“We can all – even the poorest of us – increase our wealth daily by doing some small thing to enhance the value of our property, our knowledge, our skills, and our trustworthiness.”

– Michael Masterson

Principles of Wealth #38* 

When most people think of building wealth, they think of building net worth. And although having a high net worth eliminates so many vexing problems, it cannot, by itself, give you a rich life. 

When we think of wealth, we usually think of financial wealth. But they are many other forms of wealth.

One can, for example, be wealthy in education or in skill or in knowledge. One can be wealthy in friendship and good will. One can be wealthy in wisdom or common sense. And most important of all, perhaps, one can be wealthy in good health.

We know these things. We believe them to be true. Or, at least, we believe them. But too many people believe them only in theory or, worse, in moments of solitude and desperation. But if one commits to becoming rich, as I did 45 years ago, it would be wise to give these forms of wealth the consideration they deserve.

I didn’t and I paid the price for it. It wasn’t as high a price as it could have been. In my relentless drive to make money, I could have lost friendships and family and even my health and self-respect. I got close a few times.

What saved me, I think, was being married to K, a woman that cared next to nothing about money. No matter how much money I made, it never impressed her. What did impress her – negatively – was all the time and attention I was giving to my businesses and investments at the expense of her and our children.

I’d also give credit to my parents. They, too, cared little for money. They gave their children three of the most important gifts parents can give: a respect for education and hard work and the obligation to take responsibility for one’s own life.

When you accept those three ideas as fundamental values, they shape the way you value yourself. So when my wife (and later my children) chastised me for neglecting my other treasures, I knew, even if I wouldn’t admit it, that they were right.

It’s a cliché to say that money can’t buy happiness. That became apparent to me during the two years I lived in Chad, one of the poorest countries in the world. With the $50 a week I was making as an assistant prof at the University of Chad, I was able to pay for all our living expenses for about $30. And with the other $20, I paid for the full-time employment of two Africans: a property “guardian/groundskeeper” and a “garçon/housekeeper.”

Pascal, the guardian/groundskeeper, lived in a straw cottage next to our small concrete-block home. He had a wife and three kids. He was, as was Pierre, the garçon/housekeeper, diligent and resourceful. And he, his family, and Pierre all seemed to be perfectly happy. They were certainly as happy as or happier than more than 90% of the middle-class people I knew back in the States.

Pascal and Pierre were wealthy in family and friendship. They were wealthy in the skills and the knowledge they needed at work. I never once saw them angry or even anxious or despondent. Their characters seemed to have been forged in a different world.

And now I was part of that world.

I remember sitting on my porch one rainy afternoon, working on a lesson plan and looking now and then at the little garden we had planted weeks earlier. Vegetables and flowers were sprouting. Missy, our Italian greyhound, was barking at a monkey that had taken shelter on the porch. K was inside reading a book. I remember thinking, “One day, you’ll be rich and live in a mansion, but you will never be happier than you are right now.”

Not too long after we returned to the States, I got very busy getting richer, eager to buy my family and me everything I never had growing up. On top of that wish list was a big, fancy house – the very one I had imagined in Africa. I eventually built that house and then, some years later, an even bigger and fancier one. Did they make me happier than I was in that first little cottage? No. I had been right about that. Still, making money was my priority for too many years.

When I turned 50 (19 years ago), I realized how lucky I had been not to lose K and the family through neglect. I had done just enough, through guilt or good judgment, to include in our lives at least some of the important values that I had nearly abandoned. And now it was time for me to step away from the money and start building more wealth in those areas.

I wish I had done that sooner. How could I have forgotten that all wealth compounds over time? Including the kinds that aren’t measured on a balance sheet.

* In this series of essays, I’m trying to make a book about wealth building that is based on the discoveries and observations I’ve made over the years: What wealth is, what it’s not, how it can be acquired, and how it is usually lost. 

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We arrived at the resort after an arduous journey. It was late and we were hungry, so we went straight to the restaurant. GP was sitting at the big table in the middle of the restaurant with about a half-dozen of the waiters and waitresses that report to her. They were eating lobster and drinking wine. Talking and laughing.

We sat down at another table and waited to be served. After a few minutes of being ignored, I cleared my throat to catch GP’s attention. She waved at me, then leaned to the young woman by her side and whispered something. The young woman came over and told us in Spanish, “I’m sorry. The restaurant is closed.”

I was GP’s boss and the GM of the resort. I was there with the principal architect and builder of the entire development. Apparently, that didn’t matter. It was 15 minutes after closing time.

I called GP into my office the next day. “What were you thinking?” I asked. “They’re mis chicas,” she explained. “Mis amigas. We were having so much fun. They really love me!”

