Tuesday, September 29, 2009

The Benefits of Budgeting

Post by Shawn Chandok
Article by Paul Sullivan

Now Even Millionaires Can See the Benefits of Budgeting

SOMEONE with $100 million has nothing to fear, not even fear itself. But not long ago, a client with such assets called and asked Bruce Bickel, her wealth adviser at PNC Wealth Management, to put her on a budget.

“She said we’ve never done this before, and we think we should,” said Mr. Bickel, managing director of private foundation management services at PNC. “It’s all relative. Their loss has put them in a fear response.”

That mindset is a direct result of the financial panic that turned one year old this week. At this time last year, Richard Fuld was center stage in the financial crisis; Ken Lewis, chief executive of Bank of America, was being hailed as Merrill Lynch’s savior; and Bernard L. Madoff was little known beyond the financial world.

None of that is true today. And even though a year has passed, wealthy investors remain cautious.
The Boston Consulting Group predicted this week that worldwide wealth would not return to 2007 precrisis levels until 2013. It also said it found that the number of millionaires was down 18 percent and that, across the board, clients of wealth management firms had lost trust in their advisers.

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  1. I completely agree nothing is more important than budgeting, but you cannot put all of your eggs in one basket because you can get burnt (like in the Madoff Scheme). - David Held

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  3. If I get rich I will make sure to budget correctly. But I agree with David, you can't put all your eggs in one basket.

    -Ahmed Al-Salem