Papa’s got a brand new will – show soul in your legacies
First published in the Sunday Times on 11th October 2015.
A few weeks ago, I made the mistake of taking a life expectancy test online. I fed in some personal data and there was the answer: the program told me I was almost two thirds of the way through my allotted span. Of course this isn’t remotely like being told you have an incurable disease and have only months to live. But this sobering forecast did give me a sense of urgency and purpose — a desire to concentrate on priorities more, and ignore peripheral distractions.
As you look back and survey your life, what is left behind? Hopefully, there is a family, a home and some financial assets. At some point these assets will be liquidated, which after all the tax leaves a certain amount of money. So what to do with it? There are really only three possible answers, since building pyramids has gone out of fashion, and you certainly can’t take it with you.
First, and most obviously, you can go for broke and try to spend it, but conspicuous consumption has never been my style. Chauffeur-driven limos, private jets, giant yachts — in my opinion these are all forms of vulgar foolishness that reveal their owners to be superficial and debauched.
At their core, these are devices invented to remove a chunk of money from those who have too much of it. All that work, all those sacrifices, compromises and risks — for a stupid boat? There has to be some higher purpose to the relentless striving than strutting around on deck in a ghastly place such as Monaco.
As the poet Percy Bysshe Shelley said: “No man has a right to be respected for any other possessions but those of virtue and talents.”
The second possible use of wealth is to will it to friends and relatives on one’s death. This seems a kind thing to do for loved ones, but in truth, inheritance can be a curse. A successful entrepreneur recently told me about his eldest brother, who had inherited the family estate in Scotland. The eldest son had known from childhood that the family’s land and house would be his; perhaps as a consequence, he had never attempted to carve out another career. He had done little with his inheritance except collect the rental income; he lacked purpose, drank too much and was unhappy, despite his comfortable life.
Primogeniture might keep agricultural holdings in one piece, but it also tends to destroy ambition and can lead to deep bitterness between siblings. It is an extreme example of the perils of unearned inheritance.
I have bought and sold companies, and have not spent my career building up a single enterprise. So it is unlikely that I will hand over control of a family business to any of my children. Therefore my heirs will receive cash, not shares.
This is a good thing — it allows them to forge their own careers in whatever field they choose, rather than being obliged to follow in my footsteps.
My approach is in contrast to the culture of the Italians, say, who firmly believe in passing down ownership of private companies to the next generation. However, this limits the ability of companies to gain access to outside capital, and determines that management succession is based on blood rather than proven talent.
I have had countless conversations over the years with founders who explain how their son or daughter was actually the best-qualified candidate to take over as boss — an assertion we both knew was dubious.
I agree with the steel tycoon Andrew Carnegie, who wrote: “It is not the rich man’s son that the young struggler for advancement has to fear in the race of life, nor his nephew, nor his cousin. Let him look out for the ‘dark horse’ in the boy who begins by sweeping out the office.”
And clearly the third — and most important — use for wealth is philanthropy. I suspect this is best done by the living.
As the Kodak pioneer George Eastman said: “Men who leave their money to be distributed by others are pie-faced mutts. I want to see the action during my lifetime.”
Possibly the most admirable giver of our time is Chuck Feeney, the duty-free shops billionaire. He has given away $6bn and is working on donating his last $1.5bn. He has no attachment to wealth or its trappings, flying economy and living modestly.
Sadly, the “hardest-working man in show business” and “godfather of soul”, the wonderful James Brown, did not give away his riches while he was alive.
In his will he stipulated that half his $100m estate was intended to be distributed to educate poor children. But it was contested and, due to legal wrangling, and nearly nine years after his death,not a dollar of his legacy has been spent by his charitable foundation.
Hence in the years to come I shall reverse my previous course, and devote more energy to the wise dispersal of wealth than its accumulation.