12 May The Virtues of Parting With Wealth
I heard something last week at church that got my attention: “Life is not about having enough bread, it’s about sharing the bread.”
This really struck a chord with me since I’m a professional barn builder, meaning that I help people accumulate wealth. After spending almost 20 years around some of the most affluent people in the world, I’ve seen the remarkable way great wealth can improve lives and also how it can destroy them. While the message at church was biblical, it can apply to anyone, regardless of their faith.
It boils down to this: If you are among the very wealthy, you might solve some of your greatest problems by giving much of your money away.
Consider some of the pitfalls of wealth:
- Abundance often leads to isolation. The complications of having lots of money are difficult to share with friends who are not in the same boat. Even among wealthy friends, money can be a taboo topic. So, your circle of friends shifts or shrinks, or both.
- The Ivy League dilemma. Wealth affords an education at a prestigious college, as well as the pressure that comes with that opportunity, creating compounded psychological issues for many affluent kids. In his book, “David and Goliath,” the journalist Malcom Gladwell argues your kids may be better off not getting into an elite private school.
- Creating a monster. Rich parents worry about raising kids ruined by privilege (exhibit A: Conrad Hilton III). The musician Sting said he wasn’t leaving much to his kids because he doesn’t want to rob them of the opportunity to make it on their own. (The book “Children of Paradise,” by Dr. Lee Hausner, a former psychologist in the Beverly Hills school system, discusses raising kids in an affluent home.)
- Failure to launch. Affluent kids are often sheltered from the challenges of the real world and have little experience coping when resources are constrained. Adulthood often sets them up for a rude awakening.
- Feast to famine. Wealthy parents who suddenly cut off their children out of tough love, might put their kids’ well-being at risk if they have become accustomed to a wealthy lifestyle and have friends with trust funds.
- Riches can erode trust. Money and status make it hard to separate true confidantes from sycophants. It can also make you question your self-worth – If I’m a son or daughter taking over a family business, am I really the right person for the job or am I there because I’m the owner’s kid?
- Money complicates family relationships. If a relative asks you for money, you have to choose to give or not. The relationship changes after that, regardless of your decision.
- Affluence dilutes personal connections. Out of financial necessity, non-wealthy folks watch one another’s kids, help one another move furniture, etc., and all this creates community, which is one of the keys to happiness. The wealthy have the option to hire help, and this often leads to less community.
- Inherited wealth makes you feel trapped. You may feel the money isn’t yours to spend or give away, that you haven’t earned it, or don’t deserve it.
- Overabundance creates a false sense of security. I’ve seen many become attached to their wealth as though it was part of them, and this creates stress. There is a difference between caring about wealth and being attached to it.
- Excess wealth interferes with natural incentives. Numerous clients have expressed concern about this tendency. It has caused me to emphasize the quality of the journey over blind pursuit of financial independence. George Yeoman Pocock, a leading designer and builder of racing shells, once said “my ambition has always been to be the greatest shell builder in the world; and without false modesty, I believe I have attained that goal. If I were to sell the (Boeing stock), I fear I would lose my incentive and become a wealthy man, but a second rate artisan. I prefer to remain a first-class artisan.”
Building a nest egg, investing in an education, saving for a rainy day, and all the things we do to build wealth are part of our individual responsibility and stewardship. Building companies that create jobs and help the world should likewise be encouraged and applauded. Building a family legacy can also be incredibly meaningful and essential.
What I’m addressing is excessive wealth, when you might be building your barn too big. If you are “fortunate” enough to be in this situation, consider traveling the world, enjoying the fruits of your labor, and giving your heirs a nice starter package. What you have left, you might want to reserve for philanthropy.
A more radical approach might be to start by asking yourself what you want your impact to be, and then build your lifestyle around that. In other words, instead of “me first, charity second,” think “charity first, me second.” Start by giving away a little at a time, as this strategy will buy you time to define your intended impact. With wealth comes important choices. Deciding how much money is enough for yourself, the people and causes you care about requires wisdom.
A good way to organize your thoughts is to form a financial equation for your life, based on your values and definition of success. You might benefit from coaching and conversations with experts involved with causes you are passionate about. As you think about what brings you joy, what your purpose is, you might find that you need less for yourself than you thought.
In his book on the Wright Brothers, the historian David McCullough wrote, “their happiest time was when they still hadn’t done it yet. When the most miserable experiences on the Outer Banks of North Carolina, beset by mosquitoes, terrible wind storms, crashes, and everything going, that was the happiest they’ve ever been.” While achieving financial independence is not the same as achieving mechanized flight, your happiest time, too, might be before you arrive. So, don’t be in a hurry to get to the destination, and share the bread along the way.
I know the problems of the rich are small compared to the serious problems around the world. Poor kids have it much worse than wealthy kids and we should never lose sight of that reality. My hope is to help those with significant means make better decisions about money based on what really matters to them.