Being rich means having to worry about absolutely everything except money.
– Johnny Cash
Most of us would like to be rich. We imagine that almost all our problems would disappear if only we were really rich. Having lots of money would mean we wouldn't have to worry about keeping a roof over our heads, sending our kids to any school they wanted to go to, or having enough to live very comfortably in retirement. What's not to like about being rich?
As it turns out, there are some disadvantages of extreme wealth. Here are 15 of them.
1. Sudden wealth catches us off guard
When you suddenly become rich, z. B., when you win a lottery jackpot, you are not ready for the consequences that come with it. News archives are full of articles about people who have won lottery jackpots only to end up poor, in trouble or even dead. I wrote about some sad stories of lottery winners a few years ago. Here's an example:
David Edwards won 27 million. US dollars in a Power Ball jackpot and spent much of it on drugs, a mansion, a Lear jet and fancy new cars. With 27 million. US dollars you could live comfortably for the rest of your life without working. But Edwards spent a lot of money. Lived in a filthy storeroom at the end of his life. His wife left him at some point, and he died in hospice care.
2. Many don't know how to handle the windfall
The above story is instructive. Imagine you win 27 Mio. US Dollar. Even if you lose half of it in taxes, you have 13.5 million. US dollars. Even if you spent half of that on fancy stuff and maybe bought some gifts for your loved ones, you'd still have 6.75 million. US dollars left over. If you invested the money in solid dividend stocks with an average yield of only 3%, you would earn 202 million a year.Collect 500 US dollars. That's good money to live on every year – plus, the 6.75 million. US dollars would still be there, invested in these stocks.
Over time, healthy and growing businesses tend to increase in value, and they usually increase your dividend payments as well, so your income and wealth will likely continue to grow. If you have, say, 3 million. U.S. Dollars in an immediate fixed annuity, it would also pay regularly – for the rest of your life. For 3 million. U.S. Dollars, at current rates, a 50-year-old man would get about 12.500 US dollars per month or about 150.000 US dollars per year.
3. Your wealth can overshadow your other attributes
People may focus more on your wealth than your other attributes. This wealth tends to become your most important feature. Abigail Disney, granddaughter of Roy Disney, co-founder of the Walt Disney Company, Has talked about her own experiences as a rich person: "People just say to me, "Oh my God, you must be really rich." In every interaction, you can't make a first impression because they've already thought about what they want to think about you before you even shake their hand."
4. If you are also famous, you will lose a lot of privacy
This one is not a surprise. But if you are famous and rich (and possibly you are famous because of your wealth), you will lose much of the privacy. You won't be able to just walk into a restaurant or store – or anywhere else – anymore without at least a chance of being recognized, disturbed or photographed. People are likely to gossip about you. Many rich people even have to deal with others going through the trash they dispose of each week, sometimes having to find other ways to get rid of it.
5. You may have given up a lot to become rich
People become wealthy in a variety of ways, e.G. B., if they win a lottery jackpot, inherit assets, or perhaps work hard and invest a lot of. If you achieved your wealth through a lot of hard work, there's a good chance you sacrificed a lot in the process. You may have spent many hours at work, or even worked two jobs. That means you may miss out on a lot of birthday parties, opportunities to take vacations, and more. You may not have developed close relationships with your family members and friends because you had to sacrifice a lot and work long hours. These are all significant things.
6. Maybe you feel uncomfortable
If your fortune suddenly fell into your lap, maybe through an inheritance, you might feel a little uncomfortable. Much like disaster survivors who wonder why their lives were spared when others were not, you may see people having trouble getting through life and wonder why you were spared such a fate. It may seem unfair, and that might bother you.
7. You may have to keep a lot of secrets
Many wealthy people have many more secrets than the rest of us. You might not want your colleagues or neighbors to know you're rich, for example, perhaps because of what they'll think or assume. You may not want to share your address, as it could show that you are very rich. If you take lavish vacations and enjoy many things that others may not be able to afford, you may want to keep this to yourself.
