A few years ago when I worked for a living managing money, my business associate (he actually owned the business) came up with this “brilliant” idea:   “Let’s find out how much of our clients’ money they inherited,” he reasoned, “because they will take a lot more risk with that portion than they will with the portion they earned.”  He believed that he could collect more in fees if only they would take more risks. He had learned this tidbit of wisdom from his favorite source—a correspondence school located somewhere in Pennsylvania. I was skeptical.   But he insisted.

 

He also insisted by virtue of his dominant business role that I construct a questionnaire in which he sought to discover the amounts of our clients’ inheritances without anyone suspecting that was what he wanted to know. The one advantage that I had in this and in all my dealings with him was that I always gave him credit for things that went right, and put the blame on others for everything that went wrong. That arrangement fit his motives and his personality perfectly, he was none the wiser about my insights, and we all survived as a consequence. It’s a bit of dishonesty that I nevertheless try to pass on to those yearning to learn how to survive in this cruel and imperfect world.

 

The questionnaire revealed what I had suspected: Nobody admitted that they had inherited one dime.  And they were not willing to take more risks with any portion of their inheritances.   I assigned a new axiom to this finding, namely, that people believe after they worked their asses off to inherit something, that it becomes an entitlement, not an inheritance.   I congratulated my associate for his brilliant line of reasoning in spite of the dismal findings, while noting he was not to blame for the selfish attitudes of others.  

 

And that leads me to my next observation about people and money. Most of us (not you or me) will rationalize to the point of absurdity and beyond in our efforts to justify our faulty views about money, who has it, why, and thence onward to a whole series of false beliefs about rich and poor, and what motivates both. 

 

As an example, I watched an interview between Piers Morgan (the British fellow) and Tony Robbins (the American empowerment guru) on television a couple of weeks ago.   Robbins got rich (about $350 million in net worth) by telling others that they have a lot of potential, even when they don’t.   It seems that many people will pay good money to hear what they want to hear, and there is always someone around who is willing to tell them all that soothes their sense of self-worth. 

 

Piers, in typical interviewer fashion, asked Tony a question about money, on the assumption that Tony knew a lot about this subject inasmuch as he had lots of it.   He asked Tony if the wealthy should be taxed more to help pay for the profligate spending by the government.

 

Tony flashed his million dollar smile and replied that he would be in favor of a tax hike on himself and others if it would actually help, but, alas, it would not. He explained that the most money the government could raise by taxing the rich to the max was about $80 billion, and that would be enough to run the government for only  about 10 days. Therefore, let’s not do that, Tony concluded. And that ended Piers’ inquiry into the wealth of people, profligate spending, and budget deficits.

 

Now if Piers had been more astute with numbers, facts, and the subject of his inquiry, he might have wiped that smile off Tony’s face with the following set of facts and argumentation: “Tony, old boy, your reasoning is somewhat diminished by facts. First, you are correct in that the government does spend about $10 billion each day for total annual outlays of about $3.7 trillions. But contrary to that sum being beyond the means of the wealthy, it well within their means.  You see, Tony, the Bureau of Economic Analysis keeps track of our national wealth. And those boring, but smart, bureaucrats tell us that the U.S. total net worth is $63 trillion, and the top 20 percent hold $53 trillion of that total. Moreover, their wealth is growing at 7.06 percent per year, and that rate will produce $3.7 trillion in the top group’s new wealth holdings this year alone. So you see, Tony, with just the growth rate in their holdings, the wealthy could pay the entire national budget—not merely help to reduce the deficit.  In fact, they could pay off the entire public debt and it would not hurt them at all.”

 

Tony might have looked downcast at those revelations, so much so that he might have been in need of a jolt of self-confidence via his own brand of empowerment.   Perhaps not. But we can learn something from this allegory: Isn’t it is fun when you hold the facts, and all the other fellow holds is the money? Well, at least facts cannot be inherited.