I used to advise a busy CEO, it was difficult to get a date in his diary to meet with him face to face.
He was one of the most wonderfully generous and people oriented individuals I have ever had the pleasure to meet.
Yet, his financial plan was an absolute disaster area.
His generosity meant that he spent money treating his family and his employees really well. Staff would tell stories about how he had overheard a story about a trip of a lifetime, only to find it booked for them by his PA a week later. He would book out a hotel for Christmas for his entire family, so that no one had the stress of cooking or clearing up. Meetings would often be held over lunch, where multiple random employees would be grabbed on the way out of the office to come and join the meeting (whether it was relevant to them or not).
I could see that he was spending beyond his means. In fact his savings were reducing at his peak earning period and not accumulating, ready to fund his retirement. I could never see how to make his financial plan work, unless he never retired.
I made multiple attempts to book meetings with him to discuss this, but you can’t tell a CEO over lunch that he is running out of money when you are surrounded by a gaggle of young employees.
The only time I came close, was in a meeting where only one of his senior directors was present. I did start to engage in a financial planning conversation with him (the first one we had really ever had) and he looked deeply uncomfortable.
I soon realised that being generous was only part of the reason for inviting large groups to meetings/lunches. The other reason was to avoid hearing what he probably knew deep down to be true.
It was the adult equivalent of sticking your fingers in your ears and loudly shouting la, la, la, can’t hear you.
This man had grown up as a boy with very little money, but a close family. He was now running a successful business and was able to spend extravagantly, he was generous in his extravagance, never selfish and family was still close. No one had been able though to point out that our financial lives often resemble mountains. In the early years your income is climbing ever higher, but at some point it peaks and then declines. At this point it is crucial to have saved something to live on.
He saw life as linear, I was a poor boy and I am now a wealthy adult. No one told the poor boy to live in the moment, but also to save something to create those moments when the money stopped coming in.
His was an extreme example, but I think that we are all capable of self-delusion. Telling ourselves that we will save something next month, not eat chocolate tomorrow, always feel as well as we do today and spend time with the family when work gets a little less busy.
We are not our own best coaches, we need someone alongside us to guide us in the important things in life.
I may have failed the generous CEO, but our other advisers are doing a much better job walking alongside our clients. Nudging them when they stray off the financial path and relieving them of some of the burden they carry.
Altor Wealth advises clients from our office in Hook, across Hampshire, Surrey, Berkshire, Sussex and Kent, and throughout the UK using the latest technology.