Why Wealth Requires More Than a Financial Plan

Speaker 1 – 00:00
Welcome to EWA’s FinLit podcast. EWA is a fee only RIA based out of Pittsburgh, Pennsylvania. We hope all listeners
of this podcast will benefit as we deep dive into complex financial topics that we will make simplified for you. And
we hope that this really serves as a catalyst so that you can make the best financial planning decisions for your
family and also save time. Foreign excited today, joined by Devin. Today we’re talking about the hidden surprises of
wealth. So Devin, this is, I know you’re one of the most enjoyable things we’ve agreed upon about what we do in the
financial planning is really the psychology behind it. So this is at the core, you know, what we do for our clients.
Speaker 1 – 00:45
So I think the old adage and what a lot of people think about, especially if you think about, you know, the average
person now spends six hours a day, four to six hours I’ve heard on social media scrolling. This is one reasons I just
gave it up. We have our company pages, but someone else controls those, which is great. But it, you know what we
pay attention to, our minds really expand to that. And now I think especially with AI and with algorithms like those
know us, those know the vulnerable parts of us. So like our addictions, our obsessions, whatever it is that’s going to
put that information so far in front of us. So.
Speaker 1 – 01:22
And if you think about what social media is, I mean, there’s good parts of it, don’t get me wrong, like you can get stay
in touch with friends that you know, are living in different places and stuff. But in reality, you know what it, I think
what it feels like. I heard something, you’re basically looking at someone else’s highlight reel. And then while you’re
playing out your gag reel every day, and that’s kind of what most people feel like and everyone’s in that similar
position. So I think wealth, unfortunately in today’s society can actually become a huge paradox where it’s like the
success, actually the problems it solves, it can become more, it can create more problems for you in the reality of if
you don’t handle it correctly or if you don’t have the philosophy or plan in place.
Speaker 1 – 02:06
So it really just amplifies everything. Your relationships, insecurities, the decisions you have to make become
different kind of decisions. So, yeah, well, let’s first talk about some of the, let’s talk about some of the flexibility. So if
you’re, you know, an example of this would be high income earner, you know, you got out of residency as a
neurosurgeon making 50 or 60,000. Now suddenly you’re making a million dollars a year. That one example, other
example is you’re part of a startup company, hits it big. Now you’re worth 10 million bucks kind of overnight.
Whether it’s income rich or wealth rich, you have all these decisions.
Speaker 1 – 02:45
So let’s talk first about some of the positives of what it can do and then let’s talk about how to mitigate the risk of
how we’ve seen in day to day consistently, it can work against you unless you have a plan in place, unless you have
this super awareness in place. So let’s first talk about some of the positives. So Devin, what do you have in mind for
positives?
Speaker 2 – 03:08
Yeah, look, I mean, whether it’s like you said, you hit it big with some stock options or you sell a business and all of a
sudden you’re a deca millionaire, you’ve got money at your disposal and various options open up. So instead of
having or questions, which is what most of us deal with, I can do this or that, all of a sudden you’re dealing with and
questions. I can do this and that. Right. So some positive things, I mean, you can either buy back your time or pay
other folks to do things that you were spending a lot of time on. I mean, there’s a million of those things. You could
hire housekeepers, landscapers, nannies, personal chef, any kind of menial rote tasks that we, you know, middle
class has to do that you probably won’t have to do.
Speaker 2 – 03:56
You can just pay somebody else to do. Anything else that I missed there? Anything else that.
Speaker 1 – 04:00
No, I think that’s great. And I think the other big one is, you know, a lot of our clients in that 10 million plus, you know,
are starting to fly private.
Speaker 2 – 04:07
Yeah.
Speaker 1 – 04:07
I think that one life to live and so the only money can always be gained or lost, but the only thing that you can’t get
back is your time. So, you know, there was a book called buy back your time by Dan Martell, highly recommend it. It’s
great. I’ve been planning a lot of it, business wise and personally. And the easy part is implementing it. The hard part
is figuring out once you freed up that time, what do you do? Right. And so if you don’t have that purpose driven life or
that, you know, that values oriented life, that could turn dark pretty quickly. Especially because, you know, you have
all this money suddenly and we’re talking about this suddenly, if you’ve had it your whole life. Maybe it’s a little bit
different.
