Financial Foreplay

Quarterly Reports

Money, it's often been said, won't buy happiness. This is a myth.

I mean, come on!

But there is an element of truth to even the tritest saying, and the fact is that money will reliably buy happiness only for those who don't have it. Getting money brings happiness; having it may or may not.

In the first Quarterly Report, we talked about getting rich slowly; in the second, getting rich quick. But what's this preoccupation with getting rich at all? Just how much fun is it--really--to be rich?

(Hint: How much fun is it to be great-looking?)

Here are the advantages of being rich: You don't have to take the subway, you don't have to clean your bathroom, you don't have to wait until after 11 to call. Here are the disadvantages: taxes, accountants, guilt and the persistent fear that you will somehow lose your money and be reduced to taking the subway, cleaning your bathroom and waiting until after 11 to call. (Also, truly incredible amounts of junk mail.)

But this is the crucial point: There is a world of difference between cleaning your toilet when you have always cleaned it and cleaning it after years of having had someone clean it for you. There is a world of difference between living in a smallish apartment on the second floor and living in a smallish apartment on the second floor after you've lived in a biggish apartment with a view.

It's which way you're headed that counts, not how much you've got.

Consider two families, one making $75,000 a year but knowing, somehow, that its income will be falling to $40,000; the other making $15,000 a year but assured of an increase to $25,000. I submit that the family getting by on $15,000 a year, with its eye on $25,000, is likely to be happier than the $75,000-a-year family facing $40,000.

One family is earning a fifth as much as the other, yet it is likely to be happier. Why? Because things are looking up.

This, indeed, is one of the things that make inflation so pleasant in its early stages, before folks catch on. Almost everybody feels he's doing a little better. Wages are rising, home prices are rising, profits are rising--and, at first, nobody pays much attention to the fact that prices are rising, too, so the gains are illusory. (In fact, in the early stages, they may not be. The prosperous feeling inflation at first brings can bolster confidence and stimulate growth.)

It's also one of the pluses of growing older. Your income is likely to rise gradually with seniority. Even if it doesn't, your standard of living can improve every year. That is because a toaster oven, once acquired, need not be reacquired each year. Gradually, even without a rise in real income, you may find yourself with a growing pile of household appliances, a larger and larger savings account, a cozier and cozier life. (Or you may squander it all.)

A lot of the inequality in the world is inequality based simply on age--and is, thus, inequality of the least offensive kind. A kid fresh out of college--even Harvard--is likely to own nothing but some books, clothes and a stereo, while a postal worker who has been careful may have $75,000 stashed away by the time he retires, plus his home free and clear (plus Social Security and his pension). And that is undoubtedly a good thing. Bad enough that, physically, we should decline steadily after the age of 25, or whenever it is--wouldn't it be depressing if we also started out rich and grew progressively poorer?

I had $400,000 worth of stock options when I was 21, but was fortunately too busy to spend any of it. The president of the company ultimately went to jail for the enthusiasm of his bookkeeping, and my options wound up worthless. Because the paper fortune had never seemed quite real to me (well, it wasn't real, as it turned out), I didn't particularly miss it. But others in the company had easily secured loans against their impending bonanzas--surely, the stock couldn't drop 90 percent in six months, they and their bankers had reasoned; oh, but it could! it could!--and had begun living like the rich people they would doubtless soon be. But weren't.

Even if our ship had not foundered, they were sailing too fast, in my view. For if you have a Learjet when you're in your early 30s, as the president of the company did, what sort of toys have you (continued on page 172)Financial Foreplay(continued from page 123) to look forward to when you're 40 or 50? A yacht? A castle on the Potomac? He had those, too.

A director friend of mine who really did make a small fortune at an absurdly early age, and not just on paper, understood the importance of pacing. Rather than immediately rise to the Jaguar and Bel Air style he could have afforded but not necessarily maintained indefinitely or improved upon, he put most of his money to work for the future and allowed himself a pleasant succession of indulgences. It was a decade before he finally sprang for the house with the spectacular view, and there is still some question about putting in a pool. Every year, life gets a little better.

In broad form, here are the possibilities:

You can start out with nothing to-speak of and get nothing to speak of--drab. You can start out with nothing to speak of but gradually get more--satisfying. You can make a pile and lose it, as I've described. You can make a pile and keep it, which has got to be kind of fun (one self-made friend of mine, 36, has, as a footnote to his grander extravagances, a weekly $50 Oriental bone massage). Or you can have great wealth handed to you at birth. Not so surprisingly, that last is a decidedly mixed blessing, It can rob you of your sense of purpose; it can instill no small measure of guilt.

I know a man who had the misfortune to inherit $1,000,000 when he was three. (His grandfather was a minor oil titan.) He is exceptionally talented, superbly schooled and, fundamentally, a mess. In truth, he's less of a mess now that, at 41, he has finally come into his own (though his father still manages his money). But his better frame of mind has little to do with his wealth; it's his professional and civic successes that have saved him. And yet, even now, when he stops long enough to stare into his vodka martini, he is, at root, unhappy.

One day not long ago, he told me--with no small sense of pride--that after nearly a year, he had finally opened up to the new shrink he'd begun seeing. (If I were paying somebody $85 an hour, I'd try to get it all on the table in the first half hour.) He had been holding back, he said, but had now just put it all out there.Everything. Whereupon he enumerated a list of miseries and peculiarities with which I had long since become familiar.

"What about your main problem?" I asked him.

"What main problem?" he answered.

"Your money! Surely, you've talked to your shrink about that."

"My money is not a problem!" he shouted. "Why do you keep bringing it up?"

