Beware the social distortion of money

When McGuire broke another record the following season, a guy called Tim Forneris caught the ball and went to the players dug-out to give it to McGuire as a personal memento. President Clinton was so impressed that he invited Forneris to dinner at the White House, the photo of which Forneris proudly displays on the mantelpiece of his humble home.

The financial media attacked Forneris for being an idiot. They valued the ball at four million dollars. You can tell me who was the wise man in all of this.

A little sobered by the above, I took my research into the realm of the corporate world and read ‘Deals from Hell’ by Robert Bruner, a book that outlines 12 mergers of major American corporations that went badly wrong because financial acumen is not improving.

All of these mergers failed because the directors and major shareholders of the merging companies were incredibly greedy, and sought values far in excess of what the companies were really worth. Their aim was not to create great new companies that would provide financial security and good returns for mum and dad investors, but to make as much money as possible, as quickly as they could, and get out before the markets woke up to them.

As soon as these deals were done, the executive staff of the merged entities took massive rises in salaries and bonuses, justifying this by saying that they were now managing a bigger company and were entitled to be paid handsomely for the increased responsibility. They then implemented the cost cutting that everyone says must happen when you merge companies.

So, they sacked thousands of workers in order to pay for their own salary rises. Some of the great mergers then collapsed altogether, but the perpetrators had already cashed in their chips and left — prime examples being the mergers of Penn Railroad with New York Central and Enron with Dynergy.

You come to the conclusion that none of these guys understood the chaos caused by the abuse of money, and did not have a clue how to live with it responsibly.

All of this reminded me of the fact that, a quarter of a century ago, I wrote a book called ‘Living with Money’ which Hodder and Stoughton published for me in Wellington, New Zealand. We only printed a limited edition of 2,000 copies, and it sold out. They invited me to update it, but I was too busy on other matters at the time and let a splendid opportunity pass.

Now, the world has changed so much that much of what I wrote back then does not now apply to life, as it is today, where money is far more complex. I got out a copy last week, dusted it down and read it again.

Without being egotistical, I reckon that a rewrite could spark some renewed interest in how we can live peacefully and successfully and honestly with money and enjoy financial independence, while living a creative life that is filled with good things.

But, as Cecil Rhodes said on his death bed: “So much to do, so little time to do it.”