Wealth Clarity Blog

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Some seek happiness through wealth and status, some through deeds and actions. What about a spiritual component of happiness? Can we be happy without having some form of faith?

Managing money for a living has led me lately to think a lot about the nature of happiness. I’ve watched documentaries, and read books that attempt to identify, define, and measure happiness.

Money and happiness are not entirely unrelated. While wealth, and specifically money, does not necessarily create happiness, it can be a tool on the path to happiness.

Meaningful work, material success, and abundance can lead to some level of fulfillment.  Perhaps I’m splitting hairs, but fulfillment and happiness do not necessarily mean the same thing to me. Think of fulfillment as a static or passive form of happiness, a state of mind. Think of happiness as an active emotion, one that needs constant feeding. Fulfillment is more easily sustained; happiness is perhaps more quickly achieved.

The Danish philosopher Soren Kierkegaard believes people first attempt to attain fulfillment by acquiring stuff, all of which ultimately becomes meaningless. Seeking deeper fulfillment, people turn to deeds or causes, perhaps by helping others, or by following their conscience. That too will ultimately prove meaningless, Kierkegaard says, without faith, a fixed belief in something beyond the material world. He is talking about, God.

Do you need faith in your life to have true fulfillment and happiness?

To a point, money can buy happiness, but that point is quickly reached. Once basic needs like food and shelter are met, money cannot make us appreciably happier. That is because the power of money is limited. People who are wealthy don’t necessarily have more time, or better relationships. They might have more toys, but those toys need maintenance – what they own can also own them. Riches can isolate even as they provide.

At Highland, our clients generally want to be good stewards of their wealth. They feel blessed for what they have and are conscientious when it comes to directing their wealth. They want to enable their children rather than spoil them, and are committed to doing some good for their communities and causes.

They prescribe to various faiths. Some are Christian; some are Jewish; some are agnostic.

I happen to believe having a spiritual component in your life is necessary for true happiness. But where does that spirituality fit in?

We have written often about living fully, a philosophy we try to both practice and preach in our work. We help people manage their wealth, and in a larger sense, we try to help them manage their happiness too, happiness that leads eventually to the way you define spirituality.

How do you see faith fitting into a life fully lived?

Guest blog post by Sarah Hopper of Sound Philanthropy.

You may have heard reference to the recently released study “More is More or More is Less” that shows that kids whose parents give them money to pay for college get worse grades. Personally, I just couldn’t wrap my head around this simple correlation, so I decided to do some thinking about what might really be going on.

The study was conducted by assistant professor Laura Hamilton of The University of California at Merced, and indicates that the students with financial support from their parents and the lowest grades are also the ones (generally) whose parents are “shocked” by the low marks, and failed to set any expectations around grades for their kids. She concludes that these findings support the idea that financial support of college can be a “moral hazard” – meaning that students are unable to take their studies seriously if they haven’t made their own financial investment in the education and experience. Hamilton acknowledges that the key issue is that many parents pay for college without setting expectations, or linking the money to certain goals around grades, graduation, jobs, etc. She encourages parents to consider the “investment” of their funds, and not “assume that all spending during college years has equal value.”

After reading the article Spoiled Children about this study (by Scott Jaschik, posted on InsideHigherEd.com) and the abstract (see link above), and perusing the comments of parents who are celebrating that they no longer need to pay for their kid’s education, I started to develop my own opinion about how we’ve missed the boat on what’s really going on here. Hamilton is on the right track, but I would take it a step further. Perhaps the motivation and drive to get good grades does not come from linking tuition payments to academic success, but rather in the preparation of the student to receive the gift of debt-free education? Consider this:

1. As parents (or grandparents!) how do we convey the “gift” of paying for college to our kids?

Paying for college – or any education – is a gift because the giver has the opportunity to offer the recipient a way to grow, develop as an individual, and enhance their lives – resulting in a more fulfilling existence, and a positive influence on the world. In order to allow it to take the form of a gift, the giver must tell the story of how it happened; how they are able to do this, and what it means to them, including their hopes and fears for the recipient.

Tangible idea to convey this message: Write a letter. Celebrate the milestone of getting into college with special dinner or experience that includes a conversation about the gift, as well as the responsibilities and opportunities that come with this new phase of life. Talk about what it means to be an “adult” member of the family, and express enthusiasm about the perspective and gifts that the young person will bring to the table in this role.

2. What is the “spirit” of this gift?

The spirit of the gift (a term from The Cycle of the Gift referenced below) comes from the giver’s intentions, and communication of those intentions to the beneficiary. These, coupled with the qualities of the gift to inspire and ignite the recipient, have the power to cause a cycle to happen – with the recipient perpetuating the gift to future generations.

Tangible ideas to convey the spirit of the gift: intentions can be communicated as part of the letter suggested above, or in the form of a special, personalized covenant or agreement between the giver and the recipient. The important part of keeping the “spirit” of the gift alive is on-going communications, and discussion about how these intentions are working (or not) for the recipient, and celebrations of significant milestones and achievements that happen along the way.

3. Is the recipient of this gift (the student) prepared to receive it?

The recipient is prepared to receive the gift if the giver, and other adults and mentors in his/her life, have helped him/her to build resilience, and an ability to adapt. This means that through respectful, honest, age-appropriate engagement, the recipient has participated in the growth of the idea of the gift, and discussions about what this means in terms of their own participation and responsibility. In this scenario, it is not necessary to “link” grades to tuition funding, because the motivation to succeed comes from the recipient him/herself, who has been included in the planning – as appropriate – from early on.

Tangible ideas to build resilience: Start money and values conversations early. Celebrate achievements, milestones and personal growth along the way – with real rituals and events that are meaningful for your family.

These questions and ideas were inspired in part by the recently published book, The Cycle of the Gift, by thought-leading authors Jay Hughes, Susan Massenzio, and Keith Whitaker. In it, they describe the necessary process and intentionality that must accompany a gift in order for it to have the desired effect of enhancing the life of the recipient. The buzz around this study was timely, as I was in the process of reading this book. I think it’s a perfect example of what Jay, Susan and Keith are talking about. I encourage you to both read the book, and also to think about the “gifts” in your life – both received and given – and how the spirit of these gifts has affected the outcome.

Some food for thought.

If you have questions or comments for Sarah, you can reach her at sarah@soundphilanthropy.com or www.soundphilanthropy.com  

“A small body of determined spirits fired by an unquenchable faith in their mission can alter the course of history.”   Mahatma Gandhi

The topic of today’s blog post is daunting, one that I’ve been mulling over for months as I’ve worked to craft a mission statement for our company. While some ideas for the blog come to me quickly, this one has taken a long time to form. You could say it has taken me a lifetime.

In this and other posts to follow I will attempt to answer the question of why we do what we do. Ostensibly, I am talking about the work we do at Highland, but in a larger sense I am talking about all the choices we make in our lives.

As I think about why Highland exists, why I chose to start it, and what drives me each day, I keep coming back to the idea: what it means to live fully.

It’s the phrase I used in a recent post, about the loss of my friend and colleague Steve. It applied then and, it occurred to me, should apply to all the events in our lives and the decision we make, even the professional ones.

Obviously the topic is too large for one post, so what I hope to do is to begin unpacking the suitcase of this idea of what it means to live fully.

What I hope to do is lay some kind of foundation to build upon. In future posts, you will recognize some of the concepts I talk about in this one. Living fully is more of a process than a goal, and so is writing about it.

I am convinced one of the most important components of a life fully lived is courage, the trait I was reminded of when Steve passed.

To start Highland, I had to summon the courage to make that choice. The company and all that it has become is the result of that decision.

Before I started the company 13 years ago, I was not living fully. I was stressed out, stuck in a dysfunctional job, feeling the financial pressure of having three children in private school and a new house and mortgage.

I knew I wanted a more balanced life. I wanted to coach my son’s baseball team. I wanted to get to know my wife better.  I could achieve neither without making a change, and that choice took courage. It took the willingness to step into something I didn’t fully understand.

It set me off on a process of self-discovery, healing and personal growth. It deepened my faith and sensitized me to the idea of life as a journey, one that I am still on. That, more or less, is the story of Highland. It is not just the company I run. It has become my canvas.

One of the most important relationships in people’s lives is the one they have with their money. As a wealth manager, I can play a role in that relationship. It can be a constructive one or a destructive one, depending on the choices you make. The paradox of money is that the more of it you have, the more prevalent feelings of fear, worry and perceived control can become. Prosperity sometimes encourages hoarding behavior and false feelings of self-sufficiency. People often say money is freedom. Sadly, money can sometimes lead to less freedom not more.