Speaker 1 – 04:46
If you have it suddenly now you’re going to start slowly losing friends. You’re going to start slowly losing the friends
you do have. You’re going to question what, why are they in your life? Or what are the ask or what are the. And we’ve
seen this all the time and it’s very sad. But there’s ways to handle that so that doesn’t have to happen. I’m just
speaking in generalities now. But yeah, I think those are all the, the key ones, I would say in general, like their studies
have shown, once you get to a certain level, I don’t know, it’s between like 150, 200,000 of income. Like there’s a
substantial amount of stress you can get rid of. If you get to that level of like income or net worth after that, it
doesn’t, your happiness doesn’t really improve.
Speaker 1 – 05:28
And I think at certain points it could probably decrease if you haven’t figured this out because you’re just going to
feel really isolated. If you’re like in a 1% or you’re gonna feel mistrusting or you know, people’s intentions. There’s all
these things that come up, those insecurities get magnified like crazy. Where before it’s like I’m the same as
everybody else. It’s not suddenly now you have this high net worth. It’s. If you’re single, it’s gonna be hard to date. If
you’ve got kids, you’re gonna be worried about who they date or they marry. There’s all of these things that are going
to start to pop up, which is very interesting. So I’d say on the positive end, the easy part, if you’re a high skilled
entrepreneur or physician or you know, and you have this high income, the easy part is achieving financial
independence.
Speaker 1 – 06:14
It really is. The hard part is what’s next. Yeah, the hard part is how do I fill my time, how do I feel just as fulfilled when
I was building this financial independence? Because that, you know, you typically, I think you get, you know, a lot of
people, their net worth is a representation of the value they’ve created for the world. The value they’ve created for the
net worth. And know you’ve created it, now you’re giving that up. You’re a large part of your identity. If your position
or business owner, whatever is now going to be gone. If you’re truly Transitioning if you stay in, like, why am I
grinding on the bad days? It’s like those that gets high in your mind when I, I’m fine.
Speaker 1 – 06:48
And the reality is a lot of people will end up going through this cycle of just continuing on and accumulating to
accumulate because they don’t have the next plan in place. So the next plan is going to be the hardest but most
important part of the how do you fill your time? How do you give back? How do you live that purpose driven, mission
driven life? How do you diversify your identity is really the crux of it.
Speaker 2 – 07:10
Yeah, yeah. I mean it’s a cliche, kind of enjoy the journey, not the destination. But yeah, you have to kind of aim for
fulfillment and we see it all the time with folks with more money than they could ever spend and we have to kind of
coach them to kind of find that fulfillment and those purposes.
Speaker 1 – 07:29
Yeah. So let’s talk about the danger spots. So if you, especially in today’s social medias, I view there’s, I think there’s
two ways to approach this and I’ve seen a lot of friends that have gone through iterations of this. They’ve become
uber successful where there’s, I think there’s, well, there’s. I put people in three categories. You stay really private.
Benefits of staying really private are, I think you have the highest chance, meaning you don’t change your lifestyle.
And the pros of that are, you know, humility, you could give back anonymously. If you give back like then you’re
gonna have charities calling you every day and like, you know, it’s, that’s gonna be a full time job just like so the
private has some big upsides and big downsides.
Speaker 1 – 08:16
I think the upsides is, you know, anonymous and rich is one of the best like statuses of life. I think, you know, poor
enrich is the worst because you’re, you have all this, you know, attention but you can’t do anything about it. And so
anonymous and rich is one of the best statuses. But like is that you have to decide is that an authentic life for you to
lead on? And the upside of that is same friends, you’re able to accumulate a lot of financial security. You’re probably
going to be able to give a big legacy to your kids.
Speaker 1 – 08:47
But I think the downside of that is, you know, you have to evaluate is that really in the end is that going to help your
kids or hurt them because you just worked your butt off and now if they inherit this, now are you giving them, are you
taking away essentially their ability to go through that adversity, through all those life lessons that you had to learn. If
they’re handed to them, they’re going to go on easy street right away. And it’s maybe more of an enablement than a
helping. So if you don’t, if you stay private and don’t spend it all. So I think there’s also part of that private is you could
spend it in the right way.
Speaker 1 – 09:23
So instead of getting, you know, these crazy cars and that you put in your driveway or like tripling the size of your
house, you could do some more stuff in private. When you travel 5, 5 first class, you could apply private, you know,
avoid the, the Instagram post and you know, try to reverse it instead of living your gag reel like live your highlight real
in real life and get off of the dopamine cycle of. So I think that would, that’s harder said than done. And you know, in
general, there’s other things you could do for, you know, charities or you know, a second house. You have to keep
some of those things private. In reality, if you don’t, we’ll talk about that next. But anything to add to that kind of
private and anonymous category? I mean it has pros and cons.
