Defining Wealth -- continued

At the beach

This is the 2nd in a 3 article series written in 2011 by Thomas. A prologue and an epilogue have been added to this one.

by – Thomas Twombly

artist - Daisy Lopez

Prologue

The following missive on “Social Wealth” we originally published almost 13 years ago, in our newsletter of July of 2011. I’m pleased to note that the message remains completely relevant today, though much has obviously changed in the interim, and everyone referenced herein has grown older and has certainly matured, just as I have. The only thing I have added is a new epilogue, because my perceptions have expanded as time has passed, and my sense of appreciation for the concepts I was exploring back then has matured in some very unexpected ways. I am incredibly grateful for those developments. They make me feel all the wealthier. I hope you find my musings thought-provoking.

Defining Wealth – continued

Last month we touched on the notion that there are other meaningful dimensions to wealth besides the current market value of all that you own. But how do we define those dimensions? 

 And just as there are philosophies and systems to manage the material side of your net worth statement, is it possible to have a philosophy and process for purposefully building, enjoying, and stewarding the less visible dimensions of your wealth?

 And more importantly, shouldn’t they be interconnected?

To sketch out one of the less-obvious dimensions of wealth, I’d like to recount a personal anecdote. A few years ago, as my son Gray was beginning his sophomore year in high school – the time when grades really begin to matter in the college application process – we were having a conversation about the importance of diligence and hard work. I, of course, was trying to emphasize the value of his attention to that part of his life. He, naturally, was trying to get me to lighten up and relax. “Da,” he said only half jokingly, “there’s more than one kind of intelligence. I’m focused on social intelligence.”

That comment has stuck with me. While I admit that it irked me at the time (it was designed to) I also admired the validity of his point. The fact is that Gray has a large circle of influence for one so young. His friends are impressive – every single one I’ve met is intelligent and fun to talk to. He readily puts himself into new groups and unfamiliar situations. Teachers and adult co-workers regularly comment about his disarming style and easy conversational skills, and he’s proven himself to be incredibly resourceful at meeting and engaging people in all walks of life. He expects to succeed when he sets out to make a new friend, talk his way into a new job opportunity, or cajole a mechanic into helping him work on his 1964 Volvo for a reduced rate. He’s courageous about risking disappointment or rejection to build those personal connections. These are some of the building blocks of social wealth, and even if his grades are less than perfect, they give me optimism for his future.

Social wealth is much more difficult to quantify than material wealth, but think of all the connections you have – your closest friends, your colleagues, your acquaintances, your professional contacts, the members of your club, neighborhood, social networks, or church. Think about your reputation, and your ability to build trust and have influence with these people. How important are these connections and abilities to your sense of well-being and security? Think about the people to whom you could turn, and who would readily respond if you needed help. Think of the people for whom you would instantly put aside whatever you were doing if they needed your help. When you do so, doesn’t it give you a sense of fulfillment and belonging that goes beyond what’s reflected on your balance sheet? I hear constantly from people that this is a critical part of their overall wealth. It’s not surprising, therefore, that social scientists have found that people with a large number of personal connections tend to experience greater levels of happiness and fulfillment. It’s also worth noting that recent studies of disaster survivors – from hurricane Katrina to Japan in recent months – have shown that those with the most robust social networks fared best in the recovery process. Clearly, social wealth is critical to survival and prosperity.

Each of us as individuals, or as families, or as groups possesses a certain measure of social wealth. Each of us also has the ability to build upon and shepherd that wealth in a purposeful manner – but it requires thought, reflection, and action.  People with high levels of social wealth generally don’t get there accidentally, and they certainly don’t stay there accidentally. They make intentional investments – of time, attention, talent, and often money - into the people and social organizations that surround them. They’re also purposeful about surrounding themselves with people and organizations who value their trust, respect, and input.

