When Kurt Cobain was growing up in the Pacific Northwest, he lived on the edges of society. He was a grungy independent music kid, and his currency of coolness would have been finding records that nobody else had heard of, and then sharing them with his friends.
He formed the band Nirvana out of a passion for music. Largely as a result of this passion, the band became hugely successful, the album Nevermind becoming one of the biggest selling albums of all time.
The follow up album, In Utero, sold in huge quantities as well. As a result, Cobain quickly became fabulously wealthy. His lawyer estimated that his earnings in 1994 from songwriting royalties alone would be around £1.4m.
At the time of his suicide, Cobain was estranged from his wife, Courtney Love. They had been living along with their baby daughter in a three storey house in the most expensive area of Seattle – their next door neighbour was the boss of Starbucks. Reasons for his death focus on his inability to cope with his fame and wealth.
What particularly strikes me about the story of Kurt Cobain is why a grungy kid, whose values seem to lie in the opposite direction to materialism and wealth accumulation, would spend his money on living in a house way bigger than his needs. Like the lottery winner who immediately buys a sports car, there seems to be an element of ‘Well, that’s just what you do, isn’t it’ about it all.
The key underlying principle in all that we talk about in the Financial Wellbeing book and podcasts is that of Know Thyself. We often translate this into another phrase we repeat often:
Financial planning is really very simple:
Work out what you want from life, then spend your money on that.
If what you want from life is to travel, then spend your money on travelling. If what you want is to stop working, put your money into savings and pensions. If what you really want is a huge house which has rooms you’ll never actually go in, spend your money on that!
They key, therefore, is to work out what you really want. Which sounds easier than it is!
The one thing I have discovered over many years in financial planning is that once a person really starts to understand what makes them happy, they realise they didn’t need as much money as they originally thought.
One imagines that there were many people around Cobain who were delighted to witness his accumulation of wealth because they were going to benefit. His wife, record company, lawyers, accountants, all would have been keen to encourage his success. And yet this was the one thing that was making him unhappy, as it stood in conflict with all that mattered to him.
Kurt Cobain is clearly an extreme example. It does, however, illustrate the importance for each of us in working out what a happy life looks like for us and then creating a financial plan to get there. By aligning his finances with his values, Kurt Cobain will have found financial wellbeing.
With thanks to David Hepworth and his book Uncommon People for the inspiration and information for this blog.