Speaker 1 – 10:12
It’s not a recommendation like this is what you should do. It’s, it’s just an option that is probably going to get rid of a
lot of stress, but it does come with a lot of downsides for yourself and along the way. And it’s unfortunate that is a
necessary thing for a lot of people to have to do.
Speaker 2 – 10:26
Yeah, I guess the one kind of takeaway is that there’s almost no doubt that rich and anonymous box of the two by
two matrix is the most beneficial, the one that you want to kind of aim for. And it’s just a balancing gap, like you said,
of how do you spend your money, alignment with your values, but also trying to avoid some of the downsides that
we’ll get to here in a second.
Speaker 1 – 10:47
Yeah, so I think the other, the other thing that can happen if you don’t stay super private. And this has happened to
several, you know, clients recently where they’ve, their income has gone up substantially. You know, they’ve business
owners or physicians going out of, you know, from trainer getting their second contract signed where they’re highly
productive and they’re like doubling their income is, you know, some of their friends will start to kind of silently
resent them and stop talking to them and start communicating. This is tough. If your kids are friends and suddenly
now like, what is happening? And you’re just literally living your normal life saying, went to on vacation here, we’re
doing this or we’re getting, you know, all the information. Like people can read between the lines and they’re thinking,
well, we can’t do any of that.
Speaker 1 – 11:36
And there like a lot of people view success as like evil in some way. It’s a lot of resentment. And then friendships can
ruin. So you can view that one of two ways. You can say, oh, did I do something wrong? Did I? Well, no, if that’s
authentic you. And you’re not going to hide it, just own it and just realize that, you know, you’re. Sometimes people go
into your life in seasons, like not. And that’s okay. You know, you have to accept that if those friendships are
ultimately priority, you have to navigate and you want to keep those. Now I would say if someone’s going to resent
you instead of celebrate your success, it’s probably not a good friend to keep. That’s just my personal opinion.
Speaker 1 – 12:11
But if you really want to manage and taptoe and like feel like you’re not stepping on glass, then there’s a way to do
that. You stay private. I mean, it’s simple as that. If you want to be. If the authentic version of you is just being who
you are and not hiding it, celebrating the success you’re going to kind of without trial and error. I think within a couple
of years, the people that resent you will be out of your life. Either by your decision, they’ll self select them and you’ll
have other friends that are sharing similar values as you and authentically there for celebrating your success but not
resenting you for that.
Speaker 2 – 12:47
Sorry to interrupt, but you can effectively excise a, a bad friend or a negative energy friend out of your life. The folks
that you can’t really excise out of your life are your family. Right.
Speaker 1 – 12:59
So absolutely.
Speaker 2 – 13:00
And you know, that’s becoming a thing.
Speaker 1 – 13:02
I feel like that. I feel like I’ve talked to these kids that are like, they don’t talk to their parents, which is crazy to me. I
mean, I love my parents, but you know, do you have people that do that? That’s the thing.
Speaker 2 – 13:10
I think I’ve heard of that now. Young kids, teenagers?
Speaker 1 – 13:13
Yeah. No, like adult kids.
Speaker 2 – 13:15
Okay. Just cutting their parents out of their life.
Speaker 1 – 13:17
Yeah.
Speaker 2 – 13:18
Oh. Any reason in particular?
Speaker 1 – 13:21
I don’t know, childhood trauma or something. They weren’t fed the right eggs or something. I don’t know.
Speaker 2 – 13:25
I guess I’m listening to the wrong podcast. I’ll have to check it out.
Speaker 1 – 13:27
No, I mean like real life. I’ve heard of like, you know, but anyways, not to get into specific details.
Speaker 2 – 13:31
Never heard of that.
Speaker 1 – 13:32
But no, that does happen, unfortunately. I don’t know. I don’t think it happens like permanently, but that’s definitely a
thing.
Speaker 2 – 13:39
Must be a Gen Z thing.
Speaker 1 – 13:41
I think so.
Speaker 2 – 13:43
Anyways. What was I saying? Yeah, so I totally agree that potentially cutting out some friends or other folks in your
life that aren’t bringing positive energy and good feelings and fulfillment into your life. However, you’ve got your
family and no matter how private you attempt to keep your financial life, your family’s going to know in some way,
shape or form. Even if you keep, say, off social media and donate anonymously, etc. They’re going to know. So some
of the downsides of that are, you know, your family or if you have that sort of, that type of net worth and that level of
wealth, they’re going to ask for something. So navigating that is also very difficult. Any thoughts on that?
