Data & Research December 5, 2007

Majority of HNW Segment Believes Retirement Planning is Important

Three-quarters of high net worth (HNW) individuals point to retirement planning as their most important financial activity – calling the process “absolutely essential″ or “very important,″ a new survey found.
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Wells Fargo Private Bank’s Wealth Lifecycle study said the HNW individuals may be retirement conscious, but that doesn’t mean they are headed for the office doors tomorrow.

Of those currently working, two-thirds (64%) would keep working even if they didn’t have to. Some 89% of the current workers like to work and six in 10 (60%) would rather have more money than more free time (40%), according to a news release.

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Also, nine in10 of the HNW individuals polled agree that “everyone is responsible for their own financial security.’

The survey covered 1,146 U.S. adults ages 18 and over who have $1 million or more in net investable assets, excluding residences and employer retirement plans.

The Wells Fargo poll also found that the HNW types liked the idea of giving back to society. About three-quarters (74%) of respondents indicated that they are generous with their money and the majority said that making a difference in the world (65%) and volunteering in their community (57%) are important to their overall happiness.

Nearly three in five HNW adults (57%) say that leaving an estate or financial legacy to heirs is an important financial goal.

The study categorized HNW individuals into four distinct groups based on their stage in the wealth lifecycle:

  • In their Building stage, individuals are career driven and are the youngest of the four segments (45 is the average age). They believe that the power of wealth can change lives for the better and are willing to work for it.
  • In their Managing stage, individuals believe that wealth leads to having the freedom to do what they want, are focused on the financial security of their family and emphasize improving their cash flow and minimizing their taxes.
  • In their Preserving stage, individuals are primarily focused on protecting their current wealth, and are driven to save for retirement and less concentrated on making charitable contributions.
  • In their Transferring stage, individuals are focused on sharing their money.

The study was conducted online within the United States by Harris Interactive on behalf of Wells Fargo Private Bank between June 18 and July 9, 2007

A copy of the survey is available from Kathleen Golden at kathleen.golden@wellsfargo.com or 415.396.4024.

Data & Research December 5, 2007

Gold Boosts Cost of 'True Love'

The cost of true love, like so many other things, continues to rise, according to a new survey.
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The significantly higher price of gold and increased compensation for minimum wage workers will make Christmas more expensive this year – at least for one’s “true love’ – if you are planning to fulfill the commitments associated with the Twelve Days of Christmas, according to a tongue-in-cheek economic analysis by PNC Wealth Management. According to the 23rd annual survey, the cost of “The Twelve Days of Christmas’ is $19,507 in 2007, a 3.1% increase over last year.
Gold Costs
True Loves will have to pay a bit more for the five Gold Rings this year, as the jewelers who provide the prices for the rings report having no choice but to pass increased prices along to consumers as the price of gold continues to rise, according to a press release about the “study.’
The price of five gold rings now totals $395, a 21.5% increase over 2006 prices (see Labor Costs Lift Christmas Index Costs), but still nowhere close to 1989 prices, when the five Gold Rings hit an all-time high of $750.
Labor Dazed
As the only unskilled laborers in the Christmas Price Index, the eight Maids-a-Milking make minimum wage, and have not had a raise since 1997, according to the PNC report authors. However, this year, Congress increased their wages by 13.6%, bringing the cost of eight Maids-a-Milking for one hour of work to $46.80. However, the cost of most performers in the index — the Drummers Drumming, Pipers Piping and Lords-a-Leaping — rose a modest 3% to 4%, due primarily to an increase in the performers’ compensation (apparently the contribution of writers aren’t an issue). Only the price for the Ladies Dancing was unchanged this year, according to Philadanco, a modern dance company in Philadelphia.
Among the feathered friends in the Christmas Price Index, the most notable increase was a 20% change in the price for six Geese-a-Laying, provided by the National Aviary. Most of the other bird prices in the index remained even with last year’s rates. In fact, aside from the Geese-a-Laying, only the Calling Birds will cost more in 2007. PNC prices the Calling Birds from a national pet store chain, and prices for Calling Birds (or canaries) were up 25% this year, thanks to higher demand and increased shipping costs for retailers.
Buying Online?
For those True Loves who prefer to do their shopping online, PNC Wealth Management calculates the cost of The Twelve Days of Christmas gifts purchased on the Web. This year, the trends identified in the traditional index are repeated in the Internet version, with overall growth of 3%, nearly identical to the 3.1% increase in the traditional index. However, the index authors note that in general, Internet prices are higher than their non-Internet counterparts because of shipping costs.
As part of its annual tradition, PNC Wealth Management also tabulates the “True Cost of Christmas,’ which is the total cost of items gifted by a True Love who repeats all of the
song’s verses. This holiday season, very generous True Loves will pay more than ever before – $78,100 — for all 364 items, up from $75,122 in 2006 – a 4% increase.
For a historical look at PNC’s Index, you can visit the updated Web site at www.pncchristmaspriceindex.com

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