Purpose and Prosperity Aren't Necessarily A Match

Thoughts for the Week September 14, 2018

Last month we wrote about Brian Portnoy’s book, The Geometry of Wealth – How to Shape a Life of Money and Meaning. Having read through it a couple of times now, the book has earned a spot on our recommended reading list. The boring title (right?) hides a rich set of narratives – insights built through stories and historical context, and a recollection of mistakes about money and wealth the author has made along the way. 

This is Portnoy’s second book, and reflecting, he now feels he wrote the wrong book first. His first book, The Investors Paradox, was narrowly focused on making optimal investment decisions, picking the best funds, and explaining the behavioral errors that plague investors. He realizes now it was a book principally about getting rich and having more. He feels he skipped over the more relevant and interesting topic: What wealth means to us individually, and how it changes us throughout our lives. 

Portnoy thinks about things differently now, and as his children get older, he wonders how their lives will unfold. He explains, “Like any parent, I worry about whether my kids will find happiness and fulfillment. Of course, I’m hardly worried about the stocks and bonds they might own someday, but I am concerned about whether they will be able to afford the lives they want to live.” 

What he wants for his kids is the same thing he strives for in himself - “funded contentment.” We haven’t heard it phrased that way before, and it makes total sense to us. His suggested method: First, explore and define what matters personally to you. Second, set priorities (sleeping well at night is probably higher on the list than private aviation). Third, make decisions according to those priorities. Fourth, keep it simple, but that doesn’t mean easy.

Of course life is a complex and dynamic process. Priorities change, wealth fluctuates, and we are constantly influenced by others. Sometimes we think have it all figured out. Other times we’re unmoored and drifting. Portnoy’s The Geometry of Wealth is not the perfect solution to a life which we don’t always control, but the book offers a framework and awareness that can help us navigate the uncertain times.

Now let’s dive into one of our favorite topics from Portnoy’s book.

We don’t write checks made payable to “Purpose”

Wealth does not equal purpose. There may be a strong correlation, or perhaps wealth makes a purposeful path more achievable, but wealth is most often not the defining aspect of life. Few wish their head stones to be marked, “She died with a lot of money.” 

This builds into our work with clients, including many founders preparing for a sale of their business, or navigating life after the sale. A large deal leading to a pile of money is happy news, but just one part of the math behind underwriting a life of “funded contentment.” We often spend hours with clients discussing what brings joy, or what causes fear and anxiety. None of which can be captured in a spreadsheet or cash-flow model. And those things change – what caused anxiety while running an operating business may not be what causes anxiety today. Or a year from now. The conversations are open-ended, and ongoing.

We don’t claim to have the answers – we’re not gurus. Neither we nor anyone else can define purpose at the individual or family level. That is up to the individual and family. But we can listen, we can share perspective and past experience, what’s worked and what has not, and help shape the conversations and train of thought that may help break new ground. We’re all ears!

Enjoy your reading and your weekend.

Mike, Scott, Zack, Cate, Marina, Julia, and Willis

Private Wealth Advisors

Mike Burbank, Managing Director Wealth Management

Scott Hafeli, CFA

Zack Schiller, CFP

Morgan Stanley Private Wealth Management  

555 California Street, 14th Floor | San Francisco, CA 94104  

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