Speaker 1 – 14:28
Yeah, and I disagree. It’s very difficult. Yeah. But I think it’s all about, you know, family’s family and you know, having
strong boundaries in place because you’re going to set the tone. The first ask, you know, you have to have. That’s
where an advisor can come into play to, you know, to have like a, A structure. I’m going to think about it, talk to my
advisor and there could be, you know, rationale. But that’s where a lot of rich people can go broke is they’re helping
their first degree, second degree, third degree. And like, once you say yes, it kind of becomes known and then it’s
hard to say no. And you could be rich, but it only goes so far.
Speaker 2 – 15:05
Yeah, you know.
Speaker 1 – 15:05
Yeah. I think having. If you want to protect your wealth yet some level of privacy and the ability to have
uncomfortable conversations are the two highest skill sets you will need to learn if you want to keep your wealth and
peace in kind of an equal, paradoxical fashion, you want to balance those two things. You’re going to have to learn
the skill sets of privacy, the skill set of privacy with staying authentic to you, always telling the truth. But you don’t
owe every piece of information to everybody. If someone asks, you can say, I’m not comfortable talking about that.
And it’s also Going above that and having uncomfortable conversations, which a lot of times is saying no to certain
asks and just having the plan in.
Speaker 2 – 15:50
Place to address that and having the right professionals in your life that can kind of provide that buffer between. No
question, between yourself and those folks.
Speaker 1 – 15:59
So no question. And I would say those two things, Devin. There’s always there and this is just statistically a fact. But
those that inher wealth versus those that accumulate wealth are so much more likely to keep it. Just statistically,
just the reality of what happens. And I would say that’s the reason why if you accumulate wealth, you have to learn
high level skills. Most likely you’re in a high pressure environment, whether a physician, an executive, you’re
managing, you’re leading people, you’re doing things under pressure. You have to have uncomfortable
conversations. You have to be a problem finder, not a problem solver, not a problem finder. You have to have the
ability to say no. You have to protect your time. You have to prioritize your. Instead of prioritizing schedules, you have
to schedule your priorities.
Speaker 1 – 16:46
There’s all these skill sets that are so key that will really enable you to handle that properly. If you just come into
wealth and you don’t have any of those skill sets, it’s going to be gone pretty quickly. And that’s why, yeah, you’re
going to think, oh, I’m going to be happy when I buy this and that, designer that and that. And next thing you know, to
keep your friends, you’re having to cover all their stuff and next thing you know, the money’s gone.
Speaker 2 – 17:11
Well, there’s the classic kind of anecdote that folks that win the lottery are some of the most or the least happy
people in the country, statistically. So, yeah, it’s again, it’s kind of a cliche, but it’s a cliche for a reason. It’s, it’s real.
So, Matt, maybe so we’ve talked a lot about the negative. So what are some of the ways that we, so we alluded to
earlier, finding a purpose, finding fulfillment. What are some of the ways that we help clients find the fulfillment? So
one of the ones that I have here is philanthropic missions, right? Donating to charities that you care about, causes
that you care about, potentially starting your own foundation. Any other ideas?
Speaker 1 – 17:51
Yeah, and I would say that’s typically the number one. But I’m gonna, I agree with that wholeheartedly. But I just want
to say very specifically, just Based upon real world experience. Like some of the most impactful people that I know
that are very high net worth, they’re not involved with charities, they’re involved with, you know, causes, not a
traditional non for profit causes or you know, elevating the next generation that could be even more beneficial and
more giving back than. So don’t. I think there’s a lot of guilt that comes with wealth, especially if you’ve come from
humble beginnings. And so I would say to maximize it, you have to find these, you have to navigate the competition
that you have between, you know, celebrating and privacy. Privacy and guilt.
Speaker 1 – 18:36
Like there’s all these things that you really have to work through psychologically and align yourself. Like there’s
phantom guilt if you have a lot of money in general. Right. Because someone else in your life doesn’t have. And
typically if the personality profile, a lot of people that achieve a lot and achieve a lot of financial independence,
generally speaking, they’re going to, you know, like recognition, they’re going to like achievement, they’re going to like,
they’re going to be people pleasers at heart. And that can really come back and bite you from a what your values
perspective.
