The Affluentialist

Demographers and journalists point out that, years ago, some folks believed wealth and leisure were connected in that the well-off would work less than 40 hours a week while the less well-off would pick up all the slack. Instead, it appears the opposite is happening. This finding is echoed in the original research I did for my forthcoming book, The Middle-Class Millionaire. We surveyed more than 3,000 people who had an annual household income between $50,000 and $80,000 and more than 500 people who had a net worth of between $1 million and $10 million. According to our survey, those with net worths that were north of $1 million worked 42% more hours than our middle-class sample.

On the flip side, there are more ways for your clients to spend their wealth in order to live both better and longer.

The Four Seasons just announced the opening of its Hotel Westlake Village in southern California. What makes this particular branch of the super-luxe Four Seasons chain unique is its proximity to a well-regarded “wellness” facility, The California WellBeing Institute. While a guest at this swank hotel, your clients can receive an executive physical called “Ultimate Health” for $5,560—including 4 nights at the hotel. Through the program, their health will be reviewed by a team of professionals including a physician, dietitian, exercise physiologist, and a “LifeAdvisor.” For additional fees, guests can have a DNA work-up, helping them make smarter decisions about their health based on their genetic pre-disposition.

The ancient Chinese proverb—May you live in interesting times!—seems apropos. But while the high net worth seem to be breaking new ground in their lifestyle habits, perhaps their working and vacationing habits aren’t so surprising. Most of your high-net-worth clients likely began life in a middle-class household. They were taught that hard work was a way to provide economic stability for their families and themselves. Upon having achieved this difficult goal, they are now focusing on their health, which—given the increasing lifespan of Americans and high cost of disease management—has a direct impact on their family’s economic stability, too.

One other interesting aspect about the study I commissioned for my book: Not one of the survey respondents in our $1 million to $10 million cohort labeled themselves as “wealthy.” Instead, they preferred to call themselves “upper middle-class” (67%) or “middle class” (33%). Among our middle-class survey group, 79% identified themselves as “middle class” while 21% considered themselves “upper middle class.”

When I speak to advisors, I understand that they often have intimate knowledge of their client’s lives and therefore have a good feel for their overall financial status apart from the assets the advisor manages. But the rules of affluence are changing, and as the behaviors of the wealthy resemble those of the middle class, it becomes harder to discern their net worth just from their lifestyles. Asking them what they consider themselves (wealthy, upper-middle-class, middle-class) is of little use.

Have you ever been surprised to find out that a client you thought was of modest means turned out to be very wealthy?

This entry was posted on Tuesday, April 24th, 2007 at 10:51 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.