Please note the use of “wealthy” in the title here as opposed to “rich.”
Rich people aren’t always helpful. Why? Because you don’t know where their money came from, and if it’s well protected.
Riches can be susceptible to a crisis. For example, David Dobrik — a Youtube and Facebook video phenomenon — was making $275,000 per month at in the recent past. Then, some algorithms changed. That’s a crisis for any content producer. After the shift, he was making only $2,000 per month. That’s $230,000 less.
The current pandemic crisis will bring similar enormous changes for some. Many people have gotten rich off Amazon. Then, the company recently cut affiliate earnings by up to 80%. Crisis.
Crises show you who people are. Right now, you can easily tell the difference between people who have fake riches and people who have real wealth. Once upon a time, I could only sit in the corner of coffee shops and eavesdrop on wealthy people. Now, thanks to what feels like sheer dumb luck, I can call a few of them at any given time.
Seeing that this particular time is a scary one, I’ve been in touch with them much more often than in months past.
Here are the benefits I’m seeing:
They can tell you what to do
When I saw the wheels of the economy grinding to a halt, I asked every wealthy person I knew the same question:
“What should I do with my money?”
If you ask a person who is only rich this question, they will go on about theories that they read one time in a Tony Robbins book. They don’t have enough experience with money to do anything else.
A wealthy friend will answer your question with a series of questions: How much do you have saved? Do you have a 401K? Stocks? Do you own any properties? Businesses? What does your cash flow?
When my own friends started asking me questions like this, my answers usually started with “ummmmm… let me check.” (If I’m being really honest, Tim Denning asked me some questions that used words I had to Google).
A wealthy person will ask you question after question because they don’t want to ruin your life. After that, they may give you some advice.
Here’s what you should do after that: follow the advice (even if you don’t like it).
They remind you what wealth *really* is
The financial wizards like to use this word: “liquid assets.” That’s a fancy term for “actual money in the bank.” If you have this, you can buy milk and bread. If you don’t, you are in trouble.
People who have been wealthy for a while don’t have all their money in the stock market, and they don’t have it all in their house, and they don’t have it all in cars. They have it where they can get to it. You need to be able to reach your money when a crisis hits.
I have another friend who is struggling right now because he “doesn’t have enough liquid.” Luckily I have been too stupid to make that mistake. I didn’t know enough to invest in anything. Turns out that is providing me an infinite amount of calm in a world where nobody knows what will happen next.
As Alexis Rose, a character on Schitt’s Creek, says:
“I’ve dated enough Wall Street losers to know that ‘things aren’t liquid’ means they’re just broke.”
They remind you money is as critical as oxygen
This header falls firmly under the “duh” category, but how many times have you heard someone say “money isn’t everything.” That is true. Money isn’t everything. But whenever pain comes, lack of money can be life or death.
I used to parrot this cliche constantly. “Money isn’t everything!” I would say, looking at the third overdraft statement I’d received in two months.
When I didn’t have any money myself, I hated wealthy people. Then I actually met nice wealthy people. The first millionaire I met in person was not greedy at all. In fact, he seemed almost detached from his money.
“It takes care of my family,” he said in one of our conversations. “So it has to be there.”
You can understand that “money isn’t everything” while also understanding that it’s darn useful to have around.
They provide a model to follow
As a reminder, a model is not a person. A model is an idea, an example, a representation of what is possible.
I say this because it’s tempting to treat wealthy people as gods. That’s a dumb idea. Instead, look at the model they set. Look at the behaviors they took. Look at how they spend their time. Look at how they plan.
Warren Buffet is a model of wealth. Everyone wants to be Warren Buffet. Few people want to follow the model he sets.
They put crises in perspective
Back in my mid-20s, I watched a lot of financial advice from self-help guru Jim Rohn. I’m sure I learned some useful things about money, but I remember one quote above all other
“That first money is hard to keep.”
The implication there being that a first crisis is hard to survive. My wealthiest friend rocketed to riches in the late 1990s. He landed a cushy job in the big city making more money than he could have dreamed of.
Then, the dot-com bubble burst.
All his skills were suddenly useless. He lost his job, his opportunities, and his career. Tucking his tail between his legs, he had to moved back in with his parents. These would be the parents who warned him to be careful putting all his eggs in one basket. The parents who cautioned him from living too large.
Slowly, he found his way back. He rebuilt with the sting of suffering lodged in his mind. The next time a crisis came, he was ready. And then he was ready for the one after that.
He passed through the fire and came out intact. He’s learned that life, like a roller coaster, goes up and down. At times you grow. At times you just survive.
When I called him up recently, he gave me some really good advice.
He said: “This too shall pass.”
I think he’s right.
This article first appeared in Medium.