#86: Five regrets of the rich

9th May, 2022

Welcome to the Idiot Money newsletter. This week, becoming wiser with money by understanding that regrets (especially other people’s) can be a great teacher, but you’ve got to use them properly, including:

• Why you shouldn’t buy a holiday home.

• Why you should quit your job.

• And why, regardless of what you do and don’t do, when it involves making or spending money, you should at least think about doing or not doing it vaguely consciously, because you’re almost certainly not.

Learn from others’ mistakes: regrets of the dying are all well and good, but the regrets of the living (especially the rich) are potentially more helpful. Here are five classic rookie errors people make when they come into a bit of cash.

If you hang around in financial-planning circles for more than a few minutes, you’re likely to encounter Bronnie Ware’s ‘Five Regrets of the Dying’:

1. I wish I'd had the courage to live a life true to myself, not the life others expected of me.

2. I wish I didn't work so hard.

3. I wish I'd had the courage to express my feelings.

4. I wish I had stayed in touch with my friends.

5. I wish that I had let myself be happier.

The right response to which is of course to nod along sagely, mutter something about how sad it is that people don’t realise this sort of stuff until it’s too late, and perhaps blame society, or money, or mimetic desires, before patting yourself on the back that at least you’ll never regret those things, because even if you’re on track to do so, you can quit any time you like.

Momentarily interesting as this list is, it’s also practically pretty damn useless.

Who deliberately sets out to live inauthentically?

Who deliberately works excessively hard?

Who deliberately lacks courage?

Who, outside of the last video logs of maniacs about to shoot up a school, deliberately thinks ‘f-ck friends’?

Who deliberately forces themselves to be unhappy?

And therefore, who, upon reading these regrets, does a damn thing about avoiding them?

It’s like pointing out that no one gets to their end wishing they’d spent more time with people that judged them on their possessions and their postcode, or with colleagues over loved ones. Yet it’s not like we’re short of people actively living like these are important considerations.

Turn these dying regrets into recommendations, and no one will argue with any of them. They’re thus as meaningless as a guide to living as a dating profile advertising a love of travel is as a guide to that particular potential paramour’s personality.

Money without wisdom is a peculiarly depressing sort of poverty

When I write about money, I’m really writing about wisdom.

As I wrote here:

Abstract notions of wisdom are all well and good, but what to do with money is an intensely practical topic. ‘Wisdom,’ wrote Matthieu Ricard, ‘is precisely that which allows us to distinguish the thoughts and deeds that contribute to authentic happiness from those that destroy it.’

The Greeks – unsurprisingly – had a word for particularly practical wisdom: phronēsis. Phronēsis is pragmatic, variable, context dependent, and oriented towards action. It implies good judgment, helpful habits, and excellent character.

In some spirits it can mean ‘mindfulness’.

In others it simply means not being an idiot.

It’s less about knowledge of rules, and more about knowing what to do in a given situation. It’s the difference between telling someone to calm down and getting them to breathe deeply.

The goal of phronēsis – of practical wisdom – is not only how to choose a path to an end, but how to choose the end most consistent with the aim of living well overall. To want what you really want to want.

With that in mind, therefore, in a bid to be more practically helpful than the Five Regrets of the Dying, here are my Five Regrets of the Rich: stuff pretty much all financial planning clients in my experience did, but rather wished they hadn’t.

One of the best things a financial planner can do for their clients is to leverage the knowledge of other clients’ mistakes, so that the ones that haven’t made them yet can be saved from doing so.

They are all recommendations you can legitimately argue with. Please feel free to do so by reply or in the comments.

1. Don’t buy a holiday home

Buying a holiday home is the default move for a ton of people with a ton of ‘spare’ cash lying around.

Most regret it.

This is not because clients haven’t had genuinely great times in their hilltop villas and ski chalets. It’s despite absolutely having done so.