8. You'll be criticized by the people who don't even know you
Similar to the problem described above is that once people know you are rich, they will often have negative thoughts or assumptions about you. Finally, there are certain stereotypes about the rich. Some people might think that you are greedy, superficial, or materialistic, or that you don't know what it is like to be an average person. They may assume that you became rich just because you were lucky – or maybe because you cheated or used various backdoors. (Some, of course, become rich through luck, others cheat their way to wealth, z. B. By tax evasion.) Some people will even consider your wealth as their own loss, as if one person's happiness has something to do with another's misfortune.
9. People will treat you differently
One reason you might start not talking about your wealth is because you don't want to be treated differently. If people know you're wealthy, you can become their go-to person when they need money, or they might expect you to pay every time you go to a restaurant together. Some friends or relatives may expect expensive gifts from you for birthdays or holidays – and may be very disappointed if you give normal gifts.
Many are happy to have others listen to them talk about their problems, but in doing so you might find that people don't have much patience for your problems, assuming that since you are rich you shouldn't have much to complain about. (Of course, you'll often get more attention and respect because you're rich – which can also be unwelcome). If you are rich, you can be an object of envy and even resentment.
10. You could be out of touch with most of society
There are different ways to live your life when you become rich. You might not change much, stay in a modest home and keep working. Or you could quit your job, buy a fancy house and car in a great city or neighborhood, and make new friends. This latter option may well be enjoyable for you, but it can also mean that you will lose touch with the rest of society and have problems with ordinary people, their everyday experiences and the challenges they face.
11. You can get an identity crisis
You may not realize it, but much of our identity is tied to what we do at work. You could be a teacher or a scientist or a nurse and devote your time and thoughts to your field and status in your job. If you stop working because you are financially independent, you may experience an identity crisis where your self-esteem is a little weakened.
12. You might suffer a lot of disappointment
You may not have goals like you used to, because now you can afford pretty much anything you want instead of having to work for it. You will no longer get the satisfaction of having earned something by your own efforts. Because you did not have to crave or save for these things, purchases can be less fun. Buying something you want may not bring the joy you expected, and you may still feel unsatisfied.
Many people assume that if they had lots of money, they would be happy because all their problems would be solved. But that is not always the case. If you're generally unhappy before you get rich, there's a good chance you'd still be unhappy.
13. You'll have a hard time trusting people
This is a great disadvantage of great wealth: you will find it hard to trust people. With every person you meet, whether in a business or social setting, you'll feel unsure if they're really interested in you and what you have to offer, or if they're more interested in your money and what it could do for them. This can make finding a partner particularly difficult.
14. Your kids can be too spoiled
This may not sound bad, but if you raise your kids in luxury, they'll never have to struggle to achieve things and build a life for themselves. You may also find it difficult to make friends who are not interested in your wealth.
Warren Buffett, one of the richest people in the world, has made it a point not to give his children too much of his money; he said he wanted to give his children "enough money so they feel they can do anything, but not so much that they can't do anything". Bill and Melinda Gates have said they will leave their children "a tiny fraction" of their billions, explaining that "it will mean they will have to find their own way".
15. Boredom
The last disadvantage of great wealth is this: Boredom. If you don't have to work and you decide to do so, you may find it difficult to fill your time with meaningful activities. Take Timothy Kim, who started investing in the stock market at age 19. When he was in his early 30s, he had more than a million U.S. Dollars – and was bored: "If someone gave you $100 million and you didn't have to work anymore, you'd quickly find that life felt a little meaningless and you had this hole."
Do you still want to get rich?
There is a good chance that you would still like to be rich despite the disadvantages mentioned above. This is OK. After all, being rich has compelling advantages, such as. B. The possibility to live almost anywhere you want, to travel wherever you want, and to participate in all the shows or sporting events you want, among others.
Here's some good news: Maybe you could get rich before you retire, or at least make it much more financially secure. Becoming rich or wealthy doesn't just depend on luck or a rich family – it can be achieved with determination and effort.
Here's how much you could have if you regularly saved and invested certain amounts:
Data source: calculations: Author.
So use the time you have before you retire to get as rich as possible.