You can install our site as a web app on your iOS device by utilizing the Add to Home Screen feature in Safari. Please see this thread for more details on this.
Note: This feature may not be available in some browsers.
Sometimes helping can go badly wrong. My sister and her partner had bought a Bed-and-Breakfast in a nice Australian country town in 1997, with a 10-year interest only loan. It was never really successful. At the end of the 10 years, they decided to sell it, but by then it needed some upgrading and maintenance. So she asked me to give them a bridging loan while they prepared to sell. Then, of course, it became 2008... and the bottom dropped out of the real estate market. Even in Australia, where it was nowhere near as bad as the US, it then took another two years to sell the property at a significant loss. If I hadn't given her the loan, we both would have been a lot better off; they would have been forced to sell before the collapse, and I wouldn't still be waiting for the rest of the loan to be paid back, which it never will be.
The moral here is that sometimes having access to resources can lead to bad decision making.
@StealthP3D@Causalien@FrankSG
I believe you gentlemen have all come from modest backgrounds, would love to hear your thoughts if you care to comment on the original post.
Let me first mention that your relationships with your friends sound very different than mine. It sounds like these are childhood friends, and friends you will probably keep for life as you continue to live in the same city? I've lived in 5 different countries, and although I am still close to a few people I've met over the years, my friends circle has also shifted numerous times, and it might be quite a different dynamic than your group of friends.
Although nowhere near current levels, I did first start to make money much earlier in life, when I was still in touch with my childhood friends. One of them visited me with his sister when I lived in London. I let them stay at my spacious apartment, and I also treated them to a pretty expensive dinner while they were there. I also let another friend, although more of a friend of a friend as I wasn't as close with him, stay at my apartment for free for 3 months during his internship in London. I could've asked him to pay some small amount of rent, but I realised it would be inconsequential to me and quite a lot to him as a student. So I just said don't worry about it.
Since then I've lost/broken off all contact with my childhood friends for a host of reasons, but some of them were growing apart, me realising I was very different from them to begin with, and me moving even further away to Tokyo. Back then I didn't have the type of money to be set for life, let alone be also able to change others' lives, but I had very substantial savings for my age of low/mid 6 figures. So here and there I'd pay for small things (meals) and not ask for money (rent) where others might.
Today things are a bit different, because as long as TSLA doesn't take a massive nosedive I have enough for my own financial freedom as well as that of many others. On the topic of sharing the fact that I've made a lot of money off of TSLA, it's something some people are probably able to guess, because I have talked about Tesla/TSLA to some people, but I don't think any of them are able to guess the extent of it. However, just as I wouldn't talk about having a net worth of $10k, I don't see why I would talk to people about having a very high net worth either. Perhaps if there are issues you're dealing with that come attached to the newfound wealth, such as not knowing what to do with your life anymore, those are things you could talk about, but I wouldn't talk about exact numbers, keep things vague, and just mention your investments have done well enough to perhaps allow you to stop working if you wanted to. If they ask for more details, depending on the person I would either give a rough ball park like "low or high x figures", describe it along the lines of "I could live off of my savings frugally/comfortably/extravagantly", or I would just say that I prefer not to say exactly. If any friends were to get jealous or resentful or something like that just from this kind of conversation, I'd probably wonder why I didn't notice before that they lack empathy and distance myself from them.
I would advice against straight up giving money to people, or forcefully trying to improve their lives through money, because there's a number of issues with this. First of all, where do you start and where do you stop? By giving one or some of your friends money, you're literally saying to all your others friends that you care about them less. Second, it's almost insulting in a way to give money to someone to improve their life. There's sort of an undertone saying "your life is not as good as mine, here I'll make it better for you". Who are you to judge that their life is bad because they're less wealthy? And third and most importantly, life isn't all about money. There are other much more important things. If I had to choose to live a life full of friends or full of money, I'd choose the first one obviously.
Being a close friend (or a close {any type of relationship} for that matter} to someone means caring about their happiness and doing whatever you can to help them. In most cases people's happiness is more constrained by other things than money, and you should be there for close friends regardless of what kind of help they need. Maybe now that you're financially well off, you could mention to them that you've done quite well in your investments, and that if they're ever in financial difficulties you'll be glad to help them out. Like if they're having a liquidity issue, and they need a short term loan. Or if they lost their job and literally can't pay for rent/food. Those are the kinds of things that I think make sense to help with, but just going to somebody and offering them money and saying "here, now your life should be better" is almost insulting in a way.
It seems frustrating to have the ability to do most anything and yet you can't share it.
