How Does Your Level of Wealth Impact Your Planning?Share this post
The greater your level of wealth, the less concern you have about meeting basic needs such as food and shelter, and the more freedom you have to pursue personal growth, achievement, and a personal legacy. Abraham Maslow developed a hierarchy of human needs that provides a corollary to a person’s financial planning needs (see chart on next page).
Every person is first concerned with physiological needs including breathing, food, water, shelter, clothing, and sleep. The basic level of financial planning may include things like budgeting and medical insurance. Maslow’s next level is for personal safety and security. The financial applications may include retirement and investment planning for the day you are no longer capable of working; as well as disability, long term care, and life insurance planning.
Like Maslow’s hierarchy, as your wealth increases you start to focus on intimacy, family, and the needs of others. Your financial planning may include education planning for your family, life insurance as income replacement for your spouse and children, and estate planning to provide for your family when you are gone. Finally, as you move to the top of Maslow’s pyramid, and the final stages of your financial plan, you may start to focus on self-actualization: your search for purpose, meaning, and the development of a legacy. This focus may result in charitable work, community involvement, a focus on legacy planning, and a focus on spiritual matters.