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

[wylie]

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.

I wonder how the six figure annual "gift" from the parents is asked for? I wonder now she has an average paying full time job if she will say to her parents "I don't need your money this year, but thank you". I just wonder whether her parents are giving her an allowance or waiting for her to ask them for money?

If they are giving her the money because it must be distributed, then perhaps she can invest those funds and use her own money to live on. I'd be guessing it will be hard to rein in her past spending habits, but if she has indeed had some sort of epiphany about changing course and feeling like she is doing something for herself, she will have a hard road if she turns off the parental money tap.

It won't be an easy thing for her to work out, (and I reckon it would be too easy to fall into the old habit of "money for nothing") but good on her for wanting to change have some meaning in her life.

 

[MarkB]

First generation creates, second builds (if lucky) third destroys (on third generation probability distribution curves).

I think that's a load of tosh, myself.

 

[Aaron_C]

I think that's a load of tosh, myself.

It's probably true since with each generation the family gets bigger. This means a large denominator - which dilutes the wealth. Some of those beneficiaries leech of it and do nothing (and lose it), some others may make something of it. Overall I suspect that the dilution effect is more pronounced.

 

[pully]

sounds as if she is seeking purpose and meaning in her life, which she hopes will make her happy, and believes by investing she will achieve that end?

wish her well.

 

[TingTong]

I have a rich friend I met backpacking through Mexico and Guatemala 11 years ago. She's from Phoenix AZ but spends most of her time in Mexican orphanages which her family donate money to. She's been a trustafarian all her life and tried working for awhile to give herself meaning / structure but decided she got more satisfaction helping disadvantaged kids. Her dad initially requested she do it to oversee his annual donations are being used efficiently and not misappropriated but she really loves it now. I know Australians aren't big on philanthropy but if your friends' family are extremely rich and donate then maybe she could spearhead a worthwhile cause instead of working an average paying full time job.

 

[coastymike]

Packer 1 built the fortune, packer 2 built it further and packer 3 is growing it even more. Agreed a load of tosh.

 

[MarkB]

Packer 1 built the fortune, packer 2 built it further and packer 3 is growing it even more. Agreed a load of tosh.

Thank you.

Actually, it could be argued that:

Packer 1 was RC Packer, who already had substantial media holdings on his death in 1934, thus initiating the family fortune

Packer 2 was Frank Packer, who built the fortune to resemble that we most closely associate with the Packers (eg, ACP, incl. Channel 9)

Packer 3, who if that silly maxim held true would have destroyed the family wealth, was the (so called) "idiot 2nd son" (in the eyes of Frank) -> Kerry Packer

And now Packer 4 is James Packer. I'd like to be as sure of winning lotto as I am that James Packer is going to make tens of billions of dollars in gaming.

 

[geoffw]

On the other hand- Gina Reinhardt (father built, she consolidated and built, it looks like kids just want to spend it).

 

[MarkB]

On the other hand- Gina Reinhardt (father built, she consolidated and built, it looks like kids just want to spend it).

I don't think it is possible to spend the sorts of money involved, after all, the cashflow from these things must amount to tens of millions pa.

And, to me, it looks like the kids just want to get access to it before they (or the trust) turns 80.

And, I have some sympathy for their pov. Yes, Gina has grown the wealth - but she also inherited all of the mining tenements, etc.

During my time as a financial adviser for a major bank I saw a variety of approaches with regards to wealth and, for want of a better description, attitudes towards the generations that follow.

As such, I've seen, at very close quarters, how a parent who is born into wealth (in this case a mother, who is a trustafarian and has not worked a day in her life) can laud if over her children (in this case adopted, not that it matters) with regards to money. It is not pretty, and it is often downright hurtful, and (no surprises) it has bred a lot of resentment.

If I ever had children (sadly, not looking likely), I'd treat my kids better (not saying I'd give them carte blanche like the person mentioned in the start of this thread, but I wouldn't use money as an object of control and manipulation).

 

[Richard Feynman]

I wonder how the six figure annual "gift" from the parents is asked for? I wonder now she has an average paying full time job if she will say to her parents "I don't need your money this year, but thank you". I just wonder whether her parents are giving her an allowance or waiting for her to ask them for money?

If they are giving her the money because it must be distributed, then perhaps she can invest those funds and use her own money to live on. I'd be guessing it will be hard to rein in her past spending habits, but if she has indeed had some sort of epiphany about changing course and feeling like she is doing something for herself, she will have a hard road if she turns off the parental money tap.

It won't be an easy thing for her to work out, (and I reckon it would be too easy to fall into the old habit of "money for nothing") but good on her for wanting to change have some meaning in her life.

She has worked 12 hour days for the last 13 or 14 days and hasn't asked for a cent from her folks during that period and is feeling great about the hard work, earning and perspective that's being gained. Spending has been curbed, but not stopped. The spending habits are changing, slowly.

She used to get an allowance, but in the past couple of years things changed to "ask and ye shall receive" – no limits.

Sounds good on the surface...

 

[BayView]

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..

If she is swimming in money and wants to do something useful, then clearly the most useful thing and the most rewarding thing is to help others.

Specifically; the much less fortunate and poor.

Travelling the Country, or other Countries to do this would also get her out and about and see things, and maybe appreciate what she has a little more.