What wealth can't buy
Family squabbling in the Hilton family, of Hilton Hotels fame, makes the Succession TV series look meek. It's a good lesson in how wealth can serve us, or we can serve it.
It’s 1979 and Conrad Hilton, founder of the Hilton chain of hotels, dies. His will leaves much of his wealth to his foundation. It’s contested by family members, as lawsuits fly left and right. And there are plenty of colourful characters duking it out.
There’s Francesca Hilton, the daughter to Conrad and his second wife, Hungarian-American actress Zsa Zsa Gabor. She fought her father’s will and lost, though received US$100,000. Francesca ended impoverished and living in her car, before dying in 2015.
There’s Barron Hilton, Conrad’s son, who spent much of his career building Hilton Hotels. He reached a settlement where he received a significant number of shares in the hotel company.
There’s Zsa Zsa herself, the beautiful socialite, who married Conrad during World War Two and divorced soon after, and who later wrote in 1991 that Francesca was born because Conrad had raped her.
In court in 1979, Zsa Zsa said of Conrad Hilton:
“Conrad Hilton was not an easy man to understand. So religious. Always with the nuns, the church. Every day going to the church or praying on his knees in the bedroom to a shrine. In some ways, I think it’s the reason why we are here today. He would rather the nuns have his money than his own family. I don’t think he would disagree with my saying it, either.”
She was probably right. Conrad Hilton came from humble beginnings to buy his first hotel in Dallas in 1919, before going on to building a worldwide empire. He did it through sheer will and unwavering faith. He tried to raise his children to have his work ethic rather than relying on money, though it was only partially successful.
One of his other sons, Conrad Junior, the first of eight husbands to movie star, Elizabeth Taylor, became an alcoholic and drug addict, and died aged 42. Bizarrely, Gabor alleged Conrad Junior had an affair with her at one time.
Problems have followed the Hilton clan through the generations. So much so that Paris Hilton, famous for an explicit video tape and not much else, is regarded as one of the more ‘normal’ Hiltons left.
The Hilton's story, well depicted in J. Randy Taraborelli’s book, The Hiltons: The True Story of an American Dynasty, is akin to that of the Succession television series, albeit a true and arguably better one.
It can be read as an all-American tale of rags to riches or a cautionary one of how that journey may not bring happiness.
More broadly, it has some great lessons about what wealth can give us and what it can’t.
What wealth can buy
Let’s first look at what money can provide us:
- It can buy goods. Money can be used to buy everything from basics such as food and clothing, to houses and cars, and more elaborate purchases such as boats, holiday homes etc. In Conrad Hilton’s case, it allowed him to buy a preposterously expensive and elaborate house in Bel Air, Los Angeles. Recently, the house listed with an asking price of US$250 million.
- It can buy better health. Money provides better access to doctors and healthcare, and leads to increased quality of life and longevity, according to many scientific studies.
- It can buy a social network. Having money can get you connect with other people with money. This can lead to job and other opportunities that you may not have had otherwise.
- It can buy time. Money can provide for an early retirement and give you the time to do what you like.
What wealth can’t buy
Here’s what money can’t give us:
- It can’t buy social connections. Recent psychology studies point to three pillars of life satisfaction in retirement: health, money, and relationships. On the last pillar, the single biggest predictor of happiness is your relationship with your spouse or partner. Close behind is having a social network – that is, plenty of friends who you catch up with on a regular basis. Money can’t buy these social connections.
- It can’t buy wisdom. Human beings have two types of intelligence. One is called fluid intelligence which is our ability to think abstractly and deal with complex information. It peaks early in life, at around the age of 20. The other is called crystallised intelligence, which is where we age and gain more experience of the world, and that helps us to make better decisions. Money can’t buy either of the two intelligences.
- It can’t buy happiness. As the Hiltons demonstrate, wealth has a way of bringing as much misery as it does happiness. Put another way, it can bring out the best and worst in people.
- It can’t buy freedom. A common refrain is that money can give you freedom. It can certainly provide financial freedom. It can alleviate concerns about getting food, shelter, and other things.
As for freedom more broadly, I’m not so sure. In my view, real freedom comes from not being dependent on money or anything else. By this definition, none of the Hiltons were free as all of them were dependent on wealth, as well as the source of that wealth, Conrad Hilton. I’d argue that generations of Hiltons have been trapped rather than freed by wealth.
Buddhists may have it right. They say that attachment (or dependency) is the root of all suffering. That letting go of all attachments is the key to contentment.
As investors, we’re in the game of building wealth to secure our financial futures. The tale of the Hilton family is a nice reminder that wealth can serve us, or we can serve it. And that we get to choose.
James Gruber is an assistant editor at Firstlinks and Morningstar.com.au