How Much is Enough for You? A question to discuss with your financial planner

In the last 60 days, two Atlanta companies sold for more than $700 million.  Founders, employees and investors who toiled for years with the hope of a better future realized their dream.  They became financially independent in an instant. But as history has shown us, liquid wealth can create problems.

Malcolm Gladwell’s new book David and Goliath shares stories about underdogs delivering a “surprising” result against what seems insurmountable odds. Startups and small businesses are scrappy. They have to be agile to compete against a much stronger and well financed counterpart.  But success, especially public success, changes the story – you are now Goliath and everyone knows it.  Success plants the seeds of its own destruction.  Those that have not defined how much is enough won’t have the mental tools needed to withstand the hurricane headed their way. This hurricane is called “opportunity.”

One of our clients had a very public liquidity event. We laughed at our last meeting about an interaction that happened before his wealth became liquid.  A financial planner wanted to help him manage his affairs long before the company sold.  The planner quickly realized that his wealth was tied up in the business, and the courtship stopped as fast as it began.  Can you guess who was the first to call once the news hit the page?

The motives of financial planners are easier to spot, and even the unseasoned get a queasy feeling when dealing with their approach.  The Trojan horse, however, is the army of bankers, insurance agents, real estate agents, friends with great investment ideas, family and charities all seeking your help because you have cash.  When you don’t have money, people know so they don’t ask.  But when you have resources and the world knows it, nobody believes that you can’t take advantage of the opportunity.  So the conversation has to change from “I can’t” to “I won’t”.  “I won’t” requires a much stronger resolve.

Whether you seek a small house and a Prius, multiple homes and fancy vacations, or donating your time and resources to helping others, you must define your life.  Such definition can then stand as opposition to any and all opportunities seeking to undermine your resolve. Too often, the wealthy person suffers needlessly just because they’ve never answered the question of “how much is enough?”