Personally I'm not that much into luxury things. I won't spend that much more money after cashing out TSLA, except for on a home. But if you do enjoy fancy dinners and nice vacations, you could decide to treat your friends to this every now and then. As in, "Hey I'd really like to do this, but I think it'd be boring alone. Will you come with me? It's on me.". Probably best to do this in moderation, but for example, if it's your kind of thing, you could take all your friends out to an expensive dinner every year on your birthday, as a way of thanking them for their friendship, or something along those lines.
Finally, let me also add that I've also been on the other side of this. I have a close friend who used to be much wealthier than me (always flies 1st class, $1k/night hotel rooms), and probably still is a little bit wealthier than me. He's paid for things like taxi rides, and things like dinner a couple of times. I never expect him to pay for anything, and am always very thankful to him when he does. And in general, I never expect anything out of him other than friendship. Only if there's something I really need help with and he can help with, will I ask him. Like last year in June, I had to move TSLA stock from one broker to another, so I asked him for a temporary (few days) loan, so I could sell and buy at the same time, and not risk any stock price movements. Other than that, him paying for a taxi ride/dinner are kind gestures, but it's not what our friendship is based on, so I wouldn't look at him differently if he never did those.
"What's your APR". That was a strange question to me once I figured it out. I always pay cash for a car; if I don't have the cash I save until I can. #don'tpayinterest
reminder:
a. one is only POTENTIALLY rich if they own TSLA shares;
b. one can be, in fact, richer once they take profits by selling their TSLA shares;
c. if one acts on (b) AFTER many others rush to act on (b), one will
NOT be as rich as they thought during (a)
Only if there's something I really need help with and he can help with, will I ask him. Like last year in June, I had to move TSLA stock from one broker to another, so I asked him for a temporary (few days) loan, so I could sell and buy at the same time, and not risk any stock price movements.
I don't know about your brokers, but normally, moving a security from one broker to another is possible agains a nominal fee (e.g. $100). Depending on how much you bought/sold and the fees, transferring might be a simpler option.
A friend of mine that aspired to a Tesla does have a hard time hearing about my Y. But, I have always made more than he does, and while it can get touchy at times, we stay good friends because our connection is not about money. If having money changes things then I would say they were not real deep friendships to begin with. (Said by someone with only a few really good friends)
Im realizing more and more my friends dont have what it takes to be growth investors. Time to find additional ppl to hang out with that have similar mind sets. Cant expect the same things out of everyone. Ill prob look for investment entrepreneur groups for ppl that I can see eye to eye with and will actually be around before they retire just in time to go to the old folks home.
Do you think Bill Gates and Jeff Bezos hang out with there High School friends? Prob not. Divergent mindsets. Especially considering its all Ive talked about since Model 3 came off the production line as stock was in the 200s. Not my fault they didnt even hear me out.
A lot of people say don’t talk money politics or religion. That is a very limiting attitude. I always talk about all 3. I give my thoughts on a subject plus actually listen to their thoughts without judgement. That is the hardest part. Literally no judgement. Most people have not learned how to do that. Which is why they say don’t talk about things because they don’t want to hear that you don’t have the exact opinions as them.
I regularly make it a game. How do I bring something up without any possibility of an argument. Finances specially should not change your relationship unless you no longer what to do the things they like to do. I have made 400k in tsla. That doesn’t mean I only want a catered party and won’t goto a potluck. I just want to be with my friends.
Tell people how much money you have, made by luck, investing. Discourage people from trying to trade stocks (holding less than 2 years). Plus bring up what you would have made investing in msft or Netflix or Apple so they understand that investing is always a good idea. And then just say if I would not have invested I would not have been in the position to get lucky.
investing is the willingness to stay in a stock for multiple years even if it drops 80%. You should invest because you believe in what the company is doing not because you have been watching just the charts.
also remember. You are not actually wealthy until you have diversified. If you have all your money in tsla you will make a lot over the coming years. Unless Elon gets hit by a bus. Then tsla possibly goes back to $300
Honestly, get some new friends. You can still keep the old ones, or some of the old ones but things will never be the same.(especially if they know) Also I wouldn't just give handouts. i know people who have done that for their family and they don't even talk to each other anymore. And I agree with those who say don't tell anyone. Ask anyone who came into a ton of money and told people, that would be the first thing they would say.. wish I never told anyone. It will never feel fun to constantly just hand your money to your friends. Think of it from their point of view, would you want a friend who did that? It could be fun for a little while, then I think it would get old. People get jealous. You could do single nice things like pay for a friend vacation. and really, why not just donate it? Grow it, save it for your children. Send a kid to college. There are plenty of other things to do. Its a fun problem to have. Good luck.
