What Is Wealth? (Podcast)

00:37
Today, though, we're starting with what seems like a pretty fundamental question for a financial podcast: What even is wealth, anyway? To help me find a satisfying answer, I welcome back Palisades Hudson's founder and president, Larry Elkin. Welcome back to the podcast, Larry.

Larry Elkin
Hi, Amy. Thanks for having me. I am really excited to help you kick off season two.

Amy Laburda
Great. So this summer, Palisades Hudson published an updated edition of our book The High Achiever’s Guide to Wealth,

01:06
which is aimed mainly at readers in their 20s, 30s and 40s who, while they're making these high achievements we mention in the title, reach a variety of financial milestones that they may need some help with. You contributed a couple chapters, but today we're talking about Chapter 1, “Anyone Can Achieve Wealth,” which opens the book. So one of the main projects in this chapter, it seems to me, is to dive a little deeper into the whole book's title: What is high achievement, and what is wealth?

01:36
So you know me, I'm the editorial manager — I'm never mad at getting precise about words. But when you sat down to write the chapter, what made you want to dive into a more precise definition of these two words? They're words that I assume most of our readers think they know, but what made you want to pick them apart a little more?

Larry Elkin
Well, Amy, apropos of that, I brought along a special surprise for you.

Amy Laburda
OK.

Larry Elkin
Most of our audience won't know this,

02:04
but you have been my go-to person on all matters literary for well over a decade now. But I did some of my own homework and I pulled up a quote written by Charles Dickens in 1850. It is from David Copperfield, and the character speaking the line is Mr. Micawber. And he says, “Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness.

02:34
Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.” I read those lines in college. They always stayed with me. And just for the benefit of readers who don't remember the old British system, he's talking about 19 pounds, 19 shillings and six pence in their old system. But the point was, of course, that

03:02
the adequacy of wealth is relative: relative to income, relative to needs. And also changes over time. So I continued this exercise. We can dive deep down this rabbit hole by going to the Bank of England's website and asking the question: How much was 20 pounds in 1850 worth today? And their answer is 2,260 of today’s British pounds.

03:31
Convert that sum to dollars, and you come out a little shy of $3,000. So pause for a second. Dickens is writing this in 1850, and his character is saying that an annual income equivalent to $3,000 of today's dollars can result in happiness. Today, that sum would barely cover the broadband and a couple of streaming subscriptions. So

03:58
what somebody considered an adequate or ample income in 1850 changed over time. So when we talk about wealth, you can view it in absolute terms, right? How much money in today's money do you need to be wealthy? You can view it in relative terms, compared to your own time. In my neighborhood, am I well off or am I not? In my era, am I well off or am I not?

04:28
Or you can compare it to different eras, which is something that we mention in the book too. When Franklin Roosevelt was talking about his “Four Freedoms” in 1941, and he's referring to the first and most important one as freedom from want, what was adequate, what was freedom from want in 1940? Well, none of us would trade today's medicine

04:57
for what existed in 1940, or today's transportation, or today's communication, among other things, or today's housing standards. In 1940, most houses lacked a telephone and many lacked indoor plumbing. So there are changes in our expectations that all affect what we decide is wealth. And then — So I'm sure we'll talk more about that today. And concurrently,

05:25
wealth is a measure of success or achievement, or it's an indicator of success or achievement, but it is not the one by which most people gauge themselves. Go to any cemetery and look at all the gravestones, and they will say that somebody was a beloved father, mother, grandfather, grandmother, whatever. They will almost never say: “net worth at death,” some number followed by a decimal.

Amy Laburda 05:54
Makes sense. And while we're talking about the fictional Mr. Micawber: worth noting that not only was he supporting himself, but the Micawbers had quite a few children in David Copperfield. So that 3,000-American-dollar equivalent is pretty staggering. But, for what it's worth, Mr. Micawber: also not the unhappiest character in David Copperfield either, despite his continual run-ins with debt and finances. So —

Larry Elkin
But that's really the point.

Amy Laburda
Yeah.

