Now, as I do so, I also run into people’s attitudes about their wealth.

I’ve made a close study, over the years, of how money "works", and just what it is that propels certain individuals and families into great quantities of resources … and what also brings them down.

You see, sometimes the very wealthy begin to act like they’re poor.

It’s the beginning of a bad problem. And, it’s also something to watch out for in your children — because it will give you a clear picture about what might happen should you bequest your resources to them without a clear plan. I’ve compiled a group of behaviors characterizing the financially-strapped.

You may have resources NOW … but are you:

* Spending money on things you really don’t need:  I’m sure we’ve all got one of those friends who just loves to spend money, and buy things just to say they have them.  The newest iPhone just came out? They buy it even though they already have an older version.   A new TV came out with a higher refresh rate than their current one? They buy one so they can say they have the newest and latest technology.

That may be fine for a certain amount of time, but there is something deeper happening in the heart, there, which if left unchecked, can signal a decline in wealth. Because it starts with the iPhones … but where does it end?

* Ignorant about where your money is going: Far too often people who are broke find themselves short because they’ve never tracked their monthly cash flow and their small expenses are adding up to consume everything they bring in.  They really need to track their expenses for a month or two so that they can set up a plan.

But the wealthy sometimes begin to believe that they’re immune to such proletarian concerns, and allow the same bad habit to encroach into their portfolio. Don’t let up — but, of course, don’t fall into obsession (e.g., are you checking your accounts every day? That’s also a problem!).

* Blaming your problems on outside forces:  People don’t like to see themselves as the source of their problems. While people certainly have problems that aren’t caused by something they’ve done, far too often they will also try to shift blame when they should be looking at themselves.  They blame their friends, family and the government.  They believe that "the little guy just can’t get ahead".

Are you doing the same thing? "It’s the market’s fault!", "My financial advisor screwed me!", etc., etc. … again, signals of a deeper problem.

* More interested in having others think you are wealthy, than actually being wealthy: People who are always broke like to be seen as wealthy and successful, even if looking that way to others means that they’re actually forfeiting the possibility of being wealthy in reality.

Are you pumping your resources into an image? Are you "investing" in items which, really, are more about how people will see you than how they will help your net worth?

* Not planning ahead: For the poor, money is short because they haven’t set up a family budget, and a saving and spending plan.  When they set up a monthly cash flow forecast, and know exactly what they’re going to spend in what categories–they’ll do much better.  If you fail to plan, you can plan to fail, right?

Again, many resources can lead to laziness in this area. Don’t let up with it.

Otherwise, this creates a less than ideal circumstance for a family who wants active management, as things inevitably slip through the cracks (certain matters develop or items are thought of later, etc.).

These solo lawyers have to spend so much time working "in" their practice, that they don’t have the time (or often, inclination) to make sure assets are ‘owned’ properly (which means your plan will fail!) or that they’re up to date on the changes which come through every year. This leaves new opportunities untouched, or worse … it can create plans which work for 2011 … but not for 2021.

And then what happens if your lawyer retires or passes away?
 
2) "What happens when things change in the life of my family?"

Unfortunately, even when there IS a team approach in place, often there is no previously-agreed-upon plan for communication when the laws inevitably change, or when family dynamics also become different.

Make sure that your lawyer will notify you appropriately when, in fact, there are changes to the tax or legal code that potentially impact you, and that they keep in regular communication with you otherwise.
 
3) "Does the planning fee include a regular review of your plan?"

If not, then you’ll be faced with having to initiate reviews yourself, and having to pay additional fees for the privilege, at that.

The Beatles were right too: "Money can’t buy you love." You can’t pay someone a million dollars to love you more than a million dollars. Money can’t buy integrity or friendship either. You can often purchase a cheap imitation of these values but not the genuine article.

But money can be used to clarify and encourage the things already most important to you. It can be used to show your love for someone, keep your integrity or help a friend in need.

So, here is a simple exercise which can help you determine what you value most in life: Look at this list of 15 values:

    Achievement
    Adventure
    Aesthetics and culture
    Authority/Power
    Financial security
    Friendship/Love
    Health
    Independence
    Integrity
    Philanthropy
    Recreation
    Service
    Spiritual growth
    Wisdom
    Work

Cross off 10, and keep the five most important to you. Then rank those five in order of importance. Look at your list and answer this question: Are you living your life and using your money in sync with your values? If you are married, ask your spouse to do the same exercise independently, and then compare your answers.

Now, take these values and give a hard look at where you are spending your money. Does it fit?

Surveys have found that people regret what they didn’t do more often than what they did.
Our lives can change course dramatically (and serendipitously) all because of some small decision on our part. How many times have we heard the story of how a happily married couple met, only to be surprised it almost didn’t happen?

And, often, these decisions are expressed through how we spend our money.

We each long to participate in something significant and realize our greater passions. But that doesn’t just "happen"! It requires foresight, planning and forgoing our momentary desires. The choices we make, every day, determine the ones we will have the opportunity to make in the future. Without those hesitant, often stumbling first steps, we can’t even begin the journey. And, of course, the first step is the hardest.

Voicing what we are passionate about can be scary. Beginning to act on our ideas can feel overwhelming. But courage isn’t a lack of fear; it’s action in spite of fear. And our fear may indicate we are on the quest of our lives.

So again — I refer you to your list of values, held up against how you are currently spending your money: Are there small changes you can make–which would translate into BIG, passionate goals?

That’s why estate (and financial) planning is primarily thinking through how your resources should further the values that transcend the tangible. Going through this exercise may not result in a dramatic career change, but it will help you see ways to align your actions to your goals.

This creates a "less than ideal" circumstance for a family who wants active management, as things inevitably slip through the cracks.

These solo lawyers have to spend so much time working "in" their practice, that they don’t have the time (or often, inclination) to make sure assets are owned properly (which means your plan will fail!) or that they’re up to date on the changes which come through every year. This leaves new opportunities untouched, or worse…it can create plans which work for 2010…but not for 2011 (or 2020).

And then what happens if your lawyer retires or dies?
 
2) What happens when things change in the life of your family?

Unfortunately, even when there IS a team approach in place, there is no previously-agreed-upon plan for communication when the laws inevitably change, or when family dynamics also become different.

Make sure that your lawyer will notify you when, in fact, there are changes to the tax or legal code, and that they keep in regular communication with you otherwise.
 
3) Does the planning fee include a regular review of your plan?

If not, then you’ll be faced with having to initiate reviews yourself, and having to pay additional fees for the privilege, at that.