Many of us believe that a million-dollar paycheck will automatically solve all our problems, but the reality is that financial fears and anxieties plague even the very wealthy. Most people can’t understand how rich people can have problems, but it turns out that while they might not be stressing about where their next meal is coming from, they’re still just as worried about money.
Find Out: I’m a Financial Advisor: 5 Things the Middle Class Wastes Money On
Read Next: I Followed Mark Cuban’s Genius Advice and Am on Track To Become a Millionaire
We interviewed three financial advisers to help us understand the kinds of money worries their wealthy clients are facing.
And on the other side, here are the genius things the wealthy are doing with their money.
Earning passive income doesn’t need to be difficult. You can start this week.
Not Having Liquid Assets Readily Available
R.J. Weiss, a certified financial planner and the CEO of The Ways to Wealth, noticed that a common concern among his wealthy clients is not having enough liquid cash readily available.
“Often, their wealth is tied up in investments or business ventures. This lack of liquidity creates unnecessary stress for them, as not having cash on hand compromises their peace of mind and financial flexibility.”
Learn More: Average Monthly Expenses by Age: Which Group Is Spending the Most?
Their Children’s Futures
Weiss shared that his wealthy clients, like any parents, worry about their children’s futures.
“However, their concerns often extend beyond basic needs, including preserving family wealth, ensuring their children’s financial independence, and instilling strong financial values,” he said. “They also often worry about the impact of wealth on their children’s character and the potential for entitlement.”
Market Volatility
Despite their financial success, wealthy clients often have significant concerns about market volatility, especially since large portions of their wealth are invested in the markets. This means they’ll typically experience more dramatic ups and downs when the markets are volatile.
“My wealthy clients also worry when there are periods of stagnation,” Weiss said. “They worry about the possibility of the S&P 500 or other major indices not growing for an extended period, which could impact their long-term financial goals, legacy planning, or, in some cases, loans that they’ve taken out against their assets.”
High Taxes and IRS Audits
Gloria Garcia Cisneros, a wealth manager with a CFP license based out of Los Angeles, shared that her wealthy clients often express concern about the significant tax bills they pay and the potential for audits by the IRS.
“They are particularly worried about how changes in tax laws, such as the expiration of tax cuts, might increase their taxes,” she said.
As a result, Cisneros said that her wealthy clients often prioritize proactive tax planning when selecting their advisory teams. For example, they actively seek out expert accountants, advisors and attorneys to strategically organize their assets in a tax-efficient manner.
“They also use strategies like leveraging estate tax exemptions and charitable giving to reduce their lifetime taxes,” she said.
Estate Planning and Legacy Concerns
Another major worry for wealthy people when it comes to money is estate planning. This means planning for what happens to their property and assets after death.
“They’re often concerned about efficiently passing down their wealth to their family while minimizing estate taxes. This involves complex planning and Trust structures,” Cisnero said. “On top of that, there’s a lot of emotion tied to money, so they usually want their wealth transferred responsibly to the next generation.”
Privacy and Trust Issues
Internal struggles that the wealthy often experience are feelings of distrust and paranoia, as well as heightened suspicion and a strong focus on privacy. Cisnero believes that this skepticism often arises from the perception that others might have ulterior motives for associating with them.
When you’re wealthy, your social status elevates. This then attracts people from less powerful positions who may see your wealth as a means to advance their own status. Consequently, the wealthy often become more wary of the intentions behind social interactions.
“I’ve noticed that my wealthy clients are typically hyper-aware of their financial status. Some can be distrustful when engaging in conversations about their money, even with their professional advisor’s team,” Cisnero said.
The Fear of Not Having Enough
According to the Mind Over Money survey by Capital One and The Decision Lab, 77% of Americans report feeling anxious about their financial situation, and the wealthy are no exception.
Jeffrey Lewis, CFP and financial advisor at Savant Wealth Management, shared that even his rich clients worry about not having enough money.
“It’s human nature to want what we don’t have, and for some people, there’s no such thing as having enough,” he said.
However, Lewis pointed out that while his wealthy clients generally have enough financial resources to sustain their desired lifestyles, their own self-doubt and lack of confidence often prevent them from achieving true peace of mind when it comes to money.
Understanding Financial Anxiety Across Income Brackets
Money problems exist no matter how much you earn, though the nature of these concerns can differ. Affluent individuals typically worry about preserving and managing their wealth, while those with lower incomes are often more concerned with immediate financial stability.
Despite these differences, financial anxiety is a common thread that transcends income brackets.
“It’s fascinating, as a financial advisor, to see that financial anxiety and worry exist no matter the amount of money you have,” Cisnero said. “This behavioral side of money is often overlooked and is the stem of a lot of the scarcity or overspending issues we see in both the wealthy and the lower-income households I talk to.”
In other words, many of the money worries that the wealthy and the less wealthy experience aren’t actually about dollars or numbers. They’re mostly emotional and behavioral problems, such as deep-seated fears of scarcity, that need to be addressed.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: 7 Things the Wealthy Worry About When It Comes to Money
