Jeff Nabers: Each year, Merrill Lynch and Cap Gemini produce this report called the World Wealth Report and I usually scan through it each year and what it basically is, it’s a survey of high network individuals, people with over a million dollars and invests able assets. I imagine there are somewhat scared because I think there are survey in their own clients so there are some people who are in the stock market and some people are out of it and this is a survey of the people that are in it but what I finds very interesting is that these wealthy people. They stood them up into I think high network individuals and maybe a ultra high network individuals and almost every single year, one of the pieces of that a day, they publish is how much of the invest able assets of these people was put in different asset classes and then when we break up the asset classes that specifically.
They just clamp a lot of things into alternative assets but what I find interesting is almost every year all over the world including the United States as its own segment. These wealthy people have bout 50% or a little bit under 50% of their money in the stock market and again this is surveys of clients of the stockbroker so I’m sure there are plenty of people out there who are wealthy that actually has no money n the stock market. And then when you get out there on Main Street and you just talk to more, you walk up to somebody and just start talking if they are probably not a high network individual. And this is a very small portion of the population and so the more average type of person we talk to, how much of your money is invested into stocks bonds and mutual bonds and in the next fund. Almost all of their invest able assets are. And tell me how that 50% mark in some years, this has been I think it’s low as 34%, tell me how that matches up to the reality that you’ve run into in from some of your financial planning time span.
Eric Wikstrom: You’re right Jeff and I see that report every year and I find it interesting especially from where it originates but now I have the opportunity fortunately to work with some firms where we put very high network individuals and families. And what I found very interesting is that a lot of these families have achieved phenomenal of wealth from a variety of assets outside the stock market. And it’s been only a business or owning a lot of different types of real estate and you look at, break down the FOREX, 400 for example, the wealthiest individuals in the US and most all those people made money by owning or starting a business like Bill Gates. Capturing an idea, I mean talking a couple of it or the rest of them made money by owning a developing real estate.
Those are the two primary ways people make money. They really don’t see anybody on there and say, “hey I’m on the Forbes 400 or less because I did treated my—you know E-trade account. So I find it kind of a joke to position like the middle market America is kind of trapped if you will to their only outlet really used kind of mutual funds unless they kind of say, “hey, I don’t want to trapped there. I can understand some of these rules and if we’d like to open my retirement account and do other things because frankly that’s not really wealthy people make money.
They don’t have all their assets just to the stock market. Unfortunately, most of Middle America does and that’s just because the way system and the drivers behind the institution want to focus people’s money in that area. But really wealthy families around the world have assets spread out over a lot of alternative assets in real estate and different asset classes and frankly that’s how they build wealth and that’s not a preserve but maintain it.
Jeff Nabers: Yeah it’s maybe an over simple fact of approach but I’ve always taken the perspective of when I identify somebody who has the results that I want I just want to copy it because if they did something and got a good result. Can I do something different I might not get that result? If I do exactly what they did, there’s a pretty good chance that I get that result and so, I think there’s a lot to learn from this World Wealth Report. It may like 30 pages, I don’t know if somebody wants to reads all the text but I’d recommend somebody just type in into Google; find one for many of the recent years, images, edges, a ways to look at some of the main charts.
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