What I Learned About Wealthy People as a Private Banker

Surprising insights from 20 years in wealth management

My dad’s favorite way to explain what I did as a Private Banker was “she lends money to rich people who don’t need loans.”

That summed it up pretty well. At my first job, the client criteria was having $1 million in liquidity or an annual income of over $250,000. I was focused on lending, so many clients had high income but hadn’t built much wealth yet (think doctors, lawyers, and real estate investors).

Twenty years later in my last corporate role, my team had a minimum of $25 million with our firm, and I worked with institutional clients including billionaire family offices and endowments. By then my focus was broader; I led a team for each client that might include an investment manager, lenders, trust officers, and specialists in estate planning, charitable giving, business sales, or insurance.

Reviewing people’s actual tax returns and net worth statements was addicting from the start. I was already a money nerd, and peeking behind the financial curtain of thousands of affluent Americans over the years cemented my fascination with wealth and money psychology.

The rich. They’re just like us!

In truth, one of the biggest surprises turned out to be that people with wealth are not that different from people without wealth. I’ll admit that I was (and maybe still am?) a bit judgmental about this.

I naively made a lot of false assumptions in the early days. I assumed my colleagues were all investing in our 401k plan. I assumed my clients would have more in cash savings than I did. I even assumed the bosses in their 50s could all afford to retire. After all, they’d been earning good money for decades.

There were more surprises where my clients were concerned:

• Wealthy people aren’t better at managing money. They struggle to save; they get scammed; they don’t stick to a budget or know how much they spend. They have no special investing prowess.

• Wealthy people still worry about money - about running out, about spoiling their kids, about making the wrong investments, about not making the most of it. Wealth does not alleviate money anxiety; in fact it can exacerbate it.

• They are very susceptible to peer pressure and groupthink. This applies to lifestyle choices and investing trends. The most popular conversations and think pieces were inevitably along the lines of “what our other clients are doing.”

• Rich people mostly own the same ETFs and index funds as the rest of us. There are no inside investing secrets. (This was honestly a bit of a let down!) They don’t time the market or trade actively - if they listen to their advisors. Some love a flashy PE fund or venture capital stake to talk about on the golf course, but alternatives are generally more status flex than return enhancement.

  • There are some active management and tax strategies that make sense when you’re managing millions, but overall the same investing rules really do apply.

Lots of people have family money.

There are whole zip codes where most homes are owned by trusts. These are safe, well-manicured areas where the median home price is over $1M, and they tend to be occupied by a suspicious number of young people who don’t seem to earn enough to live there.

This reality has spawned some hilarious memes.

To be fair, many trust fund beneficiaries work really hard even when they don’t have to. They become entrepreneurs, climb the corporate ladder, take over family businesses, and strive for more just like the rest of us.

Others dedicate themselves to lower income occupations such as raising families, the arts, ministry, or volunteering. And thank goodness - the world needs all types. We arguably have enough money hungry capitalists running around already (guilty).

In fact, I’ve noticed that the children of successful, wealthy families often internalize enormous pressure to excel and perform at high levels. They know they have no excuse to fail and every opportunity to succeed.

They also learn that no one will ever extend them a lick of sympathy.

Still, I remember a childless younger couple in the fourth generation of a billionaire family, who received $20K a month in trust distributions. Neither worked, and they managed to spend every dollar and then some traveling the world. At the time I was appalled, but now I smile when I think of them.

Who am I to judge? I hope they are having fun.

Many wives have no idea what their husbands are doing.

When I was 25 years old I picked up my ringing office phone and was shocked to find a client yelling profanities at me.

My crime? I’d called his wife. Their mortgage payment was over 30 days past due (again), and he’d ignored my last messages. I honestly assumed he was out of town; she’d run a check right over, all smiles, on the way home from the country club. She chatted amiably about the kids’ summer camp, gleaming teeth reflecting in her bright white tennis dress.

As he threatened me, I correctly surmised that his wife had no idea how tight their cash flow was. I pulled up their most recent financial statement and realized his income had dropped substantially each of the last four years; meanwhile credit card balances had climbed to nearly a quarter of a million dollars.

Learning to talk down angry clients was part of the job, but I was left rattled after playing dumb and apologizing earnestly (two key wealth management skills).

I couldn’t stop thinking about her, spending freely while oblivious to their increasingly dire straits. They were both my clients, co-borrowers on the mortgage. So I took what felt like a big risk. I invented a question about the annual joint financial statement he’d recently submitted and attached it superfluously to my email. And I copied her.

The payment was never late again, though they sold the house the next year during divorce proceedings. I sometimes wonder where she is today.

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Then there was the jovial husband in his 70s who called regularly to set up or amend monthly ACH payments to various young women. Once he called from a luxury auto dealer to request a wire to buy one of them a Range Rover. My assistant put him on speaker and loudly chastised him; he jokingly offered to buy her one too.

The admins cackled and gossiped; his calls were always entertaining. He and his wife had divorced and remarried and maintained separate finances - and residences.

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I had to fire one client who kept claiming fraud on his debit card, usually about a week after requesting a six figure wire to a Vegas casino to fund his marker for the weekend.

Gambling wasn’t the issue. It was the long string of alcohol and porn charges that tended to follow (yes, your banker can see your card activity). The third time he claimed his card had been stolen, I took the issue to my very straight-laced, very Christian boss. He was mortified.

