Money Talks….

According to a recent article in the New York Times: “As Cognition Slips, Financial Skills Are Often the First to Go.”  financial cognition is one of the first skills to go. According to Ralph: Money talks, bullshit walks.

When we first met, Ralph was something of a hippie entrepreneur. By the time he was thirty, he’d dropped the hippie part and considered himself a real estate entrepreneur—buying, renovating, managing and leveraging small apartment buildings–while I pursued my less than financially lucrative writing ambitions. Then his longtime bookkeeper quit suddenly and I had to take over the day-to-day bookkeeping. At the time I didn’t want to take on that responsibility, but in retrospect I am really glad I did. When I needed to liquidate the business two years ago, I knew the basics, like where the checking accounts were, but also the larger framework of how to run the business the way Ralph did. He remained the one who made the serious financial decisions, but I watched and learned.

And what I learned was to be obsessively careful. I used to tease him about the way he analyzed and re-analyzed every business decision, going over and over the worst case and best case scenarios, ‘running the numbers’ as he called it. So what struck me in reading the Times article was this line: “It may become more difficult for people to identify the risks in a particular investment, and they may focus too much on the benefits.” Ralph’s last three investments were frankly terrible.

Luckily those were his last investments. Unfortunately, they were his last investments because Ralph’s follow-through was also going. Ralph always took great pride in being “a closer.” So what I saw as his flagging interest in following through caught my eye as a problem sooner than his forgetfulness. I realize now that he probably no longer trusted his own judgment. He went through the motions, but he had checked out at least a year before his diagnosis. He sat in his office reading catalogs and magazines while letting his assistant and me run things. Fortunately, he’d done such a good job training us that we did fine for awhile.

We may have lost some money due to Ralph’s MCI, but I am kind of glad Ralph had that time to loosen his hold on the business. A grace period.

Because once we had the official diagnosis of Mild Cognitive Impairment, there was no pretending. And by the time I decided to sell the business, Ralph’s impairment was greater while his interest in anything financial had dropped to zero. The man who loved to spend days doing profit loss projections can no longer figure the tip on a restaurant tab.

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