Larry Elkin
That's exactly the point, is that

06:24
is that you can be happy or unhappy at any given amount of money.

Amy Laburda
Right.

Larry Elkin
There, you know, I was thinking as I was contemplating this discussion yesterday, I was thinking about Princess Diana, right? And what happened to her. Many of us are old enough to remember what she went through in real time, and many other younger listeners will have seen dramatizations about it.

06:52
And here's a woman who materially had everything and was so desperately unhappy. The correlation is poor.

Amy Laburda
On that note, you've been helping a lot of people manage their wealth for decades now. So I imagine you've sort of had a front row seat in a more practical way to seeing… “Hey, while we're talking specifically about money in a professional context, how does it relate to your happiness? How does it relate to what you define as success?” Is there

07:21
any particular examples that spring to mind of times that either someone surprised you, or you felt like, “Ah, I wish there was just more of a connect here between what you're talking about and what I can help you do.”

Larry Elkin
Well, it's always about having somebody define what's important to them. And if people can achieve what's important to them, they are apt to be happy. If they achieve

07:49
a lot of great things, but those things are not what's important to them, the chances of them being truly satisfied are much smaller. So that process, when I meet somebody new that I haven't worked with before, that process almost always will begin with me asking, “Well, what brought you to me, and how can I help you?” And then you can take it from there. Often when you're dealing with a couple,

08:18
with two people, you ask that question and the answers initially diverge.

Amy Laburda
Sure.

Larry Elkin
Which usually tells you why they are consulting somebody like me. So the first step in that process is that reconciliation of goals, so you get to an agreement as to what you're going to pursue mutually, or in some cases, what you're going to pursue individually within the context of your mutual relationship. And then

08:47
once you know the destination, you can plan a route.

Amy Laburda
So obviously, speaking of Princess Diana, there's been a lot spoken of and written about her life and her unhappiness. But from a financial-planner perspective: Someone with basically no material needs or wants that they couldn't meet on a wealth level, why would this person necessarily end up so unhappy, do you think?

Larry Elkin
Well, I have an opinion. With the caveat that

09:16
I never met Princess Diana. I don't know any of the British royal family, and I'm always very reluctant to make assumptions about prominent people whom I've never met. We know that Diana was very young, that she didn't grow up expecting to be brought into a situation anything like that. Who does? She married somebody who married her, essentially, out of a sense of obligation. She was not his first choice

09:45
from before she ever became involved with him. So she was married to an unhappy person, and she entered into a family that knows itself as “the Firm.” Members of the British royal family, from the late queen on down, and now the king, are driven by a sense of duty and obligation that comes with their position. The ability of individuals to make choices

10:14
about their own lives, about their own priorities, is very limited. And one thing I've always felt about wealth is that its primary benefit is that it gives you choices, it gives you options. She lacked those. She lost choices when she entered that family. So the stage was set for a very difficult situation. It wasn't inevitable. Again, with the caveat that I don't know them —

10:44
one has the impression that, apart from her health issues, the current Princess of Wales is not unhappy in the way that Diana was. But she's in a loving marriage, as much as is publicly known, right? She has children and a partner in raising those children, and they seem to be in sync. Diana lacked that. And so,

11:14
you can look at somebody in her situation, and you can feel sorry for them. The wealth, the palaces, the clothes, the glamor: none of it mattered to somebody who didn't feel secure and comfortable in her own life and in her own skin.

Amy Laburda
Obviously the British royal family is a unique case in a lot of ways. But I have to imagine, as a financial planner, you've run into married couples who are not aligned on

11:41
how to use their wealth, how to grow their wealth, what they want to do. How do those sorts of conflicts come up in discussions with your financial planner, as far as what your goals are and how to bridge that gap, if there is a gap?

Larry Elkin
Those issues are going to come up right at the beginning. When I meet a new client, usually the conversation, the serious conversation is going to start by me asking, “Well, what brings you to me and how can I help you?” And that will

12:09
typically elicit from an individual some discussion about what's important to them. Help them work through what their goals are. When you meet a new couple and you ask that question, sometimes the answers are different. And right away you can see that the first task is to identify the goals and, to the extent they differ, to reconcile them. There are some goals that people may approach as a couple.

