Charles Lowenhaupt examines why 23-year-old Evan Spiegel, Snapchat’s co-founder and CEO, turned down a $3 billion offer from Facebook.

Charles Lowenhaupt is chairman and chief executive of Lowenhaupt Global Advisors, a financial advisor whose
family has been managing significant wealth for more than 100 years. He is also
co-author of the book, Freedom from Wealth, by McGraw-Hill.

Opinions are the author’s, but Family Wealth Report is
grateful for the right to publish them, and welcomes reader responses.

The entire world is wondering why 23-year-old Evan Spiegel,
Snapchat’s co-founder and CEO, turned down a $3 billion offer from Facebook in November last year. (Snapchat is a photo messaging mobile app).   

Media reports said Spiegel won’t
entertain offers for Snapchat until next year, when the messaging service may have even more users and a higher
valuation. In other words, they believe that maybe he just wants more money.

But there’s another reason that could explain his decision. Perhaps a
23-year-old couldn’t imagine what to do with billions. 

More seasoning

For someone whose family has helped other families manage significant
wealth for more than 100 years, I am not surprised Spiegel turned down the
offer.  In fact, his decision was a smart
one. 

At 23, most people have no idea what to do with that kind of money.  Could Spiegel answer the question:  “What is your wealth for?” 

He is not ready to say that the wealth is to ensure that each of his
children and grandchildren to be can be all he or she can be.  He surely lacks the life experience to see
the enormity of the opportunity to do good and positively influence the world
around himself.  Look how long it took
Gates or Buffett to move from wealth creation to strategies for using wealth.

To
his credit, Spiegel understands what gives him satisfaction, and it is not
billions in the bank.  Instead, it is
running a business and making a dynamic contribution to society.

During
a conference at Stanford in 2013, he eloquently described the role of
entrepreneurs like himself.

An
entrepreneur, he said, is an “individual who is able to combine – gracefully and
authentically – their life and their work. An individual who has identified a
dream far greater than accumulation of wealth, but a dream that is achieved
through participation in consumer society and the creation of a company.”

Spiegel is a man who seems to see what he wants in life.  As someone who was raised with considerable
wealth, Spiegel may understand that significant, sudden fortune often ruins
individuals unprepared for it. Without the right vision, structure and
discipline with regard to significant wealth, personal development is arrested
or stops entirely.  I’ve seen it too many
times to count.

What is wealth really for?

The truly smart money understands that unhappiness is the likely effect of great wealth unless the
most basic question is asked and answered well: What is the wealth for?

That’s a process that takes time and deliberate
thought.  Wisdom requires life experience
and contemplation.  Building and running
Snapshot happened quickly for this enterprising young man and required his full
attention.  Spiegel has neither extensive
life experience nor the leisure of time for introspection to know what wealth
is for. 

In fact, until wealth has a purpose, its owner is slave to
managing and living with it.  Once the
owner knows what to do with the wealth, the opposite happens. Money does its
job and its owner has “Freedom from Wealth,” the ability
to self-actualize.  

By turning down Facebook, Spiegel hit the daily double: He
avoided the pitfall of wealth without purpose and maintained freedom from wealth. Let’s hope a young man of his
prodigious talent and judgment keeps his head about him. His success will
benefit all of us.