What’s the Real Meaning of ‘Wealth?’
Hint: It has nothing to do with money.
Several years ago, I was retained by an affluent family to help them with their long-term planning.
We started the engagement with a day-long “discovery” session for the extended family at the matriarch and patriarch’s home. When we broke for lunch, food was removed from the warm oven and placed on the buffet table so we could help ourselves. But first the matriarch carefully removed the tinfoil from the casseroles, wiped it with a damp cloth, folded it neatly and put it back in a kitchen drawer so it could be reused.
The family’s $50 million net worth did little to change the ingrained thriftiness of the matriarch who had grown up in an impoverished town after the Great Depression. She always believed that a nickel’s worth of foil wasn’t something to be wasted.
The terms “wealth,” “prosperity” and “abundance” are often used interchangeably, but they’re not similar at all, especially during these challenging times. Popular phrases such as “prosperity consciousness,” “abundance mentality”
and “wealth is more than money” only add to the confusion.
What’s the Difference?
Let’s take a closer look at the distinctions among wealth, prosperity and abundance:
1.Wealth. For most of us, wealth is broadly defined as assets minus liabilities (that is, net worth). As advisors, we do our best to re-frame wealth as “more than money,” but the public generally sees wealth as money or financial assets. The more you have, the wealthier you are. It’s tangible, or at least measurable by some standard of comparison.
2.Prosperity. While prosperity and wealth are often used interchangeably, prosperity seems a little more expansive. It often factors in health and happiness as well as one’s financial well-being. For instance, we all know clients who are extremely wealthy but also unhappy most of the time. Think Ebenezer Scrooge. Therefore, clients can be wealthy but not prosperous. Prosperity takes more of the holistic view of life; it’s not just about one’s finances.
3.Abundance is more about contentment. It’s a feeling of plenty, with the peace of mind that there’s enough for everyone. When an individual, family or society has a sense of abundance, there’s usually less competition for a limited amount of resources. If someone has more than you do, the only way for you to gain is to take from someone else. But that’s not necessary when you have a sense of abundance. Abundance is the key to collaboration and partnership. It’s a sense of win-win, not win-lose. More easily said than done when it comes to family dynamics, however.
Wait, here’s a wild card …
What most enlightened advisors consider to be “wealth” has nothing to do with money. Seeking true wealth may mean seeking deeper relationships, more personal growth or ways to create more meaning in life. Achieving true wealth means possessing the ability to enjoy the small, ordinary pleasures of life.
One of my business owner clients recently retired. Now in his mid-70s, he has a well-known enterprise and a significant net worth. He recently entered into an agreement with his former key employees to buy out his business interests.
While my client still has a very active lifestyle, he frequently feels lost and lacks a sense of purpose. His entire adult life has been about business and family. But now the kids are grown and his business has been sold, so much of his identity is gone. This is a common issue with many highly driven wealth builders, especially entrepreneurs.
We often talk about “what’s next?” Out of these conversations, we’ve identified my client’s passion for childhood literacy. It turns out he had trouble learning to read as a kid, and he’s eternally grateful for an early teacher who recognized his disability and gave him the help he needed. She changed everything for him, and now he wants to pay it forward.
My client’s wealth will sustain him and his family for generations to come. We’ve been using that abundance to fund a literacy program at which he also volunteers several days per week. That’s a lot more involvement than just writing big checks. Over time and with careful planning, my client has transformed his wealth into a sense of prosperity and abundance.
But for too many well-off individuals, the confusion continues. In fact, many who strive to accumulate more and more financial wealth don’t feel prosperous or have a sense of abundance. Their desire to keep amassing more and more assets comes from a sense of lack, not from a sense of plenty.
As advisors, most of us aren’t trained psychologists. It’s not in our comfort zone to explore a client’s very personal intimate relationship to her wealth. Nonetheless, being uncomfortable isn’t bad if we can help the families we work with better understand their wealth and its purpose.
Help Clients Gain Clarity
As planners, we can help clients gain clarity by properly illustrating, projecting and demonstrating the sustainability that their wealth will provide them. The desire to accumulate more may come from not realizing they already have plenty. I’m often surprised to see how insecure many wealthy are. Some of this anxiety comes from never having good, solid analysis and advice.
That’s where you come in.
Randy A. Fox, CFP, AEP is the founder of Two Hawks Consulting LLC and currently the editor in chief of Planned Giving Design Center, a national newsletter and website for philanthropic advisors. He is a past winner of the Fithian Leadership Award by the International Association of Advisors in Philanthropy.
TAGS: Client Relations