The Rules of Wealth

by Richard Templar

  WHILE YOU’RE BUSY ENVYING

  WEALTHY PEOPLE FOR THEIR

  MONEY, THEY’RE BUSY

  ENVYING OTHER PEOPLE

  * ‘Where are my favourite socks?’ ‘Has anyone seen my glasses? I definitely remember having them in Paris...’ ‘I must walk the dog. Hang on, where is the dog? Actually, did you remember to bring the kids?’

  RULE 3

  Other people’s money belongs to them

  When you read in your daily newspaper that some celebrity has spent a fortune on yet another mansion, or invested part of their wealth in an exciting new project, or given away millions to charity, the odds are that you think it’s up to them if they want to be stupid/generous/take risks. You shrug and move on to the next story, or maybe turn to the financial pages to find some ideas for making your own fortune.

  It’s harder when it’s your parents though, isn’t it? Or your friend, sibling, work colleague, neighbour? Suppose your brother decides to spend all his savings on buying a holiday home, or your best friend wants to plough all their money into some business idea you think will crash, or your parents want to make a big donation to a charity that’s special to them, or your colleague wants to spend thousands on cosmetic surgery that you don’t think they even need. Are you still going to shrug and turn the page?

  Sometimes it’s not easy. For a start you need to remember a key Rule, ‘Never give advice unless it’s asked for’. That can be difficult enough. After all, you might be really concerned that these people are making a terrible mistake. But, you know, you might be wrong. Maybe if your brother never uses his holiday home, he’ll still be able to sell it at a profit. Perhaps your colleague will gain huge confidence from the surgery, even if you can’t see why.

  Maybe your reservations aren’t about making bad financial decisions. Perhaps you just think these are irresponsible things to do with money.

  Actually, the reason is irrelevant – it doesn’t matter what you think. People are allowed to be irresponsible with their money if they want to. It’s theirs. Maybe they don’t approve of some of your choices, but you don’t want them telling you so, because it’s none of their business. You may think they are profligate with their money – while they might think that you’re a Scrooge who has no idea how to enjoy what you have because you’re too busy making more of it. But they don’t say so (I hope).

  So there are two things here. The first, and I hope the easiest, is about keeping your mouth shut unless you’re asked for an opinion. If you are asked, you can say what you think but don’t be fooled into supposing that gives you the right to put pressure on people to accept your advice. They may listen and then disregard it, and that’s their prerogative.

  The second thing is about what you actually think privately. It’s not enough just to keep quiet. You also need to understand properly that it’s none of your business what other people do with their money. You might think, ‘Well, I wouldn’t have done that’, which is fine. But don’t judge, or get emotionally involved. Why? Partly because you wouldn’t want other people judging you, and partly because the sooner you stop fretting over stuff that’s nothing to do with you, the sooner you can focus on your own life. And that’s got to be good.

  PEOPLE ARE ALLOWED TO BE

  IRRESPONSIBLE WITH THEIR

  MONEY IF THEY WANT TO

  RULE 4

  They can give it all away if they like

  Following on from the last Rule, not only can other people be irresponsible with their money, they can get rid of the lot if they want to. They can give it away, gamble it, burn it, spend it on sweets. They can do as they please. Yes, even your parents.

  What? Your money? Your parents can just be allowed to give away your inheritance? Well no, actually, that would be impossible, because it isn’t your inheritance until they’ve gone. If they’re still here and capable of spending it, it’s not your inheritance. It’s their money. Just like your money is yours.

  I understand that this can be very tough. Especially if you’re in a financial black hole and the only way out of the pit that you can see is the money you’re expecting from your parents when they go. And when other people’s parents are being careful with their money so they can pass it on, it’s doubly frustrating if your parents choose to spend all theirs.

  Which is precisely why you have to understand, to grasp, to believe in your heart and not just your head, that it’s their right to spend it. Otherwise watching them fritter money away – or even donate it all to a good cause – can sour your relationship with your parents and burn you up with anger.

  But look, just because you had your eye on the money, doesn’t make it yours. Why should they have to stop enjoying themselves, just to save up for you? Especially if you’re still able to earn after they’ve retired? And at what age do you think your money should stop being yours and become your children’s? When should you stop being allowed to do anything fun or interesting – if it costs money – so that your wealth can be protected for someone else? If you don’t expect the principle to apply to you in due course, you certainly can’t apply it to your parents. Once they’ve gone, no amount of money will bring them back.

  So let them enjoy it while they still can. Even if – especially if – you have the kind of parents who mess you about emotionally, who tell you they’re leaving you everything and then change their minds and spend it...even if they led you to believe it was ‘your’ money...even so, don’t listen to them. It’s their money, all theirs, just for them, exclusively, until the day they die. If after that you find there’s something left for you, just be grateful.

