TMC is an independent, primarily volunteer organization that relies on ad revenue to cover its operating costs. Please consider whitelisting TMC on your ad blocker and becoming a Supporting Member. For more info: Support TMC

You're suddenly well off, your lifelong friends are not. Now what?

Discussion in 'TSLA Investor Discussions' started by Ameliorate, Jul 12, 2020.

  1. jeremymc7

    jeremymc7 Member

    Joined:
    Feb 3, 2013
    Messages:
    570
    Location:
    U.S.
    There's way too much to say on this subject and there way to much to read before.

    Opinions will vary, situations will vary friend to friend, and it depends on the type of person you are. Girlfriends / Wives and Family need to be treated different from friends in my opinion.

    In my case I have many longtime friends that are well below me, some where I am, and a handful that are above.

    On occasion I treat the ones below me, especially if it's something outside their reach that I want to do with them.

    One's above me do the same with me, treating me. On occasion.

    But in most cases is we cover our own portions and "usually" no one asks for special treatment.

    I almost never talk income. But obviously people know what I drive, where I live, and the kind of "toys" I have.
     
    • Like x 1
  2. CyberGus

    CyberGus Member

    Joined:
    May 5, 2020
    Messages:
    255
    Location:
    Austin, TX
    Except in Scenario #1, the orphans don't get any gruel.

    Don't think of it as "donating to enrich myself through less tax", it's more like "increasing my donation by lowering my tax liability"
     
    • Like x 7
  3. FrankSG

    FrankSG Supporting Member

    Joined:
    Jun 27, 2019
    Messages:
    1,208
    Location:
    Singapore
    I've done that as well at a different time. Much more convenient yes. But this was not an option in the case I talked about in my post.
     
  4. HankLloydRight

    HankLloydRight No Roads

    Joined:
    Jan 18, 2014
    Messages:
    12,462
    Location:
    Connecticut
    #44 HankLloydRight, Jul 15, 2020
    Last edited: Jul 15, 2020
    Yes, that is absolutely true! But the OP made it sound like (perhaps just to me) "look! I found a way to pay less tax and still own TSLA shares!". But there's no free lunch.


    Reminds me of this: :D

     
    • Funny x 1
  5. tander

    tander Active Member

    Joined:
    Jul 23, 2012
    Messages:
    1,484
    To be really frank, you will likely get some negative reactions/problems from this good problem to have. But by and large if you give people a chance, as long as you don't flaunt it or talk about it all the time, as long as you are generous, as long as you don't forget that having more money than someone does not make you better than them, you might be surprised how well many of your friends/fam will be able to take it.
     
    • Like x 1
    • Funny x 1
  6. ThisIsTrue

    ThisIsTrue Re-member

    Joined:
    Nov 29, 2016
    Messages:
    608
    Location:
    'Western Slope' Colorado
    This is a fascinating thread.

    I definitely wouldn't do ANY gifting without talking to a tax professional first. I see you're in Canada, so your mileage may vary, but in the U.S. you trigger gift tax at >$15,000. (And that's tax for THEM, not you.) There are some ways around that, but you should definitely know what you're getting them into.

    I've always said that if I win the lottery, 50% (or more, if it's the Mega Millions or something ...though it's not very likely I'll win since I rarely buy a ticket, but stay with me!) goes directly into a foundation so I can give it away to truly worthy causes. I totally agree that giving someone a half-mil will probably end up with them resenting you and the friendship ending, and/or other nightmare scenarios.

    Other than "don't," the only ideas in the thread I liked (beyond charity) were buying toys so a group can do something together, and putting friends on a charity board to help you decide where to dole it out. Both are creative, and are unlikely to lead to serious schisms.

    But hey, it's a nice problem to have, and interesting to think about!
     
