Giving Financial Independence The Royal Treatment

For Americans, who didn’t grow up with a constitutional monarchy in place, the various ins-and-outs of the British royal family are a fun, if occasionally confusing, spectacle to watch from a distance. They have great taste in hats and brooches, they play an astonishing amount of polo, and any time any member of the family gets married or has a baby, it sets off a major commerce event in the U.K. and around the world. The programming doesn’t change a whole lot with the Mountbatten-Windsors (the branch of the royal family descended from Queen Elizabeth II), but it always makes for entertaining viewing.

Particularly in weeks like the last one, when something unexpected makes it onto the royal roster and we all learn something new about the monarchy. This week’s lesson: The monarchy is like any job – you can always quit in search of a more fulfilling opportunity.

Okay, in fairness, stepping down from royal duties is not entirely unprecedented. Prince Philip, the husband of the queen, recently retired from his senior royal duties – not because he is looking to do other things, but because he is 96 years old.

On the other hand, Prince Harry, the Duke of Sussex, who is currently sixth in line for the British throne, and his wife, the Duchess of Sussex Meghan Markle – ages 35 and 38, respectively – this week announced their plans to step away from their roles as senior emissaries of the royal family in favor of having “financial independence” and dividing their time between the United Kingdom and North America.

“After many months of reflection and internal discussions, we have chosen to make a transition this year,” the couple announced on Instagram, explaining that they hope to “carve out a progressive new role within this institution.”

Yes, on Instagram – and hold that thought.

“We intend to step back as ‘senior’ members of the royal family and work to become financially independent, while continuing to fully support Her Majesty The Queen,” the post said, noting the duke and duchess’ belief that this new arrangement will better serve the queen while giving them greater financial and personal autonomy.

Royal watchers weren’t the only ones surprised that it was possible to opt-out of royal family senior membership with a polite letter of resignation on Instagram – Buckingham Palace apparently read the news at the same time as everyone else in the world. And, judging by their reaction, we strongly suspect the phrase “we are not amused” came up once or twice.

“Discussions with The Duke and Duchess of Sussex are at an early stage,” per the unsigned royal communications statement. “We understand their desire to take a different approach, but these are complicated issues that will take time to work through.”

Complicated for the royal family, to be sure – but also for everyone else watching. Because a single question has surfaced over and over again since Harry and Meghan’s announcement went public:

What exactly does it mean for the Queen of England’s grandson – the person currently sixth in line to the British throne and father to the person who is seventh – to become “financially independent” of the crown? And what exactly do Harry and Meghan have to do to achieve it?

The answers to those questions are more complicated than you might think – because being on the royal payroll is exotic even by PYMNTS standards, and we see a lot of variations on paying workers. And even if it’s possible to simply hop off the royal payroll, it remains to be seen what exactly Harry and Meghan will do outside the royal context to maintain that financial independence.

But we have some answers – and some exceptionally brilliant ideas fit for a (close relative to a future) king and his new American wife for how to make it as free agent royalty.

Royal Reinvention 101: Financial Independence Is a Relative Concept

We know our readers are compassionate people, and hearing about two kids like Harry and Meghan striking boldly out on their own with a baby in tow might arouse concerns. Are they going to make it?

Before you run out and start a Facebook fundraising campaign, rest assured that the Duke and Duchess of Sussex are starting this crusade for financial independence in a stronger than average position than the typical couple in their late 30s moving out of their grandmother’s guest cottage. In fact, it’s not even all that clear that they plan to move all the way out of Frogmore Cottage – it seems that it will remain their home when they are in the U.K. A pretty nice second home, worth several tens of millions of dollars – on which U.K. taxpayers spent about $2 million to renovate and refresh.

But Prince Harry’s estimated net worth is around $40 million, and Meghan Markle was a successful actress with a net worth of roughly $5 million before marrying into the royal family. A starting nest egg between $45 million and $50 million will certainly allow them to find a lovely home in any North American market – except maybe San Francisco, where they would still need roommates or would possibly have to pick up a couple of shifts a week driving for Uber.

