A picture of wealth
Psychological and emotional connections with money and their impact on behaviours are material. Demographics, macroeconomic factors, family dynamics and upbringing, personality traits and ethical values are all factors that influence attitudes toward wealth. However, the extent to which psychology and emotions influence attitudes has often been underestimated. Once considered neutral within economic theory, researchers have, in recent decades, examined the psychology of money and demonstrated that the connection is heterogeneous and complex. For instance, feelings of guilt or responsibility can influence decisions about wealth generation and distribution.
The impact of psychology and emotions on wealth attitudes underscores the need in wealth planning to reveal and consider these factors across the family unit. Given the nuanced nature of attitudes towards wealth, caution should be exercised in making assumptions about wealth planning objectives, which could undermine the effectiveness and fortitude of solutions and structures. Advisors are encouraged to invest time and resources in delving deeper into these areas during the discovery stage with clients and the wider family to identify the spectrum of views, values, priorities and expectations that will better inform the planning process.
Money attitudes
‘If you cannot control your emotions, you cannot control your money.’ – Warren Buffet
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