  7. BLSmith2112

    BLSmith2112 Member

    Joined:
    Jul 28, 2017
    Messages:
    71
    Location:
    Milwaukee, WI
    I'm in a similar position. I really wish I had a professional to talk to about this. It stresses me out more than TSLA ever did. Good problem to have to be sure, but it's one of those things. Not only do you gotta think about friends/family's impressions of you, but also once those gains are realized, what to do with them that doesn't end up with me regretting it. At 32, I could own my dream house and dream car... but at what non-monetary cost, while friends and family are struggling to stop their roofs from leaking or are unable to coop with medical bills due to health issues. /sigh...

    The only thing I've decided is OK, is wait. Honestly, not even considering selling ever lmao. Maybe one day I can fix everything for my parents, me, and still get my dream house, dream car, and retire, all in one swoop.
     
    • Like x 1
  8. FrankSG

    FrankSG Supporting Member

    Joined:
    Jun 27, 2019
    Messages:
    1,208
    Location:
    Singapore
    So why don't you? If you have enough money to worry about having too much money, you should have more than enough money to get a psychologist/therapist to talk to.
     
  9. BLSmith2112

    BLSmith2112 Member

    Joined:
    Jul 28, 2017
    Messages:
    71
    Location:
    Milwaukee, WI
    To be honest I hadn’t the faintest idea where to start. Your mention of psychologist/therapist is the first time anyone’s ever recommended anything like that to me, so I feel pretty ignorant. There’s also financial execution worries, and not making mistakes there.

    I’ve rationalized everything through the faux lens of: If I don’t sell, I haven’t made anything, therefore I have nothing to worry about until I sell. None of my family or friends need know anything until then. I planned on holding at least 2-5 more years, but eventually I’ll have to make a series of live altering decisions that have both material and perceptual impacts. Eventually I’ll need professional help because I’m not smart enough to make a decision of this magnitude in a bubble. Until then I simply plan on being a fly on the TMC wall, make sure TSLA continues to execute, and maybe have easier decisions to make down the road.
     
    • Informative x 1
    • Like x 1
  10. Tiger

    Tiger Active Member

    Joined:
    Oct 31, 2016
    Messages:
    1,156
    Location:
    Estonia
    • Love x 2
    • Like x 1
  11. SageBrush

    SageBrush 2020: Drain the Sewer

    Joined:
    May 7, 2015
    Messages:
    10,873
    Location:
    New Mexico
    Friendships are anchored by shared interests. If those interests are quantitatively material in nature then money separates them.
     
    • Helpful x 1
  12. TravelFree

    TravelFree Member

    Joined:
    Mar 23, 2020
    Messages:
    170
    Location:
    Jacksonville, Florida
    Re Tax planning- Trade Tesla, Amazon, Apple, etc in a Roth IRA One day when you are eligible you can take the gains tax free. It's a no-brainer for money you don't NEED to live on.

    I bought this Tesla with stock gains in Tesla. It takes planning and study. Buy and hold takes too long. Trading in small moves is much faster. Want growth even faster? Trade Options. Each ramp up in speed increases risk but knowledge and effort reduces that risk. However, you can't trade options in a Roth so pay the tax man and just be satisfied with having to give the tax man some of your effort. Then vote for the guy who wants to lower your taxes, not raise them.

    Giving money to charity is a mixed bag. If you know the money will be wisely spent and not go to make someone rich, OK. But I believe it is better to fund grandkids better education first. You don't want to make your family unable to live without your charity. Teach them to save 10% in a Roth early on and learn to live on what's left.

    Finally, unrealized gains are just numbers on a balance sheet. The real joy is taking some profits off the table and converting them into something you can touch and experience. That's why I paid cash for a Nissan Leaf in 2019 and the Tesla MS this year. Now I Travelfree.
     
    • Like x 2
  13. tander

    tander Active Member

    Joined:
    Jul 23, 2012
    Messages:
    1,484
    #53 tander, Jul 16, 2020
    Last edited: Jul 16, 2020
    I thought he was talking about a financial professional:)

    Edit: Had a good laugh over this imagining people signing up to talk with a therapist when they really need to talk with a financial advisor. Reminds me of people going to the doctor for stuff when they really need to talk with a dietician. And I'm sure therapists are quite happy to let people sit there and talk as long as they pay for it!
     
