What Can Go Wrong When You Are Wealthy?
Here are eight things to watch out for as you build your wealth, or anticipate a windfall.
Family relationships may suffer.
- You may lose the wealth you built because you don’t know how to manage.
- You may encounter negative emotional reactions.
- You may lose touch with your real value system.
- You may become a target for gift seekers and exploiters.
- You may receive unwanted publicity.
- Your family may go from shirtsleeves to shirtsleeves in three generations.
- Your security may be threatened.
Family relationships may suffer.
- You are so focused on getting wealthy that you don’t have time for family, friends or fun.
- You get accustomed to being deferred to by others and expect it from your family.
- You tend to substitute things for time with your children.
- Your children have too many things.
- Your siblings, cousins, nieces and nephews ask you for money (since you are rich).
- Your family wants to treat your wealth as theirs.
- Your brother wants a job in your company and isn’t qualified to do it.
- The money upsets the balance of power in your marriage – your spouse feels threatened by it.
- The money upsets the balance of power in your marriage – you feel free to dictate since you built the wealth.
You may lose the wealth you built because you don’t know how to manage it.
- You don’t understand the impact of taxes – especially estate and gift taxes.
- Since your relationships suffered, your spouse wants a divorce and half of your money.
- You don’t understand or utilize the power of investing to maintain and grow your wealth.
- You buy whatever you want – spending all your wealth.
- You don’t understand the investment risks for your wealth.
- You hire too many professionals and pay too many fees to manage your money.
You may encounter negative emotional reactions.
- You don’t know who to trust (do they like you or your money).
- You feel guilty that you are the one with the wealth.
- You become a snob and won’t associate with old acquaintances.
- You don’t fit in with the wealthy people with whom you are now trying to associate.
- You or your family worries excessively over potential loss of money.
- Your children become spoiled rich kids.
- Your children’s peers make fun of them because they are rich.
- Other people envy you and it makes you uncomfortable.
- You realize (finally) that it is not money that makes you happy and fulfilled.
You may lose touch with your real value system.
- You lose your drive to accomplish.
- You lose your feeling of self-worth.
You may become a target for gift seekers and exploiters.
- Lottery winners frequently report that they get bombarded with requests from strangers, neighbors and even family for money after they win a jackpot. The smart ones take measures to protect themselves from the deluge, while picking the areas to which they want to contribute.
You may receive unwanted publicity.
- When Sam Walton took his company, Walmart, public, his wife Helen lamented the lack of privacy they then encountered.
Your family may go from shirtsleeves to shirtsleeves in three generations.
- You fail to train your heirs.
- Your children are not exposed to opportunities to overcome conflict and develop self-worth.
- You fail to plan your wealth transfer.
- You fail to take a cross generation view in managing your wealth.
- You may succumb to providing economic subsidies to your children instead of letting them deal with issues.
- Your family fights over your estate after your death.
- Your business has to be sold off to pay taxes or divide up the assets among heirs.
Your security may be threatened.
- You and your family may now need a body guard.
- Your homes and properties may need greater security.