Yes, I want you to at least think about and make a decision about how you might give some of your wealth away.

I'm not going to do that.

What you choose to do is up to you.

But the key is that I think it's important to consider deeply, to choose and to acknowledge that you now have capacity to participate in your community, or in the world at large, in ways that you perhaps had not been able to prior.

As the realization of our accidental wealth grew my wife and I became more philanthropic out of a sense of deep gratitude for our good fortune. "Giving back" was a very real and tangible thing to us. We'd always participated at some level, it's how we were brought up, but as our capacity grew we knew it was only right that our participation grew.

One of the saddest realizations I had some years ago was hearing from an organization what it meant to be a "major donor". Major donors are those who give gifts of a perhaps higher than average dollar amount. Organizations often specifically acknowledge major donors in some way to encourage their continued participation, and the participation of their peers. (It's not a case of not appreciating the smaller donors, far from it, but in terms of prioritizing an organizations extremely limited resources it makes sense to focus a tad more energy on those who participate at a higher level.)

I was shocked at how low the major donor threshold was.

I fully expected many more people would be giving larger gifts than they apparently had been.

What that means to you is that with extra capacity comes extra opportunity: you have a unique ability to positively impact the causes you might care about to a level or degree that you might not even realize.

Your gift might mean more than you think.

Naturally along with family and friends, non-profits and other worthy causes - and even a few not-so-worthy causes - will come to you. One of the hardest things for me to do is to say no. Even within my philanthropic interests there are so many possibilities, organizations and causes that it's painful to turn any away. My approach has been simple: plan. Set priorities, research and choose the organizations you want to support, and then support them according to your plan. Knowing that you're supporting, by choice, one organization makes turning down others a little less guilt-ridden.

Similarly, when the opportunity arises, I splurge a little. Things like being a leader in the office collection for something, visiting a corner fund-raising car wash and over-paying, buying that extra box of girl scout cookies, whatever. I've talked about being generous in small ways in general, and it applies even more so when it comes to philanthropic opportunities. You have the ability to do something that will surprise you with it's significance to the recipient. And that can feel good.

Finally, philanthropy isn't only about money, it's often about time as well. You might quit your day job, or cut back or whatever. The the bottom line is that if you have more time as a result of your accidental situation, it's something else that you can offer. Particularly if you have skills, but often all you need is a passion for the mission of whomever you might want to work with. Once again, the opportunities are many.

What I really want to leave you with here is a sense that philanthropy is something important, something that you really want to sit down and consider. Planning what your goals are and taking stock of your available resources can help make sure that you make decisions with a purpose - whatever those decisions might be. They'll help ensure that sometime down the road you'll not have missed an opportunity you didn't take the time to realize you had.

The conclusion we've arrived at is this: except under exceptionally rare circumstances we no longer make loans to friends, family or business acquaintances.

This has been a hard, and yes sometimes expensive, lesson learned.

Hesitate. If in doubt, don't do it. At least not without thinking long and hard about it.

Here's the scenario you must be prepared for: what if they miss payments? What if they don't pay you back at all?

What recourses do you have? Even if you have the loan all properly written up and formal - are you prepared to send your friends or family members to collection if they don't pay?

Either way you lose: if you do nothing you'll feel that your generosity is being taken advantage of, and if you do take steps you, and your borrower, are likely to end up with hard feelings towards each other.

It's not a pretty picture.

And even when things are going well, it can add an awkward dynamic to a relationship - in a sense as a lender you're placed in a position of power with respect to your borrower, and even if no one every explicitly notices that, it can still color the relationship.

Like I said, I've been there. Repeatedly. And the conclusion I've arrived at is: no more.

At least not without a lot of really deep and hard soul searching.

I don't want to give the impression that it never works. It certainly can - for example I'm carrying a mortgage contract for property we sold to friends some years ago and it's been working just fine. As far as I can tell our relationship remains unchanged. It's still a risk, but the formality of a real estate contract and the fact that this type of transaction is not uncommon, I think, helps make it less of a special case.

