10 Tips to Help Navigate When You Are Wealthy (But Your Loved Ones Are Not)

April 11, 2024

In this episode of FIN LYT by EWA, Matt Blocki and Jamison Smith dive into a complex and often misunderstood topic: navigating the challenges of being significantly wealthier than most of your loved ones. Many believe that accumulating more money leads to greater happiness, but as Matt and Jamison discuss, this isn’t always the case. Achieving financial success can sometimes strain relationships, especially when there is a substantial income gap between you and your family or friends.
Matt and Jamison offer ten practical tips for individuals who find themselves in this unique position, starting with understanding your “money temperature” – a concept likened to a comfort zone in spending that can be difficult to adjust once it’s set. They share strategies for maintaining relationships without widening the wealth gap, such as focusing on experiences over material gifts and the importance of setting boundaries to avoid social debt. They emphasize that while financial support can be beneficial, it should not be the go-to solution for every problem, especially when it comes to relational issues.The conversation also touches on psychological aspects, like the need for status and acceptance, and the challenge of adjusting one’s lifestyle once one’s income increases. They discuss the importance of empathy, sensitivity, and not allowing financial success to dominate relationships.
This episode is a must-listen for anyone looking to understand how to manage wealth wisely, while maintaining healthy and happy relationships, and navigating balance in world where not everyone shares the same fortune.

Episode Transcript

Welcome to this week’s Finlit by EWA podcast, joined here by Smith. We unfortunately, the heat’s not working, so gotta bundle up for this day’s but. So, Jameson, today we’re talking about one of my favorite topics. That’s a very tough topic, and we see a lot of people. You think the more money you accumulate, the happier you are. That’s just not the case at all.

 

Once you reach a certain level, it can sometimes deteriorate, unless you have a really good plan to reverse the script and make sure money is supporting your happiness and what you want out of life. And it’s not subtracting from that. So today we’re talking about ten tips to navigate being rich when you have a lot of loved ones that are not. This is very common. Let’s say you’re a doctor that’s come from a family of blue collar workers and parents. Siblings are making between 50 and $100,000 a year, ten years later of training, residency, et cetera. Although you have a lot of school loans, they don’t understand that you may be making half a million bucks a year. This can come with a lot of set of problems. A lot of assumptions can be made. Oh, he’s rich.

 

He shouldn’t be stressed or taking care of everything. This can happen if you’re a business owner that suddenly had a lot of success. This can happen if you’re an executive, et cetera. So today’s episode, we’re going to get pretty deep into some of the common problems we’ve seen and then also offer solutions around them, because a lot of people think instinctively, I’m going to help just by providing money. More often than not, if you throw money at a problem, it’s actually going to come back and hit you in the face in a really hard way and deteriorate relationships. So money can certainly help to a certain degree, but it can’t be the leading solution into many problems. We’re not talking about someone like starving with food. Obviously, money is a good solution for that.

 

We’re talking about if your basic needs are met and you have relational problems or whatnot. Throwing money as a first solution is never going to be a good thing. So first thing first tip is understanding how money temperatures work. So, James, give us what does that analogy mean? What’s a money temperature?

 

So basically what you’re comfortable spending to maintain your lifestyle. So think of if you have a thermostat in your house. I’ll use the example because I know the numbers on my thermostat. In the winter, I like it between 70 degrees and 75 degrees. And then in the summer, I like it between like 68 and 70. And so I don’t really like it when it veers outside of those numbers because I’m used to it. Same thing with the money temperature. If you’re used to spending x amount a month and you get in that temperature range and then you try to go lower or you try to adjust it’s going to feel weird. You get really comfortable with whatever the temperature is of your spending.

 

Yeah. So we found through experience, it’s really easy to adjust from. Not temperature, sleeping wise, obviously. I’ve heard the cold, the better. Good for your body. But money temperature is so easy to adjust up. If you’re making more money, it’s easy to spend more money. But once you have that new temperature established, it’s very hard, if not impossible, for many to go down just based upon. We’re not going to talk. This isn’t a podcast about the human brain works.

 

I had an idea after you were saying that.

 

Go ahead. Psychologist Jameson. Jameson is not a licensed.

 

No, I’m not. I love psychology. I like learning about the brain. It’s really interesting. And money and psychology tie together very much so. Super interesting. But, yeah, we are status creatures by nature. So our brain wants status and wants to be accepted in the tribe. This is way back. We’re tribal people. We want accepted by our peers. So money is the quickest way to show your status. And so naturally you want to your point, it’s very hard to decrease that, because once you start spending money and you get this status, you’re not going to want to cut your lifestyle in half, because then people. You think people will view you differently?

