Help me help my friend (financially incompetent, rich).

Bit of a long story, but I have a friend with extremely wealthy parents, I mean EXTREMELY.

She's been receiving 5-6 figures of annual handouts from her folks for years, blowing it all, investing nothing. Her primary circle of friends are in identical situations, so she's been far removed from reality, but since we've become friends I've set her straight and she's keen to invest. Big time. She's working on changing her $1000-$2000/week recreational spending habits. Long process, but she's making progress.

So, with access to at least $1000-$2000/week, forever, and NO CHANCE of falling behind on a single loan (parents will step in if ever needed):

1. How would you proceed in terms of investing? (All asset classes)
2. How can I assist in the process of financial rehabilitation to give some perspective to someone who hasn't needed any to help quell some of the ludicrous spending habits that are so engrained?
3. What professionals should be engaged to ensure the optimal outcome?
 
Given this:

So, with access to at least $1000-$2000/week, forever, and NO CHANCE of falling behind on a single loan (parents will step in if ever needed):

Why does your friend need 'rehabilitation'?

2. How can I assist in the process of financial rehabilitation to give some perspective to someone who hasn't needed any to help quell some of the ludicrous spending habits that are so engrained?

Investing isn't some noble calling. Being a mortgage battler doesn't build character. And in fact, the goal of investing (financial success) makes you more likely to lose perspective (which is what you're trying to 'save' your friend from.

If you want your friend to be 'better' (whatever that means), might as well steer her towards charity work, setting up scholarships, helping the poor, etc?
 
why would she bother? what would be her motivation? she already has an endless amt of funds and sounds like she is/will be financially independent for life.

why are her spending habits bothering you? not enough info.

her wealthy parents might give her some pointers if required? they may think why worry about it, life is secure.

as said not enough info. good luck.
 
Exactly

Being a battler doesn't make you a better person

If she has such a huge financial backing then she doesn't need to

So if you teach her how to get 20% returns on her 100k cash, that's a drop in the ocean for what her parents have
 
What sort of parents are happy to just hand that sort of money over to a child who is throwing it around recklessly? How old is this woman? I'd be guessing if the parents are handing it over and she is spending it, perhaps it is too late to teach her anything?

It is surprising to me for parents THAT wealthy to be so foolish with their money, or to not be putting some rules or guidelines for their daughter.
 
You emphasized the EXTREMELY which made me wonder whether you think she needs more help in learning how to invest than a friend without extremely wealthy parents and a 'free' income?

It sounds to me like her parents might be doing the investing for her so she doesn't really need to do anything.

My cousin who is in the same situation knows it's highly unlikely she could create even a small percentage of her fathers wealth so doesn't bother at all, and it's totally fine with him.

She has been given a nice place and income and dad has made it very clear it's all going to her and her brother.

In her case however not investing does not mean she's not shrewd with money - 2 ex husbands didn't get a cent out of her and any woman with thoughts of moving in on the father wouldn't have a chance :eek:.
 
Most of us invest so that we can be in her shoes.

She's already there, so doesnt need to. Let her enjoy it.
 
Bit of a long story, but I have a friend with extremely wealthy parents, I mean EXTREMELY.

She's been receiving 5-6 figures of annual handouts from her folks for years, blowing it all, investing nothing. Her primary circle of friends are in identical situations, so she's been far removed from reality, but since we've become friends I've set her straight and she's keen to invest. Big time. She's working on changing her $1000-$2000/week recreational spending habits. Long process, but she's making progress.

So, with access to at least $1000-$2000/week, forever, and NO CHANCE of falling behind on a single loan (parents will step in if ever needed):

1. How would you proceed in terms of investing? (All asset classes)
2. How can I assist in the process of financial rehabilitation to give some perspective to someone who hasn't needed any to help quell some of the ludicrous spending habits that are so engrained?
3. What professionals should be engaged to ensure the optimal outcome?

If she is to inherit those figures in the future then investing may give her good homework on how finances, risk, lending, growing assets work. This could be good if she intends to grow the inheritance rather than spend it all.
 
there are cycles within cycles, including generational cycles.

Having said this, from the limited information in your post, I would speculate that she is interested in you.

Whether this is true or not is irrelevant, the point is she needs an anchor in her life and you seem to be providing it.

Well done.
 
If she is to inherit those figures in the future then investing may give her good homework on how finances, risk, lending, growing assets work. This could be good if she intends to grow the inheritance rather than spend it all.

Meh. If they've got a family office she probably doesn't need to bother herself with this stuff either.