But I've also made business loans to friends who've apparently disappeared or who've simply failed to keep in contact. And we've made personal loans that have extended well beyond their initial terms.

Could I do something? Perhaps. Should I? I don't know. Will I feel bad if I do? Probably. Will I feel taken advantage of if I don't? Definitely.

Even though it can work sometimes, the conclusion my wife and I came to is simply to avoid it if at all possible.

One reaction is to consider giving gifts. If you know you'll never see the money again, sometimes the right thing to do is acknowledge that up-front. But that too can also add an unwanted dynamic to the relationship depending on the situation.

Another possibility is to use the formality of a loan to make what we knew was a gift acceptable to the recipient - but that too has it's share of issues over the long term.

And yes, I know too that even saying "no" has it's share of problems, depending on the dynamics of the relationships involved.

The benefit of "no" is simply that you're done. Sometimes the relationship may take a short term hit, though my experience here also is that more often than not, it doesn't. And, also more often than not, your borrower is often forced to confront the issues they're dealing with a little more directly on their own.

That's frequently also a good thing.

Obviously I can't make specific recommendations on what you should do in any particular situation - only you know what's right for you and for the relationship involved.

But I can say this: don't take it lightly. Think deeply about how what you might do will play out in the long run, and how it might impact the relationship with your potential borrower.

As hard as it is, sometimes it's simply not worth the cost.

I mean, who wouldn't want the opportunity to say that they were truly "debt free"?

One debt down. And it felt pretty good.

That left our house as our only outstanding debt.

Now, a mortgage isn't as obvious a decision as you might think. While a car loan or a credit card balance is an obvious drain on your wealth over time, mortgages aren't quite as simple. Because of the comparatively lower interest rates and the tax advantages that the U.S. tax laws give to home mortgage interest payments ... well, it gets a little complicated.

In fact, many financial advisors (and remember, that's not me) will tell you that you'll make slightly more money in the long run if you actually keep your mortgage for some time, and invest the funds that you might have used to pay it off. It's a complicated calculation that involves the interest rate on your mortgage, how long you've been paying on it, your tax bracket, and the return you can get if you invest those funds instead.

We didn't do that.

Oh, we did the calculations and got a handle on what the difference would be. But we also factored in things like our tollerance for risk and our own long term goals.

We paid off the house.

It felt great.

We were 100% truly debt free.

And when time came to purchase our next home, we paid cash. That felt great.

We remain debt free. We don't purchase cars very often, but when we do, we simply pay for them. I carry four credit cards, but I always pay off the entire balance every month.

So what does this all mean for you?

Simply this: be aware of your debts. Consider whether paying them off makes financial or personal sense for you. Now that you have net worth one of your goals, hopefully, will be to manage it in such a way to not only have it last, but also to use it wisely.

Many would consider eliminating interest-bearing debt one of the wisest first moves you could make.

As the title of the article says, "Neither a borrower ... be".

I'll address the second half of that famous quote in the next essay.

My opinion? A huge mistake.

No, not the quitting, necessarily, but the lack of thought put into the decision.

Having money doesn't mean that quitting your day job is the right thing to do. There more to work than just a pay check. Much more.

In an earlier essay I mentioned that I'd seen co-workers who'd "won the stock option lottery" leave, only to return a couple of years later nearly broke because they'd run through all their "winnings". Well, I also saw folks leave, only to return after a time because they were bored, uninspired or just unhappy without the structure of "a job" in their lives.

Not working isn't always all it's cracked up to be.

Now, I could get all metaphysical and talk about how people need to feel that they have a purpose in order to be happy, and that for many an important and appropriate purpose is their career or even just a job. And I'm sure there's a very deep discussion that someone has probably already had on meaning and purpose and self-actualization as it relates to all that.

I'll just put it this way: You need to have something to do.

Quitting your job is silly if you don't know what you're going to do next. That kind of retirement kills at any age.

Don't Leave, Go Instead.

Don't leave your job. Go to something else.

It's an important difference in perspective.