    • Like x 1
  14. Tiger

    Tiger Active Member

    Joined:
    Oct 31, 2016
    Messages:
    1,156
    Location:
    Estonia
    #54 Tiger, Jul 16, 2020
    Last edited: Jul 16, 2020
    You might be suffering from what's called the imposter syndrome. It's real, you can talk about it with a professional. A version of it is the saying, easy comes, easy goes. It just means that the real job of holding onto what you have earned is ahead of you (if you didn't get used to hart times already while earning it). Did you diversify your investments already?
     
    • Informative x 1
  15. jzcjca00

    jzcjca00 New Member

    Joined:
    Feb 18, 2020
    Messages:
    1
    Location:
    Gilbert, AZ, USA
    My brother-in-law keeps suggesting that I should buy him a Model 3, since he knows that my TSLA has done so well. I told him that I would do even better than that. He didn't listen to me back in 2012 when I said he should buy Bitcoin at $42. (It's over $9K today.) He didn't listen to me earlier this year when I said he should buy TSLA when it was below $400. So, instead of buying him a car, I offered him another tip, that he should buy Global X Lithium & Battery Tech ETF (LIT) today. I told him that EV sales are going to eclipse ICE sales much faster than most people think, so there's likely to be a global shortage of Lithium in the next 5-10 years. That kinda shut him up.

    The irony is that when you invest in something that goes down, your friends say you were stupid to invest in that. But, when you invest in something that goes up, they say you were lucky. Seemingly, they can't conceive of the notion that maybe you did your homework, applied some sound reasoning, and were able to see what was likely to happen. Anyone who's ever gone for a test drive in a Tesla should be able to see that Tesla was a great investment at $400! Of course, I didn't expect it to hit $1,500 just 4 months later, but I did expect it to significantly outperform the rest of the market in the long-term.

    Of course, I might be wrong about lithium stocks being a good bet today. I selected two great investments in a row, so it's my turn to be wrong.

    However, all energy-dense batteries seem to have one thing in common, and that's lithium, probably because it's the "light metal" at atomic number 3. Think about all the car manufacturers that are planning to come out with BEVs in the next few years. Think about all the grid storage that's going to be needed as they stop building new coal and natural gas plants around the world, as the price of renewable energy continues to fall. The world's going to need a lot more lithium than the current mines can produce. While lithium is an abundant element, it takes years to start a new lithium mine, so I believe there will probably be a severe shortage of lithium in the next few years. Supply and demand suggests that the price of lithium is going to rise significantly, and that will be very good for the existing lithium mining companies. I'm guessing that Tesla will be OK, as they probably have contracts to guarantee them enough lithium for their needs at reasonable prices.

    If there was a futures market for lithium, I would be buying lithium futures.
     
    • Like x 2
  16. Ameliorate

    Ameliorate Member

    Joined:
    May 22, 2016
    Messages:
    400
    Location:
    Victoria, BC Canada
    Right?
    To be clear this is hypothetical and is absolutely putting the cart before the horse but if Tesla does go to 5 digits and beyond I'm sure a lot of people here will have "more than they need problem".

    I think there are a lot of interesting ideas here and that was kinda the whole idea, there clearly is not one perfect answer but it really depends on your individual circumstances and friendships.

    I'm quite fond of the whole non profit idea and getting some people involved investing, which could give them some additional income as well as a boost to their resume. Additionally the person creating the fund I wonder could potentially donate shares to the non for profit saving some taxes. It's not a handout because it would be a job, and most of the proceeds would be donated to good causes. Get their minds at least somewhat involved in managing money and vetting investments. Very cool. They absolutely should be able to decline the offer without it being awkward as well.

    Buying toys to use as a group that they aren't allowed to sell is also pretty cool.

    The odd vacation or expensive night out, the frequency of which being low enough that it is never "expected" but appreciated.

