San Diego Union-Tribune (Sunday)
PANDEMIC HAS CHANGED ATTITUDES TOWARD WEALTH
Americans used their wealth to build relationships and help others, according to two recent surveys
In the early days of the pandemic, Jason Norton was enjoying the comfortable life he had built for himself. A father of three, he manages about $220 million for clients around his community in Carrollton, Ga.
But in the course of the past year, he saw employees struggle financially and emotionally, clients question what they were doing, and a close uncle die from COVID-19. His views on wealth began to shift.
“I used to think of wealth as financial independence to do what you want to do when you want to do,” said Norton, founder and CEO of Norton Financial, a financial advisory firm. “My perspective has shifted. Now I view wealth more as a tool.”
Norton is not alone in his evolving attitudes toward wealth. The pandemic has changed how Americans view wealth in farreaching ways, according to two recent surveys.
Even for the wealthiest, the coronavirus crisis challenged the notion that money could buy anything. Sure, a few could charter a plane to take them to a private
home in a secluded location. But who could go out to their favorite restaurant or even buy toilet paper during the worst of the pandemic?
“We thought we’d always be able to do the things we wanted, but you couldn’t because it was closed,” said Norton, 39. “We thought we could buy whatever we wanted, but you couldn’t because it wasn’t available.”
People still worry about taxes, and no one likes large, unexpected expenses, but health concerns have surged almost to the top of the list of worries, a survey of 400 investors found. The survey, entitled the “Why of Wealth,” was released Friday by the wealth management firm Boston Private in a follow-up to a 2018 survey.
About 60 percent of respondents said the pandemic had caused them to reevaluate their perception of wealth, but there is a huge generational disparity: 78 percent of millennials and 73 percent of Generation X respondents said the pandemic had changed how they planned to use their wealth in the future, but only 26 percent of baby boomers and the same percent of the silent generation said the same thing.
“Our survey participants don’t necessarily define wealth as accumulating a lot of financial capital,” said Gerald Baker, a head of the Center for Wealth Planning Excellence at Boston Private. “It’s about being successful in what they do. COVID has really made them redefine what it means to enjoy what they do and to redefine success.”
Several key metrics of defining wealth had fallen in the past three years. In 2018, 65 percent of respondents felt that wealth gave them peace of mind, but that number had fallen to 53 percent by this spring. Half the respondents equated wealth with happiness, 4 percentage points lower than in 2018.
In another shift, more people said wealth meant success in life; that was up to 50 percent, from 40 percent last time.
“A big component of success is still making money, but it’s just not making money to increase your financial capital,” Baker said. “It’s accomplishing something in the process, to build other things, to take some of that financial capital and put it into something else.”
Norton said his priorities had shifted to focusing more on the people around him, so he decided to pay the first half of his company’s Christmas bonus to employees in May. “I did it just to make sure they were OK,” he said. “I focused less on my net worth and income and more on making sure we’re doing the right thing for our clients but also making sure my staff and my family was OK.”
For others, though, the mandated isolation focused their mind. Douglas Swets, an angel investor in earlystage startups, said the pandemic brought greater clarity and focus to the investments he and his partners were making.
“After a year of Zoom meetings, I can have a lot more meetings, and it’s improved our due diligence,” he said. “We can have more people doing reference calls. You get all the questions answered.”
At the same time, Swets said the investments that he reviewed were not necessarily better given the extra time. If anything, they were actually riskier, but the pandemic gave him a different view on investing.
“One of the things I’m really happy about is, I’m creating jobs,” said Swets, 75. “I look at this now as my charitable contributions.”
Americans with more modest incomes and savings were largely optimistic about the country and the economy coming out of the pandemic, according to an annual survey by the Charles Schwab Corp. Onequarter of the 1,000 respondents in the survey, which was released in March, planned to splurge on big purchases.
The marker to be considered wealthy dropped by $700,000: Respondents said having $1.9 million would make them feel wealthy, compared with $2.6 million a year ago.
The number of people who identified as savers jumped to 80 percent from 64 percent over the same period. The amount of money needed for “financial happiness” fell to $1.1 million from $1.75 million, and the amount needed to be financially comfortable fell to $624,000 from $934,000.
“What we learned from the survey is, more Americans are refocusing their priorities on their relationships and health,” said Rob Williams, vice president of financial planning at Charles Schwab. “The amount to feel financially comfortable has declined, but that’s largely because of a refocusing of priorities on what money can and can’t do for you.”
Elizabeth Galbut, a venture capitalist, used her time working from home in New York to reassess where she could live. She decided to move closer to her parents in Naples, Fla.
“I had to slow down, but it sped up my actualization of my personal goals and values,” she said. “As an entrepreneur, you’re working so much that you lose sight of yourself. I moved closer to my family to spend more quality time with them. I started working out every day. I started nursing myself with good food.”
That change in priorities helped her stay focused on investing in companies led by women. Her firm, Sogal Ventures, made more investments in health care and functional medicine companies, and it reaped successes from earlier investments.
Some of the biggest areas of concern in the Boston Private survey were around children: Parents were more inclined to use wealth to help children now than to save for their children’s future.
Norton watched his older children struggle with being isolated from their peers. He said he began spending more money on great dinners that could be delivered to their home, in an effort to cheer them up.
“You don’t know what you have until it’s gone,” Norton said. “Gratitude is the word I’d use.”