The Stirrer

news that matters, campaigns that count

for Birmingham, the Black Country and beyond

Click here for Filini's great offer for Stirrer readers

REAL MONEY

24-03-2008

After the megamillion Paul McCartney/Heather Mills divorce settlement, divorce lawyer Diane Benussi ponders the world of paper assets and decides they aren't worth as much as real money.

So, Sir Paul McCartney isn’t, after all, worth £825 million – rather, a mere £400m. At least that’s the conclusion of the judge who this week brought to an end one of the most acrimonious high-profile divorces in recent times.

The culmination of the McCartneys’ protracted marital tussle coincided with “one of the worst days in living memory on financial markets,” to quote one newspaper. If the former Beatle goes in for stocks and shares, his fortune is now likely to be significantly less even than £400m.

When you’re as wealthy as Sir Paul, however, the loss of the odd few million on the stock market – or even £24.3m in a divorce settlement – is, frankly, neither here nor there.

What frustrates me about the bandying around of huge figures like these – and the mass panic being whipped up by the media over stock market slides – is that they don’t necessarily equate to what you and I know as “real money”.

In today’s society, hard cash is heading towards extinction; we live in a world of plastic cards, paper assets and mobile phone pay methods. You might be worth X amount on paper because you own a string of buy-to-let properties, but if no one wants to buy or rent them, they can quickly become a liability. And let’s not forget that inexperienced buy-to-let investors, egged on by irresponsible banks, have contributed to the credit crunch by choosing a risky way to make easy money.

The same can be said of those of us who dabble on the stock market, so why are we shocked when the FTSE 100 takes a tumble? On the other hand, how many of us see the colour of the money we make or notice the absence of the money we lose on speculative investments? Assuming we don’t need to sell our shares at the moment, if we simply hang on to them they’ll probably bounce back in value sooner or later.

Meanwhile, experts tell us there’s a downturn in house prices and everyone’s started worrying about how much less their property is now worth. Yet that suggests most people view their properties as an investment rather than as a home. Unless you’re planning to sell up in the near future, why fret? Your home is still your castle. Even if you are intending to sell, the chances are your next property will also have gone down in value, so it’s all relative.

It strikes me we’ve all become obsessed with paper assets. Being rich on paper is a bit like immersing yourself in virtual realities on the internet – it’s virtual.

As long as you have sufficient “real” cash to pay your weekly supermarket bill, heat your home and keep your kids in designer trainers, it shouldn’t be a big deal when you lose money you never had in your bank account in the first place.

Paper money is fine if you’re playing Monopoly, but it’s time we started realising that accruing or losing paper assets is also something of a game. It doesn’t, in the long-term, affect how we live our lives.

(Diane Benussi is managing partner with Birmingham-based matrimonial law practice Benussi & Co)

The Stirrer Forum

The Stirrer home

©2007 The Stirrer