12:40
And there may be some space for people to approach individual goals, but you have to identify them and work out what you're trying to achieve. First, you figure out what the destination is. And once you know that, then you can plan the route to get there.

Amy Laburda
Do you generally need to work with a new client when you're sitting down with them to get specific about what those goals are? Or do people often come in sort of saying, “No.

13:07
I want to do X, Y, Z, and I want to figure out how to get there.” Or does it just depend on the person?

Larry Elkin
It very much depends on the person. Yes, somebody may come to you with a specific question. And if all they're interested in is your guidance in addressing that question, then fine. But a lot of times, too, people come to you with a specific question that's on their mind at the moment.

13:32
And it's not because they're not interested in the answers to any other questions; it's that they don't know what the other questions are. So in the process of getting to know someone, getting to understand their situation, their goals, their expectations for the future, financial and otherwise, because of the fact that my colleagues and I are really broadly trained and have a very broad practice — we're not

14:00
investment managers alone, we're not tax planners alone, we're not estate planners alone, we're all those things and more — then we will frequently see issues that somebody should consider that they may or may not have considered. So you'll raise them. And if they say, “Fine, I've already taken care of that,” then you move on. But often that's not true. And people are grateful that you've pointed out something they should be thinking about that wasn't even on their radar.

Amy Laburda 14:28
So I think we've kind of really teased at the difference between success, which is about goals and achieving them, and wealth, which, as you said, is a way to broaden options, to give yourself sort of more runway as you're approaching those goals and trying to succeed at them. But I do think, if we're talking to a lay person on the street, before we get into this kind of deep conversation, you say “wealth” to a normal person, they're going to think about the number in an account, probably,

14:58
or at least that as a component of a broader answer. So if we're talking about building and maintaining wealth, especially as financial planners, I assume there is some component of success that involves building wealth. Is that a thing that you tend to find, you know — No one wants it on their tombstone, but is it a thing that people tend to get very laser-focused in with you, and you kind of have to tease at them to get to those broader goals?

15:25
Or is it easier to sort of slot it like, “OK, this is a means towards an end. This is how we're going forward towards the thing you want.”

Larry Elkin
Well, it's funny because the perception is that wealth is a number, right? Or some set of numbers that make someone wealthy. But that's not exactly true. In the book, we mention a study that was done by Charles Schwab where they asked people, you know, “How much is

15:54
wealthy?” And there's a number, an estimate that they came up with of about $2.2 million, is what someone would need to be wealthy in roughly today's money. But when you probe a little further, about three-quarters of people don't really care about hitting that number for themselves, I think, or more accurately, they care about other things more than they care about that.

16:22
And when you think about it, it makes sense. Individually, we all have goals. We all have desires. We all have priorities, things we want to achieve, which may or may not require us to hit a certain number for net worth. But we know what's in our own head and what's in our own heart. We don't know that about somebody else. You look at someone else, and you don't know what they're thinking.

16:49
You don't know what they're feeling. If that someone else is a princess, you look at the exterior trappings of her life and say, “She has everything,” when inside, she may feel that she has nothing of value. So wealth is how we perceive other people are doing. It's how we measure other people's success. And even then, it's just the appearance of wealth, right? You can see the

17:17
car they drive; you can see the house they live in; you can know what schools their children attend. That's the asset side of wealth. But from the accounting perspective, you don't know the liability side. You don't know the debt. You don't know whether they've got any money put away for retirement. You don't know the degree of confidence they have… where their next check is coming from, or how big that's going to be. And those are all components of

17:46
wealth, in the sense that wealth should bring a sense of well-being and satisfaction. So what we perceive as our own wealth is very often different than what we perceive about other people's wealth, because what we know about other people's wealth is so limited.

Amy Laburda
Sure. And I think this may be a slightly frivolous example, but I don't know if you heard of the video game Animal Crossing, which was very popular during COVID lockdown when no one could leave their homes.