  THEY CAN GIVE IT AWAY,

  GAMBLE IT, BURN IT,

  SPEND IT ON SWEETS

  RULE 5a

  Once they’ve gone, you can’t ask questions

  If you can master Rule 4, it might make this one a little bit easier. It’s very common for parents to die and not split their money equally between their children and/or grandchildren. And when it happens, they’re not there to give you an explanation. So you probably assume that they never loved you as much as your brother or sister, the other side of the family or something of the kind.

  Look, there are lots of reasons why parents might love their children equally, but not split the money equally. Probably the most common of these are that, in their eyes:

  one of the children needs the money much more

  one of the children has been given much more already

  one of the children has done far more for them.

  Of course, there might be some other reason. But the thing is that parents often don’t discuss these things in advance. Maybe they don’t want to start a family argument, or maybe they’re worried they’ll be put under pressure to change their will. For whatever reason, you may not get a chance to ask what’s going on.

  The way to deal with this starts with Rule 4 – you have to fully embrace the fact that it’s their money and they can do as they please with it. Then recognize that they may not have thought as you do. So how did they think? What would have been their reasoning? Unless you come from a highly dysfunctional family (I’ll come to that), the answer will almost always be that it seemed right and logical to them.

  Now you have to find their logic – get your head round their way of thinking – so that you can understand how your parents could do this without it being a reflection on their love for you. Perhaps they were short sighted in not seeing how you’d feel, but they weren’t thinking of you in isolation, they were trying to find what seemed to them a fair balance between all their children. This obviously doesn’t help you financially, but frankly the emotional fallout of this kind of thing can be far worse than the financial hardship. After all, you haven’t actually lost money, you’ve simply not gained money that you probably know, deep down, you shouldn’t really have let yourself rely on.

  What matters is that you aren’t left resenting your parents instead of cherishing the memory of them. It won’t help to be bitter. It may take ti
me, and you may need to talk to other people to help you through it, but you need to reach a point where you understand your parents’ motives even if you don’t agree with them. Look at your siblings from your parents’ perspective and not your own. And in time you’ll find you can accept the decision without rancour.

  THERE ARE LOTS OF REASONS

  WHY PARENTS MIGHT

  LOVE THEIR CHILDREN

  EQUALLY, BUT NOT SPLIT

  THE MONEY EQUALLY

  RULE 5b

  Once they’ve gone, you can’t ask questions

  OK, here’s the opposite situation, and this one happens loads too. You have struggled with money for years, with a family to support, while your sister has a high-paid job and no kids. And what do your parents do? They split their money equally, even though your sister barely needs her share and your half still leaves you with pretty shaky finances.

  Or how about this: your parents were unwell for years, and you gave up weekends and even took holiday entitlement to look after them, take them to hospital appointments, mow the lawn for them, help with their shopping, cleaning, accounts and all the rest. Meanwhile your brother was living on the other side of the world and visited once every couple of years, and maybe phoned occasionally (far too infrequently probably). And after all that, when the second parent finally dies, you find they’ve left you half of everything each. Yes, he got as much as you.

  After all you’ve done! How could they? Ah, but you didn’t do it in the expectation of a reward, did you? You did it because you loved them and you wanted to do it. I know that because you’re a Rules Player. If you’d been the kind of person to do it simply for the payoff at the end, I’m not sure you’d have deserved it anyway.

  Here’s what you have to understand. For many people, the way they divide up their assets in their will has very little to do with the money itself. It’s about what it symbolizes. And their will is the last chance for them to show their children how much they mean to them. If they love them both/all equally, they feel they have to split the will equally. They worry about the scenario we looked at in Rule 5a. And the one we’re coming to in Rule 6.* If they love you the same, they can’t see any option but to show it in the way they divide up their estate.

  And besides, you have to remember that your parents don’t see your brother or sister from a sibling perspective. They’re a loving, forgiving parent. Perhaps, in their eyes, it was your choice to give up your career to have a family while your sister stayed childless and focused on her career. Or, in the other example, they accepted your brother’s decision to move abroad – it was what he wanted for a better life for his family, and however much they missed him, they brought you both up to have free will, to make your own choices and they won’t punish either of you for that.

  What matters most of all here is that you don’t resent your siblings for the choices that your parents made. Think that one through, and you’ll see how illogical it is. Not only illogical, but also deeply divisive. And that certainly isn’t what divide-it-all-equally parents want.

  THE WAY PEOPLE DIVIDE UP

  THEIR ASSETS IN THEIR WILL

  HAS VERY LITTLE TO DO WITH

  THE MONEY ITSELF

  * No, don’t turn the page! Patience!

