For most of us, the idea that making more money would make us unhappy sounds ridiculous. Then again, most of us don't know what it's like to be rich. But many who are wealthy say having more money brings more problems.
And, despite the natural initial reaction to scoff at such complaints, they may have a grain of truth. You can, it seems, be too rich.
Why are the wealthy so unhappy?
The afflictions peculiar to the wealthy are detailed in a handful of books such as The Golden Ghetto, penned by a woman whose exposure to the money germ came from growing up in a wealthy family, which included a grandfather who was the President of General Motors.
Jessie O'Neill, author of The Golden Ghetto and therapist to many unhappy wealthy patients, says big bucks produce dysfunctional families, with members more interested in making, spending or keeping money than in having good relationships with relatives and friends.
O'Neill says many wealthy people have difficulty delaying gratification, low frustration tolerance, a sense of entitlement, lack of motivation, low self-esteem, poor self-confidence and excessive focus on appearances.
How wealth affects children.
Studies of wealth's effect on children provide support for the idea that more money means more problems for their personal finance habits and emotional state. A 2003 review of scientific literature on the topic, for instance, found researchers consistently reported more substance use, anxiety, and depression among affluent youths than among less-privileged kids.
One study compared children in a posh suburb with counterparts in a gritty inner-city neighborhood. Surprisingly, suburban youth reported significantly higher levels of cigarette, alcohol, marijuana, and other illicit drug consumption than inner-city youth.
The same study looked for symptoms of psychological upset. Again, counter to expectations, one in five suburban 10th-grade girls reported significant symptoms of depression — three times the usual rate. Anxiety among both suburban girls and boys was also higher than normal.
Another project examined sixth and seventh graders in a community where median annual family income topped $125,000, which was three times the national median family income in 2002, when the study appeared. What was the result of living in such a gilded community? Fourteen percent of seventh-grade girls had symptoms of depression, twice the normal rate of 7 percent.
Stress of wealth vs. burden of poverty
Researchers have focused on two likely causes and found some support for each. The first is parental expectations. “In upwardly mobile communities, children are often pressed to excel at multiple academic and extracurricular pursuits to maximize their long-term academic prospects — a phenomenon that may well engender high stress,” notes Suniya S. Luthar, a professor of psychology and education at Columbia University and author of several studies in the field. Stress to excel, the theory goes, boosts anxiety.
Another suggested source of angst is isolation from parents. Luthar cites research showing junior high students from upper-income families are home alone for several hours a week because parents want to promote kids' self-sufficiency. Demanding career obligations, along with a heavy schedule of extracurricular activities, may also contribute to isolation by reducing family time together.
If you're from the other, less-fortunate half, and perhaps having difficulty making the rent, low frustration tolerance may not sound so bad. But if you are thinking more money would mean fewer problems, you may want to think again. Perhaps being rich isn't all it's cracked up to be. Perhaps having to track enough but not too much in your finance management software is the better goal.
“Can You Be Too Rich? The Negative Effects of Wealth” was written by Mark Henricks.
The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on your taxes, your investments, the law or any other business and professional matters that affect you and/or your business.