Some People are so Poor, all they have is Money

The quote “Some people are so poor, all they have is money” has been attributed to Patrick Meagher (a Canadian journalist and author), Bob Marley (the famous reggae singer) and others. I cannot confirm who first uttered these insightful words, however, for purposes of today’s blog post, it is the words that matter, not who said it and the attribution. 

When I first read this quote, it reminded me of two blog posts I wrote in 2012, “Are Money and Success the Same Thing” and “Are Money and Success the Same Thing – Part 2”.

In Part 2, I looked at money and success and how they impacted five key aspects of all our lives: family, career, health, spiritualism, and impact on society. My conclusion was that money and success are not one and the same but do impact one another. Meaning in certain circumstances, money can influence success, and success can determine how much money you have. These 5 key aspects can also be applied to understand why “some people are so poor” even when they have money. 

During my personal and professional life, I have met many people who have made substantial fortunes and are also rich in many non-monetary ways. But unfortunately, I have also met many people who in my opinion have only money and yet are very poor in other aspects of their lives. Today I will delve into how this can be (for some readers, entitled children of wealthy individuals often come to mind when considering this quote, however, for today's post, I am only considering those who worked to create the wealth, not their children).

How can you have Money and be Poor?

In searching the internet for comments on this quote, some commentators assumed being poor meant being spiritually poor. My interpretation is that they think such a person is spiritually poor if they are lacking in religious, human and societal values. Others focused on the concept money does not buy happiness and that there are things money cannot buy such as values and relationships. Finally, some people took for granted many people want money and/or success. Yet, they felt it was important people chasing the almighty dollar also attempted to find happiness in day to day living as chasing wealth without chasing happiness would leave you empty and only with money.

Monetarily Successful People

While some successful people may sacrifice spiritualism, in my experience, spiritualism is typically not present or strong to begin with in those who sacrifice that aspect of their life. 

There are people who in the name of money that have impacted society negatively, either environmentally or in other nefarious ways. But those are typically a small minority. Societal values are one area where successful people can sometimes just use their money to improve society, by just signing their name to a cheque. This can be done by funding projects for those less fortunate or giving generously to charitable causes even if they have limited personal involvement or are just donating for image purposes. 

Based on the above, it is therefore my perception that those who are “poor because all they have is money” typically sacrificed family and health to achieve their monetary wealth.

Sacrificing Family and Health

Health

The health topic is unfortunately often clear-cut. Many people work so hard to make money that they do some or all of the following: don’t exercise, don’t eat properly, drink to much or take time to deal with their mental health, which often leads to poor health or even death.

Family

For me, family is the largest casualty of those who are so poor, all they have is money. These people are just so busy chasing money and/or their dreams that they have no time left for their family. I personally do not think most people have any intention to “sacrifice” their family in their chase for financial success. It just incrementally occurs as they excuse themselves to meet a client, work all weekend to meet a deadline, go to business dinners or travel to that extra convention to drum up more business. The energy spent trying to earn every last dollar and workaholic behaviour leads to missing a child’s birthday party, play/recital/teacher parent meeting and Valentine’s dinner with your spouse and the trip you promised your family after you closed that “big deal”. Suddenly, you are not there as a parent, spouse or friend and you compensate by buying gifts and material things, rather than giving your time. 

This is the cost I have seen over the years. Marriages dissolved and children estranged and spouses and/or children with personal, mental or health issues. In the end, the parent becomes solely a bank with little to no actual familial involvement. That is my interpretation of “Some people are so poor, all they have is money.”

Life Balance

At the risk of being simplistic (I am sure some psychologists have 100 page papers on this topic) and/or “preachy,” in my experience, the difference between those who had money and were not poor versus those that were poor was life balance. They did not need to make that last dollar by sacrificing their family time for every deal. Yes, they did occasionally or more than occasionally work too hard or too late and yes, they did sacrifice family time where the business or job demanded it, but overall, they ensured they had their date night with their spouse, attended as many children functions as possible, showed their children charitable actions both financially and by personal actions and just made family time a priority.

This site provides general information on various tax issues and other matters. The information is not intended to constitute professional advice and may not be appropriate for a specific individual or fact situation. It is written by the author solely in their personal capacity and cannot be attributed to the accounting firm with which they are affiliated. It is not intended to constitute professional advice, and neither the author nor the firm with which the author is associated shall accept any liability in respect of any reliance on the information contained herein. Readers should always consult with their professional advisors in respect of their particular situation. Please note the blog post is time sensitive and subject to changes in legislation or law.

Ethical Wills

Wills are typically matter-of-fact documents, as they have to be drafted to withstand legal challenges. Wouldn’t it be nice to have a “softer” complementary document, letter or even a video, in which you can express the following?

1. Your values

2. Your hopes for your family

3. Explain the decisions made in your will

4. Provide for or ask for forgiveness

Today, I will discuss such a will, commonly known as an ethical will.

What is an Ethical Will?

According to Wikipedia, “the ethical will is an ancient document from the Judeo-Christian tradition. The original template for its use came from Genesis 49:1-33”. These wills were designed to pass ethical values from one generation to the next. Modern day ethical wills had been adapted and modified and they remain excellent conduits to ensure our ethics, morals and standards are passed down and on record.

While ethical wills have typically been used to pass personal values to your family, some people are now using ethical wills to include financial issues and/or provide business guidance and values to second generation business owners. I will discuss these “wealth” wills next week.

The website for Celebration of Life, a company that helps people with their legacies, suggests you may include some of the following in an ethical will:

• important personal values
• important spiritual beliefs
• hopes and blessings for future generations
• life lessons
• love
• forgiving others and asking for forgiveness

Shae Irving, J.D. suggests you may also want to include the following in an ethical will:

• family history
• cultural and personal beliefs
• reasons for charitable and personal financial decisions
• personal stories about items of property left to inheritors
• how you would like to be remembered after death

When Do You Present an Ethical Will?

Ethical wills can be written and presented literally anytime from cradle to grave. You can write such a document when your son or daughter gets married, has their first child, or as a statement at the end of your life; but in no way are you limited to such occasions.

Most ethical wills are written as end of life statements and can be shared while alive or after you pass away. I would suggest that most people would prefer to have their ethical will shared after they pass away as it avoids confrontation; although personally, I think there is something to be said for explaining decisions and setting forth your values and beliefs in person.

Ethical wills are very personal documents and no two, will be the same. Should you wish to write such a document, the discussion and considerations above, should give you a good start on writing your ethical will.

This site provides general information on various tax issues and other matters. The information is not intended to constitute professional advice and may not be appropriate for a specific individual or fact situation. It is written by the author solely in their personal capacity and cannot be attributed to the accounting firm with which they are affiliated. It is not intended to constitute professional advice, and neither the author nor the firm with which the author is associated shall accept any liability in respect of any reliance on the information contained herein. Readers should always consult with their professional advisors in respect of their particular situation.

Business Transition Planning

Planning the succession of your business is the most vital undertaking for any small business owner. When this planning involves family, the emotional and financial stress can be overwhelming.

Today, Grant Robinson of The SucessCare Program is my guest poster. Grant is one of the most respected advisors in the area of transition planning for business and family succession.

Over the last couple years, I have been told on several occasions that based on my integrated practice of accounting, income tax, wealth management and consulting, I should attend Grant's course on succession planning. I had it on my list of things to do, but never got around to it. It is really too bad I did not, as I have now gotten to know Grant and he is one of the most dynamic accountants I have ever met (yes, I know, being a dynamic accountant is not saying much, but in this case it is).

If you are a consistent reader of mine, you know that I do not compliment or endorse easily. However, if you have business succession issues and cannot seem to get out of the quicksand, I would give Grant a shout. Enough good things about Grant, let’s get to his guest post, that somehow ties in cars, highways, and succession planning.

Exiting The Business Highway

By Grant Robinson

As the owner and CEO of your business, your primary role is to move the business forward. You drive in the fast lane, covering as much distance as you can in the limited amount of time available.

Yet you know that you can’t stay in the fast lane forever. At some point you will run out of gas!

