The Psychology of Wealth
In my work with family business clients, I often come face to face with issues related to the psychology of wealth. The topic of money often makes people uncomfortable, whether they have a little or a lot.As we often stress the value of open communication in all of our work with enterprising families, I thought I would answer a few common questions that our clients bring us on the touchy topic of wealth and money.
WHAT IS WEALTH?
Wealth means different things to different people. For some people it is having so much money that you have no worries. For others, it means having enough money to sustain several generations. One man, who was quite wealthy, told me that wealth is one more zero. This could be a negative attitude because it could mean that whatever you have, there is always one more step. There is always someone wealthier. But the positive side of it is that there is another step to achieve and you can look forward to the challenge.
WHY DO PEOPLE SOMETIMES FEEL GUILTY ABOUT HAVING MONEY?
Entrepreneurs rarely feel guilty about having money because they believe that they have worked hard to create their wealth. However, because much of their time is spent at work, they may miss a lot of their children’s lives. When their children grow up, they realize how much time they have lost. This is really where they feel the guilt, because they know it is time that they cannot recover.
People who make their money quickly – such as inheritors, lottery winners, artists and athletes – often feel guilty because they believe they have not done anything to deserve the money they possess. In addition, when a marriage occurs between families with different levels of wealth, an imbalance might occur that can create resentment and jealousies. For example, the wealthy family might give the newlyweds a house as a gift. But the non-wealthy family might give something else, such as a set of glasses, and that might be extravagant for them. This imbalance can generate difficult family dynamics.
WHY IS THE DISCUSSION OF WEALTH SO OFTEN TABOO?
In my experience, the taboo comes more from within families than from outside families. When people have new wealth, they often discuss it with their friends. When it comes to their children, though, they worry about discussing the extent of their wealth with them. They also worry about finding the balance between allowing their children to enjoy their wealth and providing too much for them. They worry that the children will be spoiled by too much wealth and too much knowledge about the family situation. Ultimately, this can create difficulties and anger in their children.
WHAT IS ‘AFFLUENZA?’
This is a condition in which someone is wealthy but unhappy because of his or her wealth and accompanying difficulties, such as lack of motivation and difficult relationships. It tends to happen more in young adults who are struggling with the meaning of their money. Education is important in this case. Children can be taught to feel comfortable with their wealth, to preserve their wealth and to use it to help their communities. They can learn to feel good about themselves by being useful. It is important that families talk to their children about wealth. Children should learn to be grateful for what they have. Using wealth as a springboard to do new things is just wonderful. Children need to be raised understanding that their identity and values are not defined by their wealth.
WHAT ARE SOME THINGS THAT PEOPLE WHO ARE WEALTHY SHOULD FOCUS ON?
Clients with wealth should put more emphasis on giving meaning to their wealth: developing businesses and investments; helping others, and so on. Also, when wealth or businesses grow, one has the opportunity for true philanthropy. It is essential to impress upon children the importance of making wealth meaningful. Focus on the positive, including what it means to young people to be motivated, to be educated and to develop values that can be passed on to future generations. And above all, wealth should be enjoyable, purposeful and perpetuated.
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