Oct 11, 2012

Wealth vs. Status

I went shopping for a purse last week. My first mistake was to even set foot inside the Coach store. Oh they had purses, alright. Lots of them. And they were made with excellent craftsmanship. And there were about 4 clerks for every shopper, falling over each other to curry your favor. Wow.

The bags were on sale, most of them. "Only $300" on this group, and "30% off!" (off of what?) on another, and so on. I did find a few I liked. The one that was most exactly what I was looking for was a tiny little thing with an over-body strap and (sigh!) a dog leash clip and yet still came in at almost $70. Ouch.

It didn't pass the hungry baby test. (How many hungry babies could I feed for $70?) Or, as my mom was fond of saying, "Quid ad aeternitatem?" (What does this have to do with eternity?) It's not that this was the most expensive bag in the world, nor even of the whole store. It was really quite economical in Coach terms.

Even so, I have to put purchases in the context of wealth vs. status. Wealth (property, investments, etc.) provides for our future. Status drains our wealth and compromises our future. Status might make us look and feel important (until the next newest biggest best fashionable thing comes along...) but it does not sustain happiness nor security for the long term.

I ended up buying a Kim Rogers purse at Belk. With a sale and a coupon, I spent less than $20, and the purse does everything I need it to do, except make me "look" important. And that's ok, because I have a future. I have wealth.

What status-seeking (and wealth-compromising) behaviors will you forgo today?

Oct 10, 2012

A Place For Wrestling

We've all heard the adage, "a place for everything, and everything in its place."

I contend that wrestling is a thing. So is singing. So is crying.

If my boys want to wrestle, like exuberant boys are wont to do, I don't say "stop wrestling." I say "Take it outside in the grass so that you don't break things or get hurt on sharp corners."

If my daughter wants to sing, I consider that a "Happy Noise" and welcome its intrusion in my day. If I'm in the middle of a tv show, I  pause the dvr, and resume it later. Or I figure I'll catch the rerun next summer when my daughter is gone, when I would give anything to hear her sing once more.

Crying is allowed, too. Yes, we are allowed to express our emotions, even painful or angry ones. However, if it devolves into whiny, obnoxious attention-seeking, we take it to our room and shut the door while we compose ourselves and figure out a better way to communicate our feelings.

Don't tell me not to feel. Just tell me where I can go to do it while respecting the rights of others.

What feelings will you express (in a socially appropriate way) today?

Oct 4, 2012

Kids "Unfit to Inherit" ???

CNBC published an article by Robert Frank a few months back, about parents who are leaving their millions to charity instead of their children. "Only 32 percent of baby boomers are confident their children will be prepared emotionally and financially to receive a financial legacy."

Whose fault is this? Let's assume this is not inherited wealth. (I assure you, multigenerational high net worth families groom their children for succession. It's what keeps the wealth in the family.) Boomers, who perhaps built a business from scratch and worked hard to become wealthy, focused all their attention on the business, but stopped short of pondering the fact that they may die one day, and planning for eventual maturity of their children to take the baton.

Frank's assessment:
In the end, however, the phenomenon outlined in the survey boils down to a simple problem: The baby boomers have raised kids who are unequipped to inherit large amounts unearned wealth. The kids have been given most of what they want since childhood and have followed their parents model of generous spending. And the job market isn’t exactly conducive to college grads making it on their own. [...]

Whose fault is all this? The parents, in part. Only half of the respondents had told their children about their family wealth. When asked why, they said the children would become lazy, make poor decisions, squander money or fall prey to golddiggers.

We can call it the Rinehart Paradox. Wealthy parents aren’t raising kids to be good with wealth, so they refuse to leave them wealth.

In the end, the biggest losers here are the kids.

That's tantamount to tying your kid's shoes because it's easier than teaching him to tie them himself. Really? You're going to be around when he is 30, still tying his shoes? You will cripple your children emotionally when you FAIL to teach them about your finances, financial strategies, where the money comes from, where it goes, and WHY you made the decisions you did with it. 

Whose shoes will you stop tying today?