18:14
It's a game that allowed you to visit one [another’s] virtual spaces. So people were using it to socialize. But I bring it up because it's a game that's about running a community and has a monetary component to the game. And it was so funny to me, the sort of different ways that people looked at “winning” in a game that doesn't really have a win state. Some people would just try to get the most — they were called bells instead of dollars, but the money in the game — they would just try to increase their net worth,

18:44
because that was winning to them. But a lot of people were like, “Oh, I only need as much as I need to build this structure I want to build, or to do this thing on the island.” So I think, you know, obviously a video game is different than real life. We don't have to feed and clothe ourselves in the video game. But I think it also illustrates that there's an emotional component, too, to whether, you know, you're seeing success as security, in “I have enough resources that I will never run out of resources. And, you

19:13
know, I will always be safe.” Versus “Do I have enough resources to do the things I want to do, to explore the things I want to explore?” And I'm sure, you know, there's a lot of other mitigating factors, but it was just an interesting illustration to me of the different ways people can sort of see it as a meter on that success we're talking about, or not.

Larry Elkin
And you just described the life of a financial planner. There are people we work with for whom

19:40
money is essentially a kind of scorekeeping. You run it up, or you look at your investment return this year, or your income this year, and it's essentially academic. It will make no difference in your life. There is no way you can spend it, other than by misspending it. So you're really accumulating wealth for other purposes, which is something worth diving into a little bit more as we continue the discussion.

20:09
And it matters to those people, what their net worth is. But more often, that's not the case. More often, there are things you want to do. You want to do things for your family. You want to do things for your community. You have some interest in philanthropy. You want to not be a burden to your children as you age. So in that respect, are you doing it for yourself or are you doing it for others? Or you don't have children, right?

20:39
And you know you need to provide for yourself. You need to rely on yourself. And so you're doing it for your future self, as opposed to your present self. Those are all real-life considerations that, in my experience, are more often what will drive the conversation. To look at it from another angle, sit down and talk about investing with somebody. And risk and potential return are correlated, right? They go together.

21:09
We can aim for the biggest long-term returns, but there's going to be more short-term volatility, and if we're not diversified enough, which is… and lack of diversification gives you the highest possible return, but it comes with greater risk. How much risk do you want to accept? How important is it to max out

21:35
that return, versus aiming for some number that's “enough,” however one defines enough. So that's a very important part of the process, both for every individual and for people who are advising individuals. Sometimes you can define the question as: What will constitute enough?

Amy Laburda
That actually leads me to my next question. We wrote this book for millennials, my peers, at least in its first edition. Now, obviously, the age spread has started to shift a little.

22:04
But millennials have really gone through quite a few bumps in our adult lives, between the Great Recession, growing educational debt (which obviously our younger peers have also been facing), the COVID-19 pandemic. And lots of these have affected people of all ages. But I guess I bring them up in the generational framing to ask: In your experience,

22:29
do people just tend to have a temperamental inclination towards risk or risk aversion? Or do people sometimes have things in their past that shape how they're looking at their wealth and what they feel security is in financial terms?

Larry Elkin
Well, those things aren't mutually exclusive. So yes, there are temperamental differences. There can be generational differences or circumstantial differences. I honestly don't believe the millennials are very different from the

22:57
baby boomers, than we were at that age. You are our children, and your upbringing was not that different than the post-war upbringing. And, to the extent it was different, in many ways, it was better, with more involved parents and broader attitudes about what is possible for everybody. Contrast, for example, the Depression-era

23:27
people who were our parents, in many cases for the baby boomers, and they knew real privation. And in many cases, they were extremely risk averse. But you mentioned risk aversion. Probably on balance, people are more risk averse than is optimal, and that's because people weigh short-term consequences greater than they do long-term consequences. So part of

23:57
advising them is not telling them long-term is more important than short-term. That's not true and not our place. But it's to explore the long-term implications of short-term decisions and see whether, in light of those long-term implications, the short-term course of action that's being considered is really the one somebody wants to take.

