THE TIME TO PAUSE IS NOW
As the HNW name reveals, they are professionally motivated, hard working and possess lofty career ambitions. They most certainly lead busy lives at work—and likely at home, too. The commitment and dedication to their craft is no doubt impressive. However, as the final study results have shown us, they appear to be so focused on the present that they could be undermining their full financial potential.
HNWs are indeed well off, so much so that the average household probably qualifies as the top 1% in most states. Yet, as they push forward in their demanding careers and play catch-up with their busy lifestyles, they may be missing out on key opportunities to expand and grow their success.
Stability is incredibly important to them. Today, 69% of high net workers consider themselves conservative investors.
Here are more key findings from the report:
- Approximately one in eight say they will never retire
- Sixty-nine percent of respondents described themselves as conservative investors
- Nearly a third has never used a financial advisor, yet 91% believe an advisor would add value to their investment program
HNWs are at a critical time in their lives, as their finances are more complex and their goals are loftier. With such a focus on career and little time for anything else, we see a red flag regarding holistic financial planning.
For the HNW, the job, the income and the assets appear to be there. An even more prosperous future, including retirement, might be within their grasp. That $1 million average Investible Assets looks good on the surface, but a typical financial planner would note, without a personal analysis, that the stockpile will only contribute about $40,000 annually in retirement.
The average High Net Worker may want to pause for a moment and channel a small amount of that daily work energy into their long-term financial planning.
Making Their Mark On The Real Estate Market
HNWs are definitely movers and shakers – at least as spenders. Historically, adults nearing retirement have downsized their homes. HNWs, however, are doing the opposite. Thirty-three percent plan to make a real estate purchase over the next two years, with many of these expected to be second or third homes.
As EverBank Home Lending EVP Tom Wind told me, “High Net Workers have money to spend, are investing in real estate and tapping into the equity of their existing homes to expand their residential footprint. Within our own business, we are seeing HNWs use home equity lines of credit to take advantage of low interest rates and a rising real estate market. Even more interesting than that though, is the trend of these High Net Workers helping their adult children with down payments. It’s helping bolster certain parts of the market.”
Onward & Upward
There’s a lot to be optimistic about here, and for the HNW, some planning and diversification actions appear warranted. For all of us, regardless of our socio-demographic, this is a good reminder to slow down from time to time, smell the roses and give a bit more thought to the future and how best to maximize our financial potential.
I’ve only touched on a portion of the results, as I know you’ve probably got a lot more to get to today, but you can download the full report here.