 

Yeah, I think people are going to be. So guess what? This jacket, my girlfriend got it for me in this new website. I think it’s called sheen. I wanted to show this jacket off today, but guess how much this costs.

 

You already told me $12. That’s been a new thing for me.

 

I want my tribe to spend $12 jackets. But no.

 

Anyway, yeah, obviously I’m on, like, the black clothes, and I’ve been kind of like a similar thing, like trying to get to not buy expensive, because you can buy like a $10 shirt or a $50 shirt or a $200 shirt.

 

It’s just black, the same thing. You’re going to wear it after a year. You’re going to have to throw it out anyway or give it away, hopefully to goodwill. Okay, so going back to money temperature. So why is this important when we’re talking about navigating being rich? Well, two ways. One, if you keep increasing your money temperature to, let’s say, a million dollar lifestyle and all of your loved ones, let’s say you’re very close family ties with brothers, sisters, parents, in laws, et cetera, and they’re all making a 10th of what you do. It’s going to feel weird because there is a huge wealth gap in America and there are extremely emotional derived viewpoints about that wealth gap. And so if you show that off, it’s going to put some silent to start relationship strains in place.

 

And then if you not just show that off, but you start paying for everything, you’re now adjusting other people’s money temperatures. And so if that’s a one time thing, you’re paying for a nice vacation, or if you’re helping them one time, well, they’re going to adjust temporarily to that. And then when that shuts off, it’s actually do more the harm than good because then they’re going to be forced back to the money temperature and forced into that is horrible. Having it be your choice is one thing, but if you’re paying for a $30,000 vacation, when they’re used to taking a $5,000 vacation the next year, you don’t do that. The next vacation they take is just not going to feel good.

 

It’s really hard to go from staying in the four seasons to the days in it is. Right.

 

It’s a good analogy.

 

I think that’s like. Yeah, it’s exactly what happens. Why are these clothes so cheap? I’m just looking.

 

I don’t know. I’ve had this for like two weeks. But I wore it last night. I wore it today.

 

Yeah, they look weird.

 

And what do you think?

 

It looks nice. There’s like shirts on here for $7. I was curious why. How do they do this? I guess the cost of clothing is cheap. The cost of it.

 

You just realize how absurdly high the margins are when you’re paying lululemon, you pay $100 for a pair of sweatpants. Yeah, you could probably get it on there for $7.

 

Yeah. Anyway.

 

Yeah. Okay, so that’s first is understand the money temperature. You think you may be helping people, but it will feel good temporarily, and you’ll feel good about yourself because it can get pretty lonely to be successful because you’ve put a lot of time into work, into creating wealth, into supporting your family. But a lot of sacrifices were made to do that. And you don’t necessarily weren’t there where other people around. So it can come across the wrong way with the money temperature thing. So the second thing, I already mentioned this, but there’s the stigma. So 80 20 analysis. 20% of people hold 80% of wealth in America. It’s actually higher than that. I think the top 11%, I just looked this up of people’s net. The top 11% of people that have the highest net worth own, like, 89% of stocks in America.

 

And that means that the bottom only owed the other 11%. The bottom 89%, own 11%. Same thing can go for income. It’s like top 1% income earners, I want to say, make between 30% to 50% of the entirety of income, even though it’s only 1%, whereas the bottom 99 make up. So there’s a huge bigger than ever in history. Two things, a wealth gap and an income gap in America. And if you’re on the top end of that and a lot of your loved ones are on the low end of that, it’s like spending Christmas and you’re a staunch republican, everyone else is a Democrat, and you start talking about. Because money is not silent, you wear it. It’s going to be tough to have.

 

So just like, probably a good policy to not go into deep political discussions when you know there’s extremist, different viewpoints in your family, same thing is probably not smart to show a huge money disparity between you and your family. So just some thoughts, but just mentioning there is a huge silent stigma out there between the difference income earners and the difference in net worth. So our advice, if you’re in the top, is being wealthy. People don’t see it being rich. People see it. So there’s a difference between being wealthy and being rich. And we recommend the solution to number two is be wealthy. You don’t have to show people the balance in your 401K or your brokerage account. You don’t have to divulge the information as a flex.

