At Column No. 500, a Look Back at Lessons Learned

When my first Wealth Matters column ran in December 2008, I wrote that I wanted to examine the strategies the wealthy used to manage their money and their lives in a way that people with far less money could learn from.

Having spent the last week going through 499 columns in preparation for No. 500, I found that I had more or less stayed true to that objective, while somehow not running out of ideas or repeating myself. There have been occasional detours into the esoteric — derivatives as a way to hedge your stock portfolio — and a few sojourns into what can only be called voyeuristic fun. Bespoke perfume, anyone?

Wealth Matters was conceived in a different world, one that was still frothy with 2007-level excess and one in which the phrase “income inequality” had not gone mainstream.

I interviewed at The New York Times to be a columnist the day that Bear Stearns collapsed. I was told I got the job as Lehman Brothers collapsed. My first column ran the day after Bernard L. Madoff was arrested in his Manhattan apartment as his $64 billion Ponzi scheme fell apart.

After his arrest, several other Ponzi schemes collapsed. My columns on the pain they inflicted looked at the due diligence people should have done, alas always too late for the readers who wrote to me.

But the enormous loss of wealth during the financial crisis kept many individual investors scared on the sidelines for years, hindering their ability to recover their losses.

As I write this, the economy and stock market continue to expand into record-setting territory. There is far more awareness of income inequality and a far greater demand to do something about it.

But the central purpose of this column has been to show how we can learn from those who have had more financial success (or bigger flops) to improve our own financial lives.

Over the years, most of my columns fell into four broad categories. Here are a few lessons from each.

It was the mistakes with money that generated some of the best (if painful) lessons.

For example, how to get a mortgage company to stop forcing you to have flood insurance when you don’t need it. Why housing appraisals are given so much weight if valuations for insurance, taxes and mortgage purposes range so widely — and the appraisers themselves are loosely trained. How to find long-lost property like insurance policies. Why home alarm systems are worth the cost. And how to run a background check on household help and train them not to share family secrets.

While the way the wealthy act often offers clues that we can use for our financial well-being, taxes are a different matter. How billionaires pay taxes has little to do with how the majority of readers pay each year. But the protestations of Warren Buffett aside — he noted he had a lower effective tax rate than his secretary — tax rates and policy are enshrined in the Internal Revenue Code, which taxes certain assets and income differently.

About a fifth of my columns mentioned taxes in some way. One thing I tried to impart was just how complex the tax system is. It’s crucial to have an adviser on even simple matters — like using a donor-advised fund to make the charitable gifts as a way to reduce taxes and still be philanthropic.

And that’s before anyone talks about trusts, which are often great vehicles for estate planning but can cause unintended issues for families if not thought through properly.

I had quite a run writing about estate taxes until President Trump’s tax overhaul increased the exemption per couple to over $22 million. At that point, few people had to worry about estate taxes anymore.

Taxes and trusts can be mind-bogglingly complex. I wrote a column on the alphabet soup of tax acronyms — and messed one up. That was one correction that proved a broader point: tax jargon is intimidating and hard for anyone to get right.

Families can be sources of love, support and generosity. They can also cause pain, insecurity and great sadness.

For wealthy families, money can act like gasoline. It fuels whatever they want to do, but also has the potential to blow up everything around them.

I wrote my fair share of columns on family squabbles, including battles over dividing estates and alleged improprieties. What they taught me was the importance of talking through problems before they escalate.

But when you examine how people spend money on their family, a lot of those behaviors, good and bad, seem immutable.

Take children and sports. I talked to three former professional athletes, who all said that overspending for a child to specialize in a sport so early was a waste and possibly detrimental. Few children are going to get sports scholarships to college. But I never felt that I changed any minds: Parents kept spending, even relocating their families for their child’s sport.

Yet plenty of parents, some quite wealthy, told me how they tried to educate their children on the responsibility of money. A group of famous heirs, including Franklin Delano Roosevelt III and Jazz Johnson, offered lessons they had learned from their own gatherings.

Prominent billionaires I interviewed, like Jon Huntsman Sr. and Michael R. Bloomberg, knew they could not spend their billions but had thought deeply about what they could do with so much extra.

Many families of great wealth who had children who were sick tried to use their money and influence to find cures, treatments and care that could benefit others.

Family businesses were a topic unto themselves. Most of those I came across had problems at some point. Yet a group of families who had been in business for many generations in different industries — whiskey, clothing, hot sauce — found principles that every family business could learn from. They had formal rules governing how and when family members could join the business and what the procedures would be if they left. They also had regular family meetings and talked out their problems, even if they had to bring in moderators.

With great wealth comes a greater ability to spend it. Some of my favorites involved a custom vacation where you could walk a tiger, personalized cryotherapy, high-end pet hotels, concierge emergency rooms and college tours by private jet, which doesn’t seem so odd after this year’s college admissions bribery scandal.

Taken together, they seemed more like an anthropological look at a particular time than actionable advice. But other such columns highlighted indulgences that could be appreciated by people of regular means.

Not everyone can collect rare vintages of fine Bordeaux wine, for instance, but many can buy cars, watches and vast Christmas displays, if that was what moved them. It just requires people to make choices with how they are going to spend their money and an understanding that one day that collection may not be valued as highly.

I found at least one group that was able to manage a windfall without having it destroy their lives: winners of MacArthur Grants, which are given annually to, well, geniuses.

One of these wacky stories constituted the only time one of my columns, about a high-end pawnshop, landed on the front page of The Times. It was novel and pointed to a truism of human desire: Rich people overspend like anyone else, but when they go, they go big — but then might struggle to pawn their Bentley.

In the fall of 2009, as the column was nearing its first year, I learned valuable lessons from readers on two topics.

The first one really rubbed readers the wrong way. It looked at the psychology of wealth in the aftermath of the Great Recession and why so many people had begun to associate accumulating wealth with bad behavior or outright thievery. The reaction, which I also wrote about, was a case of blaming the messenger, but it helped me to develop a thick skin when writing something I felt was necessary even if it would be unpopular.

The other column elicited all sorts of shared stories. It looked at a battle in Westport, Conn., over a stone wall that had cost the homeowners two or three times more in legal fees than what they had paid for it. Readers were critical over what they deemed a waste of time and money — the battle stretched on for another three years after my column was published — but they also sent in their own stories of real estate troubles and disputes with neighbors that had cost them dearly.

And it was responses like those that helped with many of the 500 columns. Some of the best ones came from readers with questions. Please keep them coming!

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