Live Off Per Cap?

Dear Dr. Per Cap:

My brother is dating someone from a tribe that pays fat per cap – about $30,000 a year. He says they’ll be able to live off that income and won’t need to work, but I’m not so sure. What should I tell him?

Signed,

Sister Thinks Best

Dear Sister Thinks Best,

First off, tell your bro to get a job and not leech off his girlfriend’s money. I don’t care if per cap is $100 a year or $100,000, no one should expect a significant other to support him using per cap or tribal dividend payments. Unfortunately, it’s an all-too-common story though, especially among economically successful tribal communities with five-figure or larger per capita payments.

Now, about that 30K ― it’s tough to say if that’s enough money for a couple to live on comfortably. You didn’t mention whether either of them has children or other dependents, significant debts or liabilities, the cost of living where they live, or their overall lifestyle. However, even with very few financial responsibilities, I think you’re right that making it on 30K a year will be a tight squeeze, especially with today’s higher costs for food, transportation, and housing.

What also bothers me is your brother’s lax attitude and overall misunderstanding of how per cap is meant to be used. Most tribes don’t pay per cap so their citizens can kick back and not work. Even for high per-cap tribes, the intention is to use per cap as extra money to supplement earned income from wages or a salary.

I’d tell your brother what a smart Native real estate investor once told me: “Per cap money is like a springboard. Managed well, it helps lift a person to new heights of success. But managed poorly, and a person just bangs their head against the ceiling, never reaching their potential.”

Ask your brother what he and his partner would like to accomplish together and how per capita can help make those dreams come true.

You might also remind him that per cap is not guaranteed money. Tribes can, and do, reduce or even suspend per-cap payments during tough economic times. For instance, during the pandemic when a lot of tribal casinos had to close or reduce hours of operation, many gaming tribes cut per cap by as much as 50%.

All the more reason for a person to lock down a good, well-paying job. Then enjoy per cap as an added bonus to either complement a current lifestyle, or save it and invest in the future.

Ask Dr. Per Cap is a program funded by First Nations Development Institute with assistance from the FINRA Investor Education Foundation. For more information, visit www.firstnations.org. To send a question to Dr. Per Cap, email askdrpercap@firstnations.org.