Fables of Fortune Page 3

  My firstborn, Aaron, and I traveled to Alaska to hunt bear. Leaving Los Angeles behind, we flew to Anchorage, then caught a prop plane to a lodge near the Tsiu River Delta. We camped on a glacier with Scott, our guide, for three days of the two-week trip.

  Portions of our trip required rigorous climbing and belaying down rocky cliffs. The night sky was filled with sparkling stars, and we could hear giant Alaskan brown bears sniffing at the entry flaps to our tent. We experienced elation and exhaustion, sweating and shivering, utter tranquility and abject fear. Each moment burned an indelible mark in our relationship.

  Together, Aaron and I stalked and bagged a black bear. After taking Aaron’s trophy, we walked down the Tsiu River with fishing rods. We hadn’t planned to fish, but the steelhead salmon were running, and we couldn’t pass up the opportunity. In two hours we caught sixty-three fish between us. It was too easy, so we threw down our rods and started skipping stones on the river. Every fisherman I know has listened to Aaron’s story of steelhead fishing in Alaska like he was describing a personal encounter with God. At the time, the ease of our catch made the experience seem common when it was anything but.

  My other two boys, Todd and Russell, traveled with me separately to Zimbabwe and New Zealand. We had incredible times together. You would think these experiences should have defined my relationship with my kids, eclipsing anything else we did together. However, extravagance does not always result in excellence.

  At the time, these trips depleted most of my savings. The planning was well intentioned. But the resulting memory was an inferior return on my investment. Simply said, the trip was my weak attempt to equal what the super-rich might do with their kids. And my kids didn’t get it! If you ask my boys about their favorite childhood experiences, long before they mention my “trips of a lifetime” they’ll tell you about the YMCA Indian Guides.

  Indian Guides is a children’s program sponsored by the YMCA that provides opportunities for fathers and sons to spend time together. When my boys were young, the program cost $45 a year per child (with a $10 discount per extra child). Initially, I didn’t want to participate. My wife signed me up anyway. Wives have a wonderful way of knowing what our children really need.

  The program consisted of “tribes” of dads and sons (between the ages of five and ten) who met at a different child’s home every two weeks for fun and fellowship, including a story, a craft, and a snack. Each year, we attended three weekend campouts together at regional campgrounds. All of the tribes in the Indian Nation came together for the event; we were part of the Naswawkee Indian Nation group, along with three hundred other pairs of fathers and sons. The dads organized the tribal activities and barbecues, and purchased all the food and snacks. A nighttime ceremony involved an exciting story told around the campfire.

  We were an impressive group of inexperienced campers. Doctors, lawyers, mechanics, construction workers, plumbers, bartenders, teachers, electricians, asphalt layers, pool cleaners, real estate brokers, and stay-at-home dads were represented. Pitching our tents provided a source of great amusement the first night as every dad struggled with the task while his seven-year-old son read the tent-assembly instructions aloud.

  All told, my sons and I struggled and laughed together through thirteen years of Indian Guides. We went on thirty-nine weekend campouts, which cost a total of $10 each for the park entry fee. Dirt, hot dogs on a grill, and campfire stories added up to the most fun we ever had.

  THE TRUE VALUE OF PERSPECTIVE

  International airports are crisscrossed by high-speed human conveyor belts that shuttle passengers to baggage claims and airline gates. Some people stand to the right while on these “flat escalators,” taking a moment to rest their weary arms and legs via the wonder of modern convenience. Others rush by on the left, carelessly slinging their carry-on luggage into anyone who might be in their way. The speed of the conveyor belt isn’t enough; they want to move even faster, get there a little more quickly, save time that probably will be spent later waiting at another gate or for a taxi.

  A few choose to walk through the concourses under their own power. Perhaps a little exercise is in order, so these individuals take the opportunity to stretch their legs before or after a long flight. Very rarely, a traveler will stroll down the corridor, taking his or her time. All of these people are heading to the same planes and baggage claims. What they may have failed to consider is they’ll all depart or collect their luggage at the same time, regardless of the method they choose to get there.

  Why do most of us believe quicker is always better, sooner is preferable to later, faster is twice as good as slower, and richer bests poorer? Does our destination change if we reach it a few minutes sooner? Is a reward more meaningful if it comes now rather than later? Who proved that faster is something to be proud of? Does the mere fact of having wealth make life more significant?

  Our perception usually determines our perspective. When traveling on the human conveyor belts, the only times we physically feel a difference are the moments when we step on or off. Within seconds, speed becomes relative. The only way to tell we’re moving faster than normal is by looking at the people who aren’t on the belt. To the passenger who opts to walk next to the flat escalator, you appear to be effortlessly passing them. But if we look down at our luggage and keep our eyes on the path itself, we seem to be moving at a normal pace.

  Albert Einstein believed if we were able to travel at the speed of light, time would stand still. In theory, we could board a train that moves at a rate of 186,000 miles per second and arrive at our destination at the same moment we left. On the train, time would seem to pass normally. Only when we stepped off the train would we realize time had not advanced. Time would be relative to our situation.