Don't leave your job just because you can. Leave your job because you have something else to go to. Something better, something that perhaps doesn't generate income, but it's some thing: travel, volunteering, a new business, a hobby, whatever, something. It just has to be specific and thought out before you jump ship.

Don't leave until you know the answer to "What Next?" Once you have that answer, go there.

The only difference your newfound wealth really makes is that you can now choose "what next?" without as much regard to its income generating potential. That's all.

But there still needs to be a "what next".

My Approach

I kept working at my company longer than I needed to financially; probably a couple of years longer. I kept asking myself "what would I be doing instead?" (aka "What Next?"), and for the longest time it looked so much like what I was doing at work that there was no reason to leave. (Yes, I really enjoyed my job.)

One day I decided that "other things" I wanted to do were creeping up on me, and that I needed more hours in the day. That's all, just more hours in the day. I went part time for a while, but eventually when those other things called, I left my job in perhaps the most extreme example of simply trading time for money.

But I'm still working. In fact, I often joke that I'm working harder now in my "retirement" than I did at my job.

And I honestly think that that's key; to find something that you'll enjoy doing so much that not only does it give you "purpose", but it gives your life a little direction and personal fulfillment.

And it doesn't matter what you call it, "having a purpose", "doing something", "working", "playing". It's just that when the opportunity arises don't take it lightly. Think long and hard.

Don't quit your day job.

At least not right away.

Why? It feels good!

Many folks will say that what I'm doing is wrong for so many reasons: I could be totally mistaken about that counting scenario, the single bill could be lost, certainly kettles have been stolen, and I'm missing out on a tax break, and so on. There are many excuses not to do it.

And yet, it feels good. So I do it anyway.

Once you've accidentally (or otherwise) achieved affluence it's time to start thinking about "giving back", in whatever way that might have meaning for you. And yes, I'll certainly talk about true philanthropy at another time. This is more about simple generosity that your newfound affluence affords you. "Philanthropy light." Nothing that has to break the bank, and yet enough so that you, and perhaps your recipients can feel good about it.

Over-tip. Unless you're trying to send a message for bad service, develop a habit of being tipping a little too much. Too much feels better than too little, doesn't it? As I said, it doesn't have to be a big increase - normal tipping for meals in the U.S. is something like 15-20%. So, tip 20-25%. Chances are you're not going to miss that extra 5%.

Tip when you normally wouldn't. Did you know that it's nice to tip the housekeeping staff when you leave a hotel? For a long time I didn't. For me it's perfect, since it doesn't have to be any of that intimidating face-to-face kind of interaction, just leave some cash in the room and walk away feeling good about it. (Check the tipping guidelines sites for ideas on how much. And of course, since we're here, round up a little.)

Throw a few dollars in the charity cans at the grocery store checkout counter. Buy a few extra items to throw in the food bank collection there too.

Buy Girl Scout cookies. And Camp Fire mints. And the neighbor's kid's fundraiser what-ever-it-is.

Sure, there are those who'll attempt to abuse your generosity. Naturally you'll want to stay away from solicitors you know aren't legitimate, and those for whom you may have specific opinions. For example I never give to panhandlers. That's all perfectly fine and I'm certainly not saying be irresponsible or that you need to somehow compromise your values.

I'm just saying be generous. Round up. Get used to giving in small ways.

It's actually harder than you think, especially if you've come from a background of saving or scarcity. It's sometimes difficult to give money away, even small amounts, "just because" or when there's no immediate, tangible return.

My position is that there is.

It feels good.

It makes others feel good.

And it's great practice.

OK, many things are really more valuable than money, but for this discussion I'll be focussing on time, and how some habits that you developed before wealth may not be serving you as well now.

Before what ever process or happy accident brought you to a position of affluence, you had to watch your pennies. Or you should have. In fact in a very real sense you still should, but that's a discussion for another day.

During tha time, while living appropriately within your means, or perhaps even just living paycheck to paycheck, you developed strategies to pay the bills, and hopefully accumulate wealth.

One of those strategies is often that your time is worth less than your money.

It makes a lot of sense.

