This week on the Retire With More Show we were honored to have Paul Sullivan as our guest. Paul writes the Wealth Matters column for the New York Times and recently released his second book, The Thin Green Line: The Money Secrets of the Super Wealthy, published by one of the best publishers in the country, Simon & Schuster. In this episode we dig into the issues facing the wealthiest people in America and share them with everyday investors.
rich versus wealthy
What is the distinction between being rich and being wealthy?
“Rich is somebody who is going to be controlled by money. They are not going to have the ability to make the choices that we would all like to make in life. Wealthy is somebody who, regardless of how much he or she makes, has the ability to make those choices. They are going to have control over their life. If something bad happens, chances are they are going to be prepared for it and they are going to be able to weather that event.” — Paul Sullivan
You might be asking yourself what in the world do some of the wealthiest people in the country, people worth hundreds of millions of dollars, talk about? How could they possibly have any worries? After all, it’s not as though they are going to run out of money.
“These folks are not going to run out of money and that is a luxury to them in some ways, but it also gives them the opportunity to talk more about the meaning of money and about those deeper issues of wealth that we should all be spending a little bit more time thinking about. What does my money mean to me? How is my money going to affect my children? Am I making the best decisions with my money?” — Paul Sullivan
At Kansas State University there is a financial therapy clinic that focuses on the study and evaluation of our deep-rooted connections to money. Just like visiting a psychotherapist to talk about problems in any relationship, the researchers at Kansas State University try to get to the bottom of our money problems.
“The people that I have known over the years who are the best with money, who are the best adjusted, particularly at an early age, are people whose parents talked openly about the decisions that they were making, whether they had a lot of money or a little money. They were connecting their labor to what that labor created, which is money.” — Paul Sullivan
There are categories of people who inherit money. Whether you are leaving your children $3,000 or $3 million or $300 million, nobody wants their kids to feel entitled. Being entitled is different from inheriting a dollar amount. Those who end up entitled often have an expectation about money that does not align with what the money is going to do or the value of that money.
“Flâneur, which is a fancy French word for a wanderer through a city, is the stereotype that comes to mind when you think of someone who is entitled. But there is another group called the sheltered. The sheltered are the people whose parents have pretended that the kids will never figure out how much money they are worth. The final group is called the inspired.” — Paul Sullivan
What do you do when you don’t have any economic incentive to work? The inspired are people who watch their parents go to work and watch their parents make sacrifices and work late and do all the things that regular people do every day. After their parents begin to start making a lot of money of their own, these children just keep on doing what they were doing.
“Oftentimes it’s parents who ruin people. Money is a means of exchange and with this group, the inspired, their parents had the sense, whether conscious or not, that they wanted their kids to know how hard it was to earn money by example, not by simply stating that money is hard to make. They wanted their kids to see just how hard they work and hopefully inspire them to do the same with their own lives.” — Paul Sullivan
We want our kids to be invested in what they are doing. Even if they are exposed to nice things, even if you go on nice vacations, as long as we show them that we are working very hard for it, making sacrifices, and discussing openly what things cost and why, that will provide them with the right lessons.
Be sure to catch up on previous episodes of the Retire With More show.