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

[pully]

good suggestion y man.

also it maybe worth considering if not already being done...excessive spending with little purpose, or satisfaction? may indicate a serious medical condition. good that she has insight, seek a medical opinion especially since she says she is unhappy. hesitate to say more but 1st stop a good gp to review her health. she may not have a wealth prob but a health one?

again not enough info but a dig deeper is indicated here. good luck.

 

[weg]

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

The Y-man

Or what alexlee said

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?

Investing does not solve lack of direction in life particularly if you have no real pressing reason to do so.

People can get direction and find purpose from many different areas. Your friend sounds like she's at loose ends and needs to find worthwhile things to be involved in.

Btw, how did her father create his wealth and why isn't she asking him how to invest or to become involved in the investments/investment decisions?

 

[Deltaberry]

Not everyone wants to invest or take on a mortgage. You're investing to get to where she is. She is already there so why would she do what you do? I have a whole suite of close associates and friends like that with probably more free income.

What she needs to do is be comfortable that this is her and accept life as it is. Do some gardening or go travel.

 

[Andrew_A]

This seems more of a mindset, purpose of life question rather than a financial consideration. After all this is the supposed end point of a lot of investing goals, the 100k/yr passive income scenario.

Would be a consideration to learn from her parents, perhaps their wealth is from a business that can be worked in or even improved upon, obviously doing something correct it might appear.

 

[alexlee]

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.

If you won the lotto tomorrow are you going to give it back and say 'no thanks I want to enjoy the journey'?

 

[Richard Feynman]

Perhaps she should be looking to her parents for financial guidance. If she's going to inherit this wealth, then they're probably the bes people to teach her to manage it.

Hey parents are utterly neglectful, and rarely see her, both working 12-18 hour days, 7 days and honestly invest almost no time (just money) in her. They see one another perhaps once or twice annually – both business OBSESSED but child uninterested.. pretty sad but perhaps she will be able to extract some guidance from them in the future. Good suggestion.

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

The Y-man

Thanks a bunch. You have contributed well, twice to this topic. Highly appreciated –*I think this is GREAT advice. Might provide great direction and motivation.

If you won the lotto tomorrow are you going to give it back and say 'no thanks I want to enjoy the journey'?

I don't play lotto.

However, if someone gifted me a million dollars tomorrow of course I wouldn't give it back. I'd invest the lot. But I'm sure it would alter my perspective on money irreparably.

 

[Richard Feynman]

Thanks for the input by the way folks. It is greatly appreciated.

 

[natmarie73]

Oh dear!

She sounds very unhappy within herself from what you have told us, so kudos to you for wanting to help her.

I second what both Alex Lee and Y-Man have said but also in regards to investing I would find out from her what she is interested in. If she loves spending all her money on clothes/shoes, perhaps she would be best off investing in a business based on this ie a boutique, fashion import etc etc - whatever floats her boat.

Or maybe she could get more involved in the family business thus spending more quality time with her parents plus earn her "salary" rather than just get handouts.

Makes me so angry to hear this sort of thing though - if you don't want children then don't have them rather than have them and neglect them

 

[weg]

Makes me so angry to hear this sort of thing though - if you don't want children then don't have them rather than have them and neglect them

The nanny could take her to the business to visit her parents if the parents are that busy that they're unable to pop in to see their child more than twice a year .

Investing wouldn't solve deep seated parental neglect problems anyway... if there are any.

 

[MelbGal]

Does she work? Have a business degree or other formal qualification?
Could she work in the family business?

 

[Cdro]

I think your heart is really in the right place, and it's great that you want to help your friend. Like others have said, her issue seems to be one of purpose and identity. Unfortunately, you can't help identity problems by just giving them yours (ie. helping her become an investor like you) or anybody else's (philanthropy etc.). Ultimately, she will only be happy if she finds her own way.

I think the best way to help her is to get her talking about herself and what she wants from her life. Who does she want to be? What would she want other people to say about her? How does she want to make a difference?

She might end up helping the eedy, doing a course, getting a job or meditating on a mountain, but she needs to come up with the idea herself. She needs to show herself that she can be a competent adult. Make sure you don't take that opportunity away from her by giving her all the answers.

 

[Waldo]

Hey parents are utterly neglectful, and rarely see her, both working 12-18 hour days, 7 days and honestly invest almost no time (just money) in her. They see one another perhaps once or twice annually – both business OBSESSED but child uninterested.. pretty sad but perhaps she will be able to extract some guidance from them in the future. Good suggestion.