In nearly a year with his new shrink, my friend had never mentioned that he was rich. Or that his dad managed his affairs and saw all the checks he wrote. Or that many of his friendships over the years had broken up over his suspicion that people liked him only for his money.

He hadn't mentioned it, he finally lied, because he was afraid the shrink would up his fee. But the real reason he hadn't mentioned it was that it was too personal and painful. The stuff about the carrots and the brassieres and his ex-wife was easy to talk about, by comparison.

And then there's my friend whose ancestor had been given much of Long Island by King George. The wealth into which he was born was such that as a child, where you or I might have knocked a porcelain figurine off the coffee table, he had once scribbled in crayon in a Gutenberg Bible. Anyway, this fine fellow has wallowed much of his adult life in the kind of aimless depression only Woody Allen has the skill to portray. Alone in a huge house except for the staff; jetting off to be alone in another huge house except for the staff--sad.

But if it is a problem to be born rich, consider the problem of having a fortune fall on your head in mid-life, as it does when you win the lottery or when Michael Anthony shows up at your door with a cashier's check for $1,000,000 drawn on the Gotham City Trust & Savings, which you are not to know came from that reclusive student of human nature John Beresford Tipton. What a discombobulation that is! Some handle it well, others less so.

Ken Proxmire had been earning $15,000 a year in Detroit when, in 1977, he won the Michigan lottery. He went bankrupt five years later. It seems that his first move was to quit his job and that his second was to transplant his family from Detroit to Fresno, California, where he bought a new house and a new car and started picking up the tab when he went out with friends. It was, in his words, "a big ego trip."

He wanted to start a bowling alley but couldn't find a bank willing to lend him $500,000 against his annual $50,000 lottery winnings. So, instead, he bought a pool hall and later began selling pool tables at three locations. He moved his two brothers and their families out from Michigan to work in the business, but a failing economy and high interest rates killed off the pool-table market, leaving him with $60,000 in debts, three households to support and no income but his lottery winnings. He filed for bankruptcy in 1982 and told The New York Times that it was such a bad experience he was planning to write a book of advice for other lottery winners. (Now, there's a big market.)

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You can have problems no matter how much money you've got. In fact, the more you've got, the richer your mix of problems.

I was once a minor speaker at a Young Presidents Organization meeting in Munich. It was a meeting of men and their wives--mostly Americans--who had attained corporate presidencies before the age of 40 and had flown to Munich to further their executive educations.

Three of the most popular talks at the University, as the week in Munich was called, were "Acupuncture," "Passive Men, Wild Women" and "How to Make Health Food Taste Good." A talk on the Soviet energy situation and its impact on the world economy, offered by the Harvard professor most often quoted on such subjects, drew 18 people to a room set up for 500.

I was not a big hit at that multimillion-dollar confab, because my talk, "Getting By on $100,000 a Year," was meant mostly to be funny, whereas these folks, facing a bad economy (not that they were likely ever to be reduced to so little), came expecting some hard money-scrimping advice.

One of the major speakers (or "resources," as Y.P.O. calls its faculty) was C. Northcote Parkinson. You've heard of Parkinson's laws? Parkinson, at 73, was magnificent--ever so slow but ever so British, ever so classy. Even watching him ascend the podium--no brief spectacle--was engaging. Picture Alfred Hitchcock in the role.

"I have been asked to talk to you today," Parkinson said slowly, "on the subject of Parkinson's... laws." (Drop your voice a half octave and tuck down your chin on "laws.") "I suppose," he said, "I am as qualified as anyone to address this subject."

But, he said, before speaking about Parkinson's six laws, he wanted to tell us that' he had, just the day before--at this very meeting place, gazing out upon this very audience--formulated his seventh... law. (Drop your voice, tuck your chin.)

I need hardly tell you that the members of the audience were rapt, edging forward on their chairs to attend the christening of Parkinson's seventh law, even if, in truth, the only one of the first six they remembered was the one about work expanding to fill the time allotted to it.

"Parkinson's seventh...law," said Parkinson, "holds that the ablest men"... pause..."get the prettiest girls."

The woman to my right, a total stranger, very beautiful, very Neiman-Marcus, perhaps 36, turned to me and whispered loudly: "Yeah--and when they hit 40, they get dumped."

My eyes widened and I stuttered reassuringly--it was all I could think of--"Oh, I'm sure that's not true."

"You bet your sweet ass it is, honey," she replied.

Parkinson went on about his business. But the point of this, none too swift in coming, is that I have myself, without even so much as querying the great man for permission, formulated Parkinson's eighth... law. And, for that matter, his ninth.

Parkinson's eighth law states, or should, that expenses expand to the income plus credit available.

Or: Whatever you've got, you spend a little more.

Or: Enough is never enough.

(Or, as the sign over the Lone Star Café has it: Too Much is not Enough.)

Parkinson's ninth law: A luxury once sampled becomes a necessity.

You say you don't particularly mind not having remote-control TV? I can state with some certainty, in that case, that you've never had one. You don't mind having to jump in and out of bed every time you want to change the channel or kill the sound? I never minded, either.

Touch-Tone dialing, the six-minute baked potato, sea planes vaulting Friday-afternoon traffic to the beach--those are things it's a cinch to be happy without before they've been invented; possible to be happy without even after they've been invented; but oh, so tough to be happy without once you've gotten used to them.

Pace yourself! Tease yourself with anticipation. Ease the fingers of your aspiration up the inner thigh of your cupidity. Tickle your fancy.

Of course money buys happiness! But both will last longer if you remember the importance of foreplay.

"If it is a problem to be born rich, consider what happens when a fortune falls on you in mid-life."