And “financial independence” seems to be a somewhat relative term in this case. What Harry and Meghan are formally forswearing is annual payments from the sovereign fund. The fund is basically a real estate trust owned by the royal family that throws off around $450 million a year. The queen gives that money back to the U.K. Treasury every year, and the Treasury then awards 25 percent of it back to the queen, who disperses it through the sovereign fund to various members of the royal family throughout the year as payment for carrying out their various royal duties.

Royals who collect from the Sovereign Fund are prohibited from having any other form of outside employment, which is what the duke and duchess mean when they talk about expanded opportunities.

It is not known exactly how much the Sussexes received from the fund each year, other than roughly $130,000 in transportation costs for the royal couple. According to a financial disclosure from Harry and Meghan, however, the official fund for the British royal family only provided about 5 percent of their household income in 2019 – along with free housing and private security detail.

The British royal family has a few funds supported by real estate trusts. The second largest one, the Duchy of Cornwall, is paid out annually to the Prince of Wales, a position currently held by Harry’s father, Prince Charles. Charles splits some of his Duchy of Cornwall funds with his sons, both of whom receive around $3 million a year. Whether Harry and Meghan intend to also stop taking those payments remains unspecified, though British tabloid reports indicate that they may not have a choice in the matter.

So if Harry and Meghan aren’t merely forswearing the sovereign fund, but are also looking to take a pass on the Duchy of Cornwall money, they really will be financially independent of the royal family, plus or minus $50 million or so. And while it could be argued that with that much money, most people would already consider themselves financially independent, it can be noted that most people did not grow up in a palace or have millions of people around the world tune in to watch their televised wedding, either.

Royal Reinvention 102: What Would the Kardashians Do?

While we’ve taken many a humorous pass at Klan Kardashian, if you’re a royal trying to retrofit the second act of your life to North America, one could choose worse role models. After all, the Kardashian family did produce the youngest self-made billionaire in history, Kylie Jenner. She is the founder of Kylie Cosmetics, which is projected to rake in about $1 billion in lifetime sales by the end of next year.

Second place in the Kardashian wealth roundup is Kim Kardashian-West, the woman who more or less singlehandedly invented the concept of being famous for being famous in the United States. Her net worth clocks in at a mere $350 million, albeit a respectable wage for an Instagram influencer.

For the Duke and Duchess of Sussex, that could be a playbook worth considering.

Harry and Meghan have several millions of Instagram followers and are widely considered the royal family’s reigning social media MVPs, despite strong competition from Prince William and Kate Middleton. Free of the strictures of the sovereign fund, the future slightly-less-royal couple is now free to monetize the social media influencing they’ve been doing pro-bono for the last several years.

As the Kardashians have proven, the idea is to think big when trading on your famous face and name. We all know the Kardashian products – the make-up, the apps, the apparel lines – because those are the things that have stayed around and worked. Not to mention the reality TV show, KUWTK, which is now in its 13th season.

Plus, as PYMNTS has already noted, it’s hard to overstate the global eCommerce enthusiasm for all things connected to the royal family. And for the incredibly rare instance of actually quitting the royal family, we feel there is likely a market for T-shirts, hats, commemorative china and a host of other goods to commemorate the momentous event. They have a market capability that even Team Kardashian may not be able to match.

Now whether they should actually seize that opportunity is another question. The duke and duchess have formally noted that their aim with this move is to continue their charitable work more effectively – and a second career as Instagram influencers and cultural icons might not be the way to pursue that goal.

Plus, we like to believe that Harry and Meghan could be to the Kardashians what The Great British Bake-Off is to the rest of reality television: the classy British version that makes everyone feel better about the medium in general.

If it even gets that far. As we noted, the Royals, with a capital R, haven’t exactly made it clear how far away the Duke and Duchess of Sussex will be able to step. What we do know is that they have already trademarked Sussex Royal, which likely means that a whole host of monetization opportunities will follow at some point in time.

But who knows? Maybe someday soon, we will be able to buy “Bought Our First Home In Fresno” commemorative china from the Sussex Royal Instagram page – and know that our purchase will help the royal renegades strike out on their own.