Living on borrowed shares

It amazes me when smart, capable business people lose track of their own personal finances. The charitable view is that they are too busy building a business to pay attention to their own investments. Besides, we pay someone to handle that for us, don’t we? The cynical view is that a lot of paper fortunes during the Dot-Com mania were just illusions anyway.

The New York Times has a cautionary tale on The Perils of Being Suddenly Rich.

“Part of the bizarre but interesting psychology of the tech boom was the sense of hubris people developed, thinking they were impregnable to losses and defeats,” said Joan DiFuria, a psychotherapist who is co-founder, with Stephen Goldbart, of the Money, Meaning and Choices Institute in Kentfield, Calif., north of San Francisco. “They had a fantasy that things could only go up.” During the boom period, Ms. DiFuria and Mr. Goldbart coined the phrase “sudden wealth syndrome.”

“At what point does the person with the money have some responsibility to know something about what he’s doing?” Mr. Resnick asked. “If you’re smart enough to have made the money, you should be smart enough to figure out something to do with it.”

Leave a Reply

Your email address will not be published.