Money

This is my last article for 2007 and as I've done in some previous years at this time, I'll move away from investment matters with some off topic stuff. Off topic with regard to investing but indirectly related as it's about money.

Checking out previous Christmas articles I noticed that I once wrote up a couple of incidents from my accountancy practice days. Here's another one though to be dishonest, in the great traditions of the investigative journalist, there may be a little invention here and there. That is either deliberate in the interest of entertainment or due to my increasingly lousy memory creating a need for my fortunately less than lousy imagination to fill in any gaps.

I had a client for some years, a producer, who earned a lot of money. But he was a heavy drinker, probably an alcoholic. He'd stink of booze even if we saw him for an early morning appointment. Also and probably not unrelated to his drink problem, he was constantly in debt, always spending more than he earned, however substantial the latter figure.

One day he came in for a regular meeting about his tax affairs and announced he'd just gotten married. Typically, he'd known the woman concerned for about five minutes and knowing him, the whole thing was probably conducted through a blurred alcohol haze. It was quite obvious from a few questions that he hardly knew who she was but anyway, we wished him well with his new bride.

We saw him next about six months later and asked about his wife, as you do. "She is no more" he announced. Given his character and the whole nature of the relationship this wasn't that surprising really. They had separated some months earlier, which means the whole marriage could hardly ever have really existed at all. Duly noted in his record and that was the end of the matter.

Time went on and some years later we get a call that our client had died. He was only in his forties but he went out like Jimi Hendrix, choked on his own vomit and too paralytically drunk to get up. Not a pretty picture. His estate was, unsurprisingly for him, bust because his large debts, including fees to my firm, exceeded his almost non existent assets. He died financially as he had lived, insolvent. When he was alive he always just avoided bankruptcy by paying debts out of his next tranche of income, a sort of Ponzi scheme on himself. But his own death was his final production.

His executor then discovered that he had a life policy for £50,000. Serious money back then and not to be sneezed at even now. And it was totally out of character too. Financial prudence was not a phrase in this guy's dictionary.

Then comes the twist. The policy didn't go to his estate to pay off creditors but had been written directly in favour of his estranged but never divorced wife. The woman whom years ago he couldn't have known in total for more than a few weeks of drunken stupor from first meeting through marriage to separation had hit the jackpot. I never knew her but I always found it odd that he had bought life insurance in the first place. As I say it was not in character. I mean the guy had never even bought his own home, always lived in rented accommodation despite high earnings. Add in the fact that the policy was directly for her benefit in the event of his death and not to his estate in general and maybe you are thinking what I couldn't help thinking at the time.

The story didn't end too badly for us though. Some time later and quite unexpectedly after having been written off, our outstanding fees were eventually paid from royalties that were due to him from past work.

I wish all my readers a good Christmas and New Year. Ignore all those dumb prognostications in the investment press that appear around now about where the market might be in a year's time or what may happen in 2008 to various shares and sectors.

The end of the calendar year is meaningless for investors. There is no sound reason why it is more desirable to make forecasts now rather than at any other time. In particular there is no reason to suppose that forecasts made now are more dependable than at any other time, which is to say not at all. All that happens is the frequency of them increases substantially at this time of year as many commentators feel obligated to write this stuff, just for tradition or because others are, leaving some gullible or new investors with the belief there may be something to it. There isn't.

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