I recently read an interesting article by Timothy L. O’Brien of The New York Times. It was published on September 18, 2006, in the online edition of the International Herald Tribune under the title, "Fortune’s fools: Why the rich go broke."
O’Brien interviewed former boxing champion George Foreman. Today, many of us associate Foreman more with oven mitts than boxing gloves. Yet his successful second career as a marketer of George Foreman grills came only after Foreman made boxing history. In 1994, after coming out of retirement and at the age of 45, he won the heavyweight championship against an opponent young enough to be his son.
Why would a middle-aged man, a former champion who had earned millions, choose to subject himself again to the punishing demands and high risks of the boxing ring? To prove he could still do it? For the challenge? Those factors may have been part of it—though, speaking as a man who just turned 50, it would have seemed a lot easier to deal with a mid-life crises in the traditional way, by buying a sports car.
Foreman told O’Brien his real reason for returning to boxing—money. In the late 1980s, he was facing bankruptcy, a more frightening opponent for him than the most aggressive competitor in the boxing ring.
Interestingly, Foreman seems not to have blown his early winnings on high living. Instead, he invested his money. Unfortunately, his investments were unsuccessful. After he made his second fortune, he was wise enough to seek out better advice, and today he is by all appearances a wealthy man.
Yet, in what to me was the most interesting part of O’Brien’s article, Foreman revealed he still didn’t feel comfortable about money, saying, "I will never feel secure again."
This is a man one has to admire for his determination and capability. Even more important, he has had the wisdom to learn from his mistakes. Yet not even his current success has been enough to erase the scars left by his earlier difficulties.
O’Brien quoted Foreman’s assessment that real wealth is more than just one’s net worth. "If you’re confident, you’re wealthy," he said. "I’ve seen a lot of guys with millions and they don’t have any confidence. So they’re not wealthy."
Even though Foreman has apparently not achieved that confidence himself, his definition is right on target. Your level of fear or discomfort about money has little to do with how much of it you have. Lying awake at night worrying about money is a stressful way to live, regardless of your income level.
The fact that someone with money may worry about it or not have the sense to hire competent investment advisors may come as a surprise to you, as it once did to me. I believed that if you had money, you felt secure, you were smart, and you knew how to manage it so you would always have "enough."
Over the years I’ve found out these beliefs were more often incorrect than correct. This is why I have broadened my financial planning practice to include helping clients develop healthier relationships with money. Much as I enjoy managing portfolios and the nuts and bolts of investing, that aspect of my work alone is no longer enough for most of my clients. It’s much more rewarding to help people move toward emotional confidence as well as financial security.
My wealthiest clients are not necessarily the ones with the highest net worth, but the ones who are comfortable with what they have and able to use their resources to build satisfying lives.