By David Rae
Originally published on Advocate.com February 15 2013 4:00 AM ET
Downton Abbey may be part of the “Masterpiece Classics” series on PBS, but some of the financial issues facing the cast of characters on the show are relevant today.
Whether you are talking about overspending, estate planning issues, couples fighting over money or bad investment choices, the residents of Downton Abbey face a slew of financial woes that put the survival of their way of life in jeopardy. With a little extra attention, we can learn from their investing mistakes.
The most glaring example of this comes from Lord Grantham’s choice to put a huge portion of his fortune into a single stock. When this “sure thing” tanks, the family quickly goes from financial security “sure to last generations” to teetering on financial ruin. Even the ladies who aren’t supposed to dabble in these things comment on how stupid it is to bet the house on a single stock. Lesson: there is no such thing as a “sure thing,” and putting all of your eggs in one basket is not a strong investment strategy. Lesson: don’t take risks you cannot afford, and don’t bet the Abbey on a single stock.
While estate planning laws and traditions of inheritance may differ from early 1900s Britain and the present day United States, members of the LGBT community should take note that without proper estate planning some of your assets may get passed on in a manner closer to the archaic rules of the UK versus the way you’d hope it would unfold.
When the heir to Downton Abbey drowns with the sinking of the Titanic, suddenly a distant cousin (Mathew Crawley) is the new heir. The same Mathew Crawley seems to be lucky at having a rich extended family, and he is set to receive another large inheritance from the father of the girl he was going to marry before she passed away. The beneficiary was never changed when the engagement was broken off. Thirdly we see Master Bates inherit all of his cumulative assets from his marriage to Mrs. Bates while he sits in prison convicted of her murder. Lesson: Make sure you have proper estate planning completed to ensure your money goes where you want it. Without it, your distant relative may be your heir rather than your longtime partner.
The Grantham’s concerted effort at “keeping with tradition” could be compared to keeping up with the Jones’s today. While similar houses around them changed with the time, or simply crumbled in financial ruin, the family continued as they had in the past with little thought of the future. Even faced with financial ruin, they went through with a lavish wedding that would be considered extravagant. Lesson: Don’t put your head in the sand and ignore the world around you. Be proactive and realistic with your finances.
Issues with money caused a huge fight the night before the wedding between Mathew and Lady Mary. This fight was serious enough to wonder whether the marriage would happen. These fights and issues continue on through the beginning of their marriage. Mathew stands to inherit another great fortune that could save the family, but he refuses to keep it on principal. The stress and disagreement cause quite a bit of friction between the couple and could easily spell the end of their love of each other. It also highlights the differing view both of them have of money, and what that money means for them as a couple. Lesson: Money issues are major cause of angst in relationships. Make sure you are financially compatible with your spouse and take steps to avoid fighting over money.
Make today the day you get your financial house in order. You may not have a house the size of Downton Abbey or the responsibility of a staff, but your financial issues could be just as ruinous. Consider working with a trusted advisor to help you craft a plan to pay off your debts, and save for your specific financial goals.
DAVID RAE, CFP®, is a retirement income specialist with Trilogy Financial Services. For more information about reaching you financial goals visit www.davidraefp.com Follow him on twitter @davidraecfp
Securities and advisory services offered through National Planning Corporation (NPC), Member FINRA, SIPC, a Registered Investment Advisor. Trilogy and NPC are separate and unrelated entities. Estate planning can involve a complex web of tax rules and regulations. You should consider the counsel of an experienced estate planning professional before implementing any strategy. Diversification and asset allocation help you spread risk throughout your portfolio, so investments that do poorly may be balanced by other that do relatively better. Neither diversification nor asset allocation can ensure a profit or protect against a loss.