A few months back, I had a rather wealthy client literally explode into tears in my office. She was heartbroken at how her children and grandchildren were always fighting, never able to save a penny, and not one seemed to appreciate the amount of work she and her deceased husband had put into building a sizable estate and a chain of very successful retail outlets. She was seriously considering leaving most of the money to a charity that “would appreciate it!” After this meeting, I took some time to study how different generations look at wealth.

The definition of wealth has changed significantly in the last twenty years. Let’s say it has evolved. Just a few decades ago, the definition of wealth was rather one-dimensional and had to do with your bank balance sheet and maybe your financial assets.

Today, people have realized that wealth has a much broader definition. Wealth is not about how much money you have in the bank or what your assets are, but the quality of your life. It’s about the degree of fulfillment you’re having in your life — how you’re serving, helping and empowering others with what you have. If you’re doing that, it matters less what your bank balance sheet is, as long as you’re comfortable with it. Wealth is really about how you’re bringing fulfillment to you and the people that you love.

Unfortunately, over the last few years, we’ve seen the word “wealth” looked at as almost a bad term. If you’re a wealthy person, it’s something to be ashamed of these days, according to the media. There’s a perception that the wealthy are more or less self-serving. You hear about the huge income that certain, say, corporate executives and bank executives have, and the kind of bonuses they’re getting, and you think, “What are they doing with all that money?”

Many people perceive these individuals as only accumulating wealth and not really giving back with it, in any great extent. What happens is, we have a perception of wealth in terms of the negative, and we see it in terms of that negative expression, at least collectively.

Being wealthy is absolutely nothing to be ashamed of. We all strive to achieve a degree of wealth. Unfortunately, a lot of us envy those who have achieved it, because often we don’t know them personally. There’s this perception that these nameless individuals who have all this money, success and wealth, really don’t seem to be sharing it with others.

Even though there appears to be a negative overall perception of the wealthy, it seems most everyone strives to achieve a degree of wealth in their own lives. Many are trying feverishly to find a way to build wealth. It takes creativity, it takes discipline, it takes perseverance, it takes planning and most importantly, it takes goal setting. There are many ingredients in the elusive recipe and code to create and achieve true wealth. Many in this world don’t have the fundamental background or the necessary ambition to set that foundation in motion.

Remember back to the days when we only had a few channels on our TV’s (many still black & white), and one of the most important televised news events was the New York Marathon. The nightly news would begin with film clips showing the remarkably fit people finishing the race. They showed many of the galloping runners breaking record times as they exploded across the finish line. What the television viewer would see is the finish line, but what they wouldn’t see are those 26 miles of grueling torture the runners went through to get there. The point is, a lot of people see the wealthy once they get wealthy, but in many cases, they don’t see all the hours, sweat, equity, ignoring the family and all the things they had to do to build wealth.

There are a few fundamentals that are required to achieve wealth and a lot of preparation that is required to get there. We don’t see that when we just see the wealthy and just what they have. When interviewing many parents and grandparents, we find their biggest dream in life is to make sure their children can do better than they can. With children, it is vital to start early so they have a strong understanding of financial literacy. Talking to them about how to identify and establish goals, as well as how to establish discipline is key. It is not only important for parents to show their children how to develop a forced degree of sacrifice and delayed gratification, but also to demonstrate the power of hard work for them to achieve those goals.

What we don’t want to do often is tie self-worth and self-esteem to achievement. When you do that, if a child doesn’t reach the goal in the way that he or she is expected, then their self-worth is challenged. It’s important to start young with children and young adults in teaching them to really think about money in a constructive way, to plan, to organize and to use self-discipline to achieve their goals. “Price is what you pay, value is what you get.” It’s important to not shortchange yourself when you’re making purchases. It’s about discernment with regard to how you use your money, and using it consciously. My grandfather was a carpenter in a small town in Massachusetts for all of his adult life, and my grandmother was a librarian. They were quite successful at the time in their small fishing village on the Cape. Whenever I spent time with my grandfather, he seemed to exude this sense of confidence. Anything was possible. It took a little hard work and it took some sacrifice, but he valued quality.

Recently, I was talking with a friend of mine who is a psychologist. She was describing how when she was raised with her brothers and sisters, they were quite poor. One winter, her father was prepared to buy new winter coats for the kids. He wanted to buy the cheapest coats they could find. The mother said to the father, “We’re too poor to buy cheap coats.” The rationale behind that was a little counterintuitive, but what she was trying to communicate to her husband was, “We have to buy the best we can afford, because it has to last. We have to be able to pass that down from one kid to the next.” It made more sense to actually buy quality than to buy the cheapest thing, because at the end of the day, that was going to cost them more. That’s what my grandfather was communicating to me at a young age.

Many times, however, the human mind works against the person. In other words, always chasing the unbelievable or gambling, when there’s a safe solution. The way they should be allocating money is right in front of their eyes. There is also the concept of conscious versus unconscious spending and debt. Too many times, we spend money unconsciously. Because of that, it’s like a bucket of water with a slow leak. We wonder where it all goes at the end of the day. It’s important to develop habits of conscious spending as opposed to unconscious spending, and become fully aware of the amount of debt being taken on.

Debt often has a bad rap in our society, because a lot of people go into debt and hurt themselves or get into situations that quickly become a massive problem for them financially. It’s important that we use debt constructively to achieve our goals. The first thing that we have to do is establish clear goals and a direction. That way, if we’re going to use our ability to borrow, we use it in a way that moves us toward our goals, and not just fritters away the income that we have achieved. I’m just amazed sometimes.

People have all the money they need to have a successful retirement, yet they gamble with it continuously and end up back where they started, trying to build back up again. There’s a famous story we talked about on our Financial Safari Radio show a couple of years back about a guy in Wisconsin who ended up suing the state lottery commission because he won a multimillion dollar lottery, Consumer Focus Articles are available to IARFC members. You may view and reprint Consumer Focus articles at: iarfc.org/consumer_articles.asp quit his job, and then eventually, ran out of money and was poorer after he won the lottery than before. He was suing the state for his demise, which is amazing. It was his own bad decisions that led him to the poorhouse. When it comes down to it, it’s about taking responsibility. Some of us are just not prepared. We haven’t prepared ourselves for financial success or for wealth. An unfortunate truth is, a third of the lottery winners who win millions of dollars end up losing it all. Many times, it’s because they don’t have the preparation or the emotional and mental discipline to manage that wealth.

The money world and the psychological world are both important features in the blueprint of wealth. I describe it as an energy or a momentum. People who win the lottery are suddenly thrust into this paradigm of wealth. That archetype has a power and an influence and if we don’t know how to manage it, it will manage us. When it manages us, usually it manifests in a negative way, and often it can destroy our lives. This is why proper financial planning almost always has a psychological element and many times, begins with the end in mind.