But only idiots compare the greatness of a thing with nothing, rather than the counterfactual. The counterfactual to owning holidays is renting them; it’s not sitting around at home. Great things can be terrible things for you. In fact, they usually always are.

Aside from the maintenance and its associated hassles, pretty much everyone, were they to do it all again, would swap the holiday home for a multi-decade holiday budget.

(This failure to see financial decisions – even the really big ones – in the context of the life they should be serving is, incidentally, a distinctive form of the sort of half-brained worldview we’re working through here.)

2. Do quit your job

‘If in doubt, quit your job’ is sound, well-supported advice. But this isn’t about that.

It’s not even about the specifics of crappy jobs. It’s about the worldview that keeps people feeling ‘trapped’ in them despite their crappiness.

It’s about breaking out of the mode of living that sticks with an unfulfilling job, primarily because of a salary which is primarily used to purchase purposeless things in a performatively wasteful way, to justify the sacrifices (time, energy, health, relationships, and other assorted good human things) made to earn that salary, in a merry-go-round of meaninglessness.

It’s about questioning if the square footage of an isolationist lair is really such a great substitute for the human connection the lair is desperately but vainly trying to feel. And if appeasing addictions is really better than breaking free of the system of belief that put them in charge of your life choices.

It’s about confronting the bullshit underlying the post-hoc rationalisation of the type we saw when we met Nigel, Hugh, and the poor couple who managed to spend £450,000 a year on being worse parents. The same type you see when despite all the resources any human in history could ever hope to control, someone’s dream life gets reduced to amateur interior decorating, and they live not for flow, and flourishing, but for pulling the levers on the John Lewis one-arm bandit in search of the next ‘Ooh, I like what you’ve done with the place’ reward.

The regret these poor rich folk feel is of not understanding sooner that the point of making money is not so you don’t have to think about it, but precisely to encourage you to do so… as a tool for living an examined life. The major upshot of which (for non-psychopaths at least) is to see financial freedom in a much cooler, healthier, way.

(While we’re in ‘top five regrets’ mode, see also the top five career regrets, if you’re into that sort of thing; they’re basically all about quitting despite not feeling completely ‘ready’ to do so.)

3. Don’t gift your children a house

Right up there alongside ‘buy a holiday home’ in the list of ‘stuff rich people do with excess cash’ is gift some of it to their children.

Nothing wrong with this. Gifts, to children or to charity, are generally always better made when you’re still alive. Such gifts can very easily be the most magically transformative, opportunity-creating thing a parent can do for a child, or for people they’ve never met, or for themselves.

However, the way most rich people go about it is regretfully misguided.

Perhaps because they don’t trust that their children have been raised to make half-decent choices, or perhaps because they’re trying to re-live their own youths through their offspring, the default is to buy a house, usually of the parents’, rather than the child’s, choosing.

This may work, but it’s leaving a lot to chance, and unnecessarily so. What parents really want to pass on is not a house, but a transformative experience. For some children this will be best done with a house (though almost certainly one the child chooses with zero input from the parent). However, for some it could be using the same funds to enable the child not to have to look for a job for a few years, to work on something creative, perhaps. Or some other experience entirely.

It’s amazing how often the actual underlying goal isn’t even considered, because of some daft belief about some sort of ‘objective’ reality of financial dreams, or because ‘property!’.

Another common error is to gift multiple children a house to share. Don’t do this. Whatever the parents’ dreams of multi-generational memory-making, the children give far less of a sh!t, are perfectly capable of creating memories in many sets of external circumstances, and it’s generally a recipe for awkward conversations all round, with children tip-toeing around not wanting to appear ungrateful and not wanting to offend, but also really wanting one of their siblings to buy them out.

Also, while we’re on the topic of inheritances, let’s not forget this:

Of vastly greater import than any actual money we may inherit from our parents are their money stories. Not least because we inherit them at a time when we have zero capacity to challenge them, and zero money to prove that they are probably bollocks. This can set us up for some pretty tragic life choices when we do.