Don’t wait too long. The exit ramp is on the opposite side of the highway and it’s dangerous to cross a three-lane highway at the last minute. You’ve seen others cause some serious collisions ― some involving their own family members.

It’s much safer to gradually move over to the exit ramp one lane at a time and allow your junior driver to get the necessary experience before taking over in the fast lane.

There are some key things to know and do to ensure you change lanes safely.

• Yes you still need to run a good business by monitoring the traffic conditions and anticipating the roadblocks. It is vital that you are continually aware of possible bridge-outs in your marketplace or industry, and at the same time look for opportunities to diversify via a new highway.

• But before making any moves, you also need to signal your intentions through good communication with the next generation management and family members. Good communication will help ensure each stakeholder is going the same direction and knows what to expect. It is also critical that you check your blind spot by preparing for all contingencies.

•  Finally, you need to be in position well before that exit ramp appears. This means having a plan that preserves and protects the equity you have built up over the years and clarifies how those assets will eventually be distributed.

An integrated transition plan will ensure you address all three of these key components of a business transition.

The Integrated Transition Plan

An integrated transition plan is a focused approach to addressing the inevitable changes to the leadership and ownership of your business.

Over the years you have amassed much more than mere physical assets. Your business, your family and your community all benefit from a number of equally important, intangible assets. Preserving and transitioning both the tangible and the intangible is the foundation of an integrated transition plan.

Consequently, transitioning a business involves much more than transferring the shares of the business. It’s about ensuring the business can not only survive without the current leader but has the ability to thrive under the new leadership. It’s also about ensuring that the family remains connected, regardless of whether you decide to pass the baton to one or more next generation members or sell to a third party.

To help you prepare an integrated transition plan you must meet the needs of three key areas of your business:

•  The Family or Personal area which focuses on the continued support of individuals, the family unit and other stakeholders such as employees and their families;

• The Ownership area which centers on the preservation of the physical capital entrusted to the shareholders; and

•  The Business area which is responsible for building and maintaining the wealth engine that generates the wealth for the stakeholders. 

In the Family/Personal area, your plan focuses on developing a long-range vision that clarifies your direction and purpose for the next 120 months (or two car lease renewals keeping with our car theme). It builds on your guiding principles and philosophy to sustain and grow the social capital that is so important to both your family or partners, and the continuity of your business. This social capital includes intangibles such as your reputation in the marketplace among customers and suppliers alike. It includes the culture that keeps your employees engaged and committed. And it serves to keep your family nurtured, connected and supportive of one another. Essentially, you have a plan that defines the legacy you will ultimately leave your family and your community.

In the Ownership area, your plan should prepare both the exiting and succeeding generations for the transition of the physical assets. In order to adequately protect these assets, you must first clarify the overall ownership philosophy and put the wheels in motion to develop the appropriate ownership structures and agreements.

In the Business area, the objective is to keep the wealth engine running and determine what needs to be done to ensure the business can continue to be profitable beyond a change in leadership, and at the same time attractive to a prospective buyer. This plan includes processes to professionalize the management system, groom the next generation leader(s), transfer the knowledge and relationships to the new leaders, and ultimately affirm that the business can thrive without the current decision-maker.

Planning a business transition is just like managing any other project except that the outcome of this project is critical to the future of many people. Success is dependent upon the right investment of time and resources.

Any business owner who has successfully transitioned a business will acknowledge that it takes a long time ― possibly as much as five years or more ― to put processes in place that enable the business to run successfully under new leadership. Unfortunately, the majority of business owners believe they can wait until they are almost ready to retire to begin planning their exit. It’s not surprising that there are so many collisions on the highway as they try to move to the exit ramp when that fuel warning light comes on.

For many, transitioning a business is a “once in a lifetime” journey. It’s a new and different challenge that requires a roadmap or a GPS. You must go beyond the technical aspects of a share transfer. You and your family need to articulate what you want in order to help you through the process of developing the strategies to get there.

Grant Robinson is a business transition specialist and National Director of The BDO SuccessCare Program, a unique program for businesses and families who want to create greater choice around the future transition of their business and wealth. You can reach The BDO SuccessCare Program at 1 800 598 6400.

