Sunday, May 25, 2008
Tuesday, April 15, 2008
WEALTH REPORT
 Robert Frank looks at the lives and culture of the wealthy. |
April 11, 2008, 10:08 am
Earners vs. Heirs
Study after study shows that most of today’s multi-millionaires made their wealth themselves, as opposed to inheriting it from their parents.
PNC Wealth Management recently polled about 1,500 Americans with $500,000 or more in investible assets and found that 69% of respondents made most of their fortune through work, business ownership or investments. Only 6% made their wealth by inheriting it, while 25% made it through a combination of inheritence and earnings.
What’s most interesting is that the survey found some major differences in the two groups’ attitudes about money — and their responses didn’t always break down along predictable lines:
RECESSION — When asked about a recession, 36% of earners said it was a concern, compared to 27% of heirs. Yet the earners were more likely to agree with the statement that “I have a lot of control over my financial future.”
RISK — Earners have a higher risk tolerance than heirs, with 29% rating themselves as “moderate to risky” investors, compared to 21% of heirs.
KIDS — More than twice as many earners (68%, vs. 28% of heirs) agreed that “every generation should be responsible for creating its own wealth.”
LUCK — Fully 37% of earners agreed that “the money I have made so far has come from being at the right place at the right time.” Among heirs, the number was 25%. I guess the heirs don’t subscribe to Warren Buffett’s “lucky sperm” theory.
HAPPINESS– Fuly 76% of earners agree that “my financial success lets me feel less stress and worry,” compared to 50% of heirs. Half of all earners agree that “as I have accumulated more money in my life I have become happier,” compared to a third of heirs.
WORRIES– Heirs are more than twice as likely to say “having a lot of money brings about more problems than it solves.” Heirs were at 20%, earners were at 9%.
Monday, March 24, 2008
Monday, March 3, 2008
The true meaning of 'wealth'
Advertising floods parents about obtaining wealth on a daily basis. With such saturation, a large amount of our thoughts focus on wealth. Such emphasis on wealth indicates the topic is of great importance. Parents concern themselves with obtaining, using and holding onto riches. Often, the hopes of parents involve passing riches onto their children.
Given the importance of wealth, there is an issue for parents to consider. The challenging question is, "What is true wealth?" Definitions of wealth which consider only bank accounts, possessions and property are wholly inadequate. Limiting the definition of wealth to those things only identifies people who are miserly. Ironically, the root word for 'miser' and 'miserable' are the same.
True wealth encompasses tangible and intangible assets. Intangible assets include family relationships, time, and pleasant memories. When wealth is defined in such a manner, there is less 'miserableness.' As parents change their definition of wealth, family life improves and becomes more fulfilling.
Parents direct their children by defining what is important in life. Parents define priorities by what they spend their time and or money on. Children observe whether parents give lip service to supporting them of if they give time. Children also know when money is thrown at them via gifts rather than being shown love through time and attention. It accomplishes little for parents to buy 'top of the line' toys and then not make time for children. Such acts send a message that children are something else that can be bought and sold.
The desires in the heart of parents often become the desires in the hearts of their children. Our children will desire what we as parents defined as wealth. If the definition is limited to money, all you have to give them is money. Money becomes their way of understanding what is valuable. Everyday life choices will then focus of money and be evaluated in terms of money. In some cases, parents begin evaluating others solely on the riches they accumulate. Such evaluations lead children to begin evaluating themselves according to the same standards. Being that children seldom have large bank accounts, they will likely find themselves not measuring up.
When the parents define wealth in terms of love, time and relationships, the family dynamics change. When wealth is seen in these terms and then freely given, children feel rich. Children can then give those qualities back to their parents, and feel they are contributing to the family. Children will desire those qualities as an expression of their worth to their parents and vice versa. Defining wealth as love, time and quality relationships becomes the goals they strive for in life. Everyday choices will be evaluated according to those terms.
How parents choose to live their lives and the riches they chase after become blueprints for the children to follow. Parents are always communicating to children through their choices what things are valuable in life. The choice of what is wealth helps determine whether your children will feel like chattel or like an active contributing member of the family.
Given the importance of wealth, there is an issue for parents to consider. The challenging question is, "What is true wealth?" Definitions of wealth which consider only bank accounts, possessions and property are wholly inadequate. Limiting the definition of wealth to those things only identifies people who are miserly. Ironically, the root word for 'miser' and 'miserable' are the same.
True wealth encompasses tangible and intangible assets. Intangible assets include family relationships, time, and pleasant memories. When wealth is defined in such a manner, there is less 'miserableness.' As parents change their definition of wealth, family life improves and becomes more fulfilling.
Parents direct their children by defining what is important in life. Parents define priorities by what they spend their time and or money on. Children observe whether parents give lip service to supporting them of if they give time. Children also know when money is thrown at them via gifts rather than being shown love through time and attention. It accomplishes little for parents to buy 'top of the line' toys and then not make time for children. Such acts send a message that children are something else that can be bought and sold.
The desires in the heart of parents often become the desires in the hearts of their children. Our children will desire what we as parents defined as wealth. If the definition is limited to money, all you have to give them is money. Money becomes their way of understanding what is valuable. Everyday life choices will then focus of money and be evaluated in terms of money. In some cases, parents begin evaluating others solely on the riches they accumulate. Such evaluations lead children to begin evaluating themselves according to the same standards. Being that children seldom have large bank accounts, they will likely find themselves not measuring up.
When the parents define wealth in terms of love, time and relationships, the family dynamics change. When wealth is seen in these terms and then freely given, children feel rich. Children can then give those qualities back to their parents, and feel they are contributing to the family. Children will desire those qualities as an expression of their worth to their parents and vice versa. Defining wealth as love, time and quality relationships becomes the goals they strive for in life. Everyday choices will be evaluated according to those terms.
How parents choose to live their lives and the riches they chase after become blueprints for the children to follow. Parents are always communicating to children through their choices what things are valuable in life. The choice of what is wealth helps determine whether your children will feel like chattel or like an active contributing member of the family.
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