Comments on: The New Wealthy, by the Numbers http://affluentialist.investmentadvisor.com/2007/03/30/the-new-wealthy-by-the-numbers/ Lewis Schiff Sat, 10 Jul 2010 23:13:34 -0400 http://wordpress.org/?v=2.8.4 hourly 1 By: Lewis Schiff http://affluentialist.investmentadvisor.com/2007/03/30/the-new-wealthy-by-the-numbers/comment-page-1/#comment-80 Lewis Schiff Fri, 20 Apr 2007 14:47:22 +0000 ia-wordup-7609#comment-80 You write: "You mention that there are many millionaires, however, I wonder how many have obtained that distinction through retirement assets" It's true that there's a gap between net worth and liquidity. I think this is going to represent the biggest opportunity for the high net worth advisor going forward: How to advise a client to take advantage of their entire net worth, not just their liquid assets. See my blog installment for 4/18/07 about derivatives for the high net worth. You write:

“You mention that there are many millionaires, however, I wonder how many have obtained that distinction through retirement assets”

It’s true that there’s a gap between net worth and liquidity. I think this is going to represent the biggest opportunity for the high net worth advisor going forward: How to advise a client to take advantage of their entire net worth, not just their liquid assets. See my blog installment for 4/18/07 about derivatives for the high net worth.

]]> By: Maureen Niemiec http://affluentialist.investmentadvisor.com/2007/03/30/the-new-wealthy-by-the-numbers/comment-page-1/#comment-79 Maureen Niemiec Wed, 11 Apr 2007 05:49:12 +0000 ia-wordup-7609#comment-79 You mention that there are many millionaires, however, I wonder how many have obtained that distinction through retirement assets which are not easily accessible. 25 years in the workforce putting the maximum in a 401(k) with decent returns is enough to put many in that category - however, unless they're borrowing it to support their lifestyle I am not surprised that the wealth doesn't translate into the "Italian sports car". We all know they're rather drive a Hummer H3 or Cadillac CTS! You mention that there are many millionaires, however, I wonder how many have obtained that distinction through retirement assets which are not easily accessible. 25 years in the workforce putting the maximum in a 401(k) with decent returns is enough to put many in that category – however, unless they’re borrowing it to support their lifestyle I am not surprised that the wealth doesn’t translate into the “Italian sports car”. We all know they’re rather drive a Hummer H3 or Cadillac CTS!

]]> By: JULIE ENLOE http://affluentialist.investmentadvisor.com/2007/03/30/the-new-wealthy-by-the-numbers/comment-page-1/#comment-78 JULIE ENLOE Mon, 09 Apr 2007 22:10:21 +0000 ia-wordup-7609#comment-78 Self-perception is also radically different from IRS designations of "wealthy". Many of us know that the top 10% of wage earners pay nearly 70% of the taxes in the US. What you may not know is that a mere $100k gross will put your clients in that top 10% category. Is it any wonder the new millionaires are concerned that they won't have enough for retirement--especially after Uncle Sam takes his cut? (And don't forget about the mess we call Social Security! How many of your clients are relying on that for their retirement?) Self-perception is also radically different from IRS designations of “wealthy”. Many of us know that the top 10% of wage earners pay nearly 70% of the taxes in the US. What you may not know is that a mere $100k gross will put your clients in that top 10% category.

Is it any wonder the new millionaires are concerned that they won’t have enough for retirement–especially after Uncle Sam takes his cut? (And don’t forget about the mess we call Social Security! How many of your clients are relying on that for their retirement?)

]]> By: Lewis Schiff http://affluentialist.investmentadvisor.com/2007/03/30/the-new-wealthy-by-the-numbers/comment-page-1/#comment-77 Lewis Schiff Thu, 05 Apr 2007 23:39:22 +0000 ia-wordup-7609#comment-77 Emil, you wrote: "This sounds a little like "the millionaire next door." Are these thefolks who drive 10 year old chevys?" Hardly. Along with these high net worths are expensive lifestyles. I call them the "working rich." While they may not be driving italian sports cars, they spend what they make on their lifestyles. In fact, they report that losing their wealth is one of their biggest concerns and they question how long they can keep their lifestyles going without their current income. That's substantially different from the penny-pincher portrait identified in "The Millionaire Next Door" Emil, you wrote:
“This sounds a little like “the millionaire next door.” Are these thefolks who drive 10 year old chevys?”

Hardly. Along with these high net worths are expensive lifestyles. I call them the “working rich.” While they may not be driving italian sports cars, they spend what they make on their lifestyles.

In fact, they report that losing their wealth is one of their biggest concerns and they question how long they can keep their lifestyles going without their current income.

