From Rich to Wealthy: Dennis Schlegel Jr. Explains How Psychology Drives His Advisory Firm

From Rich to Wealthy: Dennis Schlegel Jr. Explains How Psychology Drives His Advisory Firm

What’s the difference between being rich and being wealthy? “Simply put, rich people work for their money, while wealthy people’s money works for them,” says Dennis Schlegel Jr., co-founder of Emeritus Wealth. “It is not defined by a dollar figure, but rather a frame of mind and belief about money. Wealthy people have a deep understanding that money is a tool. They understand the consequences of the decisions that they make, the risks involved, and the long-term impact it can have on their future. Rich people tend to be more worried about the ‘now’ and have a limited view of the future”.

Schlegel credits his rapid success in the financial advising industry to many things but puts a lot of emphasis on his educational roots as a main contributor. Although not growing up rich or wealthy himself, attending Lafayette College made him no stranger to being around others who were. While surrounded by his mostly white-collar, upper-crust classmates, he chose to pursue a bachelor’s degree in psychology. While some see his background as out of place, Dennis sees it differently.

“Money is such an emotionally charged subject for many people. When a subject is emotionally charged, people tend to abandon logic and sometimes make decisions emotionally that may not be in their best interest. This concept is where the birth of behavioral finance came about. The human element took the forefront of financial planning. My studies in psychology give me an immediate advantage when trying to understand and interpret behavioral trends around money.”

The behavioral finance information gives a view of the macro. In other words, it gives a glimpse of the collective behavior of a large group—in this case, the retail investor. Schlegel doesn’t discount this information but argues this information can only be used to a certain limit.

“Understanding collective decision making is important but understanding the subsets of that population is more important when dealing with individuals like my team and I do”. 

Early in his career, Dennis noticed certain clients and prospects had a different mindset than others. “When dealing with the larger population of investors to predict group behavior it worked well, but when dealing with the individual, we needed to start asking why.”

As a student of psychology, Schlegel was looking at his clients and prospects through a much different lens than those trained exclusively in economics, finance, and business. He noticed some nuanced behaviors as he focused on the individuals and why they were making the decisions they were making.

“It was almost like 20% of my clients knew something that the other 80% didn’t. When I dug in further, it became clear that the 20% who seemed to be making better long-term decisions were not concerned with the things happening today with their money.” 

This is where Schlegel began to see a clear delineation of whom he considered wealthy and whom he considered rich.

“I would meet rich people all the time at social functions. These were the ones that would come up to me and want to know what stock to buy or which crypto currency was about to take off. They were more concerned with making money at this moment. They also tend to be those who are focused on making more money in their career, rather than understanding the power of creating long-term wealth through having their assets, investments, and earnings work for them.” 

To be clear, Dennis doesn’t define wealthy and rich in traditional terms. “I have clients who make $100k per year that I consider wealthy, and I have clients who make multiple seven-figure incomes that I only consider rich. The journey from rich to wealthy is a process.” He designed his practice and process around being able to notice the decision-making subtleties of his prospects and clients.

“The first part of my process is to understand why the individual is making the decisions they are making.  Once I understand that, it becomes easier to modify their behavior for their benefit. I can now design a plan for them and deliver it in a way that resonates with them.” 

Fed up with the cookie-cutter advice being delved out by the larger investment firms, Schlegel co-founded Emeritus Wealth. He and his co-founders are firm believers that every individual is different.

“Every person we come across will have at least one or two characteristics that make them unique to any other person we work with. This necessitates a tailored approach, rooted in understanding the psychology of each individual, how they process information, and why they make the decisions they do. Without this information, any recommendations we give would be just like the larger investment firms; generalized, impersonal, and untailored. Taking the boutique approach is what makes us Emeritus Wealth,” he said.

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