This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

4 Financial Lessons From 'Downton Abbey'





The Masterpiece series "Downton Abbey" has become a surprise hit, providing millions of Americans with a Sunday-night escape to a more elegant era. As a side benefit, "Downton Abbey" also happens to teach some valuable lessons about money.

In a way, the show is all about money: the contrast between the haves and the have-nots, the role money plays in marriage and the struggles of wealthy people to hang onto their money. Here are four key financial lessons to take from "Downton Abbey."

1. Don't tie up too much wealth in illiquid assets

Downton Abbey is the name of the massive estate inhabited by the Crawley family. The land and buildings are no doubt worth a large amount of money, but the estate also requires a healthy cash flow because of its large staff, upkeep for opulent furnishings and regular high-society functions. Robert Crawley, the head of the family, has already had to marry into money to retain Downton Abbey, and as the series goes on, the financial challenge of hanging onto the estate is an ongoing source of tension.

In the modern day, too many people have this problem, albeit on a much smaller scale. If you cut your budget too closely when buying a house, so that every available dollar goes into the mortgage, you'll find yourself caught short at the very first emergency. Unless you too have the option of marrying into money, you may well find yourself without the cash flow necessary to maintain your most valuable asset.

2. Don't concentrate too much of your portfolio in one investment

Crawley compounds his problems by investing the bulk of the family's money in a Canadian railroad venture. When that venture fails, the loss threatens to force the Crawleys to give up Downton Abbey. Then and now, diversification should not just be an abstract concept -- it should be an iron-clad rule of every investment program.

3. Never invest in something that everyone says can't lose

Crawley's unwise investment was spurred on by popular opinion that railroad ventures were sure things. Between the dot-coms and the real estate market, a more recent generation has certainly seen its share of can't-miss investments fail. The problem isn't just that popular opinion is often wrong; the real flaw in these situations is that if an investment is already wildly popular by the time you get in, you'll probably pay too much for it.

4. Always discuss financial decisions with your spouse

When the railroad venture fails, Crawley faces the task of telling his wife about the massive loss. This is all the more uncomfortable because it was actually her family money that he has lost. If you discuss major financial decisions with your spouse up front, you not only won't have to surprise your spouse with bad news, but you might just get talked out of a foolish decision.

Viewing the "Downton Abbey" characters from a 21st century perspective, their motivations seem quaintly old-fashioned, and Robert Crawley's decisions in particular seem maddeningly naive. Still, even in the information age, people continue to make decisions about money that are ill-informed, destructive and just plain careless. The characters of "Downton Abbey" could have used some better financial advice, but there is still plenty to learn from their examples today.

null

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 18,070.40 +46.34 0.26%
S&P 500 2,114.49 +6.20 0.29%
NASDAQ 5,016.9290 +11.5380 0.23%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs