Making more money than your friends (long)

[Nate tha' Great]

Hi all,

This can be filed under "nice problem to have", but I don't know that I've seen anything posted on the subject, and I thought it was worth discussing.

Since I've started playing poker semi-professionally, I've been able to increase my income severalfold over what it was just a year or so ago. I'll try and spoil myself with some goodies from time to time - the NFL games are looking really great on my 30" Plasma TV - but for the most part, my tastes and values haven't really changed. Nor has my group of close friends changed.

But my friends have more or less the same income streams that they used to have. My closest friends are, respectively, a graphic designer who is just starting his career, a graduate student, and a sort of professional hipster who makes a living selling stuff on e-bay. None of them is impoverished exactly, but they can all struggle from time to time, and whereas before our disposable income levels were in the same ballpark, now mine outstrips theirs dramatically.

The change has the feeling of having occurred overnight, which in some senses it has. Another good friend of mine went into investment banking a couple of years ago; his income went up quite a bit, but his lifestyle changed as well. He works extremely long hours, has become something of an unapologetic yuppie, and has plenty of other investment bankers to hang out with if he feels like engaging in some group splurging. I think his is a qualitatively different sort of situation than mine.

Last night I got into an argument with the graphic designer, who is still struggling to pay off some college loans. He wanted to know whether he could stake me - we'd go to the casino, he'd give me $500, and I'd give him a share of the profits. I explained to him that this would necessarily be a Very Bad Deal for me or a Very Bad Deal for him, depending on whether I bore the downside risk. If I did need to reimburse him for losses, I told him, this would represent a tax on my +EV, compared with the situation where I staked myself; it would be tantamount to giving him money. He took some offense to this suggestion, saying I'd made him to feel like he was asking for a handout. It certainly wasn't my intent to make him feel that way, but he doesn't really have an understanding of gambling and investment fundamentals.

And, needless to say, money is a sensitive issue. I almost invariably pick up more than my fair share of taxi rides and bar tabs and dinner checks, buy more expensive Christmas and birthday gifts, and loan out small amounts of money to help cover a parking ticket or something without really hounding to get it back. This does not bother me, and it has not gotten to the point where I feel taken advantage of. Some of my own happiness, after all, is tied into the happiness of my friends. But it all needs to be done with a certain pretext - "I'll pick up this one and you pick up the next one", when in fact, there's a good chance that I'll be picking up the next one too. If I ever pointed this out to them, I'm sure that they'd be offended.

I'm not really certain what I'm expecting to get out of this post - mostly, I'm just sharing my situation with a group of people that I think will understand it. Perhaps it would be helpful to create a scenario, which is not too far from a couple that have recently occurred:

Suppose that a great new restaurant opens up and I'd really like to try it out. This restaurant is rather expensive, and while I could afford it without much of a dent, it is a bit out of the price range of my friends. Should I offer to treat them? Should I magically decide to pick up the check when it comes, perhaps recognizing that my friends will figure as much? Should I go there by myself (not very much fun, obviously)? Should I avoid brining the issue up at all? Should I find some wealthier friends? [img]/images/graemlins/crazy.gif[/img]

thanks,
Nate

[mr pink]

i doubt any of your friends are expecting you to take care of them or the bill when you guys go out. they'll probably just be surprised when you pick up the bill... just don't make it into a habit as it could get pretty expensive. just be sure to explain to them it's for a special occasion - tell them you just won a big football bet or something and are taking them out to celebrate. you definitely don't want them to expect you to pick up the tab every time you guys go out. try and put yourself in their shoes, what would you think if one of your close friends started making bank while you were struggling??? generosity is good, but keep it in moderation.

peace - jeff

[Demana]

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Should I go there by myself (not very much fun, obviously)?

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What is wrong with going by yourself? Do what makes you happy. If some of your friends can't afford it, that is ok. I'm sure they do things without you and as long as you don't rub it in their faces or hold it over their heads, they won't really care that you went to the place by yourself.

[steamboatin]

It is inevitable that as your income grows, your friends will change unless they grow along with you. Eventually you will discover that you are not as interested in hanging out with them as yu once were.

There will come a time when you have outgrown them, and while you still like them, you have less and less in common. You don't have to become a tool or anything but if your income continues to grow and theirs does not, a distance will grow between you.

