Tuesday’s essay generated interesting questions.
These three questions touch on my work as a fiduciary.
#1 – What are the best types of incentives?
There are so many issues here.
Who is deciding, why are they deciding, what is the goal of assistance, does helping help, are you seeking to “parent” an “adult”, what does the situation require, where will this take us in 10/20/40 years, where is my energy best spent… and on and on.
A starting point for tackling these questions is this reading list. If you’re operating in a fiduciary capacity then the linked books are essential reading.
Before we get into thoughts about others, how are you doing? How’s your life? I ask myself this question over and over because of certain realities:
- I am more likely to be successful helping myself
- My ability to influence people outside myself is limited, prone to error and usually leads to resentment
- The people most open to my help don’t need it
- And the biggest thing I have found… what we think is “right” will most certainly change over time
How do you react when others try to help you? Many of us believe we already know what’s required of ourselves. Having an outsider give us more information rarely causes improvement.
Do you care enough to change? By this I mean, “Do I care enough about this individual to inconvenience myself?”
Am I willing to spend time with this person, consistent & frequent time, to help them achieve their goals?
…and it needs to be their goals. Not a goal of pleasing someone else. Not a goal scaffolded onto them by someone who thought it would be good for them.
If you “flow chart” the above then you’ll see there are high hurdles to overcome before you’ll be in a position to consider helping someone, beyond your daily example and the choices you make.
…and that’s a good thing because what most people truly need is you to listen and hear what they think about their life.
Listening, without knowing, and taking small actions will greatly improve your relationship and that’s more valuable than any external incentives you might apply.
#2 – What do you think about financial incentives inside family systems?
I believe in universal support: such as childcare, health insurance and value-for-money education.
Reduce stress inside the marriage (childcare), reduce the risk of ruin (health insurance) and improve human capital (education). Modest, achievable goals.
I do not believe in subsidizing personal consumption choices.
I do not believe in making it easier for a family member to enter the housing market. Learning how to wait, and buy modestly, is an essential life lesson.
A core value, that was taught to me by three prior generations, “everyone pays their own way.”
When considering financial support to an individual, run the numbers on providing the same benefit to everyone in the family system for 20+ years. Small choices have large impacts when repeated across decades and extended to successive generations.
Just like when you evaluate risk, you must assume you will repeat this choice many times. The discipline to assume you will repeat, for a long time, will help you think better.
#3 – What’s my role?
Share knowledge from prior generations, to listen, to love and to set the absolute best example I can within my own life.
The gift I give is my time and a key benefit I bring to the family system is having my own life in order. I am living the life I wish for you.
I am keeping my life together, so I don’t become an emotional or financial liability to my grown kids. I won’t be able to avoid every problem but sticking to the basics will eliminate many unforced errors.
I cultivate the humility to appreciate that I am clueless about what’s best for you. I’m willing to share what’s worked for me but, beware, my memory is clouded by hindsight bias and an inability to see where luck has greatly benefited me.
If you’re unsure then… just love ’em.
Be the brand.