When I said this article was about the pros and cons of being wealthy, I meant it: having a lot of money has drawbacks, especially if you get rich overnight.
I’ve met a fair few rich people over the years, mainly through work, and I’ve also read widely on the subject, and I feel confident in listing these negatives.
(For clarity, I’m talking about being really rich – £10 million / $15 million net worth or more).
Money doesn’t make you happy
After a surprisingly low point, more money doesn’t make you happier. Rich people get depressed, just like the middle classes. True, there’s no evidence that money actually makes you unhappy (although one rich man is giving it all away) but it could distract you from fixing your real problems.
The end of your goals and ambitions
You see this with children born into money, as well as people who built a company up for several decades and sold too late to start another. When you have the money, what next? The trick seems to be to find a substitute to your old goal of achieving financial security. That’s why you can’t walk far in Africa without tripping over a philanthropist.
Being judged unfairly
People are very critical of the wealthy, especially here in the UK. In the US entrepreneurs are celebrated, but newly rich Brits will find many people waiting for them to fall. I’ve seen it in work – a self-made man or woman leaves the room, and someone says “well, he was lucky” or “he’s out of ideas” or even “what an asshole”. Not nice, but it happens.
Someone is richer than you
Rich people are human, too. Your yacht isn’t as big as the one next door, or you had to buy your furniture, unlike your neighbours who had theirs passed down from the 17th Century. Nobody is the richest person in the world on every measure – how many billions would Buffett give to be young again?
Money can’t buy the love of your friends and family. “Don’t feel bad about being rich,” they say. But do you believe them? One has a broken boiler, another has a child with special needs, and then there are distant relatives who can’t afford nursing care. Do you help them all? Can you? Where do you draw the line?
Being rich is a big deal
Buy a country house and you need staff. Invest your millions and you need accountants. They move your money offshore, and now you don’t understand the taxes. You’ve no time to learn, because you’ve three different architects coming over to quote on your summer home. You think you’d be different? So do I. Didn’t they?
Scams and fraudsters
One reason you’ll need to all those professionals is because you’ll need help warding off the crooks attracted to your wealth. Nobody wanted to pretend to be you when you owed the bank money, but now you’ve millions parked away it’s a different story. Let’s hope your financial advisers aren’t swindlers, too.
I love you (and your money)
The big one. Does she really find you fascinating, or just your bank balance? Is he really won over by your beauty, wit, or experience, or does he just hope to bleed you dry while banging the French au pair?
Money can be all consuming
The most surprising thing about How to Get Rich (US link) by Felix Dennis is when he urges you to stop with money after you make the first few million, because beyond that you’re wasting your life.
The incredibly rich founder of Maxim magazine writes: