April 14th, 2021 | By: Wil Schroter
When I was just starting my startup career and had a little bit of success, I got the best advice ever from a friend of mine whose family had started a $50 billion company. He said:
"Never tell anyone how much money you have. Only two things will happen — they will either try to take it from you or size you up by it — either way, you lose."
I give that advice to every newly minted exited Founder I meet, and at this point, I've given that advice so many times I figured it was worth a detailed explanation. It actually doesn't matter how much you have (or don't have), the advice is just as valuable.
Like it or not, we are judged by our money. If we have it, people judge us because they don't have it, and if we don't have it, we're judged for what we apparently didn't do to get it. For those of us that didn't grow up with a ton of money, we often have to back into this understanding later in life, and usually at great cost to our relationships along the way.
We can pretend money doesn't matter. We can choose to try to lessen its influence on us. What we can't do is control how money matters to everyone else and that's what we're really talking about here.
In a perfect world, everyone would respect and appreciate what it took to earn that money. But this world is far from perfect, and no one really cares what it took, they care about how it affects them, and that effect isn't usually in our favor.
Our first concern will be how many people want to take that money from us. The thing is, it's never like we'd expect, whereby some evil banker with a handlebar mustache is plotting against our fortunes. No, the people looking to extract money are far more familiar. It's relatives, friends, and that one woman we went to college with back in the day. It's people we care about — and they all want some of it, whether they say it directly or imply it.
Beyond that, it's the larger circle of relationships. It's exactly what an investor will be thinking the next time we try to raise a round ("They have money, why aren't they funding this?"). It's what our employees will think when they feel they are underpaid ("Why can't they pay me more, they are rich!"). The list goes on.
The reality is from the moment we have a wealth event, everyone is going to relate their needs to our bank account. They often won't say it, but they will all be thinking it — especially if they know how much is in there!
Even if someone isn't trying to take it from us, they'll invariably judge us by it. Look at how celebrities and the ultra-wealthy are constantly under a microscope for every action they take. Prior to wealth (and fame), they were regular people like the rest of us. Money creates that microscope, and once we've made it — that microscope is on us!
The judgment isn't our fault per se, but it is certainly our responsibility to manage it. We can once again pretend to ignore it ("I'm the same person, no one should judge me!") but what we can't do is pretend others will do the same. From this point on, all of our actions will be reflected (to some degree) by the perception of our wealth.
Fortunately, this problem has an incredibly easy fix — just shut up about it! Let people guess, but never let them know. Take the conversation off the table by not having it to begin with. The less we talk about it, the less we spin that conversation up, and the less detail we provide, the less "counting of our money" other people can do.
There's no good that comes of it, so unless we're looking for some unwanted attention, there's no upside in sharing it — ever!
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Wil Schroter is the Founder + CEO @ Startups.com, a startup platform that includes Bizplan, Clarity, Fundable, Launchrock, and Zirtual. He started his first company at age 19 which grew to over $700 million in billings within 5 years (despite his involvement). After that he launched 8 more companies, the last 3 venture backed, to refine his learning of what not to do. He's a seasoned expert at starting companies and a total amateur at everything else.