Two philanthropic advisers on how sudden wealth affects you, and the three things to set up now.
Right now, an unusually large number of people in tech are on the edge of an extreme wealth event. Through a tender offer, IPO, acquisition, or vesting equity, they will go from a salary to tens or hundreds of millions of dollars almost overnight. This post is for them.
We are Jack Lewars of Ultra Philanthropy and Chloe Cockburn of Just Impact Advisors, two philanthropic advisors with 18 years of combined experience. Jack focuses mainly on global health; Chloe focuses on U.S. criminal justice reform. We have watched many people go through this transition, and we've seen people make avoidable mistakes. Our goal is to help you feel less overwhelmed and more prepared before the money arrives.
As we each run a philanthropic fund, we could benefit if you follow some of this advice. Weigh it accordingly.
If you only have a minute, make a plan now to do these three things:
1. Pick a small group of trusted friends and advisors, and ask them today to help keep you on track.
2. Talk to a tax advisor before any liquidity event. Some of the biggest decisions, like how and when to give shares, can't be undone after a sale.
3. Write down two numbers: how much you'll give in your first year (we suggest at least 1% of your wealth), and how much of your time you want to spend on giving.
How will sudden wealth affect me?
You don't need to become "the type of person who has extreme wealth," whatever that image means to you. You are the same person you were six months ago. However, the money will change how the world relates to you.
You will no longer get honest feedback. Almost everyone around you will have a strong incentive to keep you happy and stay in your good graces. Very few people will tell you an idea is bad, and almost no one will point out a mistake. Without feedback, it gets harder to stay considerate, keep growing, make good decisions, and, above all, course-correct