I was reading the June Edition of Trusts and Estates Magazine, my favorite magazine, and found a very interesting article which is aimed at advisors and attorneys for very wealthy individuals; however it applicable to everyone during these turmoil times. Trusts and Estates Magazine is an industry standard for those in estate planning – each issue costs $35! Luckily, my firm pays for it. The article was titled, Financial Loss Syndrome, was written by Lee S. Hausner, Douglas K. Freeman & Victoria Collin (link is unavailable because it is a subscription based website).
(Photo Credit: Kevindooley)
Doesn’t Matter How Rich you are Losing Wealth is Miserable
The authors highlight the case of Adolf Merckle a German Business Man who committed suicide after losing a couple of billion, but was still in Germany’s top five as far as wealth is concerned! It is difficult to understand the kind of despair Merckle felt, but I can tell you that I get sick to my stomach when I check my 401(k) and IRA account even though I am well aware I can’t touch the money for 40 or so years.
It seems like these sort of feelings are becoming more and more common, and the authors gives us some insight how to overcome these feelings regardless of what your net worth is.
Overcoming Financial Loss Syndrome
The authors provide a couple of ways that will help advisors help their wealthy clients, but as stated, I think they will apply to us (normal folks!).
Create a spending plan
Design a new wealth plan
Review your investment policy
Re-evaluate personal priorities
Spend time building closer and more meaningful relationships with family and friends
Give children honest answers to questions and reassure them
Use this opportunity to educate yourself and your children in financial competence
Get some perspective
Cultivate a sense of humor
Ask for help
I don’t think there is one item on that list which doesn’t apply to everyone!