If you are talking about real money. $10M plus. Talk to your friends about starting a nonprofit foundation. Put $5M into the foundation and make them board members. 2-3 hours a month deciding how to 1 invest the money. 2 how to donate the money. Every year allocate half the growth of the fund to donations the other half is split between the board members.
This also allows them to put this on their resume.
I had many friends that became "Dellionaires" in the 90's. Most them pissed it all away. Personally I made a small fortune in options in the 90's, decided I must be a financial genius, and then lost it all in 2000.
So I'm cool with my friends of significant means. I figure they're only some bad luck and a few bad decisions away from being broke. Although I admit it would be awkward around them if I were in dire financial straits.
Just like what some said, giving money is a bad idea. Remember this, once given, it becomes a privilege. Your wealth is yours alone. What you do with them is entirely up to you but Never try to use it on someone either through gifts or loans. This almost always have a negative result. If you buy a house and they started to get jealous then it is time to find new friends. Jealousy will only disappear when you have nothing else they jealous about.
Personally I would just do what I want to do with the money I gain and not worry too much about what others think. If I earn it then it is my right to do what I want with it. Friends will either be happy for you, jealous of you or want nothing to do with you.
Whatever they do at least you know where to go from there. Bad friends are like leeches, cut them off before they drag you down.
Just curious how some of you may have navigated this. I'm doing quite alright but suspect that gap will widen significantly in the coming years with $TSLA.
I skirted the subject with a best friend, wondering how one with a financial advantage could help another get ahead. Or at the very least keep your friends and enjoy what you've earned a little bit without showing off too much.
Like wondering at what point...hypothetically if one bought a house could it be okay to subsidize rent or let friends live there for free. His answer being along the lines of - If he's not paying his way fairly or something in return there would be a feeling of ownership like he's been bought, like he would never be able to complain about anything in the house. Yet collecting the rent would be like a tear in the ocean for the owner. That is just such a minor advantage too, I'm talking like 1200 a month for somebody making around 100k.
He suggested the wealthy person could use their influence to accelerate their career. Yet I feel that's just as bad because then you have no idea if you deserved a promotion at work etc.
It seems frustrating to have the ability to do most anything and yet you can't share it.
Is stealth rich really the way to go? Wouldn't you want a decent vehicle like a Tesla and a moderately nice house you can't ever invite anyone to?
Even without my Tesla investments I'm noticing widening socioeconomic gaps in my friends circle and not sure how to deal with it.
While they'd be dead set against being given money, and I agree handouts are probably kinda crappy I wanted to pose a question:
You would accept the money if it was Willed to you upon death, why not accept something from the living and enjoy it with them?
Being rich all alone doesn't sound like fun. How does one change their mindset about money if they've lived with scarcity all their lives.
Maybe I should just sell everything before this becomes a problem
All I got so far is: A. don't tell anyone, pretend you have nothing.
B. Get friends in on a lottery ticket and buy the winning ticket from someone.
I'm one of the friends who has been left behind by my friends so here's my $0.02
I have been a tight group of 8 couples for 30 years. We all live and work in Silicon Valley and 4 of the 8 have gotten lucky with stock options and their company going public and are worth a lot more than me. Of the 4 the lowest wealth is $4M the highest is $30M. As the lesser off I have zero expectations that they would ever share their wealth with me or help me out in any way. It also hasn't impacted our friendships in any way. We still get together, we still travel together, we are still friends.
If your friends don't stick with you then they weren't really your friends.
A different example. I'm not part of this friend group, but here is what one wealthy person did with his friends.
He got a motorcycle and wanted someone to ride with. So he bought 5 additional motorcycles for his friends so they could ride with him. His only stipulation was they could never sell the motorcycle. They could give it away if they were done with but they couldn't profit from it. All 6 rode together for many years and then the rich guy got into trap shooting, so he bought guns for all of his friends who wanted to join him with the same stipulation. It seems to have worked out well for all involved.
reminder:
a. one is only POTENTIALLY rich if they own TSLA shares;
b. one can be, in fact, richer once they take profits by selling their TSLA shares;
c. if one acts on (b) AFTER many others rush to act on (b), one will
NOT be as rich as they thought during (a)
I love Tesla as a car but this string of texts reminds me of every other unicorn company’s stick that eventually crashes back to a profit bad valuation. I’ve been a serious investor for 35+ years and can’t emphasize enough the truth fullness of this person’s observation above. It’s vapor money until you sell and diversify sufficiently ( eg broad ETF Like QQQ if you don’t have another plan). Too many writers sound like a fellow passenger on a flight years ago who told me how he became wealthy enough to retire based on AOL (America On Line) when that was the unicorn darling only to lose 70% of his wealth in 2 months when the bubble burst. Be happy with what you’ve achieved and diversify how. Tesla is being driven by get rich dreamers most of whom I’m guessing own little to nothing else.
