High Net Worth Retirees Don’t Necessarily Know What They’re Doing – Survey Shows

Here’s a fact many of you probably won’t want to hear: Just because you’re good at making money, doesn’t necessarily mean you know the best ways to keep it. At least, that is one of the findings in the recent U.S. Trust 2013 Insights on Wealth and Worth survey. It turns out that many of the 711 high net worth adults surveyed were leaving money on the table, or failing to plan adequately for their retirements and assets. Let’s take a look at the investment decisions of the rich and anonymous.

Give Me Land, Lots of Land

Wealthy investors like tangible assets, with 65 percent owning real estate, oil and gas properties, and even farmland – especially among younger investors, who see these investments as a bulwark against the current tax, political and economic environment.

Expensive Toys

Others surveyed collect valuable assets like fine art, jewelry, antiques, investment wines, rare books and classic cars – essentially pursing their passions in things that have a chance to appreciate over time. However, while 59 percent are buying these expensive toys, only about half of collectors insure their purchases, and just 19 percent have a plan for passing on their collections to their heirs. That is poor planning!

Dollars Backing High Ideals

High net worth investors like to put their money towards products and companies they believe in, influencing society by voting with their dollars. A full 45 percent use their money to express their social, political and environmental values (like Leonardo DiCaprio buying a Prius for girlfriend Blake Lively back in 2011). When asked, 46 percent of respondents said they would rather have lower returns on their investments if it meant investing in companies that have a positive impact, and 44 percent said they would be willing to take on more risk.

But – while half of those surveyed said it was important to consider the impact their investment decisions have on society and the environment, only 25 percent have actually reviewed their investment portfolios with those concerns in mind.

Ultimately, the survey revealed a troubling lack of planning and a very limited understanding of portfolio construction among the wealthy. How would you have fared?

–       The Savvy Investor

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