Mom is usually right

Women of a certain age might relate to the following: at some point in your life, you realize that your mother is right about a number of issues. From the obvious—“I don’t like your hair”, to the more practical, “Take a sweater to the movies because it’s always cold in the theater”, our mothers tend to consult the same manual when guiding us through life. There is one other area where my mother was particularly dead-on with her analysis: “Don’t count other people’s money…you never really know how much someone has and you certainly can’t judge your neighbor’s net worth based on the house in which he lives or the car she drives.”

I thought about this after hearing the story of an acquaintance—I will call him “Ned”. Ned lost his “big” job at a major Wall Street investment bank and called me to help him develop a game plan for moving forward. I will admit that I had fallen prey to the old trap of assuming that Ned had a lot of money. After all, he lived in a big house in a fancy suburb; drove an expensive sports car; and his wife was dripping in beautiful jewelry.

What I subsequently learned is that while Ned had previously amassed a tidy sum, he is nowhere nearly as wealthy as I would have thought he was, especially given the appearance he had so diligently created for the world. Compounding the problem was the fact that Ned made an amateur mistake: he held far too much of his net worth in his employer’s stock-when the company’s shares tumbled by over 60 percent over the past year, so too did Ned’s nest egg. And now, he had also lost his mid-six figure job with few prospects of becoming re-employed any time soon.

We talked about how he allowed himself get ensnared in this situation-he sheepishly said, “I was just greedy and have nobody to blame but myself. I got caught up in the toys, the image and the belief that I was impervious to the problems that plagued others. I am coming to you for a reality check – for perspective, and to put together a plan for getting to a better place…at age 45, it’s time for me to grow up and act more responsibly.” I am consistently surprised by how many smart people allow themselves to get into bad situations that are avoidable with just a tiny bit of discipline. Learning that lesson in your twenties or thirties is tough, but doing so in your forties and fifties can be life-altering.

So the next time you drive by your neighbor’s house and see his Porsche parked in the driveway, you may think of Ned and remember what your mother told you, “Don’t count other people’s money…for all you know, he could be broke!”