Wealth and Value

With wealth comes opportunity and responsibility. We can use our wealth to create value and change our world for the better.

Someday, somewhere — anywhere, unfailingly, you'll find yourself, and that, and only that, can be the happiest or bitterest hour of your life.

— Pablo Neruda

I have spent much of my working life in the financial services industry, dealing mostly with corporations that establish international investments or obtain international financing, but also with High Net Worth Individuals (HNWIs), people who make or have more money than needed for their immediate financial needs. Although much of what is written below is directed at HNWIs, I hope that the key concepts will appeal to a broader category of people. You do not need to be a millionaire or exceptionally gifted to add something of real value or meaning to the lives of others. In the first few chapters, I will focus on the "what, why, and how" of making a contribution. In later chapters, I will describe some real-life cases I have been involved with, and will try to explain the many tangible and intangible benefits of adding value and meaning to the lives of others.

Our business specializes in what is called "fiduciary services." This business sector is not widely known. Essentially, it helps individuals and companies structure their assets against the negative influences of death and taxes. As it deals with the two key certainties in life, it is no surprise that it's arguably the oldest business in the world, at least for Christians and other "people of the Book." In Genesis 2:15, Adam is appointed the first trustee of the garden of Eden, which was reputedly located somewhere near Basra in Iraq, at the confluence of five known rivers (global warming flooded the area several thousands of years ago and two of these rivers are now dry). The tasks entrusted to him included taking care of the Garden of Eden, together with his partner, Eve, according to the wishes of God, the settlor and protector: "The Lord God took the man and put him in the Garden of Eden to work it and take care of it." And the Lord God, (in legal terms, the settlor), commanded (written instructions did not yet exist) the man, "You are free to eat from any tree in the garden; but you must not eat from the tree of the knowledge of good and evil, for when you eat from it you will certainly die."

After Adam acted outside the powers granted to him by the settlor, with respect to the trust, by eating from the tree of the knowledge of good and evil, the consequences were swift and the cushy eternal life of being a trustee was replaced with a much harder transient existence. From that point on: "by the sweat of your brow you will eat your food until you return to the ground, since from it you were taken, for dust you are and to dust you will return." With that death penalty verdict, the eternal cycle of working up a sweat to simultaneously make a living and make your life meaningful was established, through generational transition, proper asset management and estate planning, and deciding whether or not to leave a legacy.

Homo sapiens sapiens (the man who thinks, and knows he thinks) is us, the only species on earth with the capacity to think abstractly about the future (as far as we are now able to ascertain). Our frontal brain lobes are further developed than those of any other species. This is a double-sided sword. Being able to look back and think ahead, we can plan for the future (although plants, trees, mopane worms, bees, squirrels, and brown bears also plan for winter), imagine the greatest ideas and dreams, and cooperate effectively with other humans. As Karl Marx said, in Das Kapital,

A spider conducts operations that resemble those of a weaver, and a bee puts to shame many an architect in the construction of her cells. But what distinguishes the worst architect from the best of bees is this, that the architect raises his structure in imagination before he erects it in reality.

As a consequence, we can also visualize and plan for our own unavoidable deaths, deciding how to dispose of our assets, what to organize for our relatives, and to whom we should bequeath our work, accomplishments, plans, and dreams.

One of the wealthiest people in the modern world, Warren Buffett, once said, "If you belong to the luckiest, wealthiest 1 percent of the world, you owe it to the other 99 percent to care about their wellbeing." Based on cold numbers, you belong to that 1 percent if (believe it or not) your gross annual income exceeds U.S. $60,000 (this is not a typo). Alternatively, the major private banks estimate that, once debts have been subtracted, an adult requires just U.S. $4,000 in net assets to be within the wealthiest 50 percent of the world's citizens and about U.S. $80,000 to reach the top 10 percent. An amount totaling U.S. $800,000 in assets is also enough to put you in the club of the wealthiest 1 percent of the world's inhabitants.

I assume that many of the readers of this book either belong to or are close to belonging to the luckiest 1 percent of people in the world, either through income or inherited wealth. I direct my comments to them. Many of those who are not fortunate enough to be in this category either cannot read, are too busy surviving to have time to read, or may not be interested in the subject of this book.

Let me start with the very basics:

How does one achieve a top 1 percent income or become wealthy? This question has a simple answer, as there are really only a few ways:

1) Swing the Wheel of Samsara well and be lucky at birth. Lots of wealth is inherited and kept in families for a few generations (three generations is usually about the maximum, as we will see). People are born into wealthy families or wealthy countries (in Singapore, 17 percent of the population consists of millionaires). They acquire assets that end up being gold mines (sometimes literally) or easily increase in value, as often happens...