Must Knows for Wealth and Luxury Professionals
Developing strong client relationships is crucial for professionals working with high net worth and ultra-high net worth clients. Being good at what you do simply is not enough—likability and trust are critical differentiators, they are built through personal understanding and connection.
Below are four common myths about the wealthy.
Source of wealth
The first misconception is the high net worth “HNW” ($5-29mm), and ultra-high net worth “UHNW” ($30+mm) inherit their wealth. As Wealth-X highlights in 8 Common Myths About the Super Rich, only 19% of the UHNW fully inherited their fortune, while 65% were fully self-made and 16% inherited some money but much of their wealth comes from their own entrepreneurial endeavors. The fact is, the vast majority of HNW and UHNW individuals worked for and built their wealth. They are no stranger to hard work, long hours, risk, and failure before hitting it big. Many attribute their wealth to a strong work ethic, thriftiness, and determination or passion.
Many think the wealthy all have Ivy League degrees. Which just isn’t true; only about five percent of the wealthy attended Ivy League schools. And plenty dropped out or have no college education—Bill Gates (drop out), Folorunsho Alakija (no higher education), Michael Dell (drop out), Amancio Ortega (no higher education), and Rachel Ray (drop out) are a handful. This doesn’t mean education is unimportant to them; many are dedicated life-long learners eager to learn from others and experience. They don’t have anything against, and often support pursuing a college degree; however, they are likely to point out college is not a requirement or a guarantee of wealth, success, or happiness.
The wealthy don’t give back
Yes, many wealthy individuals are thrifty and even partially attribute their financial success to being so. Warren Buffett seems to relish his reputation for being frugal. However, it would be a mistake to interpret this as being ungenerous or anything more than understanding the value of money and using it wisely. The fact is, the wealthy value and give much to philanthropic causes. The Wealth-X and Arton Capital 2016 philanthropy report, Changing Philanthropy: Trend Shifts in Ultra Wealthy Giving, estimates that on average the world’s UHNW give approximately 10% of their net worth to causes such as health, education, arts, culture and humanities, and public / social benefit. The typical UHNW philanthropist donates approximately $29 million over their lifetime, and the giving index seems to be rising with socially and environmentally conscious millennials reshaping philanthropy and innovations such as impact investing.
Attitude towards wealth
Many wealthy people don’t consider themselves “wealthy”. They are often understated and perfectly happy enjoying their money quietly and sensibly. The reality is, most are very “normal” people you would never recognize as having a lot of money. True, they might not fret much about paying the bills and they spend more time enjoying the freedom and privileges wealth makes available. But they see money as a tool or vehicle rather than a destination or objective. They keenly understand people create wealth, not the other way around; and, that being your authentic self regardless of how much money you have is among the best advice anyone can follow.
John Frankot is founder and president of Triple R Media and publisher of LIFE REFINED, a relationship management and content marketing tool designed for wealth and luxury professionals.