It’s Not How Much You Make That Matters

It’s how much you keep.

Just ask David Hayden. At one time this serial entrepreneur’s net worth (on paper) exceeded $200 million. Today his stock portfolio has evaporated, he is having a hard time finding V.C. funding for his latest start-up, he’s selling many of his most prized possessions and is being sued for $24 million by Bank of America.

Like many “idea guys” in the late 1990s, Hayden created multiple business concepts which were embraced passionately by the investment community, but less so by the marketplace at large. During those go-go days, he would have been well served to take some of his profits of the table. Liquify as it were. But he didn’t. Nor did he pay close enough attention to the fine print of many of the contracts he was signing.

He also made the common mistake of accumulating possessions which were way out of line with his true needs, or actual cash flow. Now, the 52 year-old Hayden is licking his wounds and banking on his next big deal.

I recommend every entrepreneur read this cautionary tale at CNET (originally published in the New York Times) and then come back and post a comment with your reactions. What should Hayden have done differently? What would you have done differently?

Give it a read and give it some thought. Then come back here and share with the crowd.