What needs do you think you will find with the already wealthy executive? According to the Phoenix study, there are plenty of issues the advisor can address. Despite having achieved millionaire status, senior corporate executives are more stressed and feel less secure about their financial futures than other high net worth individuals.
It seems that their wealth has come at a great cost to them. Seventy- four percent of these executives say they need to find ways of reduc- ing stress in their lives, and 64 percent say they are looking for ways to gain control of their lives. What lifestyle change do they think will help them regain the steering wheel in their lives? Becoming a free agent.
Two percent said they want to ‘retire’ early but not in the tradi- tional sense of retirement. Over 90 percent of these executives want to segue to a life of consulting or some other work where they have more control over their time. The advisor who can initiate this con- versation and follow through by partnering in the development of a plan that can make this shift a reality will have no trouble winning the allegiance of the high achiever.
Forty-five percent of high achievers also said they spend too much time making money and not enough time enjoying it. Eighty- eight percent say they have an obligation to make a community con- tribution. This sounds like a group of people that has achieved material success but not fulfillment. They are also a group that feels it has paid too high a price at times for the material success it has
achieved. These people are ready for a conversation about using their money to make a life.
LIFE AT THE CENTER
All that is indicated with the various groups mentioned in this chapter is that in the mind of the client life is the central concern.
For the advisor to connect, life must become the axis around which the financial discussion revolves. People see money as a means to building the lives they want—and avoiding lives they will regret. They quickly connect with the individual who possesses the skill to draw out his vision for his life and can help facilitate the materialization of that vision. Your clients’ money has meaning. Their money promises the fulfillment of a sense of purpose. That money was obtained with a defined set of values and has within it the seeds of a legacy they in- tend to leave. To make the life connection, the advisor needs to draw out the purpose of the money, the values that created the assets, and the legacy the clients intend to leave with it.
No professional is better positioned for this role than the finan- cial advisor. Participating in this conversation does not change the traditional role of the advisor, it simply shifts the context of the dis- cussion into the arena where the clients have the most invested—
their lives.
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The Paradox of Plenty
People say they want to be wealthy, but do they? People say if they had a little more than what they have now they would be content, but will they? People say money cannot buy the things that matter most, but do they really believe it? Suffice it to say people are conflicted on matters of money. At times we all have a hard time reconciling our beliefs and behaviors regarding our handling of money. We want wealth, but down deep, many of us fear that having wealth will nega- tively affect our attitudes and relationships. Some people have a ter- rible time finding contentment even as their assets grow. We say money can’t buy the things that bring true happiness, but down deep we wonder. What we are facing is the paradox of plenty.
It is as if our spirits and wallets are in a perpetual wrestling match for dominance of our minds. There are questions people must bring to the table and attempt to address if they hope to bring philosoph- ical clarity to the meaning of money in their lives.
• Will the achievement of wealth change me? If so, how will it change me?
• Will wealth bring me contentment? Why or why not?
• Am I being honest with myself when I describe what money can and cannot buy? Am I chasing money to buy (tangible and intangible) things I could have right now?
Because people are sometimes conflicted on money matters, their behaviors often fail to align with their intentions. This situation ends up confounding their mates, their advisors, and themselves. In order to bring clarity to the financial life planning process, it is important for the advisor to understand that these conflicts are universal. In this chapter, we will reveal where these money conflicts are most ob- vious and help to frame a conversation with clients in which both ad- visor and client will be comfortable participating.
A paradox is a tension between two opposing ideas. Both ideas contain truth, hence the tension. People today face internal tension regarding the quest for wealth. This may be because they live in a cul- ture that publishes scores of business books every year that detail how ordinary people became wealthy (and so can you) and at the same time publishes scores of self-help books admonishing us to be content and care for our souls.
These paradoxical truths form a foundation for confusion, am- bivalence, and discontentment. In our culture, these internal conflicts cause some to give up the idea of contentment and chase wealth.
There are other individuals, however, who have learned to strive for balance in their lives—a point somewhere in the middle of these two tensions. They are attempting to pursue wealth in a manner that does not topple contentment. They are pursuing a more well-rounded sense of wealth, what they might call “true wealth.” It seems impor- tant that people learn to recognize this paradox of plenty for the sim- ple reason that, until they do, they will continue to sabotage either their fiscal well-being or their psychological well-being.
