Downton Abbey is an entertaining and riveting PBS TV series; my wife and I are hooked on it. But as a financial planner, I’ve also found that the show’s storylines offer eight powerful lessons for managing your money.
Two of them come from this season’s first episode, when we learned that Lord Grantham had invested most of his wife's fortune in the stock of a Canadian Railroad company, then lost that money when the company went bankrupt.
Lord Grantham was in shock because everyone knew the company was going to be a success. The two lessons:
- Don’t put all your investment eggs in one basket.
- Just because everyone thinks an investment can’t miss doesn't mean you should stop thinking for yourself.
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Here are six other lessons from Downton Abbey that can help you secure your financial future and protect your family:
Prepare for the unexpected. I always tell my clients that the first rule of personal finance is to protect yourself — and the Downton Abbey characters offer ample evidence of this edict's value.
This year, Mrs. Hughes was worried that she might have breast cancer; fortunately, things turned out OK. Last year, Mrs. Patmore had eye surgery, which also worked out. But neither had medical or disability insurance. Instead, they relied on the generosity of the Granthams to cover their health care costs and loss of wages.
The health challenges of Mrs. Hughes and Mrs. Patmore offer good reminders to have adequate insurance and emergency savings so you’ll protect yourself and your family from unforeseen circumstances.
If it sounds too good to be true, it probably is. Yes, that’s something of a cliché, but as the tale of Thomas the slimy footman/valet showed, it bears repeating.
In season two, Thomas decided to deal in black market goods after the end of World War I, expecting to make a quick profit. But he found himself double-crossed by his supplier and lost everything. (A corollary to this lesson: illegal gains are fleeting, not to mention just plain wrong.)
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Save for your retirement regularly and patiently. In truth, I draw this lesson from a Downton Abbey plot line that had nothing to do with retirement directly, but it serves as a metaphor.
Anna, the loyal wife of convicted murderer Mr. Bates, determined that the best way to free her husband was to slowly, patiently and consistently follow up every lead she could find to prove his innocence. Saving for retirement is like that.
The best way to save for retirement is to have a positive mindset, start putting away money early (if possible), be patient and stay the course.
Follow Anna’s example when it comes to your retirement planning and you’re more likely to retire comfortably.
Neglecting your financial assets eventually leads to misfortune. This season, Matthew Crawley discovered that Downton Abbey’s assets have been mismanaged for years because Lord Grantham was too busy to be bothered.
The lesson is clear: Your financial assets are like a garden; you must tend to them regularly to reap the bounty. Otherwise, neglect will eventually lead to misfortune.
Proper estate planning isn’t only essential, it can prevent family strife. Lady Sybil’s sad childbirth episode showed why it’s so important to have proper estate documents in place.
During her life-threatening illness, Lady Sybil’s family and doctors squabbled over how to treat her, wasting valuable time. If she had created a medical power of attorney document (sometimes called an advance medical directive) before becoming ill, it would have been clear who would make the medical decisions for her.
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The four basic estate documents everyone needs are a medical power of attorney, a will, a durable power of attorney and a living will (sometimes called a medical directive).
When it comes to your finances, luck is not a plan. A client of mine told me he wants to be like Matthew Crawley because Matthew is the luckiest guy on the planet.
First, Crawley becomes heir to Downton Abbey when a distant cousin dies on the Titanic. Then, during the war, he is paralyzed from the waist down, but proceeds to walk again. He also gets to marry the beautiful, eldest daughter of Lord and Lady Grantham and ultimately inherits a fortune from his deceased fiancé’s family that will save Downton Abbey.
The problem is you can’t count on luck to enlarge your net worth. And luck has a way of changing. It's much more likely that you’ll reach your financial goals if you focus on the things you control.
Sorry, Downton Abbey fans, but in the real world distant relatives and acquaintances rarely leave fortunes.