My hope is to be a lens through which people can view their relationship with money, and to help people make healthy, constructive choices. What does that mean?

It means understanding that money is a means not an end, that it is a tool, and we are not so much its owners as we are its stewards. It means seeing a client as a whole person, not just someone who earns money, but as someone with unique talents and passions, someone with an emotional and spiritual life, someone who is part of a larger family and community.

The more we all keep this in mind, the more likely we will have a healthy relationship with money, and the more likely we will live fully.

In the 13 years I’ve run Highland, I’ve yet to compose a mission statement, partly because there are always more immediate tasks to complete, but also because it has taken me all this time to understand why we do what we do.  I’m exicited about the energy this process has created and I’d love to share more of my story so please send me a note and let’s grab coffee. 

As mentioned in my previous post, I’ve been working on Highland’s mission statement for the past several months.  I can honestly say that we haven’t had a clear mission statement since the founding of the firm – partly because we were focused on building the company and surviving, partly because of busyness, and partly because the process of being a business owner was still shaping my views.  In short, I wasn’t ready.

Recently, while reading Patrick Lencioni’s book The Advantage, I realized it was time for Highland to take this important step.  My sincere desire is for Highland to become a great company, and I realized that not having clarity of mission might be keeping us from progressing as a company the way we could.  Taken even more negatively, it could be keeping us stuck.

Part of this journey was to write the story of Highland; what was going on in my life around the time I started the company.  (I’m not going to share that story now, but I may do so at a later time.)  Suffice it to say, it was a very transformative process for me.  It showed me what some of my motivations were, what I was afraid of, and what I was hoping to become. 

As a second step, I formulated the things I had learned from running the business looking back over the past thirteen years.  From this very different perspective, it was interesting to see how my thinking and priorities had changed, and what my life had become.  It was quite an emotional and spiritual experience that I would encourage you to try. 

As The Advantage states, there are three keys to keep in mind as you contemplate the reason for your company’s existence, and I found them to be extremely helpful in my own journey:

1.  Answering the “why” question is not the end of the clarity process.  Knowing that there will be a more tactical period to discuss practical concepts can allow you to think about your organization from a more idealistic standpoint.

2.  It has to be true.  It has to be based on the real motivations of the people who founded the company – namely, me.  In my case, because we didn’t clarify our purpose early on, the process was more difficult and required a lot of introspection around my motivations and the company history.

3.  The process cannot be confused with either internal or external marketing.  It is important to refrain from trying to come up with a cute tagline or slogan that will sound good to clients, employees, etc.  This step is only about clarity and alignment.  Without formal communication of any sort, the reason you exist should be evident to everyone concerned, because in time it will be part of the company fabric and culture.

In my next post, you will hear the “why” of Highland and the transformative impact this journey has had on my life and how I see it shaping and inspiring what we do going forward.  Stay tuned!

Why are we less generous when our income grows? 

A new study by the Chronicle of Philanthropy  indicates that the middle class gives a materially larger share of their discretionary income to charity than wealthier households.  As a wealth manager, it’s something I’ve noticed over the years as well.  Some of the reasons for this may include: 

• Empathy can be harder when you’re affluent. As we earn more, we generally move into nicer neighborhoods and send our kids to better schools.  As this happens, we are more removed from those that are financially struggling in our daily life.
• Relativism. When we move into that more expensive neighborhood, we are surrounded by people that have more than us and we feel less well off.
• Our tax returns might show larger incomes, but we haven’t emotionally made the switch – we still feel like we aren’t that wealthy.
• There’s much more to lose than when we had less, so we are more cautious about reducing the net worth we worked so hard to build.
• The presence of “affluenza,” defined by the authors of the book bearing this name as “a painful, contagious, socially-transmitted condition of overload, debt, anxiety and waste resulting from the dogged pursuit of more.” 

If any of these apply, I encourage you to take a step back and consider what living more generously might do for you.  We have all experienced the positive emotional impact that comes with giving, but studies are suggesting it might even be good for your physical health.   Another benefit I’ve experienced is giving to others results in more personal freedom.  My mental focus shifts as I think less about myself and more about someone that needs help – and suddenly, that new thing I can’t seem to live without has far less control over me. 

