The Limitations of Wealth

Those of you who follow my articles regularly are accustomed to advice on how to make money … or on how to save it … or on how to invest it. By diligently absorbing the suggestions I’ve given over these many years, you possess the blueprint to pursue the prosperous life. If you simply follow the guidelines, display ordinary common sense and are not exceptionally unlucky, you will most assuredly thrive – become wealthy, if you prefer that expression.

Whether or not opulence fulfills your ambitions, or makes you content, is another matter. But if nothing else, one indisputable benefit of wealth is the luxury of avoiding many of the people you find distasteful, be it an overbearing boss, a difficult client or an offensive co-worker. Despite the reality that financial independence is not nirvana, the old adage is accurate: “Success may not by everything, but failure isn’t anything.”

The reason I’ve now chosen to analyze this subject is because of a Jeffrey Verdon Law Group advertisement I literally stumbled upon. Its heading: “The Disadvantages of Being Wealthy.” Its purpose: “… to protect your family, your legacy and your assets from an unforeseen lawsuit.” I might have passed it by with a glance, but as I scanned it I realized much of what it said – obviously from a legalistic standpoint – makes sense. For this reason I’ve inserted several portions of their ad for you to view. I’ll then add my opinions, so to more comprehensively round out the subject

“The media and popular culture always promote the advantages of being wealthy. But what they don’t show are some of the disadvantages of being wealthy. While these disadvantages are certainly not the same as those that come with being impoverished, nevertheless, having a large amount of money or coming into a big inheritance is not without its drawbacks.

“It’s certainly true no one chooses to be poor. Being wealthy allows people to afford the lifestyle they want for themselves. If you are affluent, you have the ability to spread your wealth around – to your family, friends and charitable institutions. When you are financially secure, your life is less stressful. You don’t have to worry about every penny spent. You are free to buy what you want, live where you want and go where you want.

“However, when you’re building wealth, you want to be aware of some of the disadvantages that come with being wealthy, especially if it comes overnight. Many wealthy people develop a money addiction, always wanting more and more, which can result in a loss of relationships with family and friends. You can become addicted to purchasing expensive items for attention or to get people to spend time with you simply for what you can give them.

“Another disadvantage of being wealthy is that you can become the target of frivolous lawsuits by people who are determined to part you from your money. Therefore it makes good sense to enter into advanced estate planning by working with wealth managers who are experienced when it comes to risk.”

The ad continues with a variety of other plausible disadvantages associated with wealth, concluding with a suggestion that their law firm could assist by instituting an estate planning and asset protection program. Though their services might well be advisable, they are far beyond my expertise.

Then, out of curiosity, I went to Google to see if anyone else had objections to prosperity. The answer is yes – and more than just a few. On the website of Maggie Zhang, a specialist in the buying and refinancing of mortgage investments since 2005, is listed “12 Surprising Downsides of Getting Rich.” Among the objections she raises includes “During your years of hard work to earn money, you might have given up key relationships, cut off future opportunities, missed out on life experiences or sold out on your true passions and dreams.” She then contends “your children might not learn the value of money. They might feel like they don’t have to work for or worry about money, because they grew up in such a comfortable environment. Although they will have the ambition to know they ‘should be’ working hard, they might not develop the qualities needed to succeed like you did.”

Immediately thereafter is an extensive article by the Church of Latter Day Saints (LDS) finding fault with success in general, as they contend “Among LSD members, there is a certain hero worship of those who are willing to endorse consumerism. But such blatant devotion to acquisition is so outside the LSD cultural norm that when someone embraces it, it is seen as embracing The One Cool Sin. But what is the point? It doesn’t make us better individuals and it separates us from our peers. To show so much obvious consumerism doesn’t improve life. It only leads to loneliness and to doubts about friends. Is the friendship only because of lifestyle?”

The one article in condemnation of wealth I could not ignore quoted Pope Francis, the current head of the Roman Catholic Church, who proclaimed “Unless wealth is used for the good of society and above all for the good of the poor, it is an instrument of corruption and death.” It added that Francis lives what he teaches. Despite access to some of the sweetest real estate imaginable – the palatial papal apartments are the sort of thing former President Trump’s gold plated extravagance is a parody of – the pope bunks in a small suite in what is effectively the Vatican’s hostel. In his official state visit to Washington, he pulled up to the White House in a Fiat so modest, a denizen of Northwest D.C. would be almost embarrassed to drive it. Apparently when Francis entered the Jesuit order over 60 years ago, he took a vow of poverty – and he’s kept it.

With this said, let me now add a few thoughts of my own on this subject. I freely admit that in my writings to date, I’ve largely ignored the downsides of success … and I acknowledge there are, in fact, burdens and obligations which come with it. Consider, if you will, an undisputable truism: Your stature is measured by the way you handle success. Whether we like it or not, wealth brings with it certain demands and responsibilities, and if you ignore them you will regret it. As you become wealthy – recognizably wealthy – certain aspects of your life change, and not all for the better.

Although the problems of meeting the mortgage and financing the children’s schooling may no longer exist, other problems move in to take their place. Your relationship with friends and relatives begin to change as you are viewed as something apart. It seems admiration and envy are opposite sides of the same coin, and as your perceived fortune grows, you will be the recipient of both emotions.

Your advice and assistance will be solicited, and although you may at first welcome the attention as a novelty, you will eventually find it more burdensome than complimentary. Regardless of your contribution, it often provides no satisfaction to the recipient, and you will be held to blame for the failure. Irrespective of your intentions, for every bouquet expect to receive at least one brickbat. In this regard I’ve become convinced, over the years, it’s better to be rich and not look it than to be rich and have it obvious to everyone.

An even more significant effect of prosperity can be your relationship with yourself. Despite the personal unpleasantness of failure, it imposes no demands on the ego. Success is another matter entirely, and the pressures it creates can be formidable. It’s fulfilling the mundane requirements needed to meet daily financial obligations that keep many people in balance. When this necessity is removed, the balance often goes with it. If you then add the ability to acquire unneeded possessions, exert unwarranted influence on others and seek unwarranted involvement, the potential for impairment can be unlimited.

Whether or not these pressures in any way caused the untimely deaths of such celebrities as film director and actor Andrew Koenig or musician and songwriter Mark Linkous is uncertain, but obviously financial success did not prevent them. Ultimately you must come to terms with whatever success you enjoy. Perhaps if it comes slowly, you acclimate more easily. Quite likely the most difficult task of all is for it to be dumped upon you precipitously – so in deference to your next of kin, give some serious consideration to this when it comes to writing your will.

A final comment: Although I recognize a quest for financial success can become an obsession, the fault is not with the accomplishment, but with the obsessed individual. If a person maintains a sensible attitude and lifestyle while acquiring assets, it is in no way bad. Rather, it is an accomplishment deserving nothing but praise.

Al Jacobs, a professional investor for nearly a half-century, issues weekly financial articles in which he shares his financial knowledge and experience. Al may be contacted at al@abjacobs.com.