Amy Laburda
In the chapter we talk a bit about Maslow’s Hierarchy of Needs, which I’m sure a lot of our listeners have heard of, but the idea that

24:27
you need to secure things like housing, food, physical needs first. And then you can sort of move up the pyramid towards more abstract things you're trying to fulfill in your life. I imagine most of the people who are working with you are not worried about the bottom tier, though maybe that's incorrect. Maybe some of them are. But once you've sort of secured those basics, where do you go next? Is then what we come back to the goals that we were talking about earlier in the episode?

24:56
Or is there sometimes a sense of, “Oh, we really need to lock in that bottom tier in a firmer way?” Or is that simply what we come back to with the risk aversion? Am I asking the same question in a different way?

Larry Elkin
Well, we have a relatively affluent clientele and, in some cases, an extremely wealthy clientele at Palisades Hudson. But the question of securing physical needs comes up more than you think, just in somewhat different contexts, right?

25:25
People look ahead to long-term care. And they wonder, “How am I going to finance that? Is it going to take away my children's inheritance? What will happen if I run out of money?” That's a real consideration for everybody. “What happens if I lose my job?” Circumstances can be very different if you are in a two-income household, or greater, versus a one-income household. Or if you have a family that has the means and the inclination

25:55
to help you if there's interruption in income. So those questions, even at the bottom level, do come into play. But now I'll revert to our friend Mr. Micawber again. On his 20 pounds a year, he probably wasn't looking to maximize self-esteem. He was looking to keep a roof over that family's head, and

26:25
some food on the table, and that was probably pretty much it. Expectations change. Our objectives are influenced by the environment in which we grew up, the environment in which we live now, the peer circle that we know, the partner that we choose, and some of it is just innate. So as goals change, as objectives change,

26:54
the kinds of resources and the kinds of circumstances that make somebody feel secure in their lives, in their selves, those change too. And as we've seen with the people that we work with, you try to find, “What's the sense of security that they either have or that they lack? And if they lack it, then what do they need to provide it?”

27:24
Because it's really difficult to achieve the other things people want to achieve in life if they're always looking over their shoulder, because they think somehow everything is going to fall apart.

Amy Laburda
That makes sense. And I think to your point, there's a level of literal context around that, and a level of mental security or lack thereof. As this airs, it'll be just a little past the Summer Olympics, but it makes me think of

27:53
the famous story of Winter Olympics, of Tonya Harding, who really felt like such an underdog despite being a truly tremendous skater. Obviously, that manifested in a variety of somewhat notorious ways. But I think one of the things that stood out in her biography to me was the sense that even once she started succeeding, she could never really feel that success, because it was always so tied in with insecurity, whether about people judging her, or financial insecurity.

28:22
Not to get too deep, I didn't prepare a whole biography of Tonya Harding. But it strikes me that sometimes the sense of insecurity and the lack of safety can really undermine success, even when externally people would say, “Oh, you've been very successful.”

Larry Elkin
That is very true. And it's something that we do see in our work. And when we talked earlier about that subset of people for whom the

28:48
net worth is a kind of scorekeeping, and running up the score is more important to them. I think in a number of cases, insecurity drives that. This feeling that I'm never going to be good enough. And they're using net worth as a benchmark of how good they are. But if I'm never going to be good enough, then no number is ever enough. I wrote

29:17
an article for our online newsletter in August that touched on a lot of these same topics. And I talked about Mike Bloomberg. He is an entrepreneur. He founded a media empire. He is a multi-billionaire. He was a multiple-term mayor of New York City. All great accomplishments in life. He also ran for president.

29:43
In the space of an abortive four-month campaign in the 2020 primary season, he spent a billion dollars. And it bought him very few votes in the primary. And needless to say, he did not go on to have a shot at the White House. Does Mike Bloomberg consider himself a success? Does he feel that he's achieved what he wanted to achieve in life? I don't know. I don't know Mike Bloomberg.

