Wednesday, Dec. 2
Posted: 4 p.m. EDT
A miser grows rich by seeming poor. An extravagant man grows poor by seeming rich.
-- William Shakespeare
What does it take to feel rich? The question isn't as obvious as it would appear. The answer that springs to mind is a boatload of money, but how much is enough to experience financial independence, maybe for generations to come?
There are certain monetary standards for measuring wealth that we all accept, but surprisingly, some people who are well within those standards report feelings of uncertainty about their status.
Am I rich?Wealth creators who had started a family business and then sold it for tens of millions have said to me that they were tentative with their new fortune, asking themselves the seemingly-ridiculous question, "Am I rich?"
Having spent a lifetime scrimping to build the business, the sudden wealth was overwhelming. How much could they spend? Would their money run out? Their fears were well-founded in cautionary tales of the wealthy who had gone before. Those who immediately sank money into a $10 million yacht, a $20 million vacation home in Aspen, Colo., and all the ancillary staff and maintenance, learned how quickly a fortune can vanish.
The money was here when I got hereScott Hill, senior vice president at Kanaly Trust in Houston, says that in his experience working with clients, attitudes toward money typically run along generational lines. Wealth creators, who have been building the family fortune for a long time, "tend to have a similar world view as when they were creating the wealth -- almost a middle-class outlook," he says. "They have the attitude that this wasn't easy to do, so I need to be careful (with my money)."
Generations two and three, he adds, appear to harbor no such hesitation. They often have the more carefree attitude of "Hey, it was here when I got here," leading Hill and others in the wealth management industry to find more ways to educate inheritors about money and help them develop a sense of stewardship.
Learn more about managing finances in our 2009 Estate Planning Guide.
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