When the subject comes up I just say, "I got rich the old fashioned way - I inherited and got lucky"
I've got a couple of friends who I've helped financially by telling them I needed some 'steady fixed income' investments, then carried their home loan at a lower than market interest rate.
What we do with our unexpected wealth is to donate regularly to local charities. Tax tip: Donate TSLA shares that you bought back in the day. (HAS to be > 12 months (i.e. long term gains) Example: We donated 10 shares that we bought at $100, current price was 1100. The tax deduction for us was 11,000 (but can only take this 1/3 a year over the next 3 years) but here's the kicker - we don't pay ANY capital gains tax on the gain, so we avoided tax on 10,000 (vs if we'd sold the shares and then given cash to the charity). The charity also didn't pay any capital gains 'cuz they are a non-profit. Every time I want to buy more TSLA I do that, but then donate an equal number of (low basis) shares to charity. This keeps my # of shares the same, but increases my basis in the shares, so eventually when I do sell them I'll have less tax to pay.
Just curious how some of you may have navigated this. I'm doing quite alright but suspect that gap will widen significantly in the coming years with $TSLA.
I skirted the subject with a best friend, wondering how one with a financial advantage could help another get ahead. Or at the very least keep your friends and enjoy what you've earned a little bit without showing off too much.
Like wondering at what point...hypothetically if one bought a house could it be okay to subsidize rent or let friends live there for free. His answer being along the lines of - If he's not paying his way fairly or something in return there would be a feeling of ownership like he's been bought, like he would never be able to complain about anything in the house. Yet collecting the rent would be like a tear in the ocean for the owner. That is just such a minor advantage too, I'm talking like 1200 a month for somebody making around 100k.
He suggested the wealthy person could use their influence to accelerate their career. Yet I feel that's just as bad because then you have no idea if you deserved a promotion at work etc.
It seems frustrating to have the ability to do most anything and yet you can't share it.
Is stealth rich really the way to go? Wouldn't you want a decent vehicle like a Tesla and a moderately nice house you can't ever invite anyone to?
Even without my Tesla investments I'm noticing widening socioeconomic gaps in my friends circle and not sure how to deal with it.
While they'd be dead set against being given money, and I agree handouts are probably kinda crappy I wanted to pose a question:
You would accept the money if it was Willed to you upon death, why not accept something from the living and enjoy it with them?
Being rich all alone doesn't sound like fun. How does one change their mindset about money if they've lived with scarcity all their lives.
Maybe I should just sell everything before this becomes a problem
All I got so far is: A. don't tell anyone, pretend you have nothing.
B. Get friends in on a lottery ticket and buy the winning ticket from someone.
'
Remember, it ain't money till you sell it; until then it's just numbers on a page/screen. Human nature being what it is, all the pitfalls you mention apply. If your wealth becomes conspicuous you will lose friends over it. "Sharing" will not endear you long term and ultimately even you will resent it. That is why people develop relationships within their own socio-economic strata. Nothing is free, even good fortune.
Of course you have less tax to pay because you've given away all the gains, and you only keep your effective tax rate*the charitable donations you've taken. You'd make a lot more money just keeping all the shares and paying all the taxes.
Scenario #1:
You buy 100 shares@$100= $10,000 of value.
Stock price goes up to $1000= $100,000 of value. You sell 100 shares and have $90k of long-term capital gain. LTCG tax rate is 15%, you pay $13.5k in tax and net out $76.5k in after-tax profit. If you want to have the "same number of shares" to reset your basis, then buy 100 more shares @$1000 (you have to wait 30 days first for the wash-sale rule) and you've netted out -$23.5k in the end and still have 100 shares.
Scenario #2 -- as you describe:
You want to buy 100 more shares@$1000 (current price) so you donate 100 of the $100 shares you bought in Scenario #1.
You donate 100 shares@$100=$100,000 as your charitable and deductible, donation.
Let's say your effective tax rate is 27%. Your charitable deduction is $100,000, but that only lowers your tax bill by $27,000.
You buy 100 more shares@1000 so you have "the same number of shares", and you only "profited" $27k (the lowered tax), but it now cost you $100,000 to buy the new shares at the current price. So your net out of pocket is -$73k after the donation. But you have the same number of shares.
