Thought Bubbles, and the Stories We Do Tell
by Randy Kaufman, with research assistance from Dustin Lowman
“Talkin’ to myself again
Wondering if this travelin’ is good
Is there something better we’d be doing if we could
And oh the stories we could tell
And if this all blows up and goes to hell
I can still see us sittin on the bed in some motel
Listenin’ to the stories we could tell”
In college, I studied economic bubbles: “an economic cycle that is characterized by the rapid escalation of market value, particularly in the price of assets. This fast inflation is followed by a quick decrease in value, or a contraction, that is sometimes referred to as a ‘crash’ or a ‘bubble burst.’” Bubbles of all varieties have fascinated me ever since. I’ve lived through more than I’d like to remember, and I’ve consumed 18 books on the topic, most recently, and highly recommended, is Christopher Knowlton’s Bubble in the Sun. He tells the story of the 1920s Florida real estate boom, and of course, the ensuing bust: an earthquake felt around the world, the Great Depression.
In the real world, I study thought bubbles — the stories we tell ourselves, which determine who we are: “…narration likely serves to regulate the emotions associated with the events, as well as to regulate the identity or self-implications those events may hold,” as reads a 2015 paper published in the National Institute of Health. Much deeper than mere vehicles for amusement, stories create us from the inside out.
Stories often originate in facts, and shortly thereafter, take on a life of their own, leaving facts behind as distant memories. Never is this clearer than in money stories, or money messages as we call them in the wealth advisory biz. Money makes our worlds in a very tangible way, and interweaves deeply with personal and family narratives. In my wealth management career, I’ve seen different family members take the same set of facts and create very different stories.
When stories collide, money and love often work against each other. Decades-old emotional residue interferes; facts get warped or forgotten; emotions prevail. To collaborate effectively with families, advisors have a duty to root their counsel in fact — to interpret nothing as gospel until we’ve read it for ourselves, chapter and verse.
Freeze Frames
I know as well as anyone how tempting it is to interpret events in the worst possible way. As listeners to my podcast know, the ’08 credit crisis nearly destroyed my company, LongVue Advisors. The downturn convinced me that I was a monumental failure, and that my best course of action would be to close down the business and crawl under a rock. I almost did.
But, I didn’t, largely because of the many friends who stood by my side, and because of my business partner, Charlie, who reminded me that I owed it to myself and my clients to weather the storm. LongVue never became the kind of financial success that I dreamed it would — that is, we didn’t sell it for millions and millions of dollars. However, it became an entirely different kind of success: It showed me all the damage I’d sustained from my inner narratives of perfection. It showed me that I could be resilient, gritty even, as my father always said I could be.
Perfect people don’t fold their companies, the story told me. Or get divorced, it added a few years later. Or get cancer. You’re supposed to be perfect. Why aren’t you perfect? I don’t know exactly where those narratives came from, but I’d never seen them so clearly as I did in those years. Had I submitted to their messages, there’s every chance that I’d be under a rock right now, not remarried, not the Managing Partner of my own wealth advisory firm, and certainly not happier than I’ve ever been in my professional and personal life.
When I could hear that voice for what it was, I could negotiate with it. When I negotiated with it, I began to reach different conclusions — and rewrote the ending of the story. I was not a failure; I was on my way to future success. I not only survived; I thrived.
Lost in Translation
Wealthy parents often avoid talking to their children about the family wealth. Refusing to listen to experts in the field, they listen instead to their fears, and tell themselves stories of what will happen if they do: The kids will become spoiled, and they’ll never learn the value of a dollar. In my experience, nothing could be further from the truth. The parents, in fact, should ask, what if they don’t talk to their children about the family wealth?
Meanwhile, the children tell themselves a much different story. I once sat in a family meeting where the patriarch was going on and on about how little he’d shared with his adult children about the family money out of fear. His fear, not his wife’s fear, and certainly not his advisors’ fear. His 40-year-old son rose up, slammed his fist on the table, and shouted, “And how do you think that made me feel Dad? How?”
To the kids, being kept outside the loop conveyed a lack of trust, disrespect, and exclusion from knowledge of the wealth, which of course they knew was there all along — a quick google search and a few more houses than one typically has made that rather obvious. The patriarch was telling himself one story, the kids were telling themselves another; in that moment, the two opposing stories collided.
One solution to this problem is finding a courageous advisor — one smart enough to understand what matters most. One who fosters frank conversations between family members. While these can be fraught exercises, they give everyone a chance to sync up their stories, replacing hearsay with data, fiction with fact.
Label Makers
Twice in my career, I’ve worked with families where one sibling accused the other of being a spendthrift, incapable of living within their means. In one case, the accused was a young artist; in the other, it was a successful lawyer in his 40s. In both cases, further investigation told a far more complex story.
The young artist wasn’t a spendthrift so much as a bohemian. He lived differently than his sister, the trustee after their father passed, who made the accusation to me as she refused to distribute money from a trust for some of his basic living expenses. Despite any evidence, she somehow interpreted her brother’s lifestyle as fiscally irresponsible. Her view was formed by childhood rivalries, emotion and judgement, not facts. This brother, in fact, bought the few clothes he had from thrift shops, lived in a small house he built mostly by himself in upstate New York, and actually lived a far more frugal life than most, including his sister of course!
In the other situation, when we examined the lawyer’s spending and income, we learned that he was living well below his means, independent of the family assets. In that case, the “spendthrift” label was completely unwarranted — factually inaccurate, and originating in a bias that probably dated back many years.
Different family members live differently. Their values may clash; trouble comes when one interprets the clash as proof of the other’s flaws.
True Lies
Think of that tempting message that begins so many movie trailers: “Based on a true story.” The writers hope we take that to mean the following story is entirely true, and that all the emotional content is justified. But we know that’s not the case. We know that fact and story are different. The facts are like story DNA: Once established, facts give way to much more malleable narratives, which typically cast us or others in overly flattering/unflattering lights.
As we navigate difficult conversations — internal and external — it’s crucial that we ground our judgments in fact. We can’t afford not to. Especially with families, the stakes are too high to gamble on false interpretations. Advisors should guide antagonists out of their respective thought bubbles. Or, as David Foster Wallace said in one of my all-time favorite speeches, constantly remind them: “This is water…this is water…this is water…”