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Uncovering the purpose of your wealth can be a complex journey, however early life experiences can offer useful clues. Whether trying to understand what wealth is really ‘for’, or casting an eye on the past in order to see a way forward, identifying the purpose can provide clarity over future direction and help with decision making.
A Meaningful Journey
Over the course of our journey from imagining to building Six Degrees, we have had several conversations with potential investors and advisors: individuals with the required means and experience to invest into start-ups. Most of them were new to the world of wealth management and they each challenged us, made us think, and re-think, leading us to make improvements to our plan. But one conversation stands out in our minds. This individual’s line of questioning focused less on the details of our business plan, and more on understanding what our typical client looked like. And one question in particular sticks in our memories:
What’s the most commonly identified meaning – or purpose – of wealth among your clients?
We had to admit, this had us stumped. There probably isn’t any single thing in our lives more difficult to ascribe meaning to than wealth.
The term ‘wealth’ has come to be associated with anything from long lasting contentment to good health to other positive attributes of a successful or happy life.
After all, the term ‘wealth’ generally means more than just having money. It has come to be associated with anything from long lasting contentment to good health to other positive attributes of a successful or happy life.
The common meanings we see attributed to wealth include concepts such as safety, independence, or ones even more clearly rooted in early life experiences such as feeling recognised, seen, or rewarded.
Understanding the meaning that someone ascribes to wealth can also give us useful clues about the purpose of the wealth itself.
What is wealth ‘for’?
It might sound like a silly question. Wealth is for spending or investing, wealth is for passing on to the children, wealth gives us optionality to do things and gives us greater choice.
But a use is not the same thing as a purpose, and uncovering the purpose of someone’s wealth is never a simple journey.
When a conversation became a turning point
We recall a conversation with one of our clients several years ago, who was incredibly interested in getting to the bottom of her new wealth’s purpose. She had worked her way up from junior positions in a large privately-owned business until she was eventually promoted to the C-suite, becoming a shareholder by the age of 34. After which the business was bought by private equity.
She received £4.8m in cash and rolled another £2m back into the business in shares. It was at this point we were introduced to her by a friend.
Her aim was to carry on working at the firm, until at least the next business sale, when she would be able to realise the full value of her shareholding and gain valuable experience helping manage a PE-backed business along the way.
She didn’t know what she wanted from her next career move, although she was clear that she wanted to continue to work. On discussing this further, she came to the realisation that her two main motivators in her career were the desire to support herself financially, and to play a valuable role within a bigger organisation.
Past lives, past influences
As the conversation progressed she told us that she was from a large family, and was the oldest of four siblings growing up. As a teenager she had always felt the need to work and earn money, in addition to helping to look after the younger siblings. It was important to her at the time to feel as though she was contributing properly, and she acknowledged that this self-imposed pressure had continued through to her adult life.
This insight allowed her to explore what else might be on the horizon after leaving her firm. It was important to her that while she didn’t want to work in a big corporate again, she wanted to use her experience and build on what she had learned.
It was at this point in the conversation when she surprised us with a clear realisation about the purpose of her new wealth:
“I want to work for enjoyment rather than out of necessity”
Purposes of wealth are rarely so succinct and simple, however we felt that this desire beautifully encapsulated the freedom that her new wealth could deliver.
We would go on to work with her to create a strategy to manage the initial liquidity, with the aim of structuring it to enable her to use it and any future proceeds to either supplement – or replace – her income once she left her current role.
Releasing her from the constraints of her past relationship with wealth, it gave her the bandwidth to consider alternative career directions. The clarity she gained by identifying the purpose led her to explore more creative, altruistic and entrepreneurial avenues.
Today, our client has her own consulting business, advising early stage businesses on their own growth journeys, and by her own admission, she loves what she does.
This blog is for information purposes and does not constitute financial advice, which should be based on your individual circumstances. The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.
