As Lisa Marie Presley’s tale of financial loss hit the tabloids this week, I imagined Elvis looking down from the great beyond, tears in his eyes, crooning about all that work, all those songs, all the commercial nonsense he put up with over the years to give his family financial security (OK, so that wasn’t the only reason he did all those things). And after all that, his daughter blew it all.
Celebrity riches to rags stories are delicious: juicy details of wild spending and dissolute lives followed by the wicked satisfaction of watching a charmed life come undone. And Lisa Marie’s is quite a story. If one believes the reports, Elvis’ daughter started out with a trust of significantly more than $100 million dollars. Then her profligate spending, combined with a business manager who caused her to to sell off 85% of her stake in Elvis’ enterprise and made a series of bad deals, poor investments and financial decisions that left her trust with less than $15,000.
To be sure, Lisa’s problems are trivial in an age of massive human migration with epic losses of home, family members and country. But her story still has the power to send a chill down parents’ spine. Every parent wants their child to be happy. And especially when you actually CAN give your children pretty much anything (like Elvis was able to) it’s hard to hold back: why not make your baby happy? Elvis’ darling daughter may have arrived at this unhappy juncture because her dad took pains to make her happy but didn’t pay so much attention to making her accountable. It turns out that the financial habits of a family are a powerful indicator of how happy that kid will be as a grown-up, not just a sunny 5, 10, or 15 year old.
So what could Elvis have done to keep his daughter out of her current drama? Plenty. Financial education is not just about the money; it’s about raising good kids–happy and accountable. The practices below go a long way toward making sure you don’t end up Crying in the Chapel with Elvis.
- Hone in on your financial values. What are financial values? Every family has their own: messages like ‘live within your means’; ‘waste not, want not’, or ‘save for a rainy day’ are common ones. Whatever your own family’s financial values are, make them as clear as a flashing neon sign. After every talk I give I can count on at least a few people in the audience staying after to tell me that, “My father always said…” or “My grandmother always told me….” Then they launch into a story that explains who they became. That word, always, is the clue that tells me that the steady, repetitive messaging of values that came from someone important in their lives is what helped shape their character–and their financial practices.
- Model those values. It’s one thing to tell kids what’s important; another to live those values. “Do what I say, not what I do” is an old chestnut parents bring out when they’re tired, frustrated, or just sick of explaining themselves to their annoying children. But if that’s the best you’ve got, you may find yourself sharing a cry with Elvis. I bet The King had wise words for his little girl on more than one occasion. But what she saw in real life either undermined his words or wasn’t enough to make them come to life.
- Teach the basics. Lisa Marie accuses her business manager and ‘trusted advisors’ of incompetence and corruption. If she wasn’t working with fiduciaries she’s probably at least 75% right. But it’s a long journey from $100M to $14K and her current financial disaster could have come to her attention earlier if she’d been taught to be vigilant. Many young people ignore the financial details of their lives or offload their financial responsibilities to ‘trusted advisors’ and ‘experts’ who are supposed to support life styles and bad choices by magically making money appear, no matter the behavior of the kids whose capital it is. Using a credit card is a financial decision; knowing your credit score and real bank balance is financial data. If your offspring is unable or unwilling to monitor their financial data by the time they’re off to college, they’re financially vulnerable. I suspect Lisa Marie was not looking at financial reports with any regularity. And if she did she may not have understood what she was looking at. If you aren’t discussing your kids’ financial choices and options with them–whether it’s an allowance or their trust fund, you’re missing an opportunity to help them acquire skills and confidence to engage responsibly with those advisors and experts they’ll need to work with over the course of their lives.
- Resist willful ignorance. You know what this is: it’s the 15-year-old who puts off driver ed because his parents can afford to (and will) pay for Uber, or mom is available to chauffeur–actually learning to drive means too much responsibility. It’s the kids who feigns ignorance so they won’t be called on to put the casserole in the oven (“I don’t know how to work the stove; I’m afraid of it”); set the table (“I don’t know where the dishes are”) or wash the car (“I’m really bad at it, I always leave streaks; can’t we just go to the car wash?”). It often is easier, quicker, and less trying to do it yourself or farm it out. Kids are masters of willful ignorance and in a busy, multi-tasking life, parents will pay or pick up the slack rather than spend the time it takes to get kids to do the things they feign ignorance of. But when I read that “Lisa Marie blames her business manager, Siegel, for not warning her she was spending beyond her means when she bought a $9 million English estate,” it hit me that mastery of life’s challenges is how kids develop skills and the habit of knowing you have enough money to pay for that $800 phone, the $25 thousand dollar car–or Lisa Marie’s $9 million estate. The parent that insists on mastery of small things, early in life has a greater likelihood of raising an adult who is competent and dialed in enough to know if buying a $9 Million dollar estate is actually viable–or a financially foolish decision.
- Practice financial transparency. Akin to resisting intentional ignorance is the practice financial transparency in the family. Most kids know how much things they want cost: that new drone, collector kicks, a trip to Aspen, an Apple watch. But ask them about their phone bill last month or what their car insurance costs and see what numbers they give you. Parents are often aghast when I say kids need to know the real cost of life and the decisions families make to live within their means. Withholding that information allows kids to avoid knowing the choices their parents make to allow their kids blissful ignorance. Even among the very wealthy, the cost of life ignorance is kids with a sense they never need to make ANY choices–which means they don’t learn critical thinking, priority setting, or the discernment that comes with developing judgment. Because the marketing genius of companies exceeds the consumer awareness of even the most savvy amongst us, we leave children unprepared to make the calculations of lifestyle, values and finances that will keep them secure in a world poised to part them from their assets.
Lisa Marie’s travails, are to be sure, in a class of tragedy most families will never endure. But many families know the difficulties of a kid whose credit score is never higher than 525; or of a college student whose score is 750 because the parent pays off every credit card in full, enabling that student to get ever more in debt. And many families know the anxiety of worrying about how to help a child become financially self sufficient. Elvis Presley’s tears are a figment of my imagination. But Lisa Marie’s dilemma comes from values possibly espoused but not lived and basic financial knowledge not acquired or actively ignored. There’s no luck or magic in any of this. Every family can be clear about the values that guide their children’s lives and most families can nurture the acquisition of basic financial skills among their kids. It requires mindful intention, an investment of time and yes, real effort, but that seems pretty reasonable as a way of warding off financial disasters–big and small.
Something You Should Know About: There’s a new program this summer that has the potential of transforming a teenager’s understanding of the world–and themselves. Launch Generation is the brainchild of two women who worked with me at Independent Means and Camp Start-Up and have now gone on to create the next generation of summer programming for teenagers. Not JUST a program emphasizing entrepreneurial skills (though there is that), Launch Generation helps kids explore their own strengths and potential in a world of both endless opportunity and changing circumstances. For more information about dates, sessions, agenda and costs, visit: https://www.launch-generation.com/; call 619-736-1097; or email firstname.lastname@example.org