In my four months in this office, I have come to see some similarities between many of our clients and I’d like to take this opportunity to share some of the great impressions they have made on me. Firstly, I’d like to say how nice I have found everyone to be. It’s clear that this practice has attracted and retained a very down-to-earth and sweet clientele, with a dignity that is refined, yet nowhere near pretentious. ‘Wealth whispers’ among this crowd. Although most of them are high net worth, you wouldn’t guess so based on appearance. I haven’t seen too many showy displays of wealth, like luxury labels or extravagant spending. Instead, I’ve seen the large account sizes on the screen next to quite ordinary people who have made solid financial choices throughout the years and are now in a position where they have the freedom to afford just about anything they want. That being said, “anything they want” isn’t really that much. Usually, it’s something like a bathroom remodel or maybe a once-in-a-lifetime trip, when it could be so much more. We run many planning simulations where most of the wealth will be left as inheritance. The common denominator in these situations is a shared set of values that have paid off big for a group of regular folks.
Some have coined this group the ‘middle-class millionaires,’ because their wealth comes from everyday hard work and discipline, not big ambitions or big breaks.
So, I’d like to break down these values into some habits that we can applaud, and hopefully pass on to that next generation who will inherit the remainders of these growing estates. I don’t think it’s any coincidence that the ‘old money’ crowd preserve their wealth following many of the same rules.
The first habit I’d like to point out, is a good work ethic. No surprise, right? This doesn’t necessarily mean working harder, though. For example, many folks put in the work they needed to get the credentials that put them at the top of their pay scale. Now, their pension is based on their career’s higher earnings. They only worked the one job, but they maximized their opportunity within it.
The second habit I’d like to highlight is the discipline to save and their willingness to get into the market and stay in it through the rough times. Selling in a down market is detrimental to long-term growth. Rough economies or opportunities to cash out a 401k do not tempt our millionaires to sell.
The third habit is practicing frugality. Again, we’re not talking extremes, just mindful spending, really. ‘Do I really need this?’ ‘Am I getting my money’s worth?’ and ‘Is this going to be costly to maintain?’ are familiar thoughts to the ‘middle-class millionaire.’
The fourth, is a grounded perspective. What really matters? What really makes us happy? Obviously, not feeling the need to fill every void with something money can buy will help preserve the bank account and its potential to grow.
If these values and habits hit close to home for you, then yay! Give yourself some credit. Not everyone is wired this way. With that in mind, I’d like to point out that there’s a bridge here for those who would like to see their ‘middle-class millions’ turn into ‘old money’ and that is the next generation. When I was studying for my Master’s in Personal Financial Planning, I did extensive research on how families pass on financial habits. The biggest influences are modeling and explaining. This is bigger than learning about personal finance in school. If families can show their kids what they’ve done to be successful and explain it, they’ll have a good chance at teaching those who want to be taught. This should be kept in mind when thinking about the legacy the money will leave behind.
Of course, becoming a millionaire isn’t guaranteed, but making intentional, prudent financial decisions from a young age certainly increases the odds of achieving financial independence; a goal we believe everyone should aspire to.
Any opinions are those of Susan Keltner and not necessarily those of Raymond James Financial Services, Inc., or Raymond James. Investing involves risk and you may incur a profit or loss regardless of the strategy selected.
Middle-Class Millionaires
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In my four months in this office, I have come to see some similarities between many of our clients and I’d like to take this opportunity to share some of the great impressions they have made on me. Firstly, I’d like to say how nice I have found everyone to be. It’s clear that this practice has attracted and retained a very down-to-earth and sweet clientele, with a dignity that is refined, yet nowhere near pretentious. ‘Wealth whispers’ among this crowd. Although most of them are high net worth, you wouldn’t guess so based on appearance. I haven’t seen too many showy displays of wealth, like luxury labels or extravagant spending. Instead, I’ve seen the large account sizes on the screen next to quite ordinary people who have made solid financial choices throughout the years and are now in a position where they have the freedom to afford just about anything they want. That being said, “anything they want” isn’t really that much. Usually, it’s something like a bathroom remodel or maybe a once-in-a-lifetime trip, when it could be so much more. We run many planning simulations where most of the wealth will be left as inheritance. The common denominator in these situations is a shared set of values that have paid off big for a group of regular folks.
Some have coined this group the ‘middle-class millionaires,’ because their wealth comes from everyday hard work and discipline, not big ambitions or big breaks.
So, I’d like to break down these values into some habits that we can applaud, and hopefully pass on to that next generation who will inherit the remainders of these growing estates. I don’t think it’s any coincidence that the ‘old money’ crowd preserve their wealth following many of the same rules.
The first habit I’d like to point out, is a good work ethic. No surprise, right? This doesn’t necessarily mean working harder, though. For example, many folks put in the work they needed to get the credentials that put them at the top of their pay scale. Now, their pension is based on their career’s higher earnings. They only worked the one job, but they maximized their opportunity within it.
The second habit I’d like to highlight is the discipline to save and their willingness to get into the market and stay in it through the rough times. Selling in a down market is detrimental to long-term growth. Rough economies or opportunities to cash out a 401k do not tempt our millionaires to sell.
The third habit is practicing frugality. Again, we’re not talking extremes, just mindful spending, really. ‘Do I really need this?’ ‘Am I getting my money’s worth?’ and ‘Is this going to be costly to maintain?’ are familiar thoughts to the ‘middle-class millionaire.’
The fourth, is a grounded perspective. What really matters? What really makes us happy? Obviously, not feeling the need to fill every void with something money can buy will help preserve the bank account and its potential to grow.
If these values and habits hit close to home for you, then yay! Give yourself some credit. Not everyone is wired this way. With that in mind, I’d like to point out that there’s a bridge here for those who would like to see their ‘middle-class millions’ turn into ‘old money’ and that is the next generation. When I was studying for my Master’s in Personal Financial Planning, I did extensive research on how families pass on financial habits. The biggest influences are modeling and explaining. This is bigger than learning about personal finance in school. If families can show their kids what they’ve done to be successful and explain it, they’ll have a good chance at teaching those who want to be taught. This should be kept in mind when thinking about the legacy the money will leave behind.
Of course, becoming a millionaire isn’t guaranteed, but making intentional, prudent financial decisions from a young age certainly increases the odds of achieving financial independence; a goal we believe everyone should aspire to.
Any opinions are those of Susan Keltner and not necessarily those of Raymond James Financial Services, Inc., or Raymond James. Investing involves risk and you may incur a profit or loss regardless of the strategy selected.