30:13
I hope he does, because the fact that he could spend a billion dollars to run for president, because he felt, I believe, that he was the best person for the country at that time, is a plus in my book, not a minus. But my book doesn't count, right? Only his book counts. So I don't know. But you'll find that there are very wealthy people, including many billionaires,

30:42
who became that way incidental to doing something else. And I think that's the best way to get rich. You got rich because you achieved what you wanted to achieve, whether it's founding a company like Amazon, or being a very successful and very adept performer in some field, or developing an invention that

31:10
changed the world in a positive way. Those things are inherently good. They're inherently worthwhile. And if they make you wealthy along the way, I can't think of a better way to do it.

Amy Laburda
Sort of on the flip side of that, we've talked about in the book that many people who are high achievers in the arts, in sports, in entrepreneurial ventures, don't necessarily have an innate sense of what to do with that wealth when they have it. How to

31:38
grow it, how to deploy it, how to even give it away most effectively. If you're decoupling — you've had the success, the money came but was not the point. How do you then start to sort of think about wealth as a component of your future ventures without letting it sort of become the point in itself? Or is that a thing that you can guide, but you can't really tell a person how to do, as a financial planner?

Larry Elkin
Well, if you’re a financial planner, really

32:08
you shouldn't tell a person how to do something or what they should do. More often than not, I find myself telling somebody what not to do, right? If I'm working with a young performing artist, and they get that first contract, and that contract is a terrible contract that is more apt to ruin their chances than to promote their chances, I can tell them: “Do not do this.” But

32:37
apart from those circumstances, what you really want to do is provide education and insight based on your knowledge and experience about what are the implications of doing A versus not doing it, or doing A versus doing B versus doing C. That's really the core of what it means to try to be somebody's adviser. You are advising. You are not dictating. And you are not judging. One person

33:05
may want to really become very wealthy and have a lot of material things. And someone else may want to pursue an activity that is not likely to generate a lot of compensation, but it's something they care about, right? It's something they love. If we only cared about maximizing income, there'd be no journalists today. It's just not a field

33:33
that's growing, or where one's chances of becoming wealthy are very good. But people still want to be journalists. People still want to read manuscripts for books that the world may or may not ever see. And you're going to have to read a lot of pretty bad manuscripts to find that occasional really good one. But people do that because to them, it's rewarding. And there's space in the world for that too.

34:01
It's just that in those cases, there are those material needs, and emotional needs, that are at the bottom of Maslow's pyramid that you also want to make sure have a good chance of being satisfied.

Amy Laburda
Yeah, you certainly don't have to tell me. I got my college degree in theater. So maximizing wealth production was clearly not the thing 18-year-old me was choosing. But I've certainly worked with you, and with all of our colleagues, long enough to know that

34:29
there's no one size fits all answer for really any of the many topics we talked about in season one. And I'm sure the same is true about any topic we're going to talk about in season two. It's just too… People have different goals. People have different circumstances. But as you said, an adviser isn't there to dictate a program to you. They're there to advise. If you're a person who either is newly coming into wealth or is starting to build your wealth,

34:55
how do you know it's a good time to reach out for that kind of advice? Are there any signs that a professional might be especially able to help you?

Larry Elkin
Yes. Yeah, I think the indication that you want to get knowledgeable and objective advice, and those are the two criteria that I think are important, the indicators would be either “I don't know what my options are” or “I don't know

35:24
how to evaluate my options, one against the other.” That's what you can turn to somebody to help you with. We talked before about somebody coming to you with a question on topic A, not even realizing that they should have questions about topics B, C, D and E. Part of what we do is to try to fill in that gap, to not let planning be so siloed. That was actually

35:50
the reason I started our company in the first place was, back in the late ’80s and early 1990s when I was working at a big accounting firm, financial advice was all very siloed. Your lawyer did your will; your accountant did your tax return; your broker handled your investments; the insurance agent had the answer to all your problems, and it always involved a commission. Right? There was no one place

36:17
where you could go to have somebody who was financially disinterested but personally deeply interested, who knew you, who knew your situation, who knew your goals, who evolved with you and with your family as those things changed over time. That was nascent in that era, and a large auditing and

36:41
corporate tax firm like the big accounting firms was not the place to build that. That's why we started this. And that's how I tried to train myself professionally, with the help of mentors and teachers along the way. And that's how our staff here was raised, because it's — Wealth, success, achievement. They're all part of one big

37:09
picture in a person's life, and you're trying to help them draw the whole picture, not just some little corner of it.