Some steps you can take to live more generously now:

• Spend more time outside your normal circles – perhaps volunteer at a food bank, tutor a foster child, or take a volunteer family vacation to a poor area of the world.
• The next time you catch yourself trying to keep up with the Joneses, go to this calculator to remind yourself how well you are doing.
• Look for opportunities to be more generous in daily life –with your co-workers, family, or friends.  This could be taking over a household chore, driving a friend to the airport, visiting someone in the hospital, or just giving that hurried person at the grocery store your place in line.
• Consider doubling your normal financial giving for one year and see how it goes. 

I don’t profess to have the answers but I can speak with authority in terms of struggling with all the issues mentioned above.  I’m planning to live this year much more generously than last year and I’ll report back on how it went.  What will you do to live life more generously?

I was reminded recently that experiencing the life I want requires courage: to step into the life I want even though the outcome (the future) is unclear and worse yet, out of my control.

I say that because I was on my way to Lake Chelan for a summer vacation last week when I got a call that Steve, a friend and member of my Vistage CEO peer group, had passed away in a tragic bicycle accident.  I was speechless for a few moments; reflecting on how quickly death reminds me of the fragility of life.

Clearly, Steve passed too soon and too young, but he left a legacy of caring and loving influence mostly because he made courageous choices to live a life full of all sorts of adventures with friends and family.  Yes, it was at times very risky, but this is what Steve wanted.  As one person mentioned at his “celebration of life,” Steve experienced 120 years of living in his short 60 years on earth.  Steve knew what he wanted in life and went for it.

Don’t take me wrong, my comments aren’t intended to suggest that you need to live like Steve, but instead, my hope is that you (and I) will muster the courage to step fully into the life you want, and are uniquely designed to live—and to live it.

Sounds too simple?  I believe it’s simple, but based on my experience to date it’s definitely not easy.  Here’s a quick roadmap that I’m using to think about my own life:

1.     Choose.  Life is full of choices, moment to moment, that you and I get to make – choices about what we want to experience and become.  Opportunities are abundant, and this is the reason life is so rich.  The key, I am learning, is to make bold and authentic choices that are best suited to me and not unduly influenced by others or external factors.  I’ve also learned that taking the time for introspection has helped me make better choices about my life.

2.     Act.  Don’t let fear of the unknown keep you stuck.  Many of you have seen the Babe Ruth quotation in my office that says, “don’t let the fear of striking out get in your way.” Action takes courage because there are risks and the outcome is less than certain.  Leap into the life you want because no one else will do it for you.

3.     Let Go.  In reality, we control very few things in our day to day lives – what other people think of us, or how long we have to live on this earth, to name a few.  We only control our choices and actions at this moment.  Get proficient at the things you do have control over, and stop obsessing over and start letting go of the things you don’t.

In my experience, fear is the thing that keeps me stuck worrying about outcomes, and that ultimately leads me to a muted and watered-down life experience.  If I let go of outcomes, I won’t avoid grief or failure, but the totality of my life will be authentically mine.

It’s important to note that courage doesn’t mean recklessness. It also isn’t wishful thinking or passive hope. Courage is an action word that moves us towards an outcome but can’t guarantee the result. As Steve reminded me, each day of life is precious and so the importance of making courageous choices today is even more poignant.

Are you being courageous today to choose and act, or are you stuck?  In a future post, I’ll be discussing the kinds of things that keep many of us stuck.

This is the second post in the series on Kids & Money from our friends at Marigold Associates.  Enjoy!

Kids typically don’t pick up basic life skills through osmosis. They have to be taught how to clean a bathroom, check the oil in their car, and manage their money. Often what they have learned about money is “ask and ye shall receive.” As you can probably guess, this bit of wisdom doesn’t lead to financial independence.  A good financial education can provide a wonderful foundation for your child as he learns to manage wealth on his own.

The goal of financial education is to form financially responsible adults with positive values about money and useful financial skills. Financial training and education should begin as soon as children are old enough for pocket money, around kindergarten or first grade. There are several good programs on money management for children available in your local bookstore or on Amazon. These offer common-sense approaches and point out typical mistakes that can derail the enterprise. One such example we like to recommend is Making Allowances:  A Dollars and Sense Guide to Teaching Kids About Money, by Paul Lermitte with Jennifer Merritt.

