The Problem of being Rich

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2 years ago

The majority of us would love to be wealthy. We think that if only we were very rich, just about all our issues would vanish. It would mean we wouldn't have to worry about keeping a roof over our heads, sending our children to whatever school they chose to attend, or getting enough to live in retirement quite comfortably if they had a lot of money. What's there not to like about being wealthy?

As it turns out, there are some downsides to extreme wealth. Here are 15 of them.

1. Sudden wealth catches us unprepared

If you unexpectedly become rich, such as through a lottery jackpot, you will not be prepared for what it entails. News archives are full of tales about individuals who won lottery jackpots only to end up bad, in trouble, or even dead.

2. Many don't know how to handle windfalls

Imagine a $27 million win. You would have $13.5 million even though you were to lose half of that in taxes. You will have $6.75 million left even though you spent half of it on splurges and maybe some presents for loved ones. You will earn $202,500 annually if you parked that in solid, dividend-paying stocks with an average yield of just 3 percent. That's a pretty decent sum of money to survive on per year—plus, $6.75 million, invested in those stocks, will still be there.

Good and increasing stocks appear to rise in value over time, and they often usually increase their dividend payments, so your income and wealth will probably continue to grow. If, say, you parked $3 million in an instant fixed annuity, it will pay you annually as well—for the rest of your life. For $3 million, a 50-year-old man will get about $12,500 per month, or around $150,000 a year at recent prices.

3. Your wealth can overshadow your other characteristics

People will concentrate more on your wealth than on your other attributes, and that wealth tends to become the most distinguishing attribute of you. Abigail Disney, Roy Disney's granddaughter, who co-founded the Walt Disney Company, has related her own experience as a wealthy person: "People do say to me, straight up, 'Oh my God, you must be really rich.' In every interaction, you don't get to make a first impression because they're already thought about what they want to think about you before you even shake their hand."

4. If you're famous, too, you'll lose a lot of privacy

This one is no surprise, but you're going to lose a lot of your privacy if you're famous along with being wealthy (and probably famous because of your wealth). Without at least a risk of being heard, disturbed, photographed, and maybe gossiped about, you'll no longer be able to simply go out to a restaurant or a shop — or anywhere. Every week, many affluent people even have to deal with people going through the garbage they put out with some having to find more private ways to get rid of trash.

5. You may have given up a lot to become rich

In various ways, people become rich, such as by winning a lottery jackpot, inheriting money, or perhaps working hard and saving. There is a fair possibility that you have lost a lot along the way if you have earned your riches with a lot of hard work. You may have worked long hours at your job, or even worked two jobs — so you may have skipped birthday parties, opportunities to take holidays, and more. Owing to your hardships and long working hours, you may not have formed close relationships with family members and friends. Those are all major losses.

6. You may feel uneasy

You may find yourself feeling somewhat uneasy if your wealth unexpectedly fell into your lap, maybe from an inheritance. Not unlike disaster survivors who wonder why their lives were spared when others weren't, you may see people struggling to get by and wonder why such a fate was spared. It may seem unreasonable, and you may be bothered by that.

7. You may have to keep a lot of secrets

Some affluent individuals hold a lot more secrets than the majority of us do. You do not want your friends or neighbors to know that for instance, you're rich, maybe because of what they're going to think or infer. On occasion, you may not want to share your address as it may show that you are very well-off. If you take a luxurious holiday and enjoy a lot of experiences that others can not afford, in a certain company, you might want to keep that to yourself.

8. You'll be criticized by people who don't even know you

Linked to the above issue, once people know that you are wealthy, they will sometimes have adverse thoughts or assumptions about you. There are some myths about the rich, after all. Some may think you're selfish, shallow, or materialistic, or you don't know what it's like to be an ordinary person. They might presume that you have become wealthy only because you are lucky—or maybe because you have lied or taken advantage of different loopholes. (Of course, some become wealthy because of good luck; others may cheat their way to wealth, such as by evading taxes.) Some people may also see your being wealthy as a loss to them, as if the good fortune of one person is tied to another's bad fortune.

9. People will treat you differently

One reason you may start being discreet when rich is that you won't want to be handled differently. When people know that you are rich, when they need to borrow money, you can become their go-to person, or they may expect you to pay each time you dine together at a restaurant. For birthdays or holidays, some friends or relatives may demand extravagant gifts from you — and if you offer ordinary gifts, they may be put out.

Although many of us get comfort from venting to others about our issues, you may notice that others don't have much tolerance for your problems, thinking you shouldn't have much to worry about because you're wealthy. (Of course, since you're wealthy—which can also be unwelcome, you'll also get more praise and deference.) If you're wealthy, you might be an object of envy and even resentment.

10. You can grow out of touch with most of society

When you become successful, there are numerous ways to live your life. You may not change much, staying and continuing to work in a modest home. Or in an affluent town or neighborhood, you could leave your job, buy a fancy house and car, and establish new circles of friends. The latter choice can be perfectly enjoyable for you, but it may also mean that you may lose contact with the rest of society and will have difficulty with ordinary individuals, their common experiences, and the obstacles they face.

11. You can develop an identity crisis

You may not know it but in what we do for work, much of our personality is wrapped up. You may be a teacher or a nurse or a scientist, and you may devote your time and thoughts to your profession and your status in it. If you are no longer employed and you are financially independent, you can face an identity crisis, with your self-esteem taking a bit of a blow.

12. You can suffer a lot of disappointment

You can no longer have aspirations like you used to, because instead of having to work for them, you can now afford just about anything you want. You can no longer be confident that you have gained something with your own efforts; transactions will be less rewarding because you have not had to yearn for them or save up for them. Buying what you want may not be the joy you hoped it would be and you may still be unsatisfied.

Many people believe that they would be satisfied if they had a lot of money, with all their problems solved. However, it isn't always the case. Before becoming wealthy, if you were a generally unhappy person, there is a fair chance you're always going to be an unhappy person.

13. You'll have trouble trusting people

This is a huge downside to great wealth: you're going to have trouble trusting people. You will find yourself uncertain with someone you meet, whether in a business setting or social setting, whether they are really interested in you and what you have to say, or whether they are more interested in your money and what it could do for them. That can make dating especially difficult.

14. Your children may end up spoiled

This may not sound like a bad thing, but if you raise your kids in comfort, they're never going to have to work to do things and create a life for themselves. It can also be difficult for them to make friends who are not interested in their money.

"enough money so that they would feel they could do anything, but not so much that they could do nothing."enough money to his children so that they would feel they could do anything, but not so much that they could do nothing."a minuscule portion"a tiny portion"It will mean they have to find their own way."It will do nothing.

15. Boredom

There is a final downside to great wealth: boredom. You will have difficulty filling your time with constructive activity if you do not have to work and you chose not to. "If someone gives you $100 million and you don't have to work anymore, you're going to quickly find out that life feels a little meaningless and you have this hole."If someone gives you $100 million and you don't have to work anymore, you'll quickly find out that life feels a little meaningless and you've got this hole.

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2 years ago