Speaker 1 – 19:08
So you have to learn, you have to really go deep, I think philosophically and you know, having a coach, an executive
coach, therapist, all of that stuff I would say is very important as part of the navigating relationship fallout that can
occur, you know, between friends, family, disagreements. It’s really important to align yourself and don’t think you
have to do something because this is what typically people do. You really need to go deep. And the people that go
deep, I think find the most alignment between actually like maintaining the money with peace of mind. And
ultimately I think what defines success is like you look back in life and have no regrets because you poured your time
into those that deserve your time.
Speaker 1 – 19:49
You poured your time into causes and you live that, you know, that life of like I live life the way I wanted to. And you
did it without feeling the guilt, without feeling any kind of that regret that a lot of people feel.
Speaker 2 – 20:01
Yeah, that makes sense. Absolutely.
Speaker 1 – 20:02
It’s, it’s definitely a, it’s a huge balancing act. I would say having like a playbook of like, here’s what you do to be
happy. It’s, it’s different for everybody. And I would say more often than not like the happiest people I know, they’re
not super involved with it. Maybe they started a cause or started charity, but that’s not like the default of what they
go into.
Speaker 2 – 20:22
They’re.
Speaker 1 – 20:22
They’re taking their skill set and applying.
Speaker 2 – 20:24
That in places that will make the most impact. Yeah. And sometimes charities unfortunately don’t have a
measurable impact. Right. There’s a lot of overhead costs and administrative cost. That’s another podcast.
Speaker 1 – 20:36
But yeah, absolutely. Well, I think we covered, you know, most of it. But I would say the other thing to consider is if
you have come into money, the learning these. So a lot of things happen generationally until like someone breaks the
cycle. And so the more you can go questioning why, you know, what is this for? What do I want to accomplish? What
happens if I die? And that’s a really important one. Like, where’s it going to go to my kids? Don’t delay those really
tough conversations. Start those out now because then you’re have alignment. As far as, like, I have so many people
that are like stuck in kind of like a purgatory of like really black or white. Like, I don’t want my kids anything I didn’t
have anything I’m going to spend at all.
Speaker 1 – 21:23
And then like, I want everything to go to my kids and like, they don’t realize how negative that’s going to end up going
to be. But having somewhere in the middle, like, let’s enjoy life with your kids right now. Let’s structure intentional
time. Let’s help them start a business. Let’s, you know, teach them the skill sets that you learned rather than just the
giving them the benefits of your skill set is going to make them avoid obtaining any skill sets. And then that’s going
to put them in probably ten times more misery than, you know, you were first experiencing when you had this wealth
of like all these different losses that occur in your identity and friendships and everything like that.
Speaker 2 – 21:56
Yeah, so, yeah, absolutely.
Speaker 1 – 21:58
Yeah. I would, I would say most importantly, just have a financial plan in place before you get it. Have a. That
financial plan should not just include your investment strategy because that can become like a dopamine cycle in
itself of like all these people pitching you and these private investments. And then now your full time job is just
worrying about what the next hot thing is. So have that plan in place and like, if you don’t have that time and figured
out, like the universe is going to decide that for you, next thing you know you’re going to be busier than you were
working. So.
Speaker 2 – 22:27
Yeah, agreed.
Speaker 1 – 22:31
Well, with that being said, we realize this is a very sensitive. It’s a very private topic. So if you have any questions or
struggling with any of these downsides of wealth or surprise of wealth that we see, please reach out. We’re happy to
have a very in depth conversation, but we’ve lived through a lot of examples, you know, positive and negative. So at
least we have that perspective. We don’t have a magic solution. It’s going to be individualized to you, but perspective,
education and just talking it out. So you have a game plan that you feel very confident in following and having just a
structural kind of like a family governance in place. Like, here’s how we’re going to deal with, you know, how our kids
talk about money.
Speaker 1 – 23:10
Because the kids could then say, well, we’re doing this and now their kids and now the parents are resent. So there’s
all these dynamics in play and ultimately I think you have to surrender and realize you don’t have control. But just like
your skill sets, you learn, you can learn how to maximize the money working for you versus it working against you
and all these hidden levers and hidden fashions.
Speaker 2 – 23:31
Yeah, well. So, yeah.
Speaker 1 – 23:33
Awesome. Well, Devin, thanks for joining. Look forward to catching everyone next week.
Speaker 2 – 23:37
Yeah, thank you.
Speaker 1 – 23:38
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