Keep in mind that the biggest obstacle to the success of financial training is whether busy parents will commit the time and energy to stick with it!

The details of the plan that you decide to use can vary, but generally it should include the following elements:

• Allowance system. An allowance system is a basic contract between you and your child that guarantees you will give her a set sum of money to cover out-of-pocket needs on a regular schedule. In return, she agrees to responsibly contribute to the family by performing basic chores. Start simply and add funds and complexity as your child demonstrates readiness. The allowance amount should be appropriate for their expenses. By adolescence, kids should be able to manage their clothing budget. By the time they reach college they should be able to handle all of their own living expenses within the budget they are given. This will give them lots of experience having to make difficult choices. Do they save money to travel on spring break or buy new clothes every month?
• Let them control their own funds. Resist the temptation to “help.” Let them learn from their mistakes. No bailouts! On the other hand, do not use the allowance as reward or punishment for behavior.
• Talk with your children about money and your family financial decisions. Show them how you decide to make substantial purchases, shop for the best product/prices, ascertain what you can afford. Be sure to provide examples of decisions that include delaying or denying purchases.
• Use moderation in your spending. It is not good for your children to have the most expensive and latest of everything. No teenager ever needed a $300 pair of shoes!
• Give them something to work for and save toward, for example, an iPhone or a car. Help them learn the habit of putting away a portion of their income (gift and earned) for a larger project. As they master the early stages they may able be handle to loans and repayments for larger purchases, though saving is a better model.
• Help them establish the habit of giving to others. Remember, however, it is not theirs to share if you have handed it to them. In order for them to feel the benefit of giving, it needs to come from their own pocket.

Beware the financial education you provide your children will bring up all your own issues about money. You will discover what those are as you implement a money management system for your children. Over-protectiveness will come up as you find yourself tempted to give them a “bail-out” when they have overspent. Equating money and self-worth will lead you to want to give your kids expensive gifts to keep up with their schoolmates. Using money as a reward or punishment will demonstrate your own need for control.

We hope you will follow one of the excellent programs that offer detailed instruction in wealth management. While education is essential, it is not enough on its own. The deeper challenge lies in developing character, values, and a commitment to living a life of purpose. Formation of character and values within family practices play a prominent role in limiting the negative impact of wealth on your children. This is the topic of our next blog in this series.  Stay tuned!

As we are heading into the typical year end giving season, fraught will all kinds of traditional philanthropic complexity, I wanted to pass along a lesson I have learned in my own giving: 

Consciously checking my motives to make sure the giving is about the give-ee (recipient) and not about the give-or (me and you). 

There are plenty of examples of wealthy families and individuals that give large gifts to get recognition in some form, or their name on a building, or control the impact of the gift. I find it easy to dismiss those actions as:  I would never do that because I’m not that egotistical or narcissistic!

I wish all my giving was altruistic but realistically it’s just not the case; however, there are a bunch of subtle issues, that when I’m really honest with myself, influence how and why I give. 

For example, there are times the giving is about making me feel good; wanting to be in control, gaining approval from someone, and being seen as significant.  The dark side of giving takes roots in these quiet moments of reflection where only “I” can judge my true intentions and motivations. 

One check and balance to apply to your giving is to consider making more of your gifts in the purest form = anonymous.  Gifts in this form can take away the control and impact I want to bundle together with my gift.

Another possibility is to embrace the planting and harvesting giving concept.  Using this clearly farming metaphor, there are times when the gift is about planting and we may not be able to see the fruits of our giving for many reasons.  In other instances, someone else may have contributed greatly to the early stages of planting and we get the blessing of seeing our gift bear all kinds of fruit.  I have found the more I try to control whether I’m a planter or a harvester, or both, the more the giving becomes about me.

Finally, before you write any checks–or gift appreciated securities–this year end, take the following quick emotional inventory:

1. Am I okay if I don’t get recognition for the gift?
2. Am I more concerned about the person or organization in need or the giver? 
3. Should this gift be made anonymously?
4. Am I okay not controlling the outcome or the harvest, instead being one of many to move the ball further down the field?

What other giving issues or emotional effects of giving have you experienced that could be helpful to share?