 

But if you drive a $200,000 car and you’re pulling it up to your cousin’s house in a $200,000 house, if your car is worth more than the house. It’s probably going to send the wrong message.

 

Just wear cheap black clothes instead of designer.

 

Wear the $12 jacket. I wore this on purpose. Now. I’m just kidding. Okay, tip number three is stop shifting the goalpost because a success can be very addictive. Having wins can be very addictive. Getting a first client if you’re a business owner can be very addictive if you’re a surgeon. Mastering. So if the goalpost was, I want to fund my kids college. I want to be financially independent by 55. Once you get there, it’s going to feel good for a second. But human nature is. We’re going to want to set the next biggest goal.

 

Hedonic treadmill.

 

Hedonic treadmill. So again, use your money supporting your life. You have to learn to value your family, love, happiness, good relationships as number one. And then it’s fine to shift the goalpost if it’s supporting your values. But if you’re shifting the goalpost to shift the goalpost, it’s going to make relationships deteriorate very quickly because all your time and tension is going in that direction. Okay, so that’s number three. Number four is avoiding social debt. Jameson, give us a rundown on what we mean by social debt.

 

I actually don’t know what you mean by this. I’m going to let you explain this.

 

This was supposed to be. No, actually, this is so. Well, we can just ad hoc here.

 

I’m sure I’ll know it once you start explaining it. But I literally just wrote down social debt. And I’m like thinking, yeah, this is.

 

Why basically in history, every NBA player, every NFL player, the majority of them went bankrupt, like 1020 years ago. It wasn’t their million dollar house that make them. It was like their grandma’s friend’s cousin buying them a $200,000 house. That’s how they went broke. And social debt is like, oh, I’m from this lower class neighborhood and now I’ve made it. So now there’s this. It’s not actual debt, but it’s a social debt because everyone’s like, we help you get to where you are. Can you help us? And you feel obligated to help out. So you have to avoid that at all costs.

 

The tip there is you have to have a good group of advisors that can say no for you if you’re fielding questions from your second cousin’s restaurant bar idea and you’re funding it and saying, I’m going to be a part owner. Most businesses fail. And so we see, so many times when you have a huge income and you came from nothing, there is social debt that lingers. And learning our tip on this is you have to be able to say no gracefully, humbly, with lots of empathy. But if you don’t say no, you’re actually going to hurt yourself. You’re going to go broke and you’re going to end up enabling a lot of other people and hurting them as well, because then they’re going to experience that dopamine.

 

Their temperature is going to be here and the reality is going to put them back here and they’re going to be stuck.

 

And what I found just from working, doing what we do, and I guess a little bit of personal experience, but not as much as being an athlete, because I’m not an athlete.

 

You were an athlete.

 

Yeah, but not like in the NFL. Yeah, no, it is, but not like the professional athlete. I can’t relate to that.

 

But I understand now you’re a golfer.

 

Yeah.

 

Anyway, what’s the handicap now?

 

15, getting down to under. But you started 25 under ten this year, so just watch. Everyone’s doubting me. And here’s a good example is where I’m going with this. Everyone’s saying I can’t get under ten.

 

I know you can.

 

And then once I get under ten.

 

Who’S saying you can’t get under ten? I said, you can get under ten.

 

A lot of people, a lot of people are talking.

 

Not me.

 

All right, we have this on record now.

 

Yeah, I know you’re going to get.

 

Under ten, so nobody thinks that I’ll get under ten, but then once I’m under ten, people will agree with me. And same thing, generally. There are some people that usually always support you once you become wealthy, there’s people that had doubted you all the time that try to come back and they only support you because you made it. But when you didn’t make it, they weren’t there for you.

 

They were doubting. Yeah, no question.

 

But that’s usually ties right into social debt.

 

All right, we got to put this, I believe, accountability for goals. When is the ten going to happen? So you’re 15 right now. We’re in Pittsburgh. It’s raining outside.

 

Yeah, I guess. When’s the handicap shut off? Like November?

 

I think that USGA rules change.

 

Like, you can’t post a score. I had a good round a couple of weeks ago and I couldn’t post it. First round of the year went in the 80s. Mid 80s?

 

Yeah. I’m not sure. Okay, let’s assume it. How many months into the season?

 

Let’s just say by October. November. Probably by November. We’ll say November, because that’s when you would really.

 

November 2024.

 

James, at some point I have to be. Between now and November. My handicap has to be under ten.

 

All right.