  In the same way, wealth is relative. Most of us stand on the concourse of life, watching the rich pass by at a faster pace. We envy the conveniences they enjoy and assume our lives are common and boring in comparison. We imagine the wealthy spend endless hours each day swinging from one passion to the next, experiencing an endless itinerary of life’s “Disneyland” attractions, one more exciting than the last. But be realistic. How many roller coasters do you think a person can handle in one day without becoming bored or getting motion sickness? The super-rich may travel on the speed walk, but from their perspective they are moving at a normal pace.

  Some of the super-rich fear anything that might be perceived as ordinary. They value the perception that they are different, that they are the haves of the world. The rich often pride themselves on uncommon lives and constant new experiences. Whether or not they offer true satisfaction and fulfillment is a perspective that is difficult for the beholder to evaluate.

  When the haves seek to entertain themselves, they look outside. When the have nots look for entertainment, they look inside.

  In other words, when the super-rich get restless, their money gives them access to a lot of things—trips, boats, cars, houses, entertainment from outside themselves. When one experience becomes common or ordinary to them, they become complacent. So they find something else to acquire or do. On the other hand, when regular folks get bored, they have to look inside to what they already have for activities they enjoy doing, rather than relying on other things to entertain them.

  If you are super-rich, perhaps you might recognize a lesson from the financially modest. Their weddings may not have a thirty-piece band, but their DJ will have you dancing your shoes off instead of just being a spectator in the audience. It takes a strong will to accept humble surroundings, to cope with the perils of every day, and to find fun in ordinary things.

  CHAPTER THREE

  GIVING A LOT FOR A LITTLE MORE

  I typically avoid French restaurants, not because of the food, but because of the quantity and price of the food. The appetizer typically fits on a teaspoon, the salad requires a specific tiny fork, and when the main course arrives I see more plate than food. The bill always comes on a very small receipt, and the bottom lin
e is typically large. I appreciate value in return for my hard-earned money, and meals like these feel abnormally costly. I’d much rather have a char-grilled hamburger and a dish of homemade ice cream in my own backyard. Six bucks never tasted so good.

  But French restaurateurs are actually wise. They sell the experience of dining. They know a select few will pay a lot of extra money to feel a sense of elevated service, to be greeted by a haughty maître d’ in a tuxedo and spoiled by table-side preparation. The owners of such restaurants recognize their patrons want to be treated like kings and queens, and they create a sense of exclusivity and foster the perception of quality through the presentation of fine furnishings, crystal, china, a snooty waiter, and a big-name chef.

  Why the small portions? The French are also experts in teasing the appetite. They know their food is rich and filling, so they balance a diner’s desire for exclusivity with an unfulfilled appetite. Portions are just shy of the additional bite that would completely satisfy your hunger. You leave wanting more.

  DEFINING VALUE

  The super-rich are ready and willing to pay whatever is required to receive better service, treatment, and quality. They want to achieve an experience few have ever realized. They determine value by exclusivity.

  I remember an anniversary dinner at my wife’s request at Le Cuisine, an expensive French restaurant in Orange County, California. The people at the table next to us ordered coffee and eight individual shots of Napoleon brandy that cost $250 an ounce. Two waiters arrived at their table, one with a cart carrying freshly brewed coffee and the other with a handheld platter of crystal shot glasses already filled with the precious liquid. To our horror, the host at the table instructed the second waiter to pour each shot of brandy into a cup of coffee. Without showing any hesitation or emotion, the waiter replied, “Of course, sir,” and poured $2,000 of brandy into $40 worth of coffee. As I witnessed the event, I realized each shot glass of brandy cost more than my entire anniversary dinner.

  I can’t imagine ordering Napoleon brandy—its exclusivity doesn’t add enough value for me. If I had tasted it, I would not have known or cared about the difference between expensive brandy and regular brandy. Plus, my wife would have immediately recognized and pointed out she could have bought multiple new dresses for the same price as something she doesn’t even like. Celebration over.

  DIMINISHING RETURNS

  The newly rich perceive value because everything they ever wanted to purchase or own now seems cheap and easy. When money becomes no object, every purchase is a “deal.” At first, every acquisition offers a sense of value because it was previously unattainable but no longer represents a significant expense. But over time, the sense of value diminishes with each purchase. They feed at the table of materialism without ever being satisfied.

  When Peter was first referred to me as a client in 1996, he arrived with what he perceived to be a huge problem. He worked as an interstate truck driver for a large moving company. Every Friday he returned to his one-bedroom apartment in Westminster, California. On the weekends, Peter worked as a handyman for several local homeowners.

  An elderly woman named Annette lived in a ramshackle house on the Seal Beach waterfront. She was elderly and lonely. Peter had his hands full with service calls from Annette because her home was quite old. Peter was Annette’s only real contact with the world. She always made him sandwiches and invited him in for visits. For five years he fixed her faucets, mowed her lawn, rewired electrical malfunctions, and spent time talking with her about unimportant and trivial things.

  On a Monday morning, Peter sat in my office nervously awaiting a legal consultation. He had never been in a lawyer’s office. And even though he had done his best to clean up for our appointment, his fingernails were permanently stained with dirt and his shirt needed a good washing.