Amy Laburda
I think we talked a little bit before about comparison when evaluating wealth. I have to imagine some number of clients who you've worked with or our colleagues have worked with have really fallen into the trap of instead of having goals, just having those comparisons. What we'd call

37:37
FOMO or maybe in an older framing, a “keeping up with the Joneses” kind of mindset. If you run into people who are really hung up on “My best friend is going to this place on vacation,” or you know, “I was expecting to have these kind of career milestones, because someone I respect also hit them.” Is that a thing that you try to tease out a little bit, as far as how genuine this goal is to a person? Or is it a thing that

38:05
people are just going to have to discover on their own as they go along, what goals are really true to them and which ones are just looking at what's around them?

Larry Elkin
You know, often it's very obvious that somebody's expectations are geared to what they can see, and they're not recognizing what they can't see. One incident that came up very early after I started the firm,

38:31
when we were based in Westchester County, New York, which is an affluent suburb just north of New York City, was a… A woman came to me, and she lived in a nearby town, and she made, at the time, $120,000 a year. And this is 30 plus years ago. So it was like — It's a reasonably good salary now. It was a better-than-good salary then. But

39:00
she was constantly struggling financially, and she couldn't understand why. “I make this amount of money. I don't have what I think is an elaborate lifestyle. I don't take huge trips to Europe. I'm not buying very fancy clothes. I have two kids who do the things that kids do in Westchester County. Why am I struggling?” she said.

39:30
She had an objective number, right? She knew what her income was, but she lived in an expensive area, with other families that either had higher incomes around her, or who were taking on debt at relatively rapid rates, or who weren't financing retirement,

39:54
or who had help from other family members, which… These are things that you don't see when you're looking at your neighbors. You only truly know your own situation, and information you acquire about what's going on around you is incomplete. What I tried to help her with

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was not comparing herself to her neighbors, but to look at her own situation, her own options, and help her evaluate her choices, because what was going on in her neighbor's life wasn't relevant to her. The one thing I could reassure her about was whether she was making bad choices. Is she doing things now that she shouldn't be doing,

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or that will hurt her in the long run? So you can look at somebody like that and you can say, “OK, are you piling up credit card debt? That's going to be a problem. It already is a problem, but it's going to be a bigger problem. Are you not funding a retirement? Are you not able to fund children's educations? Those are issues you're going to have to confront

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sooner or later.” You work through those types of questions with someone and try to filter out the incomplete, extraneous and irrelevant information they think they have about what other people are doing, because it's just not helpful.

Amy Laburda
So we talked a little last season, in an episode I'll commend to any new listeners, about how you got into financial planning and how you founded our firm.

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But I'm curious just on a personal level, if you're comfortable sharing it. We've talked a lot about how wealth is personal, what it looks like for every person, but what does wealth look like for you on a personal level?

Larry Elkin
Wealth for me is about providing for my family; providing opportunities for you and all of our colleagues to grow and build your careers in a secure place; and building something,

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in Palisades Hudson, that will outlast me. I've talked before about how I knew from day one that I wasn't just trying to keep myself busy as a financial planner until, one day, I would stop doing it and it would all go away. I wanted to work with other people. I wanted to coach and develop other people, but that meant,

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when I'm dealing with people who are decades younger than I am, that meant, to get the kinds of people that we need, the kinds of talent that we need, that this had to exist independent of me. And maximizing my ultimate net worth at death was never the — wasn't the objective then, isn't the objective now.