If she's happy, leave her be. If she's looking for something that makes her feel more productive, it doesn't have to be investing. What does she like doing? She could start a cafe, a bar, a yoga studio, small gallery, clothing boutique, etc., etc.. If her parents don't mind footing the bills then she may as well do something she likes. If she's a clever cookie she'll end up making $ and if not at least she won't feel like she's done/tried nothing.

Hubby has friends whose folks have bankrolled them in olive oil import/export, art gallery, video production studio, multi media, life coaching, event management, clothing manufacture, restaurants, hairdressing, bars, etc., etc.. In fact, most of his school friends opened businesses financed by their parents.

A lot of them have this attitude like they're on equal footing with someone who started from scratch with no money and built a similar business. It bugs me, but you know what, they're never going to feel the same way about money as I do, or have the same relationship with it, so I try not to get too hung up on how they treat it or their privileged attitude towards work, life, etc..

Reminds me of this song:
http://www.youtube.com/watch?v=yuTMWgOduFM

:)
 
1. How would you proceed in terms of investing? (All asset classes)
2. How can I assist in the process of financial rehabilitation to give some perspective to someone who hasn't needed any to help quell some of the ludicrous spending habits that are so engrained?
3. What professionals should be engaged to ensure the optimal outcome?

1. (a) Commercial property - and probably a decent sized one at that. (I would assume the parents are porbably at least partly into this). (b) industrial land banking and commercial development.
2. Agree with the others in that probably not much - just that she might find a new avenue of spending in property or business as a bit of fun.
3. Her parents - they got there. My guess would be they are actually quite "thrifty" (spends big but not needlessly so)

The Y-man
 
A lot of them have this attitude like they're on equal footing with someone who started from scratch with no money and built a similar business. It bugs me, but you know what, they're never going to feel the same way about money as I do, or have the same relationship with it, so I try not to get too hung up on how they treat it or their privileged attitude towards work, life, etc..

:)

yeah completely agree, it makes me laugh when they think their definition of financial acheivement is to save their 50% of their $2k per week allowance for 6 months,

or they ask daddy to buy them a multi million $ business or to bankroll their dream of indepnednace by opening a boutique hair salon, or art gallery or cafe

and think they have made it through their own,

but I rarely take any of these people seriously any way,

I used to know of a girl who though she was doing the world of good when she asked her daddy for a Z3 on her completion of her Ls but decided to downgrade to a WRX.........
 
Sorry for failing to mention that this is a REQUEST from my friend. She's very unhappy. Her spending bothers HER.

She feels so detached that she's depressed and wants to gain a) a sense of perspective, and an understanding of money and building wealth b) use her lucky position to build something huge for herself so handouts are no longer needed or desired and she feels she's done something useful with her situation. Instead of taking advantage of it and learning nothing.

To address those saying this is where investors dream of getting, let her enjoy it. That's like taking the option to get air-lifted to the top of Mt Evertest. Reaching the summit has no value if you don't endure the climb.
 
Sorry for failing to mention that this is a REQUEST from my friend. She's very unhappy. Her spending bothers HER.

She feels so detached that she's depressed and wants to gain a) a sense of perspective, and an understanding of money and building wealth b) use her lucky position to build something huge for herself so handouts are no longer needed or desired and she feels she's done something useful with her situation. Instead of taking advantage of it and learning nothing.

To address those saying this is where investors dream of getting, let her enjoy it. That's like taking the option to get air-lifted to the top of Mt Evertest. Reaching the summit has no value if you don't endure the climb.

the question is why is she doing it???? is she just trying to prove a point to her fellow rich friends/family???

ive known people who for whatever reason didnt agree with their family for whatever reason, have simply packed up and moved away. One person who was a girl who I knew well for a few years, her father was a billionaire, but when I met her, she had already moved out, and at the time told me her father owned a corner store............(later I fount out he owned 800 of them , replace the word store with hotels/banks), but she was adament to make it out on her own, good for her for trying

if she was so serious about doing something about it, she can easily move out of home, get a job on her own skills and strengths,

have you seen why often the top sportsman in their field unless its a field that requires a lot of money to enter eg motor racing, are filled with people from normal to poor backgrounds, its because they want it so badly


and yes absolutey correct, first gen builds it, second gen enjoys it, third gen destroys it, however, I would think second gen also destroys it too
 
She feels so detached that she's depressed and wants to gain a) a sense of perspective, and an understanding of money and building wealth b) use her lucky position to build something huge for herself so handouts are no longer needed or desired and she feels she's done something useful with her situation. Instead of taking advantage of it and learning nothing.

.

Cool. Get her to travel to some developing countries - might get her interested in some philanthropic work.

The Y-man
 
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