Don’t Hire Your Friends… and Don’t Make Friends With Your Employees 

“One of the most important things I’ve learned as an entrepreneur is that the most difficult problems to solve are people problems – and in particular, problems that arise from the personal connections you have with your partners, your colleagues, and your employees.” – Michael Masterson

In 1966, when, at age 16, I started my first “real” business, I hired two of my closest friends to work for me. And it was fine. Between then and 1983, I started and ran a half-dozen other businesses and always hired friends to work for me – with no problems that I can remember.

I began to change my egalitarian view of business relationships in 1983 when, for the first time, I ran a business with more than 100 employees. I hired friends (and even family members) to fill certain job openings. These were hardworking people that for the most part did a very good job. But because of the size of this business, I couldn’t be involved in everything they did. Unlike my earlier businesses, I wasn’t working shoulder-to-shoulder with my worker/friends. I wasn’t able to settle disputes before they began. Nor was I able to resolve personal problems because there were protocols I had to respect.

As a result, I got dragged into some uncomfortable situations. And because I always put my friendships above my loyalty to the business, the outcome was invariably problematic. Feelings were hurt. Productivity was sacrificed. And in two cases (that I’ll never forget), putting friendship first cost me (and my partner) more than a million dollars.

After suffering stubbornly for several years, I made it a rule: I promised my partner – and myself – that I wouldn’t hire friends or family members ever again.

It was a relatively easy rule to follow, and I’ve obeyed it. But I’ve had trouble with the flip side: not allowing myself to befriend employees.

Since I work mostly in publishing and marketing, I have the good fortune to employ lots of very smart and engaging people. Every week, I meet some new employee that has the qualities I seek in a friend: intelligence, good character, and wit. I can’t stop myself from wanting to be friends with these people, even though I know I shouldn’t.

What I do to resist the temptation is tell myself, very consciously, that the desire I have to make friends with them is a sort of mental illness.

I’m serious. I tell myself it’s a morbid combination of narcissism and self-loathing.

And I think, at root, it is. I want to “be there” for these good and interesting people. I want to help them achieve their potential at work. But I also want to help them in every aspect of their lives. In my rational mind, I believe that’s all I want. But in the arrested development of my emotional brain, I want something in return. I want their admiration and everlasting devotion.

It feels to me, as I’m sure it does to you, creepy when I put it that way. And that feeling generally dissuades me.

The Friendship Imperative 

Friendship is a necessary component of a well-lived life.

You can have everything else – wealth, stature, fame, and even power. But if you don’t have friends – true friends – you have a life that is barely worth living.

Yes, friendship matters a great deal. But boss-employee friendships pose problems, all sorts of sticky problems that get stickier as those friendships grow.

Not all of my business partners agree with me on this. Some actually promote work friendships. They say it makes for good company morale and a better work experience for one and all.

Just this morning, I read a loony article in an online business magazine that supported this view. (I will protect the publication and its author out of compassion.)

“Today’s workforce suffers from a lack of work friends,” the writer proclaimed. “Employees need friends to satisfy [their] need for companionship, love, and safety.”

And just in case you didn’t see this coming, he continued with this doozy: “Employees need friendships in dealing with the stress, politics, and hostility that exists in the workplace. They need friends they can turn to when issues arise around sexual harassment, bullying, layoffs, and poor management.”

Really?

I believe it’s impossible to have an opinion like this unless (a) you are an academic specializing in business management, or (b) you’ve never actually employed more than a dozen people.

I am also aware that some CEOs of large businesses promote the idea that “employees matter first” and that if you focus on making your employees happy, everything else will take care of itself and you’ll have lots of happy customers.

This is an equally bad idea. But it’s actually another issue. (We can get to that in another essay.)

A Self-Imposed Dilemma 

I believe in caring about employees.

I believe employers should care about the productivity and potential of their employees and make sure they have the resources to excel at their jobs.

I believe employers should provide their employees with safe and humane working environments.

I believe, too, that employers should care about company morale.

But when business leaders confuse caring about these things with caring about the personal problems or personal happiness of their employees, they put themselves on a slippery, downhill path that eventually involves compromise, favoritism, and all sorts of ancillary problems.

If this philosophy of employer-employee friendship becomes commonplace in the company, the workplace degenerates. The work ethic and, more importantly, the purpose for working become inwardly focused – towards internal relationships and their needs and away from the outwardly focused customer relationships that are the foundation of every healthy business.

Think of it this way: As a business leader, your primary job is not to make your employees happy but to make your customers happy. When you befriend your employees, you are wittingly or unwittingly telling them that customers come second. That is a very damaging and debilitating message.

If you don’t agree with what I’ve said so far, you need to know this: Your employees don’t need your friendship. And if they are smart, they don’t want it. They will see your effort to befriend them for what it is to them – a burden that will one day make their business lives heavier and problematic.

What your employees want from you, and deserve from you, is your support and guidance. They want ideas and mentorship. And the best of them will want you to give them the freedom to work on their own. The fact is, however good it might feel, it is difficult, if not impossible, to provide those things within the boundaries of friendship.

This essay and others are available for syndication. 
Contact Us for more information.