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Now that I'm in my 60s, I literally get approached every single day about buying the firm, which really just means people want to buy the $1.5 billion of investment assets we have under management, which is just one part of the business that we do for a subset of our overall clients. Those people who would buy the firm would deposit a large,

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a significant pile of money — large is relative, but a significant pile of money in my hands, for which I have no immediate need, would

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want to retain, for at least a little while, a few of the people that have investment advisory relationships with our clients, and would put you and everybody else who works here out of work, and really destroy that comprehensive model of being independent, objective advisers that we've worked so hard to build. If I cared enough about having that pile of money, maybe I'd consider these offers. As it stands,

43:55
nobody gets to talk to me on the phone, and the emails get deleted as soon as they're in the inbox. So that's what it meant for me. I'll elaborate a little bit more about it too, because I have two grown daughters. They each have their own careers, completely independent of the business, though eventually ownership and stewardship of the business is intended to pass to them.

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They are married to fine people whom I love and respect. They have good marriages. They have happy homes. I have great grandchildren. Not great-grandchildren, but I have wonderful grandchildren from them. I want to be there for them as a backstop, as a rock on which they can build,

44:48
as a place they can go for advice that will be right or be wrong, but it will always be intended to be in their best interest. I want to have the flexibility to help them when they need help. One of the things about running our own business is that I can be available for my family when I'm needed. It doesn't take me away from them in ways that I think

45:17
compromise what I want to do for them. Having those options, having that flexibility, having those needs met, having the opportunity to work with you for 14 years, with many more I hope to come, and work with all of our colleagues for decades and watch you grow up professionally, and work with multiple generations, in many cases, of client families, and now watch people who

45:45
professionally matured here do the same things. That's rewarding to me. And to me that's wealth that material objects wouldn't displace.

Amy Laburda
Thanks. I think that's a very thorough and very illuminating answer. I appreciate you sharing it.

Larry Elkin
Well, I want to make you feel secure that you're working in the right place, because otherwise we'll never make it to season three.

Amy Laburda
So in season one, I sort of made a habit,

46:13
at the end of episodes, of asking people: Is there anything else we didn't touch on? Obviously today it was not as technical a topic as some of the ones we touch on. But talking about achievement and wealth and success, is there anything else you wanted to discuss that we didn't get to today?

Larry Elkin
I guess I'll conclude this way. I was approached the other day by somebody who has a good job, a steady paycheck, a lot of flexibility in

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their life as to when they work, where they work, a family that they take care of. This person had an opportunity to pursue another job with a much larger paycheck, much larger salary. But it would have been different kind of work, in a different company, with

47:07
a philosophy, a company philosophy, a founder's philosophy that was different from theirs. Whether or not that job would have been stable in the long term would have been a question mark, but they knew it would be less flexible. And they thought about that and brought this to me, but we agreed in the end — I don't think I drove the decision, I think they made it for themselves — that

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the best decision professionally, and in life generally, is just not going to be driven by the size of the next paycheck. Whether you're 26 or 66, you should be thinking down the road and taking steps along the path that get you in a direction that you want to go. And if you get there, speaking for myself,

48:04
I think you will feel wealthy in the ways that matter to you, regardless of what number you are not having carved on your tombstone.

Amy Laburda
Thanks so much, Larry. It's always a pleasure, and I appreciate you joining me to kick off season two of “Something Personal.”

Larry Elkin
Thanks, Amy. It was great to be here with you. Have a great season.

Amy Laburda 48:27
“Something Personal” is a production of Palisades Hudson Financial Group, a financial planning and investment firm headquartered in South Florida. Our other offices are in Atlanta; Austin; the Portland, Oregon metropolitan area; and the New York City metro area. “Something Personal” is hosted by me, Amy Laburda. Our producers are Ali Elkin and Joseph Ranghelli. Joseph Ranghelli is also our director, editor and mixer.

48:54
Our firm has written two books: Looking Ahead: Life, Family, Wealth and Business After 55, and The High Achiever's Guide to Wealth, which offers advice for younger professionals, entrepreneurs, athletes and performers. Both books are available on Amazon, in paperback and as e-books.