The power of purposeful wealth

Most people would agree that wealth is not about hoarding money but the financial freedom and flexibility it affords to help us achieve our passions and goals. Wealth essentially has the capacity to create a powerful purpose within our lives, provided we are able to unlock its true value.

Understanding your ‘why’

A good starting point for unlocking the value of wealth is to develop a clear understanding of what you want from life and what mark you want to leave. Do you want to travel; start your own business; support your family; create opportunities for others, or leave a legacy? Establishing the type of things that you really care about can provide a genuinely powerful purpose to wealth.

Sharing your wealth

One of the best ways to find fulfilment in your wealth is by sharing it; there is certainly no joy in holding onto wealth you will never use. Using wealth to help family, for instance, can be a particularly rewarding experience that allows you to positively change loved ones’ lives. Indeed, as the cost-of-living crisis continues to weigh heavily on household budgets, there has perhaps never been a better time to offer financial support to family members.

Intergenerational planning

A recent report1 shows that one in three advised families now share the same financial adviser, with many turning to them for help with wealth transfers and planning. As well as cost-of-living pressures, the increasing need for intergenerational advice has also been fuelled by the Chancellor’s decision to freeze Inheritance Tax (IHT) allowances until at least 2026, which will result in a growing number of people becoming liable for death duties.

Unlocking the real value of your wealth

We can help you develop a clear understanding of what you want to achieve with your wealth and then provide the support and advice required to fulfil those goals.

1. M&G, 2022

The Financial Conduct Authority (FCA) does not regulate Will writing, tax and trust advice and certain forms of estate planning.

It is important to take professional advice before making any decision relating to your personal finances. Information within this newsletter is based on our current understanding of taxation and can be subject to change in future. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK; please ask for details. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency. Taxation depends on individual circumstances as well as tax law and HMRC practice which can change.

The information contained within this newsletter is for information only purposes and does not constitute financial advice. The purpose of this newsletter is to provide technical and general guidance and should not be interpreted as a personal recommendation or advice.

The Financial Conduct Authority does not regulate advice on deposit accounts and some forms of tax advice.

All details are correct at time of writing – June 2022.

Personality traits of the self-made millionaire

In the first study of its kind2, researchers have distinguished the personality traits most common among self-made millionaires versus those who have inherited their wealth.

The study analysed a sample of wealthy individuals according to the so-called ‘Big Five’ personality traits:

  • Openness (curious vs cautious)
  • Conscientiousness (efficient vs disorganised)
  • Extroversion (outgoing vs reserved)
  • Agreeableness ( friendly vs uncaring)
  • Neuroticism (confident vs anxious)

The results showed that wealthy individuals across both categories tended to show a similar personality profile, being open to new experiences, extroverted, conscientious, agreeable and demonstrating low levels of neuroticism.

They were also shown to be more risk tolerant than the average population. Interestingly, the study revealed that self-made millionaires more closely match this personality profile than inheritors – and that this becomes more pronounced the wealthier they are.

The report concluded that people with this unique combination of personality traits have a higher chance of becoming rich via their own means. The good news – if you don’t match this specific profile – over the years many studies have also shown that taking financial advice can result in heightened wealth accumulation.

2 Humanities & Social Sciences Communications, 2022