The Daily: Boomer Briefs-The 50something Life!

Wed Mar 8 2006

By Michael Kane

VANCOUVER — Canada’s ultra-rich have found that money doesn’t necessarily buy happiness, even if it does pay for a German luxury car or two, loads of foreign travel and a pretty nice art collection.

A survey of individuals with a net worth of $10 million or more, the first of its kind in Canada, shows that bundles of loot come with responsibilities and anxiety.

Some 48 per cent of rich folks polled by Vancouver-based Sensus Research were neutral or actually disagreed with the statement, "As I have gotten wealthier, I have gotten happier."

The top challenge of wealth identified by 38 per cent is "maintaining a strong work ethic and a sense of values in my family." Some 24 per cent are worried that their children or grandchildren will become less motivated because of family wealth, an effect termed "affluenza."

Another 34 per cent said their top wealth-related concern is maintaining their lifestyle.

It seems inflation is a bigger challenge for an estimated 110,000 Canadian families in the ultra-wealthy set than it is for mere millionaires who are at least three times more plentiful.

While the rest of us can expect goods and services to go up an average three per cent a year, the cost of luxury items is rising at rates of around 11 per cent per annum, said Thane Stenner, a Vancouver financial adviser to the wealthy who commissioned the survey.

"It is quite a difference and even somebody who is worth $100 million, for example, still has to be careful as to how much they spend to maintain their lifestyle. You would think they wouldn’t have a problem but the reality is that people do spend a fair amount of money and their capital can be eroded over time if they spend too much. It is a challenge getting an appropriate spend rate."

The survey of 165 wealthy individuals across Canada found that 53 per cent own at least one Mercedes, 43 per cent own at least one BMW, and 33 per cent own a Porsche. They described travel as their favourite activity with 34 per cent picking London as their top destination followed by New York (33 per cent) and Paris (27 per cent).

How did they make their money?

Earnings from a business were the primary source of wealth for 28 per cent, followed by the sale of a business for 21 per cent. Earnings from corporate employment were cited by 16 per cent, the same number who inherited their fortune. Another six per cent cited stock or stock options, five per cent earnings from a professional practice, three per cent real estate holdings and two per cent who cited sale of real estate.

The T. Stenner Group TrueWealth Report is available online at www.truewealthreport.com.

Findings are considered accurate within plus or minus 7.6 per cent, 19 times out of 20.