Thoughts on money and people’s expectations

Money changes your relationship with people. At least it changed mine.

As the de facto go to guy on anything financial amongst people who know me, I am starting to feel the weight of my own advices. I am someone who have no grudge taking money from strangers who made the wrong choice in a transaction, but I deeply care about whether or not people whom I give advice to succeed in making money based on what I say. Especially so if they follow my advice closely (Not so much if they don’t). That is why, I don’t usually tell people what to do in detail and instead insist on showing what I can see coming and what the choices are. I also focuses a lot on the strategies. Monetary strategies is just like the strategies in a war, you cannot always commit 100% of your forces.

How my advice work

I advice by building expectations of the problems to come so people don’t sell in panic. I suggest good times to get in based on my own analysis and people’s situation. Which, I believe, is the fairest way I can go about doing this without destroying the friendship.

Why am I being so careful? Because someone did hold me responsible for their losses and the relationship has since soured. The psychology of human is this: You are not going to blame yourself, so you are just going to blame the next person with the most control.

How it happened

It was one of the people I communicated with when I first started out. We were more like investment buddies sharing our findings together, but I am the one who is in control of the direction of our investments. The problem then is I had no idea how much money he has and what kind of tolerance he have on losses. Starting in 2007, I have maneuvered my buys fully expecting a recession and at worst case a deep depression. Thus, I didn’t commit most of my resources until October and am now fully committed except for cash reserves for living (The reason of which is a mystery to some and is something that I will go over in another post). The strategy were not communicated, but the stock buys were circulating freely. Partly because we have reserves on revealing our financial worth. So he sold once his tolerance is reached while I don’t mind a swing of 50% in my net worth.

Jackpot winner

Take the example of the guy who won the 649 Jackpot. The expectation of his friend from him changed dramatically as soon as he won. He is now thrown into the pit of the riches where nobody have sympathy for. I can only imagine the shock that he is experiencing and the adjustments he has to make to people’s expectation of him. After all these are basic human instincts. I’d do the same if someone I know won. And as someone who’ve gradually increased his own net worth over the years, I understand a bit of what he’s going through.

From poor to rich

As an example from my life. When I just graduated, nobody expects me to pay for anything. My relationships with people were more like co-conspirators on getting things for free. It was an adventure. Nowadays they call me cheap when I try to do that. Probably because I mistakenly revealed certain indications that I am well off. It can’t be helped because your habits start to change as you grow wealthier. For starters, pocket change is now $5 instead of $2 and coins of $2 is now pocket change that you don’t mind losing on the street. As these threshold increases, so does the interactions in your life.

Generosity

Generosity is another tag that you get when you are richer. You are not pinched for money so you can actually give without regretting. You can participate in more diverse spectrum of events instead of going for a boring stroll in the park all the time. Well, you can always do that, but my difference from others is that I only want to be able to do that when it doesn’t hurt my wallet.