You want to be rich. Perhaps very wealthy indeed. Who wouldn’t? Debating the pros and cons of being wealthy seems as one-sided as a boxing match between Warren Buffett [1] and Muhammad Ali.
However I’ve given this some thought – inspired by a strange and unfounded fear I’d be the £195 million winner [2] in the EuroMillions – and there are quite a few bad points.
Don’t get me wrong – it’d be a nice problem to have. If you’ve just searched out ‘the pros and cons of being wealthy’ as a sanity check before accepting a briefcase of cash from the Premium Bonds [3] people, take the money!
You can come back later to tell us how hard it is being rich. But let’s begin 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.
He knows we’ve all dreamed of being rich. He just has to flick that switch.
At the very least, being wealthy gets you:
- Financial freedom [4]
- Holidays anywhere
- A great home [5]
- Funding for your pastimes and passions
- Good suits
- Excellent health care
- A swimming pool full of beautiful people in their skimpies
- Gold [6] teeth
Feel free to substitute your own desires. (Personally I’d like an island.)
However as Morgan Housel writes in The Psychology of Money [7]:
“Money’s greatest intrinsic value – and this can’t be overstated – is its ability to give you control over your time.”
Self-determination is at the luxury end of the hierachy of needs. And when you’re very wealthy, within reason you can do what you want, where you want, when you want, and a lot of the time with who you want.
But beware! Just like the baddies level up in a video game moments after you get a new weapon upgrade, so your money problems can mutate and come back stronger when you get rich.
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.
Just consider the lottery winner’s curse [8].
Even making your own money won’t necessarily make you happy. 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.
(I’m mostly talking about being really rich here – at least £10 million / $15 million net worth.)
Money (probably) won’t make you happy
Once you’re earning a surprisingly modest amount of the stuff, researchers say making more money [9] 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, but it could distract you from fixing your real problems. That said, more recent research [10] suggests earning more money can make you happier – so who knows? And being poor is definitely hard work. So some money is definitely better than none.
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 it 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. [11] That’s probably why you can’t walk far in Africa without tripping over a philanthropist.
Being judged unfairly
People are critical of the wealthy, especially in the UK. You might give nearly half your money to HMRC [12], but you’ll still read that you’re a freeloading leech who doesn’t pay their fair share. In the US, entrepreneurs [13] are celebrated, but newly-rich Brits will find many people waiting for them to fall. I saw it a lot in my old career. A self-made man or woman leaves the room, and someone says “well, he was lucky” or “she’s out of ideas” or even “what a dick”. Not nice, but it happens. Then again I’ve also noticed newly-rich people can be terrible for a year or so, before reverting back to their old selves. So if you only got rich six months ago, perhaps you are being a bit of dick.
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 [14], 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 [15] again? And anyway, in an increasingly digital world many of the best things can be enjoyed equally as well by normal people as by billionaires [16].
Guilt
Money can’t buy the love [17] 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? Should you give all your money away? Where do you draw the line?
Being rich is a big deal
Buy a country house and you need staff. Invest your millions [18] and you need accountants. They might move your money offshore, and now you don’t understand the taxes. Perhaps you’ll go to prison for tax evasion [19]? But you’ve no time to read up, because three different architects are coming over to quote on your summer home. You need to brief the security guy about that. Except he’s getting off with your disinterested wife in the boat shed. You think you’ll be different? So do I. Didn’t they?
Scams and fraudsters
One reason you’ll employ all those professionals is because you’ll need help warding off the crooks attracted to your wealth. Nobody was pretending 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 [20] aren’t swindlers, too.
I love you (and your money)
The big one. Does she really find you fascinating, or is it just your bank balance? Is he really won over by your beauty, wit, and 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 you’ll read in How To Get Rich [21] by Felix Dennis is when he urges you to stop with money after you make a few million [22]. Beyond that you’re wasting your life.
The incredibly rich founder of Maxim magazine wrote:
“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 [23], in which Nas laments the ill-feeling his wealth inspires out on the streets.
The 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 is a bestseller.
Being wealthy has its rewards, but irony – that’s priceless.
Do you think the pros and cons of being wealthy are in balance? Would you rather be rich or just comfortable? Share your thoughts below.