One of our jobs at Highland is to develop investment portfolios that maximize return and minimize risk.  While investment portfolios are critically important, it is only one facet of life; there are other areas of life that if properly considered, can guide you to a well managed life portfolio–something we at Highland refer to as living fully.

In that regard, when was the last time you took a hard look at your “life portfolio”?  By that I mean, checking to see if you have proper diversification, are balancing trade-offs, and measuring performance in key areas such as:  family, health, community, or even fun experiences?    

Personally, I value my health and want to have an active life well into my senior years.  Considering my current condition, I would rate my health possibly a 6 out of 10 (not very good).  To move that needle a little bit higher would be rather simple:  get more active.

In isolation, taking proactive steps towards better health sounds easy, right?  Well not really because I have a ton of excuses and embrace them all!  But considering my life goals, it’s worth it to me to invest the time, energy, and money on a trainer so I’ll have some accountability.  Check with me in 6 months; I expect to feel and look much better. (More importantly, check with me when I’m 70; how many times did I go skiing with my grandkids?)

For those who are interested in living fully, this can be a life changing exercise.  Budgeting effort, time and resources into the life you have always dreamed of can pay dividends in ways you could only hope for.  The daily or weekly investments you make now reap dividends and compound over time.

In my next post I’ll be sharing a few ideas on how to make simple and easy investments into your life portfolio that can help move you closer to living fully.

What is the “real” cost of your lifestyle?  Not the amount you spend each year but instead the other emotional and real implications of living the way you’ve chosen.  My recent trip to Africa helped put this in perspective in a way that was life changing.

There is something in the Seattle area called the “eastside lifestyle”.  It refers to the suburban area east of Seattle that tends to attract people with higher incomes and wealth.  It has less to do with location (as there are neighborhoods like this in Seattle proper) and more to do with the way in which upwardly mobile people tend to live.  It implies access to bigger homes and amenities, better schools and more Range Rover-type families, and generally newer everything.  Most communities on the West Coast, and elsewhere, have their “eastside” pockets or bubbles.  For many people, including our clients, the financial cost to live this lifestyle ranges roughly from $200,000 to $400,000 per year.

I’m not making a value judgment about this lifestyle (I live on the eastside), but my experience shows that the impact of living this type of lifestyle extracts a cost that is real and tangible.  I’m not referring to the actual dollars spent but instead the emotional and time implications, and the trade-offs we all have to make to live this way.

Real costs, or even symptoms of the eastside lifestyle, include:  anxiety and worry; thinking about work when on vacation or weekends; no margin in our lives; stress and pressure to get into the best private schools and sports programs; difficulty staying on top of the financial complexity, keeping up with the Joneses, etc.  These costs can be amplified further if there aren’t reasonable financial controls and boundaries around spending or the ability to say no.

This is where Africa comes in:  as the picture of this African family clearly shows, many people of Uganda have virtually nothing; average earnings are about one dollar per day. For this reason, Ugandans value everything they have and feel so blessed to have it.  Sure, they are enticed by the American dream, but they also realize that it doesn’t bring happiness or joy.  The have more love and community than we do by a long shot, and it was interesting to realize that it wasn’t because of lifestyle or status.

I came home realizing how blessed I am but also how many of these lifestyle costs I feel personally.  They can exhaust me, and drain valuable energy from me so that I’m not present and available to those I care about; they also limit my ability to use my blessings to impact the world around me.

I just don’t plain need all the things I have and quite frankly I was appalled at how often I carelessly handle and manage the many financial gifts in my life.  Here are a few of the practical implications of this lesson and a few of the changes I’m making in how I live my life:

• Buy less
• Making sure I understand whether it’s a want or a need
• Making do; let things wear out before buying something else
• Say no more often—it’s okay to deny myself things from time to time
• Reduce the number of “things” in my life that create complexity
• Improve my communication about money at home

These types of adjustments to lifestyle are hard to make.  We all get hard-wired into living modes that create difficult patterns to break. Even though I want to make changes I find I still fall prey to old ways of living, however, the first step in change is awareness.

Going against the grain, choosing to lead the un-eastside lifestyle, takes energy and commitment.  I’m curious to hear from those who’ve done it and whether you’d be willing to share your journey and what you’ve learned?