying to have wildly successful people talk about “being happy with what you have” and “money isn’t that important” and “enough” etc.
While the concept is absolutely correct, and I believe “if you weren’t happy before hitting the lottery you probably won’t be happy after”, be successful independently twice then talk to me about how it’s done.
On the other hand, there are many wealthy people who are unhappy, with their wealth or otherwise.
I had the honor (but not the pleasure) of working closely with a guy whose personal wealth was estimated at half a billion or so, all self made. There was nothing he wanted he couldn’t afford. And yet he was incredibly unhappy almost all the time - I caught an occasional glimpse of happiness from him after he would come back from a weekend fishing alone, or when some-list-or-other of wealthy people bumped his rank up in their listings.
When someone like like Sivers says “I was happy before the money and money didn’t make me happier”, I believe him.
In fact, I’ve known many people who made fortunes, and quite a few who lost fortunes and some who lost family to terror attacks. Other than a transient effect after specific events (good or bad), everyone reverted to their pre-event happiness levels.
Having money is an incredible daily-stress reliever. But according to my life experience, it has very little effect on happiness.
This falls in line with studies that show when most people hit the upper middle class, more money doesn’t automatically equate to happier. And if someone doesn’t have a purpose beyond money, I could see more money making them less happy. “What do I do now?”
I actually know Derek in real life (although not very well). He gave away most of his wealth, but he still draws a very comfortable salary from the fund he set up with the wealth that remains. He's rich.
I'm not sure where you heard the $1k/month figure, but there's no way he possibly makes that little. He lives in Oxford, possibly the most expensive city in the UK outside of London. $1k/month in Oxford isn't enough to rent a one-bedroom flat, without even considering other living expenses - there's no way he lives in Oxford on an income that low.
He didn't, he siphoned them in a "charity/fund" for tax purposes. That's a rich man's move 101. It only becomes an actual charity if he (knock on wood) dies young from my understanding...
Derek has worked in a circus and knows how to live cheap enough. He also has lots of friends so he does not need to pay for lots of things.
I know people that earn in excess $10.000/month and spend it all or even get into debts.