This site provides general information on various tax issues and other matters. The information is not intended to constitute professional advice and may not be appropriate for a specific individual or fact situation. It is written by the author solely in their personal capacity and cannot be attributed to the accounting firm with which they are affiliated. It is not intended to constitute professional advice, and neither the author nor the firm with which the author is associated shall accept any liability in respect of any reliance on the information contained herein. Readers should always consult with their professional advisors in respect of their particular situation.

One Big Happy Family - Until We Discuss the Will

This summer I am posting the "best of" The Blunt Bean Counter while I work on my golf game. Today, I am re-posting my 17th blog which I wrote way back in December 2010. This post tackles the taboo subject of whether you should discuss your will with your family. While this is my fifth most read post of all-time, it only had 6 comments which I find puzzling. Maybe our aversion to discussing our will goes as far as commenting on articles about the topic?

I almost forgot that when I started this blog, I used to post a non-financial post with ever tax or financial post, as evidenced by my Dentist's Wallpaper discussion that follows the main post.

One Big Happy Family - Until We Discuss the Will

What I want to discuss in today’s blog is the issue of whether parents should discuss their will with their children.

When there is a “black sheep” child in the family, or a child who is not treated equally in the will, I expect that a family meeting would likely be a disaster. But what about a meeting in situations when the children are treated somewhat equally? There is no right or wrong answer, but I think a family meeting is wise. Any meeting of this type can turn ugly because of money issues, but more likely, any ugliness will be the result of historical family jealousies or resentment over some prior issue or treatment. Nevertheless, if you feel you can navigate the minefields noted above, the family meeting can be very effective and useful.

The family meeting could be used to deal or clarify several different types of issues. For example:

1. Possible perceived inequalities: The meeting could be used to explain why you have left your Picasso to your daughter instead of your son so that he doesn’t feel slighted when the will is read. This discussion could involve explaining that since your daughter studied Art History at university, you feel she would appreciate the Picasso; however, since it is worth $500,000, you have left your son $500,000 of stock to equalize (or if you have not tried to equalize, you can explain why face to face). Also, where you have left more money to one child (perhaps they make less money than the other children), you can use the meeting to clarify why and explain that it has nothing to do with loving that child more, you are just helping them since they have not been as fortunate as the other siblings.

2. Determine wants and needs of the beneficiaries: Many families have second properties such as cottages or ski chalets. Some children may have attachments to these properties while others might not, or maybe you are not sure whether any child would want to take over the property when you pass. A meeting provides the opportunity to raise the issue for your children to decide among themselves if they will want to sell the property, share the use, or have one child inherit the property. This issue may be best discussed prior to a will being finalized.

3.  Deciding on an executor: Most children have no idea of the responsibilities and the burden of being named an executor of the will. You can broach this topic at the meeting to explain the duties of the executor and determine if the children or child you wish to be an executor(s) are/is willing to undertake the position.

4.  Full disclosure: Finally, depending upon how open you wish the meeting to be, you can provide a current list of assets to your children so they know what assets you own and where they are held. In any event, you should also provide such a list to your accountant, lawyer or spouse. A copy of the list should also go into your safety deposit box. They key take-away is that you must ensure such a document exists and someone knows where it is.

The decision to have a family meeting to explain your estate planning while alive and in good mental and physical health is a complex decision based on past family history and relationships. However, if you feel the meeting can be held without creating a “civil war,” it gives you a great chance to explain your estate planning and to get everyone onside.

Update: I followed this blog post up with another in February 2012, which reviews an Investors Group survey of Canadians attitudes towards discussing their wills. If you have any interest, here is the link.

The Dentist’s Wallpaper

There is not much to do while you are in the dentist’s chair, especially if you are not lucky enough to have nitrous oxide administered. Personally, I look for anything to take my mind off that damn drill.

One day while having a cavity filled I started reading my dentist’s wallpaper. Before you say “I think you really did have nitrous oxide administered and maybe too much,” you must understand my dentist’s wallpaper actually has “life quotes” all over it. One of the quotes was “Life is Hard by the Yard, But by the Inch Life’s a Cinch.”

