Quora Answer: What is Some Financial Advice Rich People Always Notice?

The following is my answer to a Quora question: “What is some financial advice that rich people always notice?” 

That really depends on which “rich people”.  The wealthy socioeconomic classes are not all the same.  Some people built their wealth through entrepreneurship.  Some people achieved wealth through some skill or professional qualification which is divorced from financial knowledge.  Some people are wealthy due to the lottery of birth.  They are either thoroughly imbibed in the science of financial engineering, or they are useless heirs who are living off the work of prior generations. 

People who built their wealth through entrepreneurship tend to be risk takers in their business.  Building a business is a series of calculated risks.  When making financial recommendations, they focus on risk exposure.  This could be currency risk, political risk, or something else.  This is important for them because they need to manage that risk on their personal financial management, and on the business side.  A good financial consultant is appraised on that, and makes recommendations accordingly. 

People who built their wealth through professional skills are interested in diversifying their income streams.  Their concern is the loss of ability to continue earning through their professional skill though illness or disability.  A career-ending injury, even with insurance coverage, often means a drop in socioeconomic status.  Insurance alone cannot replace lost income if that coverage is inadequate.  Insurance coverage can never adequately address loss of future income because that is difficult to quantify.  As such, investment plans have special significance. 

People who are part of inherited wealth are either the easiest to deal with, or the most difficult.  Some of them have been schooled in finance, so they understand the work of financial consultant, bankers, tax consultants and accountant.  They are easy to work with because they grasp the recommendations and structures quickly.  Sometimes, they make the requests themselves.  For them, a large part of their focus is on diversification and investment horizons.  They are looking for opportunities. 

Some of them are difficult because they think they know everything.  A little knowledge implies a lot of ignorance.  These people should be avoided.  They want to have full control, but they will outsource blame for failure.  Others are difficult because they are ignorant.  Since they are wealthy, they are only interested in enjoying what they have.  One wants to know everything in minute detail without fully grasping all that information.  The others knows nothing, so they cannot make proper decisions.