    Appreciate all the replies so far it's been really interesting to see how different people might tackle this type of situation.
     
    • Like x 3
  17. ram1901

    ram1901 Member

    Joined:
    Feb 8, 2017
    Messages:
    59
    Location:
    Delaware
    #57 ram1901, Jul 16, 2020
    Last edited: Jul 16, 2020
    Quick way to lose 'real' friends is to treat them like charity cases. Real friends don't care how much you are worth and do not expect you to give your wealth away to them like they're your children.
    If you need a new house and can afford it, buy it.
    If your car is due for a refresh, buy it.
    It is at this point when you will find out who your real friends are.
    P.S. Tesla stock, like any growth stock can go up and down quickly. You could lose a lot if you don't cash in up to half of it at its next high. You don't get the benefit of that stock increase until you cash in some portion of the investment. Now if you are in it for the long haul then don't think you are any richer while your money is tied up in the stock. The market could crash tomorrow putting you right back where you started from.
     
    • Like x 9
    • Love x 1
  18. Sudre

    Sudre Member

    Joined:
    May 30, 2012
    Messages:
    853
    At 50 I still have half a dozen friends I met under 20. We still hangout together and have a good time. All of us have been pretty open with each other and they understand I am "potential rich" altho never directly ask questions. Like many here have said, I have to sell it to be actual rich.

    We have always based our success off of being happy not income. I have found NEVER GIVE AWAY MONEY. I have done that twice and lost both friends. Even when it was a gift of less than 4 figures and they only had to pay it back if they could. Probably in the long run we would have grown apart anyway.

    A few friends I just dropped because they went way far left crazy. All rich people to them are evil and should give it away or have all their savings taxed away. Then there are those like my wifes brother who is very smart but thinks everyone should have a government house, car, cell phone, etc. He does not work and spends his time going from protest to protest. At 30ish he lived with mommy and she recently died and left him mid 5 figures. On that note do not make your security questions to your accounts actual true information. Like "Mothers maiden name" and such. I have always made those questions more passwords and keep them written down in a safe. ExFriends and ExWifes know those answers.

    I have tried mingling with other groups to make new friends but even the Tesla Motor Club types too me are.... well.... I am embarrassed to say but cultish. It's not that they live and breath Tesla (I hope). It's just that's all we have in common so it was all we talked about when together. It became too much of one topic.

    See the friends I have now........ we are the type that have a wine club and discuss which red wines go best on a Kayak or Canoe float trip on a hot day of paddling. You certainly can't take a Malbec but a Rose that is a touch on the dry side yet still slightly sweet works great chilled in the water of cool stream and lake. Then there is how to clean the stainless container to transport it so you don't change the taste or body. Then there is the chuggability scale. You know.. alcohol level can't be too high but it has to be enough to be worth taking. These are far more important questions than how much money one has.
     
    • Like x 5
    • Love x 1
  19. SageBrush

    SageBrush 2020: Drain the Sewer

    Joined:
    May 7, 2015
    Messages:
    10,873
    Location:
    New Mexico
    Sounds rather ... cultish, to use your use of the term
     
    • Funny x 1
  20. MXLRplus

    MXLRplus Active Member

    Joined:
    Mar 11, 2020
    Messages:
    1,181
    Location:
    Eastvale, CA
    I "suddenly" became well-off. It only took 40 years of hard work. ;)

    The odd thing is, when I was making very little I had lots of fun, lots of friends, and was every bit as happy as I am now. The money had nothing to with it.:confused:
     
    • Like x 4

Share This Page

  • About Us

    Formed in 2006, Tesla Motors Club (TMC) was the first independent online Tesla community. Today it remains the largest and most dynamic community of Tesla enthusiasts. Learn more.
  • Do you value your experience at TMC? Consider becoming a Supporting Member of Tesla Motors Club. As a thank you for your contribution, you'll get nearly no ads in the Community and Groups sections. Additional perks are available depending on the level of contribution. Please visit the Account Upgrades page for more details.


    SUPPORT TMC