Can Mo' Money Really Mean Mo' Problems?
MICHEL MARTIN, HOST:
We turn now from consumer protection to personal finance. It's been weeks since that huge lottery jackpot made just a few people millionaires and left many of the rest of us with worthless tickets stuffed in our junk drawers. But if the disappointment of not being a few hundred million dollars richer is still on your mind, this conversation is for you.
If you're still contemplating the fantasy of what you could do with money like that, college and retirement funds paid up, a second home, shopping sprees, a life with no worries, our next guest says that old cliche really is true. Mo' money, mo' problems. And he says he should know because he is a financial and legal advisor to the very wealthy.
He has a new book out. It's called "Fables of Fortune: What Rich People Have That You Don't Want." His name is Richard Watts and he is with us now.
Mr. Watts, thanks so much for joining us.
RICHARD WATTS: Hi, Michel. Thank you for asking me.
MARTIN: Now, you know, Mr. Watts, let me just say that the first thing I bet is on a lot of people's minds is not the troubles of the wealthy. It's the trouble of getting by, you know, trying to make sure that their kids are educated, that the mortgage is, you know, paid every month. So, you know, given the economic troubles that we've been having in this country and also around the world. So what's your thought about why this is the right time for this book?
WATTS: Well, I really don't think that the book was meant to expose or to be an expose of wealthy people, but really to talk to the middle class and to say to the middle class, you spend an awful lot of your time dreaming about things you probably will not have. And I can tell you that, once you get to what you call the promised land, it may not be as good as you think.
MARTIN: You do not pull any punches in this book, you know, I have to say. One of the things that you are very blunt about is how wealth can unravel and compromise marriages. For example, you write: When you wake up at night and see your spouse sleeping next to you, what do you see? Has she stood by you for a long time? Has he done his best to provide you with a worthwhile life? Has he or she made you feel like you deserve to be alive and loved?
You talk about the fact that, oftentimes, significant wealth can compromise a marriage and I think a lot of people might be surprised by that because they would think that, if you don't have money worries, what do you have to fight about? Tell us why it is that you have found, in your experience, that significant wealth can really compromise those relationships?
WATTS: Well, there's two sides of that, Michel. The first part of that is people that become wealthy with their wives, and then there's those people that have been divorced and are now trying to find new wives, that have wealth.
The first one is just the issue of when a lot of money comes to play, husband and/or wife, whoever made the money, has their time taken more and more and more. It reminds me of the time when I saw the CEO of a very large Fortune 500 company sitting on the beach with his kids playing in Hawaii and he did nothing but tend to two iPads, two phones and a laptop that he had. The entire time he was sitting on the beach, that's all he did.
And so there's this sense that we're growing apart. We don't have the same direction anymore and, frankly, we have the money to be able to afford to divorce each other.
The second side of that is the husband or wife who's divorced now, so now you've got a single person going out to the marketplace and looking for love. And the people that are usually interested in them become very interested in them and it doesn't seem like it's because of their money, but somewhere in the process, oftentimes - and I would say most times - they knew of that person because they had money and they headed in that direction to make sure that, if that particular person that's interested in being married - and I'm talking about the non-wealthy person, the have-not - is closing in on someone, they want to make sure that, if they married for love the first time, they want to make sure that they have lots of money the second time.
MARTIN: You also talk about kids, you know, how children can be affected by wealth, and some of the stories you talk about - the sense of entitlement - are really sickening, you know.
(SOUNDBITE OF LAUGHTER)
MARTIN: And things that you might expect. You know, kids just going off and just buying, you know, whatever and parents just setting no boundaries at all because it doesn't affect their financial bottom line.
But one of the - I think - the most powerful stories in the book is your own, where you talked about how one of your sons racked up thousands of dollars in credit card debt without your knowledge and thought you would bail him out, and you didn't. Could you talk a little bit more about that?
WATTS: Yes. That was my son Todd. He was at University of Southern California. We put him on a budget and the lifestyle that he wanted to engage there with a lot of the kids that were there was more than he could afford. And so without telling us, he basically started getting - taking every credit card that was offered to him and, by the time he graduated, he had $48,000 in debt, in addition to, you know, the things that he had obligations for with regard to his school.
And it was horrific and it created a situation where my wife and I sat looking at each other and my wife said, he's a great kid. He got great grades. He's going on to graduate school. Pay it off. Just write a check and pay it off. And I said, first of all, I can't do that and, second of all, I won't do that. And we made him pay and, over the next years, he lived with four guys in an apartment. He had very little he could do for four years.
He went on to graduate school and now he's got a job and he has paid that off and, at the very end, he wrote a check. I told him, if he ever got a bonus, he would have to use the entire bonus to pay the balance off, which he did and he and I were both in tears when we watched, after four years, that balance go to zero. He said, I never felt so good to be poor, Dad.
MARTIN: I'm speaking with Richard Watts. He's the author of the new book, "Fables of Fortune: What Rich People Have That You Don't Want." It chronicles some of the difficulties that extreme wealth can actually cause or bring to people and their families.
So what about people who are struggling to pay their mortgage? People that are probably listening to our conversation and are struggling to pay their mortgages or struggling to keep the kids' college funds funded so that they - kids can have some choices, you know, later on, are struggling to make sure that they have something to live on in retirement? You know, what's your message for them?
WATTS: Well, there are varying different levels of where people are and, certainly, people that aren't eating and don't have a roof over their head - I feel awful for them and feel that they are entitled to gain whatever they can from life to put themselves out of that position.
What I'm really aiming at is the middle, the people that are making, you know, 75,000 - I think Time magazine said - and above, the people that really have the opportunity to live on what they have. And my message to them is it's probably best for you to quit dreaming about something you will probably never have, but to really recognize the blessings of where you're at and what you've got, and just to enjoy the things that you've got because there's things you've got that the wealthiest families in America can't get.
MARTIN: Finally, have you ever met anybody or worked with anybody who can have their cake and eat it, too? Can you be wealthy and not wind up with all these problems that you talk about in the book? Bratty kids, you know, entitled spouses that you're not really sure what their motives are. I just want to be ready in case Powerball comes through.
WATTS: Yeah. I speak about that in the book on several occasions, that there are people that do this, but the very interesting thing is that what they do with the money is they begin to use it as a security blanket and they don't use it in order to elevate their lifestyle.
So the ones that have been successful at it have done it basically to create security and the Warren Buffetts of the world, when they get to a place where they can have anything, they don't allow themselves to have anything and they make sure that they continue to echo to themselves that this was never about having jets and 15 homes and having more than I could possibly own in the way of a wardrobe and house in one place.
It's really about the journey and it's about security. And so they put themselves in a position where they want something in the future instead of putting themselves in a position where anything they dream, they go get.
MARTIN: Richard Watts is the author of the new book, "Fables of Fortune: What Rich People Have That You Don't Want." He joined us from Costa Mesa, California. Mr. Watts, thanks so much for speaking with us.
WATTS: Michel, thanks a lot. Bye-bye.
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