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.