You want to be rich. Perhaps you plan to be very wealthy indeed.
Who wouldn’t? Talking about the pros and cons of being wealthy seems as one-sided as a boxing match between Warren Buffett and Muhammad Ali.
However I’ve been giving this some thought – inspired by my strange and unfounded fear of winning £56 million pounds in the lottery – and there are quite a few bad points.
Don’t get me wrong – it’d be a nice problem to have. If you searched out ‘the pros and cons of being wealthy’ as a sanity check before accepting a briefcase of cash, I say take the money!
Later on you can come back and tell us how hard it is being rich. But let’s start with the good points.
The pros of being wealthy
Unless you’re very religious, contrarian, or you’re visiting our planet ahead of the full-scale invasion from Mars, you’ll know how great it is to have money.
The esteemed rap poet Nas sums up the general picture as follows:
Clothes that I buy, Ice that I wear,
Clothes that I try, close your eyes
Picture me rollin, sixes, money foldin
Bitches honies that swollen to riches…
Mr Nas is a bit weak in rhyming the clothes he’s trying with those that he’s buying, but then he doesn’t need to try too hard – Nas knows we’ve all dreamed of being rich. He just has to flick the switch.
At the very least, being wealthy gets you:
- Financial freedom
- Holidays anywhere
- A great home
- Funding for your pastimes and passions
- Good suits
- Great health care
- A swimming pool full of girls in bikinis
- Gold teeth
Feel free to substitute your own desires. Personally, I’d like an island.
The downsides of being wealthy
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?
Guilt
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
The incredibly rich founder of Maxim magazine writes:
“Let me repeat it one more time. Becoming rich does not guarantee happiness. In fact, it is almost certain to impose the opposite condition – if not from the stresses and strains of protecting it, then from the guilt that inevitably accompanies its arrival.”
And he should know.
To conclude with the rapper’s perspective, what I didn’t tell you earlier is that the lyrics were from a song called Hate Me Now, in which Nas laments the ill-feeling his wealth inspires out on the streets.
Our bard sums up his frustrations thus:
You wanna hate me then hate me; what can I do
but keep gettin money, funny I was just like you
I had to hustle hard never give up, until I made it
Now y’all sayin that’s a clever nigga, nuttin to play with
Of course, the single was a hit and it made Nas even richer, just like Dennis’ How to Get Rich book has become a bestseller.
Being wealthy has its rewards, but irony – that’s priceless.
Question: Do you think the pros and cons of being wealthy are in balance? Would you rather be rich or just comfortable? Please let us know below.
Filed under: Monevation, Zen of money
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Well written article… And yet, I’ll take the problems of being legitimately rich any day. (Unlegitimately rich would be like Bernie Maddoff, that I don’t want).
Money Reasons on: 10 Millionaire Lifestyle Secrets
@Money Reasons – Thanks, we seem to be on the same posting wavelength today! Some cool facts you’ve found there. For the avoidance of doubt, I’d take the money too!
ha! ha! Brilliant article…. well written, funny, and educational.P.S. I’d take the money too.
I’d take the financial independence anyday. My motto is slightly different to yours with ‘Money doesn’t make you happy but it sure helps’.
The problems faced by the rich and poor are very different but I still think the ones you listed are preferrable to what some people are facing today:
- If only I had some money I could go private and get it sorted quickly rather than waiting for the NHS.
- The debt collectors are at the door again.
- Darling should we eat tonight or heat the house?
RetirementInvestingToday on: UK Inflation – February 2010 Update
@RIT – Yes indeed, I think we’re all agree it’d be swell to be mildly rich. But I do think there’s a case for saying truly rich isn’t a bed of roses? I felt the Dennis book was quite candid in this regard, though there’s no doubt he’s inherently quite a melancholy type.
@Money Reasons – Cheers. Interesting you bring up Bernie Madoff. He’s a classic example of what I mean about how the rich can get taken in – most of his investors were in this bracket.
@swebb – Thank you kindly!
I’ve seen this firsthand with my parents… They worked their asses off for 20 years to get where they are today and their families are now jealous and treat them differently… being successful has literally driven a wedge between them and their brothers and sisters and thus between me and my extended family as well. Super annoying and I hope that never happens with my sister and I (assuming only one of us gets wealthy).
Insightful look since a lot of people don’t think of the downside.
Ryan @ Planting Dollars on: Hiking Diamond Head and Snorkeling In Waikiki
The secret Monevator, is to be wealthy and have nobody know how much you make or have!
Nobody will EVER know what I make or have. They may guess, but they will never know which is exactly the way I like it. In fact, it’s better to be perceived as poor and have bank for some of the reasons you mention above.
The only thing I reveal on my site is my “Freedom Fund” barometer. It’s a measure of one savings account, but more importantly, I need it to be included in Kyle’s wealth tracker list! lol
Financial Samurai on: The Most Important Tip For Job Hoppers: Join People, Not Firms
@Ryan – It’s so sad when success backfires like that – I hope your family finds someway back. (Let’s hope your sister doesn’t start blogging?
)
@Sam – Yes, this is pretty much my outlook, offline and online. My favourite house I ever lived in – in a very rough part of town – looked like a crack den from outside. (It had broken glass cemented into the top of the walls!) But behind was by London standards a little oasis. I often think of it when thinking about how to present my financial profile to the world. (Admittedly I was a student and I did have no money then, but you take the point).
It is tempting to be like Flexo from Consumerism Commentary and reveal all my finances on Monevator, in semi-anonymity, as I think it could be useful for readers to see the ups and downs, but once you go public you can’t take it back. What I may do is set up a demo real-money portfolio or two, a bit like your cash freedom fund, and track that here.
I know what its like to not be rich so if you are willing to force it upon me I’ll take my chances with money!
Frankly, if suddenly I had it, my life would change little. I have no need for a bigger house or a new car. As long as my family is healthy I have everything I already need with the exception of money in the bank to sustain my current lifestyle through retirement.
LeanLifeCoach on: Combat The Closing Techniques – The Puppy Dog Close
@LeanLifeCoach – Mine neither, with the possible exception of buying a property irrespective of what I see as the overvaluation. I’ve often thought I’d try to hide a small lottery win (say £1m/$1.5m) completely from my friends, and just invest the lot. (That said, I’d give some money to my parents and tell them “I had some luck on the stock market I wanted to share” or similar! And maybe the same for sibling down payments on property.)
Was it Earl Nightingale that said ” You’ve got to BECOME a millionaire on the inside before you can be one on the outside ”
I found that a pertinent point , even with all the risks attatched im guessing most would still take it
Keeping it a secret .. that’d make you feel like Clark Kent right .. you’d have all these super powers of wealth & you’d have to be very elusive in how you displayed it to help others , it’d be one hell of a feel good kick ! .. helping others yet being humble enough to not let them know it was you
The Investor , think i read you saying you are overweight on equities right now with inflation looming , i’ve just sold out all my holdings today , it is going to be painful keeping it in cash at near 0 % .. , if you squeeze another 10 % or so out good on you man , im just going to grit my teeth & sit tight for now , atleast i got most of my losses back yay
@Davy – Thanks for the comments. (I deleted the Kipling poem after initially approving it, because it just seemed to break up the discussion here).
Clark Kent – yes, that’s exactly how I’d like to be wealthy. I’m already a bit like that as a blogger, with most of my family and friends having no idea about Monevator.
Re: Stocks, if I was only looking for 10% from the market I’d not be so overweight… I am looking for 50-100% over the next 5-10 years or so, before dividends. Possibly much more. I would love to be more diversified though, not least because I think asset allocation is woefully overlooked by private investors and I’m being a hypocrite. I’m watching Gilts like a hawk, and will start buying 10-year gilts at 5% most likely.
Yeah, worth picking one fund of yours and just tracking it. Pick a savings cash account, or equity investment account or whatever. It’s fun!
Financial Samurai on: Marketing Or Manipulation?
I’ve decided not to discuss specifics of my money for another reason not mentioned. The tax man! Not that I’m behind in taxes, but because the government has used blogs and Facebook postings against people. No BS on this.
Investor Junkie on: Are You Saving Too Much?
@Sam – I’ve actually set up an account ready to track a small £10K equity trading portfolio, really just to have some nice way of grouping my share write ups together. The trouble is it sends the wrong messages in some ways (passive is actually better for most, and £10K isn’t barely enough for efficient trading of 10+ holdings). So I hesitate.
@Investor Junkie – Wow, do you have any links? I’m such a goodie two-shoes I wouldn’t be worried about the tax man calling from a financial point of view, but could do without the paperwork and time etc.
The Investor , agreed .. there’s alot of good honest advice out there about correct asset allocation & it does make common sense , as you never know which asset class will be declining or advancing at a particular time , there was an interesting article i read on it not so long back showing how it can effect the deviation , not sure what you’ll make of it
http://tinyurl.com/ykuodg
With the 10 % , i just meant that the markets are looking overdue for a correction , that’s why im taking a breather from them , there may be some gains left on the table who knows , im looking to buy in at lower levels .. im after similar gains to you in the long term , never bought gilts as of yet , would consider it though
$10K? Don’t feel bad. I’m just tracking $1.8 billion in The Samurai Fund.
Financial Samurai on: Marketing Or Manipulation?
“The end of your goals and ambitions”
This is so true. Once you traveled to all the places you wanted to go and eat at the finest restaurants, you do become bored. People are looking forward to visiting Argentina and you already been there. Your neighbor is excitied and when you already had a safari, you almost wish you didn’t b/c of the excitement of looking forward to it. You run out of fun and ambition. trust me, I know
Moneymonk on: Friday Quote
About a million quid should do it. Much more than that seems excessive. Even with just a 5% real income from that you’d have 50K. 50K on top of any salary is a lot of money in my opinion, not to mention the million sitting there to dipped into on the odd occasion.
If I won the 56 million I’d be very tempted to give 55 million to somebody who needs it more than a millionaire.
I could imagine there being a tough side to being wealthy..knowing that I would still like to give it a try myself. Good points.
Ken on: Weekend Linkage – Olympic Edition
Pros. I get to travel all around the world with my family. Can I also buy an island?
Cons. Where do I go next after visiting all the places/countries I like?
DJ@ProductivePinoy on: Avoid Low Price Strategy
Even if you’re not really rich, you encounter this problems…but then rich people encounter a lot of problems than the middle class people, yes they have all the resources but there are things that money can’t buy, love, friendship, peace of mind and loyalty. Very well said, though admittedly we all want to get rich.
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