Being financially successful in a visible manner comes with consequences. A direct consequence is having people automatically looking to you for money: relatives, friends, acquaintances. It is a great privilege to be able to help your loved ones, but there’s a fine line between doing so and outright supporting them. Issues such as entitlement, lack of gratitude and downright betrayal are a byproduct of people around you making their own assumptions about your hard earned money. Handling such problems can be tricky. How one addresses the expectations from the get-go and the type of strategies used can definitely make a difference.
We all have heard stories of the affluent being blackmailed or taken advantage of by people around them for the sole purpose of extorting money from them. That is nothing new. I can, for example, point to the football player who paid cash for his father’s house and added his brother to the deed just in case. The brother refinanced the house without telling the client or the dad (to the tune of $200,000), spent all the money and started to default on the loan. The athlete had to come to the rescue and bail him out. I can also mention the entertainer whose mother called at the beginning of the year asking for $10,000 although he had just given her $100,000 for Christmas. Upon further review, I realized she had actually received a total $400,000 in cash during that previous year. Mind you, her mortgage and car notes were being paid by the client. Examples such as above suggest a certain entitlement and lack of gratitude from these family members. The athlete’s brother was not happy enough to live mortgage-free, he had to tap into some equity since, as he put it “it’s my house and I can do whatever I want with it”. The entertainer’s mother started living like “she” was a celebrity. Of course the clients feel betrayed and used, but that is only the tip of the iceberg as I did not even get into the constant requests for loans and outright gifts of various nature (need for a car, down-payments on houses, etc…) from friends and acquaintances.In our communities, one person making it is a sign of hope for the entire family. Although it is true, it does not absolve the other family members from their financial responsibilities altogether. The key is to nip things in the bud and establish expectations early on. As the saying goes, “Give a man a fish; you have fed him for today. Teach a man to fish; and you have fed him for a lifetime”. The idea is to let family know that you will use your new-found wealth to assist them in getting on the path to self-sufficiency, and even let them enjoy your material possessions. However, you will expect them to sustain that effort and only come to you for legitimate emergencies. I know it is easier said than done, but it is a must. Not doing so will jeopardize your wealth building effort and indirectly affect your relatives in the long-run as well. What good is it to the family if you end up broke? As with the airline oxygen mask, take care of yourself first before helping the person next to you. Giving out cash randomly, ATM-style, is not the way to go. Instead, paying for one’s college tuition, helping them start or buy a business, even giving them a job is the solution.
We all have heard stories of the affluent being blackmailed or taken advantage of by people around them for the sole purpose of extorting money from them. That is nothing new. I can, for example, point to the football player who paid cash for his father’s house and added his brother to the deed just in case. The brother refinanced the house without telling the client or the dad (to the tune of $200,000), spent all the money and started to default on the loan. The athlete had to come to the rescue and bail him out. I can also mention the entertainer whose mother called at the beginning of the year asking for $10,000 although he had just given her $100,000 for Christmas. Upon further review, I realized she had actually received a total $400,000 in cash during that previous year. Mind you, her mortgage and car notes were being paid by the client. Examples such as above suggest a certain entitlement and lack of gratitude from these family members. The athlete’s brother was not happy enough to live mortgage-free, he had to tap into some equity since, as he put it “it’s my house and I can do whatever I want with it”. The entertainer’s mother started living like “she” was a celebrity. Of course the clients feel betrayed and used, but that is only the tip of the iceberg as I did not even get into the constant requests for loans and outright gifts of various nature (need for a car, down-payments on houses, etc…) from friends and acquaintances.In our communities, one person making it is a sign of hope for the entire family. Although it is true, it does not absolve the other family members from their financial responsibilities altogether. The key is to nip things in the bud and establish expectations early on. As the saying goes, “Give a man a fish; you have fed him for today. Teach a man to fish; and you have fed him for a lifetime”. The idea is to let family know that you will use your new-found wealth to assist them in getting on the path to self-sufficiency, and even let them enjoy your material possessions. However, you will expect them to sustain that effort and only come to you for legitimate emergencies. I know it is easier said than done, but it is a must. Not doing so will jeopardize your wealth building effort and indirectly affect your relatives in the long-run as well. What good is it to the family if you end up broke? As with the airline oxygen mask, take care of yourself first before helping the person next to you. Giving out cash randomly, ATM-style, is not the way to go. Instead, paying for one’s college tuition, helping them start or buy a business, even giving them a job is the solution.
...To be continued
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