As others have suggested - is it possible that she could get involved in growing the business? The parents seem to care about the business only - atleast it would get them to spend more time together working towards a common goal. It would also give her a sense of purpose & something to work towards (working towards family wealth is prehaps even more rewarding than personal wealth as there is someone to share it).

Rather than just investing, it sounds like she is potentially seeking more of a direction in life. Does she have a job - is it a job that she can build a career out of (& hence get that direction). She could consider a job that gives a high level of personal satisfaction (especially if the $$ aren't going to be tight for her). Maybe helping people (nurse, Dr), helping animals (vet) or something - whatever she personally finds rewarding.

On the actual investing side. Perhaps some of our resident finance guru's could indicate if she would be able to get finance to leaverage her money. Do any lenders consider regular allowances from parents for servicability? Due to the low contact with the parents I would be relucatant to suggest she asks them to go guarantors on any loans.

 

[pinkboy]

Im guessing she isnt working with all these handouts?

How will a lender see her earning an income? What Im alluding to is the parents $$$ can be turned off like a tap, so no lender is going to look at her unless the handouts are distributions etc?

pinkboy

 

[Shaneelastic]

id suggest you try and tap that and join the gravy train

 

[BayView]

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?

Perfect existence - endless supply of money.

No need to ever think of being an investor.

Slap her in the head and tell her to snap out of it and keep living the dream.

 

[The Fence]

Very interesting opinions on this but I cant but think of the lack of gratification this person must have...you know, I worked my butt off for this and that etc...?

or should I just take the easy way out and react like someone who doesnt have that sort of existence and use my own emotions in thinking about it?

There is a thing called spoilt isnt there?

I thin k the OP may have been trying to get this across to said friend who agreed to "do something" useful maybe?

I could be terribly wrong but just askin..

 

[china]

Very interesting opinions on this but I cant but think of the lack of gratification this person must have...you know, I worked my butt off for this and that etc...?

or should I just take the easy way out and react like someone who doesnt have that sort of existence and use my own emotions in thinking about it?

I am not sure that the best gratification comes from hard work.

Sometimes, I take a gamble on the stockmarket wherein I put in a low price for a stock, not expecting to be able to buy but somehow an unexpected dip in the market allows me purchase and sell within the same day making 1-2k. This gives me even greater gratification, something for nothing.

 

[Richard Feynman]

Very interesting opinions on this but I cant but think of the lack of gratification this person must have...you know, I worked my butt off for this and that etc...?

or should I just take the easy way out and react like someone who doesnt have that sort of existence and use my own emotions in thinking about it?

There is a thing called spoilt isnt there?

I thin k the OP may have been trying to get this across to said friend who agreed to "do something" useful maybe?

I could be terribly wrong but just askin..

I abysmally failed at explaining the situation when posting this topic, sorry to all.

My friend asked me to help. Everything I asked in the original post was a distillation of what my friend asked me to help her with. Not me deciding what's good for her.

She is unhappy and reached out as she saw that I have a much more grounded view of money, work, and investing. She's determined investing is the best course to address her dissatisfaction and unhappiness.

For the record, she has recently taken up an average-paying full time job for some stability and to gain a sense of self, structure and to actually earn income instead of mooching it to gain a perspective on money. It's been very beneficial so far but she wants to now utilise her situation to build something big up over quite a period of time.

 

[MRO]

It funny how most of us spend our time trying to get out of working an average paying job and strive to have the free cash so we can do what we choose do do and this person is the opposite.

As said before she needs to accept her great fortune in this world and use it to do something she really wants to do. I suspect it is only the standard mindset of this world that equates work with personal value that makes her want to go to work. If you are fortunate enough to have the cash, regardless of where it comes from, enjoy it.

Personally I would keep 'mooching' and stick a fixed monthly amount away in a managed fund for a rainy day. In the meantime I would ride my bike, play with the kids, travel and be merry.

 

[The Fence]

Yes but this person is not merry.

It's as I thought, a spoilt brat (maybe not a brat but anyway) who has grown up and wants to fit in socially with everyone, not just her richie rich mates.

They also want a sense of self worth, not Dad's worth.

As much as many on here have stated this person should just get on with the spoils, there is a real issue here about being someone who can take care of themselves.

My advice would be to help this person navigate the ways in which they can advance but not show every step, just point them and allow them to make the same mistakes as well as wonderful discoveries involved in being a "ordinary" citizen.

Good on them for having conscience enough to realise they are spoilt rotten and will only amount to a heap of blubber in time.
I bet they are already thinking of philanthropy among other things, but want that sense of "I did it MY way"

Just my 2 gazillion cents...!