Lasting luxury: Enjoy life’s finer things without eroding legacy

Beyond finance or business, sustainability has become a way of life, a badge of honor that signals future-oriented values and stewardship for generations yet to be.

For affluent families, sustainability can be as simple as considering wealth as a responsibility: wealth enough to enjoy the fruits of one’s labor without compromising the future of the next generation.

Yet, in the pursuit of a life well lived, lifestyle creep can quietly destabilize long-term plans. Without a clear framework for how wealth is allocated, monitored, and protected, even substantial fortunes can begin to drift, particularly when family dynamics or generational transitions enter the picture.

Building sustainability in spending

Metrobank Trust’s Head of Account Management Wanda Beltran, who has over 25 years of experience in providing estate planning solutions, says that there are five common pitfalls affluent families fall into that accelerate lifestyle creep and wealth erosion:

1. Expanding lifestyle faster than income growth

As wealth grows, so does temptation. It could be nicer cars, more frequent international travel, additional residences, or gifts for the children. This is not inherently unsustainable. The problem arises when lifestyle expenses begin to outpace the growth of income or investment returns. Once-occasional indulgences can very quickly turn into expected standards of living. Without a spending budget, this can spiral out of control.

2. Dipping into family capital instead of living off returns

One of the most common but overlooked forms of wealth erosion happens when families draw directly from capital to fund lifestyle upgrades, rather than relying on income generated by their investments. Over time, this can destabilize a family’s entire financial architecture, eroding protection against external factors like market downturns.

3. Lack of risk management solutions or structures

Many affluent families focus on growth but neglect protection. In reality, proper insurance or asset protection structures like trusts are just as important because the more wealth accumulates, the more it becomes vulnerable to shocks like investment volatility or inflation.

4. Lack of a common family vision and shared values

In essence, financial sustainability is about aligned values. Wealth disputes are issues that are better prevented than cured. Families that thrive across generations often invest not just in assets, but in governance: charters, family councils, and open dialogue about roles and responsibilities.

5. Underestimating the long-term cost of luxuries

A luxury purchase rarely ends at the point of sale. A yacht requires a crew. A vacation home needs staff, maintenance, and taxes. Even private education for children often implies future commitments to postgraduate tuition or global relocations.

Rethinking the meaning of wealth

For an easy framework that prioritizes preservation alongside leisure spending, Beltran recommends a simple allocation: “40% for lifestyle spending that will allow you and your loved ones to enjoy life now, 35% for investments for growth and appreciation, and 25% for legacy building, which is for generations beyond your children.”

She recommends a return to the basics. “First, liquidity must be able to cover six to 24 months’ worth of expenses. I would suggest money market funds and time deposits,” she said.

“I would also suggest that lifestyle needs must be worth 30-50% of the portfolio and should comprise income-generating assets like dividend paying stocks, bonds, business interests producing passive income or real properties that produce rental income.”

Legacy building assets, then, should represent 30-50% of one’s portfolio. Assets in this category should be able to provide for long-term growth such as equities in emerging markets, land and its development, private equity or venture capital or commodities such as gold.

Another underappreciated strategy lies in leveraging lifestyle privileges already bundled with private banking relationships.

Concierge services, preferential rates, exclusive travel access, curated cultural experiences, and even health and wellness benefits can elevate lifestyle without additional out-of-pocket spending. These services are often overlooked but can provide significant value when integrated into family travel, events, or long-term planning.

Finally, a reframing of luxury around meaning can be a powerful shift in mindset. Instead of collecting high-maintenance assets, bespoke experiences like immersive travel or impactful spending through philanthropy can provide emotional richness without the long-term costs associated with ownership.

After all, possessions depreciate eventually. Memories and goodwill are priceless.

(Editor’s Note: This article is part of a special collaboration between Metrobank and BusinessWorld. Our aim is to explore the facets of living well for Wealth Insights readers, who value the finer things in life. From discerning choices in cars, dining, and travel to appreciating exquisite jewellery and, ultimately, the journey toward building a legacy.)