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The Role of Perception vs. Reality

With memories of the financial crisis still lingering, many people who are close to retirement or even already retired don’t have enough wealth to feel secure. As a result, many hard working Americans feel stuck on a treadmill, without a real sense of how much wealth would make them satisfied enough to get off and begin to enjoy retirement, according to the latest UBS Investor Watch Report, When is Enough…Enough?

While many successful people do feel a great deal of happiness and appreciation for what they have earned, it somehow doesn’t feel like it’s enough. The very nature that has bred success also leaves many investors feeling compelled to strive for more, spurred on by ambition, and driven by the desire to protect your family’s lifestyle.  

But, you may also be haunted by the ever-present fear of losing it all. Ironically, while it’s easy to believe that we have “made it” through hard work and rising up the ladder from humble beginnings, we are at the same time concerned about the decline of upward mobility for future generations. If this sounds familiar, then take heart. You are not alone. 

How Do Wealthy Investors Perceive Their Financial Situation?

UBS Investor Watch is a quarterly survey of U.S. investors that UBS conducts in order to keep a pulse on the needs of high net worth families across the spectrum of successful professionals. In the most recent March report, UBS surveyed 2,215 investors with at least $1 million in total net worth. The results of the survey offer some interesting insights.

Here is a summary of the main findings of the survey : 

  • Millionaires feel like they must continue making money indefinitely to maintain their lifestyle. However, if they felt they could retire, they would pursue their personal passions.
  • Millionaires worry that wealth will spoil their children. They regret relationship mistakes and not spending enough time with family.
  • Millionaires believe they’ve “made it” through hard work but believe the American dream is in danger.
  • Despite their success, millionaires keep striving for more because lifestyle expectations rise with net worth.

 

Despite the fact that many people would label this demographic the poster child for success in America, those perceptions are not as clear-cut in the minds of the accumulators. This is not necessarily because these investors have not managed their personal finances well or made specific mistakes along the way. It’s that busy, successful people simply ignore or can’t afford the time to address the planning process that would make them feel more secure.

Retirement Shouldn’t Be Scary

The pace of change in the world is faster than it has ever been. With technological change, geopolitical challenges, enormous demographic shifts, and political gridlock in Washington, there are many unknowns on the horizon. Taken in a vacuum and through the lens of a media establishment that is rewarded by its ability to foment negative emotion in exchange for ratings, feeling some insecurity would seem warranted.  

However, positive facts and data about the recovery of the American economy and a booming stock market aside, as a successful investor you’ve already worked hard to get to this point and carried years of worry and anxiety along the way. Now may be the time to take the final step to envision your goals and plan in a concrete way how your life will look in retirement. 

Financial planning has evolved dramatically since the advent of the Internet and the broad access to information. Whereas in the past “stockbrokers” were the ultimate gatekeeper of financial opportunities, the Internet has rendered that business model largely obsolete. Financial planning and advice that extends far beyond financial markets and into all aspects of a family’s financial life has become the industry standard. 

Every situation is unique and requires a truly customized approach. This process takes time, diligence, commitment and an advisor with the education, experience, and expertise that you can trust. Like all things in life, you get out of it only as much as you put in. But, if you self-identify with the results of the UBS study on successful investors, then chances are you already know the value of hard work. 

About the ASteve_Soltesz_BWuthor

Steve Soltesz is a Financial Advisor with the Indian River Wealth Management Group at UBS Financial Services Inc. in Melbourne. For a copy of the UBS Investor Watch report, When is Enough…Enough?, visit UBS.com/team/indianriverwmg


This article appears in the August 2015 issue of SpaceCoast Business.
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