That’s substantially different from the penny-pincher portrait identified in “The Millionaire Next Door”

]]> By: Lewis Schiff http://affluentialist.investmentadvisor.com/2007/03/30/the-new-wealthy-by-the-numbers/comment-page-1/#comment-76 Lewis Schiff Thu, 05 Apr 2007 23:35:54 +0000 ia-wordup-7609#comment-76 You wrote: "What about inflation? Aren't people becoming middle class millionaires from that alone?" Inflation alone cannot account for the double-digit growth of net worth in America. While real estate is definitely a factor in wealth creation, keep in mind that net worth takes into account assets and liabilities. A $1 million home with a $800,000 mortgage doesn't make you a millionaire. It's true that home-ownership is a critical factor in reaching higher levels of wealth but that doesn't explain why households with less than $500,000 are SHRINKING while households with more than $500,000 are GROWING. American business owners, stock owners, home owners and retirement investors are awash in a sea of money that's unprecedented in history. You wrote:

“What about inflation? Aren’t people becoming middle class millionaires from that alone?”

Inflation alone cannot account for the double-digit growth of net worth in America. While real estate is definitely a factor in wealth creation, keep in mind that net worth takes into account assets and liabilities. A $1 million home with a $800,000 mortgage doesn’t make you a millionaire.

It’s true that home-ownership is a critical factor in reaching higher levels of wealth but that doesn’t explain why households with less than $500,000 are SHRINKING while households with more than $500,000 are GROWING.

American business owners, stock owners, home owners and retirement investors are awash in a sea of money that’s unprecedented in history.

]]> By: Lewis Schiff http://affluentialist.investmentadvisor.com/2007/03/30/the-new-wealthy-by-the-numbers/comment-page-1/#comment-75 Lewis Schiff Thu, 05 Apr 2007 23:35:23 +0000 ia-wordup-7609#comment-75 You wrote: You wrote:

]]> By: Emil Hunt http://affluentialist.investmentadvisor.com/2007/03/30/the-new-wealthy-by-the-numbers/comment-page-1/#comment-74 Emil Hunt Thu, 05 Apr 2007 01:53:27 +0000 ia-wordup-7609#comment-74 This sounds a little like "the millionaire next door." Are these the folks who drive 10 year old chevys? This sounds a little like “the millionaire next door.” Are these the
folks who drive 10 year old chevys?

]]> By: Hal Sloane http://affluentialist.investmentadvisor.com/2007/03/30/the-new-wealthy-by-the-numbers/comment-page-1/#comment-73 Hal Sloane Thu, 05 Apr 2007 01:42:02 +0000 ia-wordup-7609#comment-73 What about inflation? Aren't people becoming middle class millionaires from that alone? Or just owning a house? Primary residence real estate inflation alone has made many of my clients wealthy today. What about inflation? Aren’t people becoming middle class millionaires from that alone? Or just owning a house? Primary residence real estate inflation alone has made many of my clients wealthy today.

]]> By: Hal Sloane http://affluentialist.investmentadvisor.com/2007/03/30/the-new-wealthy-by-the-numbers/comment-page-1/#comment-72 Hal Sloane Tue, 03 Apr 2007 20:04:28 +0000 ia-wordup-7609#comment-72 I recognize these clients. They are some of my first clients who, over the past 10 years or so, have really hit their stride. My biggest client is perhaps one that is least likely to have had that kind of wealth. He owns a mailing list company that is highly profitable. But he doesn\'t act like it. I only know about it because we have a mutual friend. I haven\'t yet re-visited his assets though. I recognize these clients. They are some of my first clients who, over the past 10 years or so, have really hit their stride. My biggest client is perhaps one that is least likely to have had that kind of wealth. He owns a mailing list company that is highly profitable. But he doesn\’t act like it. I only know about it because we have a mutual friend. I haven\’t yet re-visited his assets though.

]]> By: ANITA Shaw http://affluentialist.investmentadvisor.com/2007/03/30/the-new-wealthy-by-the-numbers/comment-page-1/#comment-71 ANITA Shaw Tue, 03 Apr 2007 16:51:46 +0000 ia-wordup-7609#comment-71 I have several clients who are, as you say, middle-class millionaires. One that comes to mind still lives in the same neighborhood but has built a McMansion on a .3 acre lot. He certainly stirred up some strong feelings about this in the community but he said he can afford to live elsewhere but he chooses to live here. I have several clients who are, as you say, middle-class millionaires. One that comes to mind still lives in the same neighborhood but has built a McMansion on a .3 acre lot. He certainly stirred up some strong feelings about this in the community but he said he can afford to live elsewhere but he chooses to live here.

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