Wealth doesn’t make people happy. And in other breaking news, gravity causes objects to fall to the ground.
A New York Magazine article – “What Does Extreme Wealth Do to the Brain?” – is an interesting study as it interviews both wealth creators and inheritors to understand how wealth affects them.
Recently catching up with a friend who raises capital for venture funds and is a venture partner in some funds, I asked why he does this: he loves being involved in the latest and most dynamic innovations.
I reflected that my work with families is the opposite – the oldest and most immutable thing that is human nature. The reason history “rhymes rather than repeats” is because people don’t really change. The repeating generational patterns within families are a great example of this.
The perception among people without wealth is that wealth makes people worse. I disagree. If you’re a nice person when you have no money, you will still be a nice person with it, and ditto if you are an a**hole
In the word-association test I use with families, the word “wealth” is often associated with “freedom” and “choices”.
But for some, this is a double-edged sword.
What makes our brains unhappy is complexity and uncertainty.
The freedom to do absolutely anything can trigger very unpleasant emotions.
While the first-person accounts are diverse and informative, the highlight for me was the interview with Dr Paul Hokemeyer, psychotherapist to very rich people.
He identified eight steps that turn an “ordinary wealthy person” (what exactly is that?) into a monster.
The first two are key: wealth identity, and isolation. Each is worth a long article and I want to focus on the second because it’s the tipping point.
Isolation is about “private [anything]”: clubs, schools, neighbourhoods, planes. And the sycophantic world of “private wealth”, where people are nice to you for purely altruistic reasons … not.
When you live in a bubble, surrounded by people like you and experiencing the world in a completely different way to the other 99.9%, you lose touch with “the real world”.
The value of this insight is that is contains the seeds of the solution. The parents I’ve seen do it well make sure they expose their kids to the outside – often to Third World suffering.
Gratitude is one of the most important things to maintain, and seeing “regular life” sets a baseline and a constant reminder for our blessings, so that they can indeed remain blessings.
This is where active and strategic (not chequebook) philanthropy as a family can be such a powerful tool to help raise kids and live with purpose.
Conversation Starters:
Word-association test: “wealth is …”
How homogeneous and isolated is your life and social circle?
How does your social circle and that of your parents/children differ?
What does a loaf of bread cost?
The original article was published in Happy & Wealthy: Because of, or in spite of? - David Werdiger
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A successful family advisor, business strategist, entrepreneur, and thought leader with a proven track record of achievement in driving innovation and growth for entrepreneurial endeavours and not-for-profit organisations.
David's experience includes founding and building multiple businesses from the ground up, and expanding and leading operations into new markets. He is recognised by colleagues as a creative problem-solver and strategist with expertise in coming up with ideas and creating new ways of improving business, strategy, operations, and results.
As a business and family advisor, he provides clients with expert business advice on intergenerational business and wealth transition, advancing entrepreneurial efforts, setting up good governance, improving financial and operational results, and strategic direction. He is also a seasoned program leader with an aptitude for providing governance in corporate and philanthropic pursuits with a strong focus on culturally focused non-profits.