I still don’t know if he was a liar or if he truly didn’t remember blacking out and watching porn all night on the regular, but we delicately asked him to find another provider due to the demonstrated risk of repeated fraud.

They give a lot to charity.

I was regularly impressed by the generosity of many of my clients. Wealthy people get a bad rap (and sometimes they deserve it), but many of them truly take giving back seriously and view it as a responsibility.

This is not unusual; many wealth management firms have whole teams dedicated to helping clients give away their money. These charitable giving specialists help evaluate and monitor non-profits, devise long and short-term giving strategies, give advice about establishing foundations and donor advised funds, and more.

Many clients tithed a full 10% of their large incomes to their church (helping them define “income” for that purpose was sometimes part of the job). Some gave extraordinary sums to alma maters to construct buildings or football teams. Others keep the arts alive in their cities, propping up museums and performance halls. Most funded some portion of the annual budget of local homeless shelters, food banks, animal rescues, and other traditional charities.

I only recall a handful of clients over the years who said giving wasn’t a priority (usually because they wanted to leave a larger legacy to their own families).

Assets may be larger than they appear.

I got a referral once from a business banker who had met an older couple in the lobby of a Hilton Garden Inn hotel over the weekend. I took the lead in good faith (so we could both log the internal referral and please our corporate overlords), but I was shocked when the prospects ended up having $25M in investments.

You would never know it. Their house was worth less than $500K, their kids had gone to public schools and had middle class jobs, and their favorite restaurant was Olive Garden.

They were fiercely proud of their frugality. They had built wealth slowly, steadily investing a large portion of a good paycheck for decades without ever increasing their lifestyle.

My biggest concern was how their middle aged sons were going to manage the shock of inheriting 8 figures each. I tried to gently suggest they talk to them about it, but they assumed the money wouldn’t change a thing and that their sons would just let it grow for their grandkids’ educations. (How expensive did they think college would get??)

There was no intent whatsoever for their money besides pretending it didn’t exist and letting it continue to compound in the shadows. I started to wonder - then what’s the point of building wealth?

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One couple had several hundred million dollars with us. The wife was an executive at a company that went public, but they kept the amount of the windfall a secret from their kids while living a relatively normal upper middle class lifestyle.

When their daughter turned 35, the terms of her trust required her to be informed and start receiving statements. She wasn’t ungrateful, but she did not take the news of her $25 million dollar windfall well.

She’d chosen a modest university, turned down the opportunity to move to New York in her 20s, and become a public school teacher - all choices she might have made differently if she’d known about her resources. She felt immediately unmoored and isolated from her middle class peers.

This experience changed my perspective on “protecting” kids from wealth and keeping family money secret. I wrote about the benefits of transparency here.

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And yes, I also had several clients over the years who embodied the stealth wealth cliché, Texas style: old pickup truck, jeans and muddy boots, and 7 figures in the checking account.

No, they didn’t want to talk about CDs or brokerage accounts - they don’t need nothin’ fancy.

All hat, no cattle.

Then there is the flip side, of course. Many seemingly wealthy people have a lot less money than you would guess.

(One of the fun things about trying to suss out wealthy people for a living is learning this the hard way after months or even years of prospecting efforts.)

There’s the former professional athlete whose assets are a tenth of what Google reports. The guy who rolls up in a Lamborghini who only has $7K in savings and borrows to pay his property taxes. The big-spending socialite who has zero control of any real money.

There are all kinds of reasons that someone who looks wealthy may not be - and not all of them are “bad.”

• Sometimes they’ve given away big chunks or spent it down. They may have “lost” some in a divorce.

• It’s often due to bad business deals. They chose a bad partner or a start-up failed. Weirdly though, many start businesses they don’t expect to turn a profit - as a lifestyle choice, to be part of the action, or as a tax write-off (popular choices include restaurants, vineyards/farms, gyms, private investment funds, and boutiques).

• Many are house poor. Their $4M house may represent 80% of their wealth.

• Technically, lots of rich people are legally broke. They might own very little in their own name but receive large trust or distributions or dividends from a family owned business they will never control.

Lots of high earners live paycheck to paycheck; it’s just a bigger - and possibly guaranteed - paycheck.

Money doesn’t really change people.

It magnifies what’s already there.

Anxious people become more anxious. Generous people become philanthropists. Spenders ramp up spending on a never-ending hedonic treadmill of delights. Sibling disputes become expensive multi-year legal battles.

I think too many wealthy parents worry unnecessarily about hammering a “strong work ethic” into their kids. Whether childhood is rough or smooth, some people develop it, and others just don’t.

Similarly, some kids have a tendency to over-save, while others spend or give too much. This happens in poor and rich families alike.

At the end of the day, we all want the same things. Happy, healthy families. To love and be loved. A strong economy. A safe society. A healthy planet.

Wealthy people aren’t all that different. But they do have more power than most to create the world they envision.

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I help people get organized and use wealth to design a life that feels secure and aligned. A former Wall Street banker and CERTIFIED FINANCIAL PLANNER™, I act as an unbiased advocate without selling products or managing investments. To learn more, visit my website.

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DISCLAIMER: I love writing about the personal, emotional, and practical sides of money, but please remember that my Substack is strictly for educational and coaching purposes. The insights shared here are general in nature and do not constitute specific investment, tax, or legal advice. While I am a CFP® certificant, reading this does not create an official advisory relationship, and any comments or likes should not be interpreted as client testimonials. For personalized investment advice, please consult a registered financial professional.