Coming to Grips with Sudden Wealth

Did you ever know someone who was an environmental advocate, or your locavore activist friend, or a deeply religious soul—fill in the blank—who lived their lives with their values-flag writ large? Unless you know them very well, you might not be aware if they’ve had decisions to make about their money life that have challenged those core values. Spoiler alert: not all these stories have happy endings for these caring souls!

Kristine unexpectedly inherited a significant sum after someone she knew died and left her money (all names are pseudonyms). She is an aggressive activist leader, nationally known and engaged in growing the local community. She has steadfastly moved her money out of mainstream investments and into everything from CDFIs to municipal bonds to progressive alternative offerings. She wants decent returns, but prioritizes her core values as she works with her windfall. One of the new-economy heroes! In the beginning, though, it took some time and dedication to find a financial advisor that would “get” her values and support her non-traditional choices. After interviewing a few advisors and not finding the connect she wanted, a friend recommended her fee-only SRI advisor and Kristine finally found the ally she was looking for.

Shawn was a young environmental activist involved in stopping nuclear power plants in New England. As he grew his family, they used electricity as little as possible and added solar when that became financially feasible. They gave generously to charity, primarily to activist groups, and lived mostly off the land, banking at a credit union and investing their modest savings in SRI options. They realized there was a family inheritance to come in later years, but that day came suddenly when a parent died young. They spent a year considering what to do with the large inheritance—perhaps buy more land to expand their CSA or start an earth academy type learning program—but were also influenced by their parents’ advisors, who were much more conservative. Sadly enough, they gave in to the pressure, and wound up spending several years deferring their own priorities.

John’s parents died when he was just a young parent himself. John and Becky inherited a stock portfolio full of companies that they didn’t support at all, with tobacco, defense, and alcohol being the largest categories. Without having an advisor, they did some of their own research, and spent almost a year exploring their options, given the fairly low cost basis embedded in the holdings. They finally decided to give away almost 40% of the holdings to charitable organizations, in part to offset the capital gains tax hit, and they sold the balance of offending positions. Given John’s parents’ right wing bent, they had quite a bit of fun choosing social change charities that they thought would offset the history of the holdings! They gave to African-American farming groups, union groups, and women’s organizations. As the grandchildren grew older it was a great family story to be able to talk about using this money to foster social change, especially since it had for so long worked against these values.

What do we learn from these tales? Most of us live our lives trying to incorporate our core life values into the everyday decisions we make, and we’re pretty successful at this. Then, suddenly, you have a source of new wealth, from an inheritance, a sale of a property or real estate—it doesn’t really matter where it comes from. What matters is that you consider what impact you want it to have on your life.

Take time to consider if you want to share it with others in some way; and take time to decide whether or how you want this to spark a change in your lifestyle. For some of us, we’ll find we are more charitable because we have more. Others will aim to hold onto the wealth, but make sure it gets put into SRI and community impact investments. From what I’ve seen, very few of us will significantly change our lifestyle, though that is often a fear—the fear of becoming someone you don’t think you are, succumbing to a lifestyle that is culturally strong but not in your core values DNA.

Enjoy new wealth, if and when it comes your way. Have faith that as you come to terms with the changes, your values will win out. Ask your advisor for ideas and books that can help you deepen the process—go get ‘em!

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Greg Garvan

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