The Luxury of Patient Capital


Mae West, among others, is quoted as saying “I’ve been rich and I’ve been poor. Rich is better”.  That profound bit of financial wisdom is not only obvious, it also belies the marked superiority of the position of people who have “enough” money.  Owning sufficient wealth has enormous cognitive advantages.  Being broke not only shortens life, it also diminishes mental ability because the thinking process occurs in an atmosphere of scarcity.  ‘Rich is “better”’ is a huge understatement.


The purpose of this Blog is to convince readers to be 1) more informed; and 2) more secure about wealth. There is no middle class anymore.  It was destroyed by the Great Recession.  If you think you’re middle class you are not – you are either 1) poor and uninformed; or 2) rich and insecure.  All it takes to be considered “affluent” is $100,000 in liquid assets.  Most people with that much in retirement or other accounts would not call themselves affluent – but that’s the financial industry’s definition.


Financial angst from radically increased volatility in employment and capital markets causes people to lose sight of their true economic status relative to others. The mass affluent demographic is the top 20%-30% of households.  That means you’re at the least in a better position than 70-80% of all other households.  Not too shabby.  If you are reading these thoughts (aimed at my mass affluent clients) you have sufficient wealth – be secure and confident.  You are able to exercise patience with assets.  Relax.  As an investor, you have what Katie Nixon (chief Investment officer at Northern Trust) calls “the luxury of patient capital”.


Wealth provides the luxury of thinking and living in a backdrop of plenty. Appropriate insurance, financial and estate planning are essential for psychological security, which brings with it the mental energy and capacity to pursue other passions and interests.  Your Estate Planning War Chest is a sturdy vessel in a vast, uncertain sea of time.  But time is your friend and it’s on your side.  Wealth planning is a multi-decades, even multi-generational endeavor.  Grow rich slowly, as the title of a Merrill Lynch investment guide advises.  Long-term horizon gazing will keep you informed and secure. And this lays a solid foundation for life, enabling an upward mental focus – more on that next week.



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