The Downside of Wealth
You think “If I just had more money, everything would be OK”. Past a certain point, however, more money can be more trouble than fun. Being wealthy is not for the feint of heart. You need to understand the things that can go wrong when you have lots of money, so you can learn how to avoid them! Here are six.
Letting money get in the way of a worthwhile life.
We’ve all heard the story of Scrooge – who wasted a lot of his life being super thrifty and then realized he wasn’t really living at all.
Don’t let your goal be solely to build financial wealth. Live your life each day. Find what your purpose in life is and work towards fulfilling it. Nurses report that dying patients never wish they had spent more time at the office!
Heed the advice, as scripted by Disney writers in the movie Secretariat, of Penny Chinnery’s father when he said “Let him run his race”. Run your race and make sure it is about more than money.
Robert Frank, in Richistan, noted that Michael Sonnenfeldt sold his two businesses for tens of millions and then felt empty. His purpose was his business and once sold he felt empty.
Letting money ruin your chance at meaningful relationships.
Many lottery winners are unpleasantly surprised to find that “friends”, relatives, co-workers, acquaintances and total strangers feel free to buddy up to them in hopes of getting a monetary handout.
Don’t let money harm relationships. Develop strong and lasting ones on the way up and hang onto them for dear life if you make it to your financial wealth goals. Beware of new relationships after you achieve wealth. Develop some criteria to test the strength and truthfulness of that new relationship before committing to it.
Letting your money take over your life.
The more you have of most things, the harder they become to manage. The same is true with money. When you start out, you have a few hundred dollars – hard won from summer jobs. It’s pretty easy to manage that. As your wealth builds, the complexities increase. First you start investing in your 401K, then you set up an IRA, you also may be building a brokerage account or a set of real estate holdings. Before you know it you are buried deep in statements, tax issues, asset allocation needs and investments you may not truly understand. Be prepared. If you don’t want to spend your time managing the money, find an adviser early on and develop a trusting and profitable relationship with that person.
Letting your wealth ruin your kids.
Sometimes folks on the path to wealth get so consumed by their careers or their businesses that the kids lack proper parental attention. Sometimes they are suddenly presented with the fact that they are in a rich family (as Jamie Johnson of Johnson & Johnson family wealth was) – because the parents were afraid that letting the kids know would spoil them. Leaving children in ignorance is not the answer. Train your kids to know that they are expected to add to the wealth, take care of themselves and give them the tools they need to deal with ‘you’re a rich snobby kid’ comments!
Ignoring the security risks wealth can bring.
If you are blessed (or cursed) with large amounts of wealth, you may experience clear and present danger to life and limb of you or close family or friends. As with any risk, you need to understand it and mitigate it. So, as your wealth grows, learn about how to protect yourself from theft, kidnapping, reputation damage and so on and be prepared to take action based on that knowledge.
Going too far.
Really, how much money is enough and when does it become too much? Stacking up wealth – just to be wealthy – is like a miser counting his gold coins in the dark, dank cellar so no one else can see. Using money as a scorecard can be fun, for awhile, but in the end, having more money doesn’t make you any better than the next gal. Only you know what is enough for you. Set a goal, work towards it and when you get there, kick back and reflect on where you have been and what is next for you. I know I did.
There is an upside of wealth.
Even though you acknowledge the above as possibilities, it is still worthwhile (in my mind) to pursue the level of wealth that is right for you. Wealth brings financial independence, which can allow you and your family to pursue bigger dreams and avoid the grinding pressure of day to day living. It frees you from the clutches of the loan shark and the bill collector. It lets you eat well and get good health care. It allows you to do the things you see as your purpose in life – moving the human condition forward, helping save the environment, uplifting a depressed segment of the population, pursuing a political career to make your country a better place – or whatever your purpose is.
You just need to learn how to be wealthy! You need to understand what it takes to keep both your wealth and your well being. That’s what Family Money Values is trying to help you do.
What do you see as the downside of wealth?