Appreciating Capital | Spring 2025
A Tale of Two Money Mindsets
Understanding each of our clients’ unique needs and goals is how we help them build a meaningful life with their money.
Brian Kearns, CPA, CFP, RIA
Founder, Haddam Road Advisors
Best Practices in Financial Planning
As those in the financial planning space know, not all clients are created equal. They all have different motivations, goals, lifestyles, and financial habits. Some are happy to take risks, some hold their money safely at arm’s length, while others fall somewhere in the middle. Of course, like our clients, we too have our own unique experiences that shape the way we navigate the financial world, including how we offer financial advice and influence our clients’ decisions.
In the spirit of Charles Dickens’ “A Tale of Two Cities,” let's look at two very different scenarios. Instead of comparing London and Paris during the French Revolution, we’ll be comparing a gambler and an anonymous millionaire. We’ll call this story “A Tale of Two Money Mindsets.”
THE GAMBLER
Let’s start with Archie Karas, a legend in the gambling world. In 1992, he was down to his last $50 playing high-stakes poker, so he borrowed $10,000 from a friend and accomplished the most successful parlay in history, winning somewhere near $40 million in just under three years (no one knows the exact amount). Then, in three of the worst possible weeks in gambling history, he lost it all.
At the time, Karas said: “Gamblers enjoy both winning and losing. I’ve been a millionaire over 50 times and dead broke more than I can count, probably a thousand times in my life. But I sleep the same whether I have $10 or $10 million in my pocket. You’ve got to understand something. Money means nothing to me. I don’t value it. I’ve had all the material things I could ever want. Everything. The things I want, money can’t buy: health, freedom, love, happiness. I don’t care about money, so I have no fear. I don’t care if I lose it.”
In September 2024, Karas died of complications related to a brain aneurysm at the age of 73.
THE ANONYMOUS MILLIONAIRE
Now, let’s look at Ronald Read. Born in 1921 in Dummerston, Vt., Read was a World War II veteran, married for 10 years with two stepchildren, and widowed in 1970. He worked at, then bought, a gas station which he later sold in 1979. A year later, he started working as a janitor until he retired in 1997. Every day, he ate the same breakfast at the same local coffee shop and read The Wall Street Journal at the library. Read died in 2014 at the age of 92 at the Brattleboro Memorial Hospital, six miles from Dummerston.
In a February 2015 Boston Globe article, journalist Nik DeCosta-Klipa called Read “the epitome of Yankee frugality, according to those who knew him.”
One might ask, “Why was Read—a seemingly average Joe—the subject of a Boston Globe article to begin with?” Well, because when Read died, his estate was found to be worth $8 million, mostly in dividend paying stocks. He bequeathed $1 million to the local Dummerston library and $5 million to the hospital where he died—an exceptional and generous act.
It seems only his lawyer knew of his material wealth. Even his stepson commented: “He was a hard worker, but I don’t think anyone had any idea he was a multimillionaire.”
UNDERSTANDING THE TWO MINDSETS
Dickens would appreciate the contrasts of these two men: Someone who had every material possession they could ever want, living only for the single moment of uncertainty between the wager and the outcome (Karas), and someone who spent only on basic needs, living for the certainty of repetition (Read).
When I first read about Karas, I thought of my time in the futures/options trading world, where some of the biggest risk-taking traders I knew would invest a portion of their profits in the safest, most boring investments like Treasury bonds. These traders understood the risk was in the job, so investments needed to balance out and ensure the financing of their lifestyles.
With this experience in mind, my first questions to Karas as his financial planner might have been: “Does your family feel the stress of your job? Do they feel the same way about money? Also, money can help maintain health, how important is that to you?”
Perhaps, just a 10% allocation to Treasury bonds (in a spendthrift trust) would’ve financed a completely different lifestyle for Karas.
As for Read, the “anonymous millionaire,” I’m left with so much intrigue and questions about his donation to the local library. (Perhaps he felt indebted, as his time there reading The Wall Street Journal led to his prolific stock portfolio?) This is likely related to my own unanswered questions about my late frugal grandfather. You see, after my grandfather died, we found $10,000 in cash hidden in the garage behind a woodpile. My family also discovered his notes that mentioned he always wanted to visit Pearl Harbor. Notably, my grandfather was a veteran of the Pacific theater in World War II, where he was awarded two purple hearts for his injuries. So, I've always wondered—was he looking for permission to spend the money on his dream of visiting Pearl Harbor?
This experience frames my first question for Read: “You spend a lot of time at the library, is there anything you’ve read about that you’d like to see or do?” I’ve always been curious what Read’s answer might’ve been if I could’ve asked.
So, I’m curious, what questions would you have asked Karas and Read if given the chance? Do their two very different money mindsets bring up personal comparisons on your end?
As financial fiduciaries, we have guidelines and best practices regarding what our clients “could” or “should” do, but the two tales of Karas and Read remind me that listening to clients’ stories, asking questions, and listening again to their answers can help us better serve them in using their money to build a meaningful life.
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