I don’t want to get all philosophical here, but I just found the quote so interesting; it actually took my mind of the drill. Such a simple adage that says so much.

We all can get overwhelmed when we look at all the tasks and requirements of our daily lives, but if you break those tasks down into bite-sized pieces, the totality of all the tasks is less overwhelming. Although this is easier said than done, I do try and remember this quote when I feel overwhelmed.

The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

Are Money and Success the Same Thing? Part 2

In my blog post yesterday, I left you to contemplate some very insightful definitions and interpretations of success and how you would answer the question; are money and success the same thing? After re-reading those definitions and interpretations, my answer is that money and success are not one and the same.

However, that being said, I acknowledge that there is also a thread that closely connects success and money in many circumstances, such that the distinction is often blurred. Thus, today I thought I would expand the question to include not only are money and success the same thing, but can money bring you success or success bring you money? For those that feel I should be true to the original premise and question, I apologize for the re-phrasing, but hey, it's my blog :).

I believe there are circumstances where money can certainly help buy or leverage success while in other situations, money may derail success. On the flip side, there appear to be circumstances where success brings you money.

So let’s look at money and success in five of the key aspects of all our lives: family, career, health, spiritualism and impact on society. 

Family

I agree with John Maxwell’s definition of success noted in yesterday's blog, or at least a variation of it. When it comes to family, love and affection are familial success, not money. Nevertheless, we know families can be torn apart because of money; often because money is very tight, but surprisingly often when there is too much money in the family.

With respect to family, money and success are clearly not the same thing. In respect of my re-phrased question, money will not bring you familial success, but in some circumstances, too much or too little money can tear away at the fabric of love and affection. Familial success in my opinion has little bearing on monetary success.

Career

If we are honest with ourselves, career success often leads to money and thus, this is the one aspect of our lives where I can see how a number of people equate money with success. Yes, there are many people for whom the job is the key and money is only secondary. But when we chat about someone, the first topic is usually about their job, which leads us wonder how much money they make. Or alternatively, John makes so much money as a lawyer, he must be successful.

I definitely think there is some truth in Wayne Dyer's comments noted in my blog yesterday where he says  “Successful people make money. It's not that people who make money become successful, but that successful people attract money. They bring success to what they do.” 

Thus, in the case of a career, even if you don’t agree money and success are one in the same, I think you will agree, there are career related circumstances where money can buy success or success can lead to money.

Health

Striving for money can affect one’s health, be it striving for enormous wealth or enough to just support your family. Alternatively, money may relieve stress (no need to work hard) and buy you better health care.

In this circumstance, I think it is clear money and success are not the same thing. Having money won’t mean you’re successful in health, aka healthy, happy, active (whatever other words you think defines healthy), the only affect money can have on successful health is that it may enable you to buy the best healthcare possible. We all know the best healthcare does not guarantee successful health, but in very selected cases, money may buy you health because of the access to care money provides.

In the end, Bob Marley said it best. On his deathbed he told his son Ziggy, “Money can’t buy life”.

Spirituality

This is one case where money is meaningless. People’s spirituality comes from deep inside and money means nothing. However, it is somewhat ironic that when looking for money to build the addition to the church, synagogue or mosque, the first line of attack are those parishioners with money.

Impact on Society

Many people have a positive impact on society by giving their time for the greater good through volunteering. However, other people with money leverage their money to achieve real or perceived success through philanthropic deeds associated with money, such as building a hospital. Some people feel that is not true success, it is just a donation of money, while others would argue building a new hospital is a true success, regardless of whether the person just wrote a cheque or wrote a cheque and volunteered their time.

I think in this situation, money and success are not one in the same, but money can clearly have a positive impact on society and therefore, promote a form of success.

Conclusion

Wow, this blog post just kept going. If you are still with me, give yourself a gold star. So after rephrasing and rambling on over 1400 words, have we learned anything? I have learned (as I worked out this little philosophical debate in my head) that money and success are not one and the same, but do impact one another. Meaning in certain circumstances, money can influence success, and success can determine how much money you have.

On that note, I wish success to you all; however the heck you define it.

The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.