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It’s a rich man’s world — full of worry
It really isn’t easy being rich, according to James Grubman, a psychologist who provides counselling to the rich clients of major banks and brokers.
“Many people with wealth are unhappy or anxious because they are worried about their families and what the wealth is doing to the family, they have stresses across generations with their kids, depending on the level of wealth they are worried about losing the money,” he said. “Money turns up the volume on everything and for some people it just changes or magnifies anxieties that they had before.”
He acknowledges that money does relieve some stresses but those stresses get replaced with a bunch of others.
The problems can be profound, he told the Reuters Wealth Management Summit in Boston. Grubman said they include:
–A feeling of guilt about their wealth.
–Concerns that their kids are going to turn into spoiled brats.
–Worries