Getting Kicked Out of the Tribe, Part 1: You’ve Struck it Rich
Congratulations. You’ve won the Google/Facebook/Amazon lottery. You got in on the ground floor of a successful company, you’ve worked hard, and it’s paid off. So what’s the downside?
Unless your entire social circle consists of co-workers enjoying the same liquidity event, you will likely experience shifts in your Tribe. That group of people you depend on for social connection, feedback, belonging, and the occasional phone call at 3:30 in the morning for bail money. That’s your Tribe. You’ve typically accumulated them over time based on shared experiences, or from a particular, notable point in your past. These are the friends you’ve had since kindergarten, the buddies you hung with in college, your cohort at that first job.
Even if the members of your tribe all won the lottery along with you, family members might see you differently, and expect different things from you. Take an extreme case, that of Michael Jackson and his family. Jackson was a hugely talented, hard-working artist whose success was deemed by his family to belong to them collectively. He was most conflicted about how to help his mother, Katherine, a fight many successful kids face. His painful struggle was meticulously and poignantly described in Randall Sullivan’s biography, Untouchable: The Strange Life and Tragic Death of Michael Jackson. Four years after his death, Jackson is still in the news, and his family is still fighting to get what they feel is theirs. (Katherine Jackson’s wrongful death suit against AEG, Jackson’s concert promoter, seeks damages based on Jackson’s future earnings potential, estimated to be $40 billion.) Jackson’s effort to make everyone happy took its toll as the extended family piled on to let his wealth support their lifestyles. Expectations regarding what you can do for family now that you’ve hit the jackpot can create new tensions in these relationships.
What Happens When You Come into Money
Any major shift in one’s personal circumstances is accompanied by a shock to the system. New money often comes with a rush of emotions: euphoria, guilt, fear, numbness, relief, feeling unworthy, depression. Making financial decisions in an emotional space is never wise, so first give yourself some time to adjust. Don’t spend it all, don’t give it all away; you can do these things later on if you still want to. Right now, wait, and do some research on getting help to sort out your financial options.
Once it becomes known you’ve hit the jackpot, you are a target. A target for scam artists, money-seeking paramours, friends and distant and not-so-distant family who may have a changed view of you. Part of my work involves helping clients given away their excess – helping them design a philanthropic strategy to improve the parts of the world they value most. In the beginning, I was impressed with those who gave anonymously. I felt slightly guilty that personally I wanted the credit for my own donations. But often these lists of donors are targets for salespeople, scammers and highly specialized professional lawsuit creators. These donors were giving anonymously perhaps because they didn’t need the validation of seeing their names in the annual report, but in large part they were giving anonymously to protect themselves.
You Will Need to Work to Keep the Friends Who Matter
Most celebrity success stories – those people who manage to skirt the ego-engorgement and excesses that often come with renown — have a Tribe that goes back to their pre-fame days. These are the people who will laugh in your face when you get a little too full of yourself. Who will be there to bounce ideas off of, with no vested interest in the result other than trying to give you the best advice they can. They are the people who liked you even before you came into money or fame. These are the people who know you, and can call out when something you’re suggesting doesn’t fit with who they know you to be. They will remind you who you are.
Once you’re surrounded by people who are on your payroll (for real, or just every time you’re picking up the tab) it becomes very hard to know whether they are telling you the truth. An early Microsoftie who signed on in the late ‘80s retired several years later at 33. He found himself surrounded by a great group of people who enjoyed a lot of the same music, the same clubs, the same lifestyle he did. Until the tech bust wiped out his ability to buy them drinks. Suddenly he was dealing with a personal financial crisis that turned his world upside down and a time in which needed friends the most. Turns out that’s when they needed him the least. He was alone in his house, sorting out what was left of his portfolio, including a hefty tax bill, with no one to turn to for support.
What to Do?
• Recognize that your friends will not be able to keep up. You might pick up the tab from time to time, but the friends that are worth keeping won’t want to be on your payroll. Consider mixing up time in the VIP suite at the Giants game with lunch at a food truck to maintain some reciprocity in your relationship.
• Be aware that you will attract attention. Buy that Model S and you’ll get attention. Carry that Prada bag and you’ll get attention. Move into that posh place in the city, and you’ll draw attention. That’s not always a bad thing, but recognize that it becomes more difficult to discern the draw of your charm from the draw of your dough.
• See an estate attorney. You might not yet have stuff to protect, but you have moved into a situation in which establishing trusts to protect financial assets could make sense. You may also want to shield future acquisitions of property from the probing eyes of others.
• Take a minute to think about what a shot at what financial freedom really means. The first question I ask new clients is what they would do if they were financial free. Money is no longer an issue. What would you change in your life? Would you change anything? Continue to work? Focus on different things? Retire? Can you really handle 50+ years of golf? Include everything – things, people, experiences — you think you want. Now is the time to consider how you really want your life to look.
• Recognize that building new relationships will be challenging. I think this is the hardest part of new money. How do you want to develop relationships going forward? It might be easy to offer to buy lunch, treat a friend to a show, or try in other ways to even the playing field. But are you trying to make things more even between friends, or subtly buying affection? What are you worth to your friends, new and old? Do you feel you have something to offer besides money? Recognize that you may literally buy in to new groups to which access comes with money, but these relationships are based on a monetary foundation. They may evolve into more, but don’t confuse buying access with earning acceptance.
Education is your best defense against missteps that can derail your good fortune. Finding a financial advisor who can offer objective analysis and support over the course of your transition to your new circumstances, and a sounding board for decisions going forward, can be hugely beneficial. At a minimum, your advisor can be the “bad guy” who you can blame for not being able to fulfill the demands or other financially questionable requests from others. Fee-only financial advisors offer their advice free of conflicts from selling specific products, and many offer holistic planning that incorporates aspects of your financial life beyond your portfolio, including taxes, residential real estate, asset protection, charitable giving and long-term planning. You can search for a fee-only financial advisor in your area through the National Association of Personal Financial Advisors (NAPFA): http://www.napfa.org