Enjoy the present thinking about the future
Faced with a few years of certain uncertainty on the horizon, it is advisable to have a wealth management strategy aimed at tomorrow.
We are entering uncharted territory to understand the lasting effects of the pandemic and find a way to cope with the “new normal.” Will life return to the way it was before or are the changes irreversible? It is too early to tell and the events of the last year and a half have added new uncertainties to the economic and political situation that make forecasts even more difficult.
Before 2022, the general rule was that the well-off consumer had to deal with about twice the inflation rate of the average consumer. Taking 2022 as a base (with global inflation flirting with 8%), this would have meant that the Lifestyle Index produced annually by Julius Baer would have exceeded 15% in US dollars. However, taking into account the unexpected strength of the dollar in 2022 and the general inflationary environment, this figure was only 6%, although it reached 13% in local currencies.
Against this backdrop, and the lingering influences of geopolitical and market uncertainty, high net worth individuals are adapting their spending habits and lifestyles to take advantage of the situation while possible and prepare for any future crisis.
Once the pandemic is over, personal health and that of their families have emerged as the top priority for high net worth individuals, who want to dedicate time to taking care of themselves, relaxing and improving their physical fitness. This “future-proofing” of body and mind also extends to establishing better relationships with family and friends, and creating a safe and efficient home environment in which to live and work.
However, this does not mean that they want to stay at home. After several years of restrictions, they are willing to enjoy themselves, which translates into greater consumption of leisure, hospitality and social experiences. They also demand luxury products and top quality services and seek to recover travel for pleasure and work.
The outlook is one of cautious optimism. People spend more, travel more and take better care of themselves, but they are also preparing and investing for the future, and considering the impact of their decisions. Family, health and resilience are top priorities for good reason. As the world faces the legacy of the virus, an unpredictable financial outlook and a war in Europe, it is more important than ever to have a solid wealth management strategy that can meet the needs of both the individual and their families for generations. As complexity increases across cities, continents and financial jurisdictions, the value of an experienced and trusted partner is invaluable. We must enjoy today, but be prepared for what tomorrow brings us.
