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Financial planning for the nouveau riche


Are you a busy professional in your 30s or 40s and starting to accumulate wealth? A financial advisor who specializes in serving new affluent clients can help you enjoy life more with less money stress.

In the US, households with investable assets between $500,000 and $1 million are commonly called the mass of the wealthy. If you’re going to join this group of roughly 6 million households in the next few years, you’re part of a group known as which arise affluent.

Many newly affluent individuals and couples earn above-average incomes and start their careers. And many managed their finances on their own through this moment. But as major life events like starting a family, changing careers, or moving to a new city disrupt the status quo, the advice of a financial professional can be timely and incredibly valuable.

You’ll probably find dozens nearby financial advisors well suited to help you reach your money goals with a personalized plan. But it can be more difficult to find a financial advisor who specializes in serving the emerging affluent.

Fortunately, many financial advisors offer virtual services so you can meet online no matter where you (or they) live. This means you can choose hire a financial advisor who live hundreds of miles away when you decide that their knowledge and experience working with newly affluent clients like yourself is more suited to your unique financial planning needs.

Financial planning for the nouveau riche

💡 In the Q&A section below, you’ll get insights from financial advisors who work with newly affluent clients in their 30s and 40s to help them make smart decisions to enjoy life more today while preparing for a comfortable retirement in the future .

💸 Smart money information for the newly wealthy

This page is organized into sections to help you quickly find the information you need and get answers to your questions:

  1. Q&A with financial advisors who specialize in serving high net worth clients
  2. Get answers to your questions about financial planning for the newly wealthy
  3. Browse related articles

Q&A: Financial advisors who specialize in serving high net worth clients

Eight questions with Carlton McHenry, CFP®

We asked Leavenworth, Washington-based financial advisor Carlton McHenry to answer frequently asked questions

Q: What is a common financial planning challenge unique to newly wealthy individuals that you often encounter when working with your clients? How do you work with them to overcome this problem?

Carlton: This is usually a job or career change. Many people work in stressful, intense jobs and want to find a way to achieve more balance in their lives. They want to make sure they maximize their earning potential during their peak earning years, but they also don’t want to burn out and lose other important things in their lives, like family or health.

We help our newly affluent clients better understand where they are financially now and what things would look like if they were doing something else – maybe they’re aiming for a big raise, knowing it will lead to an earlier retirement and greater financial freedom. Or moves to another job in the same industry, which may be lower wages but fewer hours, or switching to a different career that may allow them to have more balance.

We help them evaluate their executive compensation package and determine whether they will truly make the change that is the best way to maximize their earning potential and keep their personal and financial goals in line.

Q: What advice can you give to individuals and couples who are entering the emerging affluent category and are unsure whether they should hire a financial advisor at this stage in their lives to help them make a more informed and informed decision?

Carlton: I would like to start by asking if you like managing your finances yourself. If you like it, do you have the time to do it effectively? If you can answer yes to this question as well, you may not need to hire someone.

But one last thing: ask yourself how much your time is worth and how many hours are you spending managing your finances? If this is a significant number and your time is worth a lot, you may want to consider hiring a professional to do this for you.

This person can act as an advocate for you and your family if needed, and can step in and continue to manage your money for your family if something happens to you. Is it worth the extra peace of mind?

Q: How do the services you offer to new high net worth individuals differentiate your firm from other consulting firms?

Carlton: Our focus is on serving this niche of people that we call the new affluent. They come to affluence and wealth, whether they do it on their own or through an inheritance, and they need guidance on how to manage it in a way that improves their quality of life.

Most of our clients are going through major changes in their lives and have many decisions to make that will affect them financially. They want to make sure they make the right choices in these situations and are well prepared for everything.

Our clients are typically Gen X, but we also work with younger millennials. Many of them work in the field of technology, as well as in branches of this industry.

Many other firms are focused on the baby boomer niche, but we are not. Our clients are typically still in the wealth accumulation phase and may have many years of career ahead of them. Many strive for financial independence more than retirement. So we help our clients in these areas.

Meet Carlton McHenry, financial advisor to the newly wealthy:

The view Carleton profile page on Wealthtender or visit his website to learn more.

Q: When you first talk to a newly affluent individual or couple, what questions would you like to ask to better understand their unique circumstances and determine how you can best help them achieve their goals?

Carlton: We always start with this concept called the title Return of Life or ROL. We ask them, “Are you managing your money in a way that improves your life?” We have them rank and rate 10 different areas of their lives, and then we dig deep into those areas to see what’s going on and where they need help.

We also reveal their past history and philosophy of money through the tool we use in our Return of Life (ROL) process. This is a very interesting exercise with couples, as often each person has a different philosophy in a certain area, such as spending or saving, that is at odds with their significant other. This may be the reason why this area may score lower than others and may be a source of stress in the family. While working with the couple to determine the best way to manage their finances, we also do our best to align their financial philosophies to create a more holistic plan for their family.

Q: What advice do you often offer to newly affluent clients who are considering a career change and are concerned about the implications of giving up their primary source of income to help them make an informed decision?

Carlton: We not only propose, but also run what-if traps for many different scenarios to show them how things could happen.

This can include not earning money for the next 12-24 months and how this will affect them financially. Do they have other things they can turn to for support – a working spouse, a loan from a friend or extended family member, etc. Can they reduce their lifestyle expenses? Do they have stock options from work that they can exercise and liquidate to ensure a longer financial path? How will this affect their long-term financial goals? Will a career change mean delaying retirement?

All these things need to be factored into the mix and planned accordingly, which is where we come in and help. This is the reason we get to know our clients 360 degrees to help them make better, more informed decisions in areas like this.

Q: What steps do you suggest young affluent couples with elderly parents who may need financial assistance take?

Carlton: We suggest that they factor in these costs to care for their aging parents.

Will they need housing assistance? Will they need full care? Memory care? Other? Can they provide this care at home or will it require an outside facility? Are there other family members willing to help? Has their estate plan been updated to reflect all of this?

Q: What questions do you recommend newly affluent individuals and couples ask the financial advisors they are considering hiring to help them decide if they are a good fit?

Carlton: We recommend that you first visit the advisor’s website and get a better understanding of who they are and their story. Who do they help? What is their education and experience level? How are they compensated – fee or commission? What are their fees? Do they act as fiduciaries all the time when working with their clients? Finally, check their disciplinary record with regulatory authorities to make sure there is nothing negative.

Q: Is there a particularly memorable experience or moment you remember with a new high-net-worth client when you first realized they had unique opportunities and circumstances when it came to their financial planning needs?

Carlton: I think we realized that early on when you read our personal story.

My wife and I left the big city in search of something bigger, and we found it in the beautiful Cascade Mountains here in Leavenworth, Washington.

Now we meet a lot of people who have done the same or who want to do the same. COVID has only accelerated this because now people can work from almost anywhere in the world, but they may have to make some sacrifices to achieve this and make things really work.

What all our customers have in common is the desire for more – a way to maximize and achieve the best return on life (ROL). When you are living your best life, you are truly happy! You stop chasing money and your money starts working for you instead of against you.

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