It’s possible to build great social wealth without ever accumulating significant material possessions. Mother Teresa, The Dalai Lama, or Gandhi come to mind as a few of the significant influencers whose wealth and investments have been personal and spiritual as opposed to financial. It’s also possible to transform massive financial wealth into great and lasting social wealth – like Andrew Carnegie, John D. Rockefeller, and other famous philanthropists whose gifts redefined their legacies, and continue to influence our culture to this day. 

For most of us mortals, though, success is a matter of balance. We must steward our financial resources well in order to sustain ourselves, or to invest in our children’s or grandchildren’s future. We must shepherd our personal and social resources well for the same purpose. We have to be conscious of the personal, social and financial legacy we wish to leave behind – and invest our time, attention, talents and assets accordingly. Most importantly, we must integrate the management of these dimensions of wealth into one overarching worldview. How can we build wealth if we haven’t defined the totality of what it means to us? How can we know when or how much to invest in a financial or material asset unless we have a clear picture of what we’re trying to accomplish – and how that investment will help get us there? How can we make conscious choices about what to spend and what to save, what to give and what to keep, what to indulge in or what to sacrifice for, unless we’ve explored the full range of the dimensions we call wealth?

Successful individuals and families engage in these questions regularly. They also look for discerning advisors who understand them and can help them align their financial wealth-management activities with the softer, but equally important, activities of social and personal wealth-management.

Epilogue

My son Gray had just finished his senior year in high school when I wrote this piece, and my daughter Kelly had just completed the ninth grade. I remember looking forward with a growing sense of dread back then at the many years of college costs rapidly heading my way – two years of which would eventually be doubled up, because Gray chose to take a “gap year.” I was worried about how I was going to make it all happen. In other words, I was experiencing significant financial wealth anxieties.

What I could never have anticipated was what both of them would go on to achieve in creating social wealth for themselves during the next 13 years. And even more surprisingly, just how much their individual journeys and investments would eventually add to my own sense of social wealth and well-being. It took time, but the interconnectedness I wrote about back then has revealed itself in some ways that are truly stunning to me now - and for which I am incredibly grateful.

After completing four years of college, Gray decided he wanted to learn everything he could about the construction business. True to form, he picked up the phone and cold called a man that I had worked for during my high school and college summers, who had built a very successful homebuilding company in New Hampshire over the ensuing decades. In less than 45 minutes, Gray had talked his way into a job offer, and the following week he drove off to the northeast to begin the next chapter of his lifetime adventure. Almost eight years later, he now leads his own steadily growing construction business. And in the process, he has built deep personal trust with a large group of people in the surrounding communities, including several that I had once known for a short period of time in my younger years. His connections have now rekindled many of my connections that I had thought were lost to distance and the passage of time. And his integrity and his careful attention to detail in his work have shone a light of respect on me from those folks that I don’t believe I had ever earned on my own way back then.

In similar fashion, my daughter Kelly chose to attend college at my old alma mater (and unquestionably rescued and upgraded the family reputation in the process.) She took classes from professors I had taken classes from once upon a time, and she became good friends with some of the sons and daughters of my old classmates - people I hadn’t seen in decades - reviving old friendships I had also thought were lost to time and distance. Connections of hers have led to reconnections for me, to the creation of new adult friendships with diverse and interesting people who were never in my immediate social circle when I was an insular, immature, and insecure student, and to the blossoming of a completely new relationship with our alma mater for both of us. This last May she attended her fifth reunion while I attended my fortieth, and we both interacted with each other’s friends and classmates over the course of several days. Shortly afterwards, she accepted a position with our college’s endowment office, and she is now interacting with the Investment Committee, members of the Board of Trustees, and philanthropically minded alumni around the world on a regular basis. And since Twombly is a fairly uncommon surname, this has led to discovering all kinds of otherwise hidden interconnections.

Time and the effects of compounding clearly aren’t just financial functions. They work wonders in the stewardship of social wealth, too. The long-term significance of these investments to my current sense of wealth and well-being has been among the great revelations of my recent years.

Thank you for your confidence and trust,

Thomas Twombly

President

Next month: Defining Personal Wealth