Rich People Problems
Millionaires Disavowing Real Estate
Fidelity’s Millionaire Outlook shows millionaires’ overall confidence in the health of the current economy is fueled by their perception of a strong stock market, yet the perceived weakest aspect of economic performance is the value of real estate. More than 2,500 financial decision makers at households with at least $1 million in investable assets were surveyed by the Boston-based firm. Millionaires say they will not abandon the stock market. In fact, 30% say they will increase their investment in stocks this year, compared with only 6% decreasing the amount they will invest in equities. Millionaires comprise an increasing part of the retail investment sector, and therefore it’s important to gauge where their investments are headed, as well as what precipitates their financial rationale.
What’s weighing on the millionaire mind? Mostly retirement, according to Fidelity’s report. With their money already accumulated, most millionaires are now preoccupied with managing it all and supporting their retirement lifestyle, while still leaving something for the next generation, it says. What is indeed most interesting is the order of priority in which millionaires put their financial concerns: managing investments, supporting the lifestyle they want in retirement, maintaining their household’s wealth, increasing their household’s wealth, estate planning, tax planning, supporting the lifestyle they want today, providing for their family’s financial security, leaving an inheritance, and, finally, paying for their children’s or grandchildren’s education. Sound a bit selfish? Why sacrifice your lifestyle today, when you can sacrifice paying for your children’s education tomorrow? Hah!
People get even more self-centered the more money they have. “Compared to millionaires with less than $10 million, deca-millionaires are younger and, being accustomed to having more assets, they need to stretch a more demanding lifestyle over a longer period of time,” the Fidelity survey finds.To help achieve their goals, a majority of high-net-worth individuals turn to investment advisers. When asked about the main reason for hiring an adviser, millionaires say they want to get trusted investment recommendations. Next on their list of wants from an advisor is to help them make more money. They then say they need help planning for retirement. It seems high-net-worth individuals will be looking to and talking about stocks much more than real estate to increase their wealth this year.