It's the classic "do it yourself" scenario. You can save money by doing things yourself - be it cleaning the toilets, building the deck, doing your books or installing a new faucet. You trade your time and a little elbow grease for saving money.

In fact, it may be one of the strategies that got you here. Nicely done.

But now that you are here, it might be time to reconsider. Now that your situation has changed, and you have the resources to perhaps make difference decisions, are those old habits still serving you well?

One of the local housecleaning services advertises with the slogan: "Life's too short to clean your own home." There's a deep truth in that sales pitch. If you have the resources to do otherwise, is cleaning your own home what you would choose to do? How about the other things you do day to day?

Hiring someone else for things you do, call it handing off or outsourcing or whatever you like, is something worth considering, and well worth exploring. Think of it as purchasing time. You're trading money, which you have and perhaps continue to generate, for time, of which there is only a limited supply.

And all that is actually not really the point I wanted to make here. At least, not all of it.

You see, this urge to save money at the expense of time runs deeper than whether or not to call a plumber or hire a house cleaner. Much deeper.

The big decisions are easy. They're obvious, they grab your attention, you can make a decision one way or the other objectively and move on.

Habits, on the other hand, are harder to break.

Let me give an example.

As I'm sure is true for you as well, there are several gas stations in my home town. And, as fate would have it, the cheaper gas station is further away - about three miles, out of my way. There's a more convenient one that I drive by every day, but naturally it's more expensive.

On top of that, everyone knows that the cheaper one is, well, the cheaper one. So it's always busy. It's not uncommon to have to wait for a while before being able to fill up.

You can probably see where this is going.

One day I did some math. On average say I put in 20 gallons and the price difference is as much as $0.20 per gallon.

$4.00.

I'm saving $4 by using the cheaper gas station each time I fill up.

But I'm spending an extra 10 to 20 minutes to save that $4. Between travel time out of my way to the other station and occasional wait times it really does add up.

So, not long ago I decided that was a poor use of my time. I now fill up at the quicker, more convenient station. I pay $4.00 extra for doing so, but get 10-20 minutes of my life back each time. It's worth it, to me. Not to mention that it's less stressful than jockeying and almost competing for a position at the pump.

One of the rules of thumb for estimating the value of your time is to take your annual income and divide it by the number of hours in a work-year, 2000. I don't really like that approach, because there are so many different ways to measure the value of time, and we're not all actually working. However it's one random rule of thumb.

Another random rule of thumb is that if you can pay someone else one half of that or less to do something for you it's worth it. Again, I'm not sure I agree, but it's a starting place for the thought process.

$4 for 10 minutes is $24 an hour. That's a fair trade for me.

Looking for bargains is a hard habit to break. And, in all honesty, just "breaking the habit" isn't the right thing to do either. I'm certainly not suggesting that you start spending wildly and rationalizing it by saying "but I'm trading money for time". You might be, you might not be. You might also be spending more than you would objectively think that it's worth.

The point here is simply to realize that time is a precious resource, and you are in the fortunate position to be able trade some money for time. You can do it in big ways, by having others do some of what you have traditionally done. You can also do it in small ways that add up, by changing some of your habits.

In either case, it's well worth considering how you spend your time, how you want to spend your time, and what all of your options really are.

I think we invested more than we spent. (I know we lost more than we spent, since this was also just before the stock market crash of 1987, but that's a story for another day.)

One of the things we spent money on was a new car for my wife. It was sorely needed, her previous car having been nearly totalled the year before.

Naturally we were in a position to get a "nice" car, and we did. This was 1987, and the car, a new Pontiac Bonneville, cost something like $20,000. To the car's credit, and to my wife's, it lasted nearly 10 years, so we feel like we truly got our moneys worth out of it.

Or did we?

Two. Million. Dollars.

Sometimes hindsight sucks.

And that's really part of the point of this essay.

Hindsight is great, when you can learn from it. But if you use it to fill your life with "oh, we should have done X", when there was no way to know at the time that X was the thing to do, you'll just drive yourself nuts.

