Evelyn Jacks: Thoughts for Year End – Wealth is a State of Mind

Are you wealthy? How do you measure your answer? Many people don’t believe that word belongs to their situation until they sit down and actually map out their personal and family net worth – total assets less total debt. But wealth has a lot to do with your state of mind around financial decisions.

According to a monthly survey from Spectrem Group’s Millionaire Corner[1], the notions of wealth are highly subjective. Retail investors – those with a net worth of less than $100,000, not including primary residence – most commonly believe it takes $1 million to be rich. Ultra High Net Worth (UHNW) individuals are most likely to say it takes a minimum of $5 million to $10 million to be wealthy.

Apparently, there are millionaires walking around the world today, who don’t feel they are wealthy enough. What’s missing for them? It turns out that the notions of wealth are also influenced by the factors that contributed to an individual's net worth. UHNW inheritors of wealth tend to see themselves as less wealthy. Those who say their success is based on hard work, education, running a business, and luck tend believe they are more wealthy.

I like to think of the notion of wealth as “having enough”. For me, this is the tangible result of increased financial literacy:

• Independence, resulting from the use of financial skills
• Peace of mind, resulting from use of financial knowledge
• Confident and purposeful decision-making, enabling individuals to live and retire with dignity, and with enough resources to cover both needs and wants 

It’s Your Money, Your Life. The two walk hand in hand. It goes without saying that when financial concerns overtake the quality of your life, a life deficit exists. The peace of mind that comes with understanding your true wealth often comes from financial literacy and the tax and financial planning processes that can help you plan for the future. Including a tax and wealth manager who can act as a financial educator, an advocate and a steward of your precious capital is a good first step to peace of mind. That’s the mandate of designates of the Master Financial Advisor program. 

Evelyn Jacks is president of Knowledge Bureau and author of 51 books on tax and personal wealth management. Her newest book Jacks on Tax: 2014 Edition will be available in December. She is also the founder and director of the Distinguished Advisor Conference (DAC). The theme of the 2014 three day think tank in Horseshoe Bay, Texas Nov 9-12 will be “Think BIG: Find the Sweet Spots in Wealth Management”  Follow Evelyn on Twitter at @EvelynJacks.