[Bluffoon]

Having more disposable income has opened some doors for you. These doors are still closed for these friends.

When you hang out with these guys, pretend that nothing has changed. Don't often do things with them that you/they couldn't afford back in the days when your incomes were equivalent. They may be just as uncomfortable with the new order of things. This may put you and them more at ease. They may not so feel pressured to spend beyond their means or feel inadequate when they can't pony up their share of the bill.

If you want to do things that your old friends couldn't afford, call your investment banker friend or cultivate some new friends that have equivalent disposable incomes.

[B00T]

good post...I have some of the same struggles right now. I do work a full time job (40-45 hrs a week) and then bang out 25-30 hrs a week playing poker so its essentially 2 full time jobs with high incomes (both totalling over 100K at 24 yrs old).

My friends doing the full time grind for their 33k a year cant do the same things I do recereationally. $100 to them to go out one night means a hell of a lot more to them then me.

My advice. Try and do things less often where they feel obligated to plunk down so much money. As for the fancy restaurant, take a chick out. Paying for 2 beats paying for 4 and still beats going alone.

Try and do more at home stuff with your boys. A fun night of watching a game, or talking over high school memories or stories about each others work staff etc is just as fun as goin out to a ritzy lounge suckin down martinis.

I really dont have the answer but totally grasp your dilemma. I am interested to hear other responses as well.

Honestly, try and tie up more of your income and spend just as much as them. Only bring $50 instead of $150 to the bar one night. Invest some money or just get 6 month T-Bills with 1/3 of the money you take out from your bankroll so in hindsight your weekly nut is less and will indirectly act more frugal in your spending.

Most important thing I said was to take the chicks out for dinner. If you need a quench to have a place to blow money make sure you are getting blown in return. [img]/images/graemlins/cool.gif[/img]

[cjx]

Pretend to go on a horrible losing streak. I mean really... how would you feel if your friend started playing some stupid card game and crushing your income (after years of school and hard work)... you might think it was unrealistic and the "luck" has got to end. When your "luck" does end your friends will be quietly satisfied. Granted this could become quite a charade, but it might be worthwhile to put your friends at ease.

Oh, and about the bank rolling thing... yes, it would be like giving him a handout as I'm more than certain that you can bankroll yourself for $500. While you probably didn't mean to I'd bet that you did insult him a little, but it was more out of his own ignorance of that kind of situation.

cjx

[Paul2432]

How about taking a date to the restaurant?

That said I do appreciate your dilemma. I have experienced your situation from time to time myself. I think you want to avoid (or at least I try to avoid) appearing to flaunt your money.

One thing I have done in the restaurant situation is to make sure that the bill is split according to what people order and not an equal split. I think it is the responsibility of the person who ordered the more expensive items to do this. Your friends will know they can eat out and order according to their budgets without getting a surprise when the check comes. If you are so inclined you could pick up the cost of wine/shared appetizers.

Paul

[Nate tha' Great]

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How about taking a date to the restaurant?

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FWIW, I am dating and there's a little bit of the same problem. Although it's natural to be somewhat more generous in that case, I have some worry that the financial disparity could put a strain on my relationship too.

[umaga]

I know where you are coming from. I’m an investment professional, while most of my friends are teachers or municipal workers. Between my job and poker, I probably make 3-4 times their income. Generally, the way I deal with it is by doing things at their financial level, but tweaking it a little bit.

For example, if we take a group trip somewhere, I’ll let them pick the hotel, but I’ll get my own room instead of doubling up. I’ll just say something like “I like to sleep naked, and none of you want to see that.”

If we go out to eat, I’ll make sure to get the check and underestimate what each person’s share is and pay the difference myself. If you have a party of eight that had food and drinks it is very easy to do without them realizing.

My friends’ primary recreational activity is boozing/partying, so that is generally where I pay more than my share. It’s pretty easy to just say “I don’t have any cash, so I’ll just put it on my card and we can figure it out later.” Basically, allows you to be generous without it being obvious.

For your restaurant example, if you want to treat, just invite them and say its to celebrate “XXXX”. If you don’t want to treat, I wouldn’t try to get them to do something that is financially a stretch for them.

All of the above is based on my friends not expecting subsidies and not taking advantage of me. If you detect a whiff of that you have to nip it in the bud. Be helpful and be generous, but don’t be used.