Does more money really eliminate worry? A common misconception is that wealthy people have less to worry about because their money solves their problems. But the truth is, while money may make some things in life easier, the fears and worries can often be magnified. The rich may get richer, but the richer also become more worried.
Let’s begin by understanding that the rich are, in fact, getting richer. According to Barron’s, a study performed by Boston Consulting Group revealed that there were 6,789,666 millionaires in the U.S. in 2015, which was 41.5% more than in 2010. That’s a lot of growth in five years! Even more impressive, during those five years, millionaires in the $20-million to $100-million range grew 63.5%, and those in the $100-million to $1-billion range were up 61%.
Now, let’s think about what these same wealthy people may be concerned about. First, affluent investors have been tormented by very low interest rates and market volatility, causing them to have genuine insecurities. The more money you have in the stock market, the more money that can be affected during times of volatility.
But, more than that, like most people, the rich have concerns about spending. Often, when you have a lot of money, you aren’t really counting your pennies and thinking about where your money is going. So, the question of whether you’re spending more than you’re earning becomes a real issue. Are the two vacations a year you’ve been taking for the past ten years adding up to more than you thought? Have you forgotten to take into account the tuition you’re going to pay for your soon-to-be college kids? And will the projected amount you will be earning at that time be enough to support those additional expenses? When the reality of these issues hit you, it can be overwhelming.
Part of what brings on such fears and insecurities is simply not knowing. Not knowing how much you actually spend and how much you need to live on. Not knowing how much you will need to live through retirement. Not knowing how much you’ve saved or invested. Not knowing can be your biggest enemy, and many are living in the unknown. In fact, a survey conducted by TIAA, showed that most Americans aren’t even sure what they have saved. The survey results indicated that “fewer than half (46 percent) [of Americans] even know how much they have saved in their retirement savings accounts, and just 35 percent know how much monthly income they’ll have in retirement.”
Our knowledge of results and statistics from studies like TIAA’s have been the driving force behind Taylor Financial Group’s initiative to show our clients, firsthand, what their money is doing and how far it can go. By using WealthMatch, our personal financial management experience, we have been able to open our clients’ eyes to the “big picture” and, in turn, ease their anxieties. WealthMatch has the ability to illustrate the potential impact of today’s financial decisions on your future wealth. Decisions such as keeping or downsizing your home, working longer in life, or when to begin drawing on Social Security, can have a substantial impact on your long-term finances. With WealthMatch, we can create scenarios to help you decide what financial decisions will help you to pursue your long-term goals.
In fact, Debbie attended an eMoney conference last week, where she was learning about new ways we can use WealthMatch to best service our clients. Stay tuned for next week’s newsletter to read about the insight Debbie gathered.In the meantime, don’t let anxiety and fear stunt the growth of your wealth. Contact us today to learn more about how WealthMatch can work for you.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.