An amazing story about George Clooney:
Rande Gerber (one of Clooney’s good friends, also husband of Cindy Crawford) recently told a story about Clooney inviting 14 of his closest friends to his house on 27 September 2013.
Clooney said some words about how much he valued these friends. He said that he wouldn’t be where he was without them.
Clooney then presented each of these friends with a designer suitcase. Each suitcase was filled with $20 bills, to the sum of $1 million. He gave each one of his 14 friends $1 million in cash.
This is a great story. It also sounds bonkers. Especially since some of these men were already wealthy. Gerber, for example, is the long-time husband of Cindy Crawford, and apparently gave his $1 million to charity.
Surely, if Clooney was going to give so much of his wealth away, there might have been more “worthy” causes?
Perhaps. From another perspective, if Clooney had the wealth, a gesture like this would probably give him more satisfaction than buying another mansion and/or a garage full of cars. Why not give it away to friends?
Even from a practical perspective, generosity of this nature might drive him to want to create more wealth in the future. If I were honest with myself, it’d probably give me more reason to work than the prospect of buying more stuff. Especially if I already owned the Hollywood house; a villa in Venice; and had a garage with a Tesla Model S, a Porsche 911, and a Range Rover.
(As a former financial services lawyer the story also sounds bonkers from a practical perspective. With anti-money laundering laws being as they are, getting $14 million in $20 notes in this day and age would be… a challenge. But I digress.)
But I’m inclined to think of it from another perspective. Clooney probably didn’t think of it this way, but being so generous with his close friends would probably pay dividends if he ever needed their support.
I’ll be candid: If a close friend of mine ended up in financial or reputational trouble I would probably help him or her out. If he’d given me $1 million in a designer suitcase at some point in the past, this would especially be the case.
My intention would probably be the same either way. It wouldn’t be a quid pro quo thing.
But my ability to help him out would be much better if I’d received a $1 million windfall at some point in the past. For most people, that’s the difference between having a mortgage over several decades and not having a mortgage. That’s the difference between whether or not you have to worry about how to finance your children’s education (especially if you live in the US).
Thinking of sharing wealth in this way also makes sense when you think of other examples of people sharing their wealth with their loved ones. Young sports stars or successful performers buying a nice house for their parents is so common it’s basically a cliche.
These young people could lose all their money and have creditors knocking at their door at some point. (And in a shockingly large percentage of cases, this happens.) But if they’ve got mum and/or dad with a roof over their head, they’ve always got something to fall back on.
I’d extend this to more mundane generosities as well. My wife and I will never worry about how a bill is split for a meal at a restaurant. We don’t keep track of who has paid when, or who has contributed more or less. (Possibly to the detriment of some people – if you’re reading this and this relates to you, I’m sorry! Let me know! But for the most part we give more than we take.)
We’re fortunate. And we like to share our good fortune with the people we care about. We hope our good fortune continues, and we hope we can continue to be generous and be even more generous as time goes by.
There’s nothing more to it than that. Being generous with the people we care about makes us happier than spending our money in other ways.
But we know that the people we care about are equally generous. And if and when they have the means, and if and when we need support, we know that they’d be there for us.
We don’t do it to “manage risk”. And I’m sure George Clooney didn’t give $1 million to his friends for that specific reason.
But whatever the reason, I’m sure that’s an outcome.
Generosity – especially at Clooney’s scale – is not insurance, per se. But it’s something like it. Let’s call it “Risk management for ballers”.