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Even the Wealthy Need a Budget

Updated: Feb 16, 2023

Whether you are worth $3 million or $30 million, I’ve got good news and bad news for you.

The good news is that you can probably live comfortably for the rest of your life and leave some money to your grandkids or your favorite charity.

The bad news is that in order to live comfortably, you may need to stay on top of your spending… or have your financial advisor work with your accountant to stay on top of your spending if you prefer to outsource.

Even the wealthy need a budget to guarantee they can afford the luxury of a jet card.
Have certainty you can maintain your lifestyle.

What is this live comfortably concept? Well, I mean you are living a lifestyle that you can afford and enjoy. But, you also have the peace of mind that you will never run out of money. I mean, if you have $3 million or $30 million you probably worked very hard to accumulate that level of wealth. Usually as your wealth and income grows, your lifestyle, the things you like to do with friends or family changes. You may take an extra vacation or two each year, or you may purchase a vacation home, or if you are in the $30 million category you may buy a small estate, start racing cars, or buy a jet card. Alternatively, you may decide to start a major giving program to your church or alma mater. All of these things are great and can bring you enjoyment and satisfaction.

For most individuals, their current lifestyle is one they would like to maintain, or they just want a little more. Either way, in order to assess whether you can maintain your current wealth and meet your lifestyle spending, you need to know how much you are spending today and how much additional income your investments (whether stocks, real estate, or a business) can generate. And, you have to account for taxes.

Once you know how much income you have and you compare that with your annual spending, you have three potential outcomes:

  1. you can maintain your lifestyle as it is today,

  2. you need to cut back a little on your lifestyle to maintain your wealth, or

  3. you know with certainty you can afford that jet card or the third estate.

Seriously, it is that simple. If you want some help working through this issue, talk with your financial advisor. Or, contact the Peak Wealth Planning team to learn about our concierge services.

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About the Author

Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind.

Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance, and estate planning advice. Peak Wealth Planning is a fee-based financial advisor based in Champaign, Illinois, and Fraser, Colorado.


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