The challenge when you become rich: Stay 'normal'

Article content

There’s an episode of the TV series Gilmore Girls in which a blizzard hits the town of Stars Hollow, and bookish teen Rory is stranded with her wealthy grandparents overnight. It’s lucky for them, because their cook’s a no-show, and they’re so unfamiliar with their own kitchen that they can’t prepare a meal. (Rory saves the day by introducing them to frozen pizza.)

The situation satirizes a common stereotype about wealth: It can disconnect its owners from everyday life.

But is this perception purely a myth, and if not, how do people of means stay grounded?

Richa Arora, senior family advisor with KPMG Family Office in Toronto, says she rarely encounters this issue, but “in my work with families of wealth, I find sometimes, based on a change in their life or a point of transition, they could be looking for a renewed sense of purpose or experiencing that moment in time when they’re not quite clear about what they’re doing.”

Most of the people she works with have a good peer-support group who can help them refocus, she says, and “a trusted body of advisors can really help them to take a step back when they’re experiencing that momentary lack of clarity.”

Anecdotally, it seems that the desire to stay grounded can be a concern. Of course, the definition of “grounded” is different for different people, says Tom McCullough, chairman and CEO of Northwood Family Office in Toronto and author of several books, including Wealth of Wisdom: Top Practices for Wealthy Families and Their Advisors. What might constitute red-flag behaviour in some cases – like splurging on the ultimate dream car – might make sense in others.

We all think we’re marvellous. Practicing humility and gratitude is a very proactive, positive, helpful activity.

Tom McCullough, Northwood Family Office

The determining question, McCullough says, is whether individuals understand their core values and are therefore able to judge whether they’re being true to themselves. He points out that Apple CEO Tim Cook purposefully lives in modest circumstances to remind himself where he came from.

“That’s hard to do when there’s a lot of adulation and power that comes with money,” McCullough says. “That’s something that a lot of people wrestle with. You have to do normal things, like having a job. Which doesn’t mean that every wealthy person should work.”

Moira Somers, a psychologist, family wealth consultant and professor based in Winnipeg, says this concern is one that first-generation wealth-builders have: “How do I not forget what it was like to struggle?”

Somers says, “There are a couple of different things that people are concerned about, one of which is that they not be so insulated from the problems of the world that they lose empathy and lose touch with the range of financial struggles that people have. And that they continue to understand the value of money.”

She notes that there is a parallel challenge on the flip side of the coin: “Sometimes we actually see that wealthy people are not grounded in their wealth, so they live as though they don’t have it, and they don’t have the help they need to manage it,” she says. “This can include things like not giving adequate attention to the impact of the wealth on your heirs.”

For advisors, these are difficult topics, and not everyone is prepared to bring them up with clients. “Brave ones do,” says McCullough. “Those are tricky conversations for sure, because they’re about ego.”

Somers says, “I think family advisors often wait for clients to bring it up, but often if you initiate conversations, you find that there is concern about it, and they want to talk about it.” A few ways to keep “lifestyle creep” at bay range from monitoring the family’s carbon footprint to staying in the old neighbourhood with long-time friends, she says.

After deeply rooted and well understood values, nurturing a sense of gratitude is the best way to keep your feet on the ground, experts say.

Arora recommends “taking stock of all of the great progress they or their family have made, looking at how far they have come, counting their blessings – and making that a daily practice.” She says many of her clients spend a few minutes every morning with a journal to set intentions for the day, and end the day with an informal family debriefing around the dinner table.

McCullough refers to Malcolm Gladwell’s book Outliers, which shows that some high achievers are successful not only through their personal qualities but by the accident of being born into the right time and place.

“We all think we’re marvellous,” McCullough says. “Practicing humility and gratitude is a very proactive, positive, helpful activity.”

Somers says, “When I think about the metaphor of grounded, I think of ‘rooted in reality,’ but the other thing I think of is to have a ground wire. There can be a huge emotional charge around money, and what we want to do is bring that charge to ground, to be sure that people’s emotions and behaviours around money are calm and are rooted in their values as well as the reality of their situation.

“Electricity can provide light and warmth for people, or it can blow holes in people,” she says, “and often that depends on whether it is grounded or not.”

More from Canadian Family Offices:

• Why next-generation immigrants clash with parents over money, business
• How high-net-worth investors are handling higher interest rates
• An ‘outlier’ year: What wealthier investors are doing, and their plans for 2023

Please visit here to see information about our standards of journalistic excellence.