  RULE 6

  Blood comes before money

  I said I’d mention very dysfunctional families. Sadly, a few parents don’t care what emotional wreckage they leave when they die, and may even design their will to create hurt or dissension. If this applies to you, you’ll know because they’ll have been doing it for long years before they finally go. They may well have promised the same things to you and your siblings, or tried to manipulate you with threats about what you will or won’t get in their will.

  At least if this is the case, you probably had no expectations anyway, but you may have had hopes that are dashed when it comes to it. Mind you, there are plenty of other, less obviously dysfunctional parents who make disruptive decisions about who to leave everything to.

  I used to know a man whose father was furious with him for shaving his head (seems strange to me, but that’s folks for you). So furious, in fact, that in a fit of pique the father cut his son out of his will. And then the father died suddenly and unexpectedly before he could calm down and rethink.

  I have one friend, with five siblings, who came from a very traditional family. His mother died first and, when his dad died, he left absolutely everything to my friend. Why? Because he was the eldest son, and as far as his dad was concerned, the eldest son should inherit everything. Now in some cultures that may still be true, but in London about 20 years ago it certainly wasn’t the norm.

  Part of the problem here, obviously, is that you don’t end up inheriting what you’d hoped to. But that’s not generally the biggest issue. The real difficulty is what happens to your relationships with your brothers or sisters when one or other of you feels that your siblings are benefiting at your expense.

  We touched on this in the last Rule, and the first thing to grasp is that your siblings didn’t ask for this any more than you did. If your parents’ will (or indeed your grandparents’ will, or any other will that benefits some of the family more than others) creates bad feeling within families, you’re all victims. Whether your parents intended it or simply didn’t think things through, everyone is in a difficult position. The sibling that comes off best generally feels guilty and uncomfortable, and under pressure to give away money that their parents expressly wanted them to have. The sibling that misses out on the money may feel they’re the only loser, but that’s not true.

  And it’s rarely that cut and dried. The sibling with the lion’s share of the inheritance may feel that they need it more, or deserve it more, or have had less until now. You may disagree but the point is that it’s often a matter of opinion. Clearly your parents thought, for whatever reason, that one sibling should have most.

  If your relationship with your brother or sister was previously even half-decent, saving that relationship is far more important than the money, and potentially far more valuable. Sooner or later most of us hit bad times, and there are countless circumstances where money doesn’t help one jot, but the support of family will be worth the world to you. Remember that.

  THE REAL DIFFICULTY IS

  WHAT HAPPENS TO YOUR

  RELATIONSHIPS WITH YOUR

  BROTHERS OR SISTERS

  RULE 7

  Your children owe you nothing

  Right. That’s enough about your parents’ money. Now, what about your children’s cash? Suppose you’ve struggled all your life, and they’ve done really well for themselves. In fact, the reason you’ve struggled is because you were supporting them, and their success is in large part down to the sacrifices you made to give them the best start you could.

  And now they’re in a position to make your life a little bit easier. That’s not too much to ask, is it? They could give you a bit of money, or help towards the bills, or treat you to a nice holiday, after all you’ve done for them.

  I hope you know pretty much what I’m going to say. No. I repeat, that’s a big fat no. Don’t you dare ask your children for money. And while we’re at it, don’t even imply that they should consider giving you some. If you think back all those years, it was your choice (or possibly your carelessness) that brought them into the world, and they never signed any kind of agreement. You wanted to give them a good start, create a supportive home, make sure their childhood was comfortable. Those were all your choices.

  I’m certainly not suggesting they were bad choices. On the contrary, I congratulate you on giving your child the confidence and drive to do so well for themselves. But your reward is seeing your beloved child so successful. I don’t believe that all the time you were kissing their grazed knees better, or helping with their homework, or listening to them sob about broken friendships, or cooking their meals, or picking up after them, that you were mentally counting off the value of it all in terms of what you could claim b
ack from them when they were old enough to earn a living.

  Listen, here’s how it works. Your parents did all that stuff for you. You owe them nothing. Then you put in all the graft for your kids. They do it for their kids, and so on down the generations. We all get, and we all give. But we don’t give back up the generations, we pass it on down. Your child’s money is their own, and if you’ve set a good example, and they choose to have kids, they’ll have learnt how to pass it on. That’s your reward.

  Of course, if you’ve done a good job of instilling the best values in your children, and with a bit of luck on your side, they may give you as much financial support as you hope for and more. Just as I hope you support your own parents in whatever way you can. One thing I can tell you though, from frequent observation: the more you ask for the less you’re likely to get, and your children will resent you (and I’m including emotional blackmail there, as well as direct requests). Whereas if you don’t ask, anything they give you will be given willingly and with love.

  DON’T YOU DARE

  ASK YOUR CHILDREN

  FOR MONEY

  RULE 8

  Don’t make money taboo