 

Obviously, the goal is to finish it. Like, keep it there, but it’s a low watermark.

 

Okay. I like it.

 

What are you trying to.

 

My goal is aggressive. I don’t know if I want to say it out loud, because it’s a little. I’ll say it.

 

What are you now? An eight?

 

I’m an eight, and I want to get down to scratch this year because it’s nonlinear.

 

So, like, me getting from a five to 15 to a nine, it’s not a linear correlation to, like, nine or eight to. What’s the math there? Down to a two. What you’re doing is way harder than what I’m trying to do.

 

Yeah, I’ve always had justification. I got a torn labrum. Whatever. That’s fixed. I just went through, like, a four month physical therapy regimen. That’s not why I got the surgery. I mean, it hurt to get up in the morning, but I want to prevent a hip replacement. But there’s no excuses. There’s no justification. There’s no excuses. If I don’t do this, I’m just not coordinated enough or not mentally tough, and I got to do it. All right, well, this could be a great podcast or the most embarrassing one if we don’t reach your goals now, Jameson.

 

I mean, I think it’s okay to fail, but we’re making it accountable.

 

Okay, so the fifth one just went on a tangent there. All right, we’ll leave it in. Leave it in unscripted. So, fifth one is practicing empathy and sensitivity. This is obvious, but if you approach loved ones that don’t have the same wealth as you with empathy and sensitivity, and not, like, literally saying, I’m sorry, you don’t have wealth. It’s just understanding. And not flash, not don’t be flashy. Understand how your actions may affect them. Don’t be financially dominant. Pay for literally everything. Demand to do that. There’s a balancing act there, and you have to make sure it’s with the right intention. You don’t expect anything back. You’re not expecting to be able to dominate decisions because you have the money or you’re paying for everything, because that’s very common, especially in today’s day and age. There’s a lot of great. Divorce is.

 

You’ll have one breadwinner, that’s just like the dominant financial person. And up until that point before the divorce, they’ve made every decision because they make the money. They call the shots. So if you want, one of the keys, I think of a good relationship is having mutual empathy discussions, mutual decision making, et cetera. And don’t be financially dominating. Okay, so tip number six.

 

We kind of said that.

 

I just covered that. Yeah. Don’t be financially dominant. Make sure everything has the right intention behind it. And make sure there’s no influence that you want to have other than just being generous if you’re picking up a meal or picking up a tab or a vacation, et cetera. Okay, so number seven. Having trouble reading my handwriting here.

 

Experiences.

 

Oh, yeah. Number seven is experiences. What’s our advice around experiences? Should we focus on them?

 

Yeah, I’m big on experiences. I think a memory dividend is a real thing.

 

Memory dividend.

 

I’ve never heard that book die with zero. Talk about that memory dividend. It pays dividends. So think about a really good trip you took in the last five years. You still probably talk about it and remember it and tell stories about it versus buying the $200 jacket versus the $12 jacket. Like five years from now, you’re not going to talk about the $200 jacket because you probably don’t even own it anymore. So, experiences. Yeah, I’m big on experiences in general, but as far as family members, for the point of this podcast, I think it’s important that spending on experiences can go a long way. You’re experiencing something with them versus, like, materialism, no question.

 

And the experience, if you do it the right way, and if it’s an experience that’s at a mutual playing field as well, like something that they could have afforded regardless without your help and you let them chip in, that can be an amazing thing as well. Okay. Eight thing is, with all of these, there has to be a balancing act. So have boundaries in place. So I think it’s important to actually have a family philosophy in place. If you’re the wealthy person, what are you going to do when someone asks you for a loan? What are you going to do if someone asks you for a gift? What are you going to do if there’s repeated asks from a family member? So have a philosophy in place with how do you determine the answer?

 

And then more importantly, because a lot of times you can help in non monetary ways that will be much better for your relationship long term is how do you say no? How do you say no? With empathy. How do you say no? How do you prevent even getting the ask? By setting the right boundaries in place from the get go and not saying you can’t loan money if someone needs it. Not saying you can’t gift money, but it has to be done the right way or else it’ll come back and bite you. To a family member, just a general rule of thumb is never loan money because there’s probably the stigma of like, oh, they don’t need the money back. And I’ve seen that so many times with doctor clients that came from humble beginnings.

 

Financially, they loan, and then their family members always have excuses and that creates a lot of relationship strain from a family member. If there’s going to be a money exchange, make sure it’s a gift. Make sure it’s a well thought out discussion, though, and make sure there’s no expectation in return. But make sure they also understand it’s a one time thing.