In this chapter, we will address three conflicting thought patterns.
1. Will I like who I am if and when I achieve wealth?
2. Will I really be content when I reach my financial goals?
3. Do I really believe that money can’t buy happiness?
DR. JEKYL AND MR. GREED
Will the achievement of wealth contribute to making me some- one that I won’t like? Is there a monster in me that prosperity will un- leash? A study commissioned by the AARP entitled Money and the American Family revealed this first pattern of the paradox playing out within members of our society. When asked what they would do with their money if they became millionaires overnight, respondents 10 / The Paradox of Plenty 101
stated that they would help family and friends, save for their own future, and donate to charity. But, in a response that illustrates the duality of many Americans views toward the wealthy, respondents overwhelmingly stated that they believe that wealth is likely to make people insensitive and greedy, and give them a feeling of superiority over others. If you read between the lines, what Americans are saying is that although they want to become millionaires, they do not want to be given the stigma of other wealthy people. This paradox possi- bly is one of the reasons for the commercial success of books on how ordinary people became wealthy. Maybe people want wealth with the assurance that they can maintain their values and attitudes toward others. They also want others to view them as unchanged.
Many people fear that too much money will unleash superiority, insensitivity, unkindness, and greed. Do people question the affect of plenty because of what they have seen in others or is it because of what they have seen in themselves at times? If people are afraid of feeling superior to others, is it because they have felt the brunt of conceit, or because they have at times felt superior toward those below their stations in life? If they fear being less kind after they have money, is it because an insensitive rich person bullied them or made them feel inferior, or is it because they have, at times, been kind to- ward others only for the purpose of getting something? If greed is perceived to be a problem that comes with wealth, is it not also a prob- lem now? Is greed not a ubiquitous temptation at any income level?
Many people have at some time or another felt the bitter sting of condescension at the hands of a successful individual who was dis- missive or rude toward them. As badly as they want the comfort that wealth brings, they loathe the idea of anyone seeing in them the character that they saw in the individual that looked down upon them. Consequently, not every person desires to be wealthy. In fact, the AARP study revealed that one-third of Americans say they do not want to be wealthy. This is especially true in the mature crowd where roughly 60 percent said they do not desire to be wealthy. Is this be- cause they have experienced more of the wealth-induced conde- scension in their lifetimes? Or, is it possibly because they have learned to be more content with simpler means? Or, is it a combina- tion of both these ideas?
Some advisors may draw the conclusion that the only people who say they do not want to become wealthy are those who have no chance of doing so. We would expect that some of the people fit that char- acterization—but not all people do. An advisor’s job is to optimize
the clients’ earning potential within their parameters of risk toler- ance. It is not the plenty that these people are so uncomfortable with as it is the characterization that goes with it. No rational person would turn away additional income, because he or she could always give it away. It may merely be a matter of you choosing the descrip- tion of prosperity that your clients are most comfortable with, or even better, let them choose it for you.
No matter where clients place their goals, they have indicated the definitions of prosperity that they are comfortable with, and have offered you a springboard for developing a plan to meet their goals.
Each answer leads to a question of “How much will it take to get you to this place?” If a client is conflicted about having too much, he or she is best working that conflict out in a counselor’s office, not yours.
Your efforts simply need to assume a context and description of pros- perity that will connect you with the client. If you are on the same page, you will have a better chance of working with their entire fi- nancial picture and maintaining lasting relationships.
Quite possibly, clients who have an aversion to the concept of wealth need to be reminded that much of that thinking could be based on myths and stereotypes. The spoiled, silver-spoon-fed, handed- down-from-daddy rich is hardly the case with the modern wealthy set.
According to Thomas Stanley and William Danko in The Millionaire Next Door, 80 percent of America’s millionaires are first generation wealthy—they are regular people who went out and EARNED IT.
Caveat: I have a doctor friend who will tell you he has no desire to be rich, even though he makes over $250,000 per year. This indi- vidual lives a relatively simple lifestyle and gives over 80 percent of his income to various charities. It would be a poor assumption on an advisor’s part to think that every person who indicates that he or she doesn’t want to be wealthy, lacks the assets or the potential for be- coming wealthy. If an individual’s assets have greater potential than his or her lifestyle requires, the advisor can simply segue the conver- sation toward charitable planning. In the case of this doctor, he chose a definition of wealth that differed greatly from the crowd.