Perhaps $2,000,000 worth of nuts.

In reality, there was no way we could have predicted what was going to happen to our company's stock over the next 20 years. In fact it could just as easily have gone the other way. So, we hedged our bets. But we did it what we hoped would be a sensible fashion.

We spent some. We saved some.

We grew wealthy anyway.

Perhaps not as wealthy as we could have been, had we been able to predict the future, but wealthy enough.

And in the mean time, my wife had a very good car that lasted her for a long time. And loans got paid off. Yes, perhaps a few toys were purchased. And some philanthropy was enabled.

So what are you doing?

Are you avoiding your wealth for fear of purchasing what'll turn out to be a two million dollar car?

Are you spending right and left because you don't think it'll last?

Or are you somewhere in-between?

Think about it.

I believe strongly that there is value in the here-and-now, just as there is value in preparing for the future. The trick, of course, is balance.

In hindsight, I don't regret our decisions. Even after having done the math.

We've gone back and forth between the old "one checkbook or two", or better yet the, "your money, my money and our money" debate. Even today we may have coalesced accounts, but there's still a sense of "yours, mine and ours", though what gets used when and for what tends to be very loose.

But I don't think we've ever argued about money, regardless of how much we've had.

As I said, I'm a really lucky guy.

Our money management styles are very compatible. Everything from how much we think is spending "a lot", to our tolerance for risk. Not identical, but very, very compatible.

And it's been like that both before, and after wealth arrived.

•

The point of all that is simply this: when it comes to money management, I believe that past performance is a strong indicator for future success. And I believe that the arrival of wealth more often than not will make money-related relationship issues worse, not better, unless you consciously acknowledge it and work at it.

Sadly, the fact that my wife and I are able to maintain a fairly healthy status quo is the exception, I think, not the rule.

And yes, it takes some work.

A lot of people think that becoming wealthy will erase any money problems with their spouse. I mean, once there's enough money for what we need, what's there to argue about?

There's a bigger pile of money to argue about, that's what.

I'm certain you've heard of once happily married lottery winners that are, within a few years, not so happily divorced. It's the "fortune" part of "fame and fortune" that puts many couples at risk.

Many things can happen when wealth arrives. A common reaction is that differences in money management style, previously somewhat similar, become magnified. Perhaps someone who's slightly risk adverse might become downright paranoid, irrationally afraid to lose it all as quickly as it came. At the other end of the spectrum a habitual over-spender might now be given much more resource to work with, and overspend even that.

Whatever the differences between the two, they are magnified, often greatly.

And each spouse is left bewildered and angry, wondering why money somehow changed the other.

The issue isn't that things and people change, they can and do. The issue is that it can drive spouses further apart unless they're approaching their newfound situation rationally, and together.

•

The other risk that couples run revolves around the implications of wealth arriving ostensibly because of the work or luck of primarily one of the two. For example one spouse gets a job that turns out to provide a wealth of stock options at some later time. Or perhaps the years of work put in by one of the two finally begins to pay off in a big way.

The issue here isn't about specific ways of rationalizing it.

The issue here is about acknowledging it.

The issue here is about realizing that it could be an issue.

The issue here is about making sure that whatever the feelings are that result from the discrepancy, they're somehow dealt with. Openly and up front.

The "other spouse" might feel resentful, or under-appreciated, or somehow left out. Perhaps they don't feel worthy of participating in the good things that can follow the arrival of wealth. Perhaps they don't feel they're getting their fair share of either the wealth, or acknowledgement for how they did participate.

Perhaps the lucky one feels particularly entitled, or somehow resentful of his or her spouse's lack of individual fortune. Perhaps he or she sees the wealth as "more mine" because it was due to his or her efforts that it arrived.

The specifics don't matter. Really.

What matters is that when and as wealth arrives you do what's right for you as a couple to acknowledge your newfound positions, and decide how you as a couple are going to deal with it all.

•

A small example.

