Definition of wealth changing
Wealth – and who has it – has been top of mind for many New Zealanders in recent weeks.
But while we talk about how best to tax it, some people are debating how to even measure it.
Financial advisers and coaches said the things that people thought of as making someone ‘‘wealthy’’ might not be what you’d expect.
Hannah McQueen, founder of financial coaching firm EnableMe, said getting rid of financial concerns was a big marker of success for her clients.
‘‘The people I tend to work with want to know that their children are sorted and that they don’t have to worry about money,’’ she said.
That was more important as a marker of success than being able to afford a flashy car or house.
Data from the Commission for Financial Capability backed this up – people who were most comfortably off defined wealth as security and independence.
Related to this, research has shown that having an established savings account that is enough to cover unforeseen financial disaster is a major factor in creating a sense of comfort around personal finance.
Adviser Tim Fairbrother said most people saw owning their own home, debt-free, as an important plank in having ‘‘made it’’.
‘‘We deal with a diverse range of clients in different age groups and they all aspire to home ownership first and foremost, and then dream of having a bach or rental as next on their wishlist.’’
David Boyle, formerly at the Commission for Financial Capability, and now with Mint Asset Management, agreed getting out of debt was a significant marker of success for many people.
He said student loan debt was another milestone that many people wanted to overcome.
Many people were dealing with children who lived at home longer.
Helping them to get sorted, perhaps paying for their education, was something many strived for.
Being able to set children up for adulthood – maybe spending money on their education and helping them into homes of their own – was often a big goal for parents.
Financial adviser Liz Koh said exotic travel was held up as a marker of wealth more than material possessions.
‘‘Once they’ve paid off the mortgage, the status symbol thing is the latest trip they’ve been on.’’
She said there seemed to be a shift away from consumerism to spending money on experiences.
Social media drove the ‘‘holiday envy’’, she said.
It used to be said that New Zealanders knew they had made it when they could tick off the three Bs: Baches, boats and BMWs.
‘‘People’s Facebook posts are quiet for months then they go on holiday and you’re bombarded with pictures.’’
It used to be said that New Zealanders knew they had made it when they could tick off the three Bs: Baches, boats and BMWs.
Financial adviser Lisa Dudson said that was still an aspiration for some people.
‘‘It’s enjoyable having those things and a good status symbol of success, which many people like to have.’’
Commission for Financial Capability research showed this was more common among people who were struggling a bit.
They were more likely to think of wealth as material items and emphasised that it would mean comfort and enjoyment.