 

Yeah, I think people generally will start to expect things and then there’s a fine line between enabling and helping.

 

So one of the tips on how to say no is have a templative response that you can adjust, one that’s very empathetic, and that way that you don’t have a decision fatigue in coming up with a justification. There doesn’t need to be a reason. There doesn’t need a justification. You’re allowed to say no without a reason. Have an advisor who you run every decision make and say, you know what, I’ll have to check with my advisor. I’m going to let him talk to you and then have the advisor say no on your behalf. That’s very common. We get involved with a lot of family transactions all the time. They’re not always no’s, but sometimes they’re tough discussions and setting boundaries around money exchanges. That’s number eight is around boundaries. Number nine is, I believe, the greatest gift you can give someone, a loved one.

 

Just talk about kids, for example, is their ability to handle adversity. So people have raised kids and made it really easy on them. Paid for everything, best school, paid for college, paid for postgrad. They really haven’t had the ability to deal with hard things yet. And so then they go in the real world where that’s the number one skill set you need to have the ability to work through hard stuff. You’ve gifted them all the money in the world, but you haven’t gifted them the most important skill set to be by themselves. And then they can become codependent back on you. And maybe that’s what you want. Maybe that makes you feel good, but there’s a fine line between supporting and helping, but it can quickly turn into enabling.

 

And so I always love the analogy, not the analogy of saying of your greatest strengths can become your greatest weaknesses if you don’t monitor them and calibrate them. This is one helping someone can really quickly. It could be awesome. But if you don’t put boundaries around, it can quickly turn into enabling.

 

Yeah, I think that failing is like, you have to fail to be successful, basically is something I believe you have to go through. Ask any really wealthy, successful person that’s built something and they’ll tell you about all the hard stuff they’ve had to deal with. And so I think it’s super important. Obviously, you don’t want to hurt people, but, yeah, it’s important to let people deal with hard things and that builds really strong people that end up doing big things and having the most impact on people.

 

Awesome. Okay, number ten is we talk about mental health is an epidemic in America right now. And that’s for it. Could be young kids all the way up know adults. I think a lot of social media constant. The hedonic treadmill you mentioned before, Jameson is causing that. There’s a couple silent killers out there. One I think we’re dealing with is addiction. There’s a lot of addictions. We think of addiction. We’re not talking about alcohol, we’re not talking about drugs. You can see those pretty. Evidently you can see I’m talking about being addicted to your work. I’m talking about being addicted to money, seeing your money girl, maybe addicted to gambling. Those things are real. And the crazy thing about those is you can’t see it. There’s no symptoms. And sometimes when it does come out, it’s in a big way and it’s too late.

 

So one of the repercussions that’s very common, actually study, there’s a whole book written on this, is if you’re a top one or even a top 10%, it’s highly likely you are going to experience loneliness. And with loneliness can come to trying to get quick fixes or quick feel like, I’m giving you money, I’m helping you. That’s going to make our relationship better. So I feel good about myself. That’s going to end up feeling good for a second, then end up hurting our relationship in the long run. So our tip number ten is make sure you have a really good support group with other people that have similar situations, similar income, similar net worth to you. And just be able to talk this stuff out. That’s super important to navigate this because you’re not alone.

 

It’s very common, the struggles that you’re dealing with when you have different net worth and different incomes and loved ones. So having a person, a professional, or a support group you can talk to can be crucial. So those are our ten tips. James, anything to add before we close down?

 

I don’t know. There’s some I heard this late, I don’t know what the statistic is, but there’s something like loneliness. There’s more correlation to disease and health issues with loneliness than most lifestyle decisions. Loneliness is like a real thing right now. And like you said, with social media, and you can sit in your house and do everything on your phone, it’s just like eliminating a lot of the need for social interaction. I could sit on social media versus going out and meeting people, for example. So it’s a real thing. I think it’s important to be around. Community is so important. So if you’re around like minded people that you can have these discussions with that actually are relatable, is obviously very good for mental health and avoiding loneliness, no question.

 

Well, James, thanks for joining and we’ll catch everyone next week. Thanks for tuning in to our podcast Hope full. You found this helpful? Really hope this is as beneficial and impactful to as many people across the nation as possible. So hit the follow button, make sure to rate the podcast and please share with any friends or family members that would also find this beneficial. Thank you very much.

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