Gay Money: The Tempting Twenties
Victory! Vol. 3, No. 1 January/February 1996

The more I've helped hundreds of gay men and lesbians, the more I see that our money matters are critically different from mainstream America. How? Let's first take a macro-look at the factors that make us rich or poor because we're gay. We must deal with distinct threats to our corporate careers. Many of us suffer income and job discrimination. Yet our street smarts seem to make us excellent entrepreneurs, and often we have the cash to make it on our own earlier in life. Moreover, many of us have the time and motivation to build extra skills, to take extra risk in our career choices, and to convert our extraordinary networking skills to catapult into better careers throughout our lives.

When we're young, because few of us have children, for a few crucial early decades we have much more spendable income than comparable hetero society. Most of us can enter and leave relationships without expensive marriages and disabling divorce settlements; yet often our loved ones remain unprotected and we can spend thousands haggling over who gets the dog. Most of us complain about tax discrimination, not realizing that as couples we enjoy many tax advantages (most of which we don't exploit).

It's important that we invest our surplus early, because most of us face many financial challenges as we get older. Investment could be our strong suit, our guarantee to financial security in later years. For example, at times we're better-positioned to make real estate choices. Some of us have the financial continuity to reap significant returns in collectibles.

The key to it all: Recognize the uniqueness of the opportunities and dangers born of our gay experience. Why should we get our financial advice from mainstream money magazines and books which don't take these factors into account? The entire country acts as if we don't exist and writes the rules of personal finance for people with 2.5 children and--even today--at-home spouses. No wonder gays turn off when they open a standard personal finance book or tune out when tuning in a financial program on TV.

But before I can dish out financial advice with you in mind, I must note that we tithe our membership from every nook and cranny of society: young and old, all races and ethnicities, rich and poor, conservative and liberal. Faced with such diversity, what are our common needs?

As an answer, let's consider the stages of life we all go through and the financial issues we face as we get on with life. Because things continue to change in gay life, gay personal finance turns out to be a life-long occupation, a second job whose contribution to wealth and happiness can be much greater than what happens from 9 to 5.

So think twice before following straight universal, one-size-fits-all financial advice. Our personal finance questions and answers are as unique as our historical experience and our highly individuated lives. With this series as a guide, you can start writing your own book on your own gay personal finances.

The 20s: Asset-building, Addiction, and Advice With money matters, spending is where it all starts. With far greater spendable incomes, gays have a choice not open to married heteros with children: Blow it or invest it.

Many heteros face different circumstances. While their incomes may start out the same, more head straight into legal marriage--and more still have children, or hope to. The mere possibility of marriage and children drastically changes their financial picture, putting a damper on spending even in single years. And most straights are single during their early years when incomes are low. The result? Most heterosexuals may not have large amounts of spendable income until after childrearing.

Where does all this surplus, spendable gay income go? Without children, gays have two basic choices: Spend the money for present pleasure, or invest the money for future pleasure. In terms of financial techniques there really isn't much else for someone gay in their 20s to do. Resources are too thin for real estate or sophisticated investment. Corporate or entrepreneurial careers require skill and capital that have yet to be acquired. A young gay's focus can be quite simple: Spend or save.

Gay Spending: The Gay Dividend or the Gay Disease?

What do gays actually do? Spend, spend, spend. There seem to be 3 major reasons why. Unless they're addressed it's a foregone conclusion that many gays will blow their chance at wealth, selling off their economic advantage for immediate gain. If they get addressed and unraveled, gays have an incredible chance at financial security for life. The first challenge is that high spendable income gives apparent wealth. Because there's so much more cash than others seem to have so early in life, it's easy to fall into the belief that it won't stop.

The belief that gays have an unending source of surplus spendable income has built on the need for gays to connect. It's important to tally up the annual and decade-long costs of gathering at gay bars and resorts. One major focus is gay spending on travel. Alternatively, consider what return would occur over 10, 20, 30 and 40 years from the same amount of money invested in medium-level securities. The comparison will be nothing less than mind-boggling due to the effect of compounding and the performance of the market over the decades. With clients I've found it important to make such comparisons early in my intervention in their finances; it eliminates a lot of rationalizing. Facts don't lie.

The second challenge is specific to the 90s. With AIDS gays see the finances of their friends gradually drained, or wrecked overnight, depending on the particular pattern of the disease. At the same time, they see friends getting fabulous sums of cash from selling the ownership rights to their life insurance through a new process called viatication. In these times it's hard to know what's economically real.

The third challenge may come from the generation-long push towards gay power hitting the double wall of AIDS and the conservative backlash. One result seems to be that it's become important for some gays to feel economically superior, giving at least one turf where we can still have gay pride. People in this group portray themselves and gays in general as well-off, when in fact the wealth may be a statistical game.

This substitution of gay spending for gay power has in fact become a movement in the gay community. However, the politicizing of financial decisions like spending carries a stiff price. The focus should be on husbanding gay money, not on spending it as a political gesture. Yet, as with ethnic Americans, gays face a major decision as to if, when, where, why and how to buy from their own community. The publicity about the gay market may be as much about gay exploitation as about gay power and gay pride.

The fourth challenge comes from how different gays have reacted to years of growing up with hatred and discrimination. When it strikes, this reality is a hard thing to shake. Several spending reactions can result:

• Ghettoists may pay to join special interest groups for their strong identity.
• Assimilationists may try to buy acceptance by buying into consumer society.
• Isolationists may seek security in things, furnishing homes as fortresses.
• A-gays may invest in fantasy lifestyles decorated with symbols of superiority.

