Everyone has their own perspective

Years ago, I did some work reviewing the financial statements for a group of family trusts. There were about 15 different trusts that had been established by an extremely wealthy man for each of his children, grandchildren and great grandchildren. The basic setup for each trust was that the beneficiary could withdraw any amount of earnings each year from his or her trust, but could never draw down the principle balance of the account. Personally I was not all that familiar with the family dynamics as another group of CPA's had actually done the work and I was just a disinterested objective third party who was checking the technical accuracy of their work. While I was there, one of the grand daughters came in for a meeting with the gentleman who was responsible for managing all the various trusts. She was a woman in her early 40's, she was visibly upset and proceeded to yell and scream at this poor man about how it was completely unreasonable that he could not find a way to get her more money from her trust. It seemed totally unfair to her that they expected her to live on just what she withdrew from the trust. She was well dressed and did not appear to be destitute, but it seemed from the conversation, she had no other source of income, besides the money she withdrew from the trust left her by her grandfather.

Of course being the nosy accountant that I am, I inquired as to which trust report was her's and proceeded to see what sort of meager existence this poor woman was having to live on. It turns out she was barely scrapping by on $1 million per MONTH as the earnings from her trust for the previous year had been just over $12 million.

Now you could say that she was obviously a spoiled rich kid who had always grown up being able to afford to buy anything she wanted and that she was just stupid to think you can't live a month on more than what most of us make in 10 years, and you would be correct. As I have retold that story over years; however, I have come to realize that it truly was her perspective, not so much that she could not live on an unbelievable monthly stipend, but that she had no idea where to start cutting her expenses.

I once worked with a gentleman who was without a doubt the most frugal person I have ever known. We would make fun of him because he was always looking for ways to save a penny on something. Granted sometimes his penny pinching ended up costing more than it saved, but he was never deterred to cut costs somewhere. I asked him what drove him to be such a cost cutting nut and he said that it was a kind of game he played with himself. He was always challenging himself to see if he could get by with a little less of something and it had become a source of fun for him. 2009 is only the second year since I left college that our family income was less than it was the year before. I look back and realize that we got very good at spending right up to and sometimes beyond what we brought in each year. I know my family and I have personally gone through several budget cutting exercises in 2009 and I will be honest it was a very hard thing to start doing, but I also learned that like my friend it does get easier to challenge yourself about what can I really do without. Plus, you start to appreciate a lot of small things that you used to take for granted.

I have also come to realize that in some parts of the world (like Haiti which we are hearing a lot about or Zambia where my family has taken up the cause of orphans) that I look like that spoiled rich woman who couldn't live on $12 million a year.  At least I look that way from the perspective of the people who are living on $50 a month in those countries.  There seems to be a growing consensus that the US economy is in for a long slow period in our economy, instead of the boom days of the past couple of decades, so I will keep challenging myself to choose what can I do with less of and show a greater appreciation for the things I do have.

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