[Do you consider yourself wealthy? And how much money do you actually need to be happy? These questions and our answers to them are worth examining. That’s why I’m pleased to share this guest post by Richard Orlando, Ph.D., founder of Legacy Capitals, where he discusses a recent wealth survey and challenges a view of wealth that is focused merely on the financial. – Bill]

According to a recent survey from Charles Schwab (referenced in an online article by Financial Advisor Magazine]), “…respondents said that on average being wealthy means having a personal net worth of $1.9 million. That’s down from $2.6 million in the prior year’s annual ‘Modern Wealth Survey.’”

“Survey participants also lowered the bar for how much money is needed to attain ‘financial happiness’… Financial happiness can be achieved with $1.1 million, according to the recent survey. That’s much lower than the $1.75 million pegged in last year’s survey.”

I think I understand why these types of survey questions are asked, but I believe they produce VERY LITTLE VALUE for families and the advisors who serve them. Here is why:

Firstly, wealthy is being defined solely in financial terms. This one-dimensional definition can force a mindset in people to think, “Now, I am wealthy.” Or, “I am so far from being wealthy.” And for the client-families we work with everyday whose net worth is north of 25, 50 or 100s of millions…how should they think about this definition of being wealthy? “Then we must be off the charts wealthy?” In reality, some of our clients whose net worth is north of $25 million still wonder if they are wealthy enough. This is because “Am I wealthy?” is more of a human and spiritual capital question.

Instead, we should use the original meaning of wealthy to include overall “well-being.” It is much more productive and helpful to define wealthy using this broader definition than just how much money do we have.

One of our client’s NextGen asked their parents, “Are we wealthy?” Their response was: If you have your health and people who love you, then you are wealthy. And if you also have lots of money, then its icing on the cake.

In terms of financial happiness…this is practically an oxymoron. There are a couple of “studies” out there that suggest that once an individual earns about $70,000 a year, anything above this amount, there is no correlation to happiness (see the chapter on Happiness in my book LEGACY). So defining happiness in terms of a financial target has much more downside than usefulness. Money is a tool, it is NOT meant to determine happiness. Financial happiness is more of a human and spiritual capital question.

I propose surveys like the aforementioned start asking more valuable questions such as:

1. How do you define personal/family well-being?
2. What role might money have in contributing to your personal/family’s well-being?
3. What is your definition of personal/family happiness?
4. What role might money have in contributing to your personal/family’s happiness?

[This article first appeared on LegacyCapitals.com.]

Photo by Khoa Pham on Unsplash

Richard Orlando

For the past twenty-five years, Dr. Orlando has sat at boardroom tables and kitchen tables alike, advising high and ultra-high net worth client-families—many at the helm of a family enterprise—as well as training thousands of advisors to build upon financial advising to include the qualitative, multigenerational planning needs of their client-families. Prior to founding Legacy Capitals, Dr. Orlando led Merrill Lynch’s Global Practice Management Consulting Group for fifteen years and served in Merrill’s Family Office. He has been referenced in numerous publications, including The New York Times, Bloomberg Business, and The Wall Street Journal online, among others. His interdisciplinary background includes computer science, business, and psychology. After earning a Bachelor of Science in computer science and business from St. John’s University, he pursued a career on Wall Street, earning his Series 7 and 63 licenses. Returning to school, he received a master’s degree in counseling/theology from Trinity International University, then a doctorate in family systems from Seton Hall University with a dissertation on wealth management family teams. Dr. Orlando is an approved instructor for IMCA’s Certified Private Wealth Advisor Certification Program, holds a certificate in family wealth advising from the Family Firm Institute, and is certified as a professional coach from the International Coach Federation’s accredited program. Additionally, he is the author of Legacy: The Hidden Keys to Optimizing Your Family Wealth Decisions and Love Your Clients: the Tale of the Whole Family Advisor®. Dr. Orlando sits on the board of directors for Urban Hope in Staten Island. Born and raised in New York City, he resides in Bucks County, Pennsylvania, with his wife and children.

Published August 20, 2021

Topics: Family Business

Family WealthFinancial AdvisorsHappinessValuesWealth