BY: DAVID RUSSELL, CFP®, CSA® – Vice President & Trust Officer
(6115) 385-2345 firstname.lastname@example.org
In the iconic 1972 film, The Candidate, idealistic young lawyer Bill McKay (Robert Redford), thoroughly involved with civil rights, legal aid and ecology, agrees to run for the U.S. Senate – not to win, he tells himself, but to bring vital issues before the voters. Just one problem – he does win, and the film’s final words trail off from the McKay’s lips as if his life had just flashed before his eyes. Could he handle the success of a political victory or would he squander the spoils of his new-found power?
We’ll never know how it turned out for Bill McKay, but when it comes to sudden wealth for entrepreneurs, there is mounting research that reveals that after a large liquidity event such as an IPO or acquisition, entrepreneurs who were so adept at calculated risk-taking, leadership, and tireless work ethic, are often asking the same question Bill McKay asked of his campaign manager, Marvin Lucas (played by Peter Boyle) at the end of the film, “Marvin, what do we do now?”
Emptiness, isolation, lack of purpose – not descriptions you might expect of entrepreneurs who come into the sudden wealth created by an IPO or acquisition. Yet that is often the result. “When [someone] suddenly strikes it rich, the impact is profound on every part of their life,” says Dr. Stephen Goldbart, co-founder of the Money, Meaning & Choices Institute, a firm that works with affluent clients. “It can become a painful psychological experience for some people.”
I recently dined with a venture capitalist who helps take mid-stage companies to the next level through private equity deals or public offerings. He revealed that one entrepreneur he was working with would receive a wire transfer of over $40 million into his personal bank account from the consummation of his company’s acquisition that week. As unimaginable as that was to me, his next statement was even more surprising although it shouldn’t have been. “He asked me if I knew anyone who could help him manage his wealth.” After fumbling my business cards all over the table, he went on to say that most of these newly minted millionaires have no clue how to manage their personal wealth or how to function as part of the “one percent.” Often their ideals are at odds with their wealth and they need as much guidance on reconciling their wealth with their life purpose as they do with selecting professional money managers.
Argent’s fiduciary position allows us to focus considerable front-end time establishing a vision of financial wellness for wealthy individuals or families that supports their unique personal, family and community goals. A we develop this vision with our clients and their other advisors, what results is not so much a financial plan as a life/wealth plan that reflects their core identity. Emptiness, isolation, and lack or purpose are replaced with fulfillment, connection, and intention.
David W. Russell, CFP®, CSA® is Vice President and Trust Officer with Argent Trust in Nashville, TN. He is founder and editor of Wealth and Honor, an educational website offering community and resources to families in age transitions. His book, What You Need to Know: The Adult Child’s Guide to Becoming an Effective Financial Caregiver is available on Amazon.