Again, the approach I've found to work best with clients is to annualize the real, total costs of these lifestyles and sum them up over a period of years. Only casting these costs on such a scale seems to provide a jolt to high-spenders and to draw them to conclude that these lifestyles may simply be too expensive to maintain.

Suicide, Addiction, Accidents, Violence, AIDS

It's important to point out that even in the 20s, gay life is not so gay for some: widespread hatred, discrimination, violence, playacting, constant monitoring, inhibition, invisibility, isolation, loneliness, a battlefield mentality, having to use guerrilla tactics, and having few legal safeguards.

Many retreat from all this into forms of suicide and addiction. The teen suicide problem (30% of all teen suicides are gay) only gets translated into more subtle forms of suicide in the 20s unless there is intervention. In the teens and twenties gay life can seem to be all about sex and pleasure.

It can be easy to get waylaid and to make this life's priority. None of the gay media indicate otherwise. Yet that's the tradeoff: the present for the future.

As gays retreat into the temporary solace of alcohol, drugs and sex, they fall prey to greater risk of addiction, accidents, violence, and disease from both within and outside the community. And each of these produces financial fallout that may never be overcome in a lifetime.

Why this emphasis on the dangers right up front? Because this is the core issue of personal finance for gays in their 20s. If gays are to save, they have to go beyond these aspects of gay life that can stymie them financially. The traditional center of gay life remains the gay bar. Gay disco midnight-to-dawn night life is commonly fueled by drugs. It's almost expected of the gay stereotype that there be a cigarette and a drink in the hand. Internalized stereotyping of same-sex attraction has pushed it for centuries into the night, the fringes, and the depths of society. Internalized homophobia has promoted the myth that gays self-destruct. In today's age this has translated into an attitude among young gays that those with HIV have the attention and that survivor guilt is untenable.

It's not surprising, then, that gays have 3 times the average rates of alcoholism. It is not surprising, either, that despite advances in preventive education seroconversion rates are highest among young gays. The financial solution proposed here will be to provide a way to tally up the true costs of any evidence of addiction. Often the spur to treatment and remedial action is making real how addiction hits the wallet and pocketbook--how it impacts the personal bottom line.

Costs that need to be included are the health cost of higher smoking rates, the epidemiologically-based cost of alcohol impairments, the increased cost due to driving accidents, the generally higher risk costs of smokers and drinkers in general, the incidence of mugging and anti-gay violence, the incidence of robbery, the impact of non-reported violence of people who prey upon gays, the extent of alcohol-related domestic violence increasingly reported in the community--and of course the highly increased risk of lowering judgment and becoming infected with HIV. (The startling figures here will be the enormous financial costs of HIV.)

The bottom line that may surprise most readers is that addiction has a greater incidence and higher cost in the gay community than does AIDS--and of course is an intimate link in gay men becoming infected with HIV. The impact of addiction and/or AIDS alone on the personal bottom line of a gay man or lesbian is the greatest threat facing any gay starting out in life. Any gay financial plan must include a strategy for preventing the financial fallout of addiction and AIDS.

A second approach will be to address the lack of vision peculiar to gays in their 20s. There are multiple threats to the very idea of planning for gays in their 20s today. The battlefield mentality of AIDS limits vision to tomorrow, next week--this year at most. The pleasures of this most personally opulent decade distract and obscure any future horizon. In a society where future translates into children and legal marriage, most gays have few alternatives as tangible for which to save. To plan and save you need goals--goals so attractive and so real they can compete with today's priorities.

Perhaps gays can come to see themselves as protecting through savings a lifelong succession of future selves--manifestations of themselves that no one else will provide for.

Without planning gays don't have a lot to look forward to in later life: glass ceilings, denigration from their own as they get older, no children, poor family relationships, continued discrimination and ridicule. It's not a pretty picture. It's no wonder gays are sorely tempted to spend it while they can, while they're young, while life seems sweet, good and prosperous. It's easy for younger gays especially to choose the present and gamble on mere hope that things might change in the future.

But there just isn't that much payoff in just saying no. The key is presenting alternative actions that will not only lower present costs but also promise future payoffs.

The picture is brightening. As recovery programs have become widespread, a parallel movement has emerged to create gay community centers. The center in New York has over 100 activities each day. Today gay social life is increasingly being organized around common interests.

The Internet and a group of over thirty local gay online bulletin boards promises further opportunities for gays to socialize directly. With this development the era of the gay bar and gays as merely creatures of the night is ebbing.

Isolation and ignorance

Faced with this sobering picture, what's a gay man or lesbian to do? The first advice here is to be wary of straight advice. Mainstream financial advice is geared towards the needs and events of legal marriage and child-rearing: childcare, parenting vs. working, financing college educations, and recovering from divorce settlements. None of this is appropriate for most gays. This argument can easily be supported by a tally of the number of articles on gay topics to appear in the major financial magazines and personal finance books. This can be supplemented by the stated reader profiles of most magazines as put forth for advertisers.

The solution lies in the age-old gay practice of networking across all boundaries. The greatest need for new contacts and information is across generational boundaries--to re-establish the gay tradition of the Gay Aunt and the Gay Uncle. This may also be the greatest challenge because of the historical changes that have now separated the gay generations.

Access is now possible, though, if gays will turn away from the bars towards the new special interest groups forming in their communities and use the Internet to reach out across all boundaries. By tapping into the experience of older generations, gay men and women in their 20s will get at least some of the advice they need about how to focus on what--and when.