How much financial wealth is needed to feel secure?

During a gathering of professionals engaged in family business adivising in Chicago earlier this year a survey of ultra high net worth families was mentioned that queried "how much money would you need to have to feel completely secure?" The answer, regardless of wealth level (starting at $10 million and going up to $1 billion) was approximately 80% more than they currently possessed. The book citing the survey was "Richistan: A Journey Through the American Wealth Boom and the Lives of the New Rich" written by Robert H. Frank (the wealth reporter for the Wall Street Journal) and published in 2007.

I was struck by the nearly constant factor at each wealth point: families with a net worth of $10 million would feel completely secure if only they had $18 million; families with a net worth of $100 million would feel completely safe if only they had $180 million, etc. It was as though at each level of financial wealth a family established its lifestyle at the same relative threshold of insecurity. I have personally worked with clients who expressed fear of impending impoverishment, even though they had financial resources in excess of $100 million. My first encounter with a client presenting this fear pattern was with a woman who's family had been wiped out in the Great Depression in the U.S. during the 1930s. I remember wondering if those traumatic memories were the primary reason for what I perceived as an irrational fear since the woman had amassed what most would consider a great fortune. Based on the results of the survey mentioned in the book perhaps there is much more to the story. What experiences have you had that illustrate the "insecurity gap" in wealthy families?

Primary Goals

The three primary goals identified for an online community focused on family wealth advising were to gain:

• An understanding of the processes involved in building, sustaining and transitioning family wealth.
• Insights into the complexities of various forms of family business governance, ownership structure and dynamics, and how these issues inform family wealth advising.
• Practical knowledge of the role of the advisor in family wealth advising, with special attention devoted to the skills needed to deal with conflict, identify success factors, and encourage families to work as systems.

Perhaps we should organize the blog into three tracks associated with the primary goals. Post your thoughts and ideas. Thanks.

Building an online community

We have a great opportunity to learn from each other and gain perspectives informed by a variety of professions and practice experiences. We all expressed gratitude for the experience and the knowledge, but also expressed hunger for deeper understanding and the opportunity to explore topics in greater depth.

One way we can continue the connections made in Chicago and find ways to share knowledge and experience is through participation in an online community with its nexus in this blog. It has been designed to allow us to share resources through web links and through lists of books. The blog has a random newsfeed and video feed based on the key phrases "family business" or "family dynamics." You can immediately change the news items that appear by selecting one or the other phrase. The phrase generating the current view is shown in bold type and the other phrase that can be selected to produce another set of articles is underlined. We also have the opportunity to participate in polls that we might use to find consensus of opinions in the development of theory or practice.

Please respond to the poll questions as they appear and let me know your ideas about moving this online community of learners forward.