One Fatal Mistake Every Giver Must Avoid
I’ve seen it too often. It’s the story of a giver. He or she is someone who is just sailing along. The business is going well. The team is in place, and they are beginning to enjoy the freedom of being able to step away from the business. And their giving is at all time record numbers. They are having fun.
But tragedy strikes—usually without warning. What is the cause? Their prosperity causes them to take risk outside their expertise. They begin to think they cannot fail. They are ready for new adventure so they begin working and investing in an industry in which they are not familiar. They tend to use the same people and same approaches.
It is pride. Jim Collins in his book How the Mighty Fall calls it hubris born of success.
When I last talked with Steve (not his real name) about 2 years ago, he’d built up a net worth of $40 million. Much of it was illiquid, but he also had a pretty good supply of cash. He hated to see his cash sitting on the sideline, so he began investing the cash into loan portfolios, intellectual property, and other privately held enterprises. All of these “opportunities” were outside his normal realm of expertise.
When I next talked with Steve, his cash was gone, and his outside investments were secured by loans on his other holdings. He was filing for Chapter 11, and his wife was divorcing him. His giving was gone. Sadly, he still insisted that his investments would make it. When I talked to his other family members, they told me that Steve was no longer listening to anyone.
One fatal mistake—not bad investments—it was just pride. Indeed, how the might fall, and with it their opportunity to give. Avoid that fatal mistake by constantly being in relationship with those who will hold you accountable.