A question that I constantly ask myself is “How would you spend your wealth once you have accumulated it?”
And for a long time, my answer has been the following:
I’ll snap up mansions far and near, dock a megayacht at one, and deck out a private jet in the most luxurious trims sourced from around the globe. And that’s not all: I’ll throw extravagant parties on all of the above, with (of course) free-flowing alcohol, foie gras, and truffle A5 Wagyu. In short, I’d be living up a real-life Gatsby, with the ultimate goal being the establishment of a new social circle - one that embellishes the ideas of exclusivity, pleasure, and lavishness.
But when I asked the same question to a close friend of mine, all I got was a scoffing response. His answer could not have been more different:
If he was to accumulate the same level of wealth, his strategy would be to accumulate a network of scattered apartments - aiming for distribution and living mobility rather than a single, flashy mansion. His aim is to dedicate the majority of wealth to his goal of self-actualization - helping as many people around the world self-actualize as possible, with relatively little worry towards his material needs.
I could not have imagined a starker contrast between the two answers - the two primary methodologies of personal wealth management. Over the course of the next few days, I aimed to understand why such a discrepancy would exist. Let’s call the first wealth management framework the “Gatsby Methodology” and the second, the “Self-Actualization Methodology”.
One observation upon reflecting on my upbringing is that many of my peers embodied the Gatsby Methodology to a shocking extent. At the NYC Prep School that I attended from Middle School until Graduation, I couldn’t walk a few paces without feeling the sense that I did not really belong. That these schools were created as playgrounds for the ultra-wealthy (hard to forget when the girl sitting next to you is the daughter of Goldman Sachs’ CFO and another person in the grade below is the child of HBO’s former CEO), and they made sure that those who didn’t come from the same backgrounds felt it to its core. Bar and Bat Mitzvahs encompassed ultra-posh venues downtown, with some of Music’s biggest names (think Nick Jonas and Becky G) among the list of performers. And who could forget about Spring Break trips to the Bahamas, where the drinking age is (shocker) 18 - often costing a few thousand bucks for solely a week of pleasure?
Unsurprisingly, this trend has continued at Stanford as well. My failure to adhere to my policy of never clicking past the “you have exceeded your screen time limit” notification on my phone, and subsequently getting my classmates’ ultra-opulent vacations thrown in my face. It’s hard to resist the urge of renting a mansion and a yacht in Cabo San Lucas, and inviting everyone you know who can afford such a trip. Or jetting off to a private island in the middle of the Pacific Ocean, surrounded by nothing but pure nature itself as you relax and escape the horrors of another Academic Quarter.
I do admit that I struggle quite a lot with FOMO - the Fear Of Missing Out - when this is all being thrown in my face. However, this reflection has compelled me to think more of a new framework - one that strikes a balance between the Gatsby Methodology and the Self-Actualization Methodology.
It seems all too common in today’s society of virtue signaling that the only moral way to spend one’s wealth is to distribute it entirely to humanitarian causes. I fundamentally disagree with this statement, because what is the purpose of accumulating wealth if one has no opportunity to enjoy it?
Maybe neither the Gatsby Framework nor the Self-Actualization Framework would be most productive as a personal wealth-management tool. A delicate striking of balance is what sets apart those who manage to hold on to their wealth and those who eventually lose it - while some degree of philanthropic action is necessary, the criticality of the role that personal enjoyment plays cannot be overstated.