4. Do prioritise your physical and mental health (no, really, actually do)

This one feels almost so obvious as to be pointless, but it’s so damn ubiquitous, and so damn important, I’m including it anyway.

I’ve never met a client that wouldn’t swap millions in the bank for better health into middle- and old-age. But hold up a mirror to how they’d dedicated their lives up to that point to doing the exact opposite and they’ll look away, refusing to acknowledge that they’ve firstly made some poor choices, and secondly still have plenty of time to correct them.

They’d sooner use their money not for improving their health, but for making it ever-easier to stay sedentary, while conning themselves with some drivel about how they can buy all the health and relationships and things just as soon as they’ve saved enough money to do so.

Anything you hide that hard from is definitely something you want to face as soon as possible.

All the good human stuff (health, belonging, connection and so on) simply must come before all the mechanical stuff (material attempts to buy the human stuff, which divert resources from actually experiencing the sought-for emotional rewards, because of believing that if a solution isn’t for sale it won’t work). And yet here we all are.

5. Don’t wait

Regret number five of the living is dying while they’re still alive.

There’s a wonderful quote, seemingly misattributed to Benjamin Franklin, that goes ‘most people die at 25, but are buried at 75.’

Most people believe that retirement is the end of a job and the beginning of waiting to die. Despite at ‘retirement age’ likely having more potentially productive time left than has elapsed. And being less burdened by children and careers. And having more wisdom to know what lights their fires (fires that will of course flicker, and fade, and flare up in all sorts of different directions yet). And often having more money to fund everything too.

Thinking you’re broadly ‘done’ when you’ve enough time left to become the world expert in something three times over, not to mention physically glorious, is both depressing and insane.

A large part of being a financial planner is encouraging old folk to just do stuff.

To not wait to experience long-dreamt-of things. To not wait to donate slightly uncomfortably large sums (and likely discover that seeing the effects of doing so far outweighs any ‘sacrifice’ reflected in a net-worth statement). To not wait to try a thousand things, and ‘fail’ at 999 of them. To not wait until you’re ‘ready’ or ‘secure’ or ‘free’.

This isn’t about not waiting too long to ‘enjoy life’.

To set life up as a balancing act between frugality and frivolity is fundamentally foolish, and a strong indication that you’re stuck playing a damn silly game.

It is, instead, about not waiting to examine whether, when it comes to the game you are playing – the way you are attending to your life, the world, and the role money plays in the grand dance between the two – you could be playing a less silly one.

Not least because we regret more what we didn’t do than what we did, so of course most regret-avoidant behaviours are buying emotional insurance against faulty predictions.

As Daniel Gilbert et al wrote:

Research suggests that people routinely overestimate the emotional impact of negative events ranging from professional failures and romantic breakups to electoral losses, sports defeats, and medical setbacks. One of the reasons for this is that people do not realize how readily they will rationalize negative outcomes once they occur [...] people are less likely than they realize to blame themselves for their negative outcomes.

If you treat life as a mad rush to build as big a pile as possible as quickly as possible, before swapping stress for therapy to deal with the effects, you overlook both the facts that if you have value to give the world, then the world will very likely reward you for it, and that the Good Life for which you are doing the rushing is not a destination.

No regrets, well, maybe a few

What these regrets have in common is that they are all markers of a self-deceptive money mindset, seeing numbers where it should see narrative, valuing having things over becoming somebody, and prioritising unthinking over thinking.

The self-deceived mindset that gets us into fearful, regretful, positions also makes us flee from fear when it gets in our face. Dispelling fear requires changing not the circumstances, but the mindset, swapping self-deception for courage.

I said above that the problem with the regrets of the dying is that they are unlikely to make a damn bit of difference to anyone’s life choices. In truth, I doubt these recommendations will make anyone do anything differently either, but, meh, at least I won’t regret not having tried.