  “Annette is dead,” he muttered. I remember thinking, Criminal law is not my area of practice, and it sounds as if Peter needs a defense attorney. Then I thought about the pocketknife I kept in the top drawer of my desk and pondered whether I could inflict much damage if this killer tried to assault me. Peter passed a torn piece of an Albertson’s brown grocery bag across the top of my desk. With two hands, he gingerly turned and centered the brown paper on my desk so the writing was facing me.

  Nearly illegible handwriting was scrawled across the front in gray pencil. Each letter was an inch tall or more: “I, Annette Simpson, give all of my property to Peter Corin, dated May 5, 1996.” She signed the letter in an even larger hand.

  That was all. Annette had died of natural causes.

  Peter inquired, “What does this mean?” He didn’t seem to want the answer.

  “Well, it depends on who Annette Simpson was and what property she had when she died,” I counseled. He hadn’t given me much information. “This is called a holographic will, and as long as it is dated and in the handwriting of the testator, it is as legal and effective as any will or trust.”

  Peter squirmed in his chair. “I was afraid you might say that. She owned an old house with a few sticks of furniture.” He fidgeted with his car keys. “I’m just a simple guy with simple needs. I have never had anything worth much. I wouldn’t know what to do with that house.” His next question took me by surprise: “Do I have to take it?”

  “No,” I said. “You can just rip up this paper, and her property will go to either her heirs—if she has any—or the state of California.”

  “She didn’t have any children,” he reluctantly volunteered.

  Peter didn’t mention Annette’s home was situated on one of the most expensive stretches of coastline in Southern California. After my staff completed a title search, we learned Annette not only owned the home and lot; she also owned three other oceanfront lots next door. Peter never thought about the “lots next door,” where Annette had asked him to mow down the weeds three times a year.

  Peter became a multimillionaire in an instant. Oddly, his new fortune seemed to make him extremely uncomfortable. A more accurate word might be horrified. He started calling me every day with concerns about the properties. Peter told me he would gladly sell all of the property to me for $200,000. This was one of the greatest tests of integrity I have faced during my legal career; a multimillionaire was willing to sell me his estate for $200,000. Instead, I offered to find a listing agent who would assist him in selling the house and lots. Ultimately, Peter received a seven-figure down payment in cash and a promissory note secured by each of the four properties that would yield him a monthly income of tens of thousands of dollars for decades to come.

  My job as his legal counsel was complete. Peter’s present financial situation and future security was like Fort Knox. But his life was about to unravel. First, without asking anyone, Peter bought a Kenworth diesel big rig. He had never bought anything new before, but he had always wanted to pull his own cargo. Peter became an independent interstate trucker. He appreciated the realized value from his purchase; the truck met his expectations perfectly. Peter thought the salesman was sincere when he said the $125,000 list price on the tractor was the lowest the dealer could accept to sell the vehicle. Peter also assumed because he paid cash, he didn’t need to insure the truck.

  His brother-in-law Bill suddenly took a great interest in helping Peter with his money. Within a week of disbursing the funds, Peter and Bill came into my office. Bill had convinced Peter to invest $500,000 in his accountancy practice. Bill signed a promissory note—unsecured by any collateral—that entitled him to make interest-only payments for ten years at an absurdly low interest rate. My hands were tied; Bill was a previous client, and giving advice to either party would have constituted a conflict of interest. I did share my opinion that it is never a good idea for family members to invest with one another. Bill took Peter to another lawyer, and the deal was done. Six months later, Bill convinced Peter to accept $50,000 as payment in full for the remaining balance owed on the note. Peter lost $450,000 to his opportunistic brother-in-law.

 
Next, Peter decided to upgrade his living standards. He could easily afford it. So he purchased a home on the beach and purchased not one, but two new cars to fill the garage. He paid retail for everything. Peter hated confrontation; he didn’t want to ask for a deal.

  Simultaneously, he began to purchase things he didn’t really need. One day, Peter remembered his father had taken him hunting when he was a child. With great nostalgia for “the good old days,” Peter started collecting expensive rifles. He planned to learn how to hunt again. But somewhere around the purchase of the fifth or sixth rifle, he lost interest. In the months that followed, he gave his rifles away. They didn’t hold any value.

  As he continued to maneuver for more and greater material gain and personal excitement, he forgot about the activities he used to enjoy—tinkering, fixing things, and taking hikes on the local mountain trails. The menu of acquiring more things was on the table, and he was busy letting the main course of materialism dictate his every move.

  Twelve months later, Peter appeared in my office once again. He had bailed two nephews out of jail, given several supposed “friends” money to start businesses, and bought a new Harley Davidson motorcycle that had been promptly stolen because he left it out on the street at night. He had crashed his uninsured Kenworth while hauling cargo, damaging another vehicle and injuring the driver. He was being sued and was paying for the cost of an attorney because he had no insurance. His life had become hell.

  In a panic, Peter sold the mortgages he held on the three oceanfront lots to an outside investor for fifty-five cents on the dollar. After paying the legal fees required to get Peter out of trouble, he declared bankruptcy. Peter left my office on the verge of a nervous breakdown, unable to enjoy a moment of his life.