My wife and I have "a number", or at least an order of magnitude, that if we're about to spend over that amount we at least mention it to the other. If it feels like we need to, we discuss it. Rarely is the decision to spend reversed, but we've both participated. For where we are financially, the number is probably lower than where you would think. In our relationship it's a sign of respect and an implicit acknowledgement that we're a couple, and that this is our wealth, not just mine or hers.

It works for us.

What's kind of surprising is that I don't think we ever really explicitly choose a number - it just happened of its own accord. Even as it's changed over time, it seems to have changed in unison without anything really explicit.

But we do acknowledge it.

And ultimately that's the point:

Don't just let wealth just happen to you and your spouse.

Whatever the approach to money management between you and your spouse, acknowledge it. Work it. Make a conscious decision to treat your newfound wealth together.

If you don't ... well, as we've all heard, money problems between you and your spouse are probably the fastest way to "screw it up".

Specifically who I am is unimportant. This site isn't about me, really.

I'm certainly no authority. Far from it, actually. I'm just a guy that got lucky. Really, really lucky.

The site's really about paying attention and not taking your good fortune for granted.

It's about not screwing it up.

•

"OK, but ... just who the heck are you?"

Like I said, I'm just a lucky guy.

Yes, I'm a millionaire. Unfortunately in our society saying that is often considered bragging or somehow inappropriate boasting. I don't want that to detract from the content here so I'm choosing to stay relatively anonymous. (Yes, you can find out, but if that's important to you then you're really missing the point.)

I think it was my estate planning attorney that coined the term "accidental income" after listening to the more recent chapters of my life. It's a phrase that I identified with since it feels like an accurate description of several things that brought my wife and I to where we are.

Even though I've had others tell me otherwise, I feel came into wealth by accident.

I certainly wasn't born into money. My parents were working class immigrants who did well for themselves and taught me the importance of hard work, education and just generally gave to me a good set of core values.

I went to school, studied, got a degree, got married, got a job - all very standard stuff. My first industry job lasted a few years after which I joined another medium-sized company. Though I didn't know it when I joined, that company was to become perhaps my industry's largest and most influential player. I was there for 18 and a half years, and then retired.

At the age of 44.

My salary was ok, probably industry average or a little below. What I failed to take into account was something else I got when I hired on: stock options. Over the course of my career with those options, and more options granted later, went from being a few thousand dollars in value to a few million.

I call that an accident. It's certainly nothing I planned on.

We won the "stock option lottery".

So, some years into my career my wife and I found ourselves millionaires. No training, no real expectations, just "here's the deep end of the pool, and by the way, there's money in it".

"Oh, and don't screw it up."

•

So just what do I mean by "screwing up"?

You probably know already. You've heard of actual lottery winners that within just a few years have squandered their new found wealth. Or families that are torn apart by it. Or individuals who "let money change them", and not for the better.

I do recall other "stock option lottery winners" who took their newfound wealth and disappeared for a couple of years only to return after having spent it all. They returned because they needed the money. I also saw those who used their fortune to play the social ladder climbing game: transforming, or trying to transform themselves into society's upper crust. Sometimes it worked, more frequently it didn't.

In my opinion they screwed it up.

But on the flip side I've also seen people survive wealth. Folks who remained true to themselves and their values. People who look and act pretty much the same "before and after money". People who use their wealth wisely. People who continue to teach their children and their community valuable lessons in what it means to have the responsibility of wealth.

It's that later group my wife and I strive to be part of.

So far, I hope, so good. I don't think we've screwed up. At least not yet.

•

But that's just me.

This is really about you. And it doesn't matter how you came to be here: fortunate accident or years of hard work finally paying off.

You're here because you have wealth, or you see it coming.

You're here because you don't want to screw it up.

You don't have to agree with anything I say or do. The goal here is to think for yourself and make concious, intentional choices, rather than letting what you've accomplished slip away through inattention or destroy things that are even more important to you.

I'm hopeful that the experiences I'll relate, the lessons I've learned and that opinions I'll share will help you to make good choices of your own.

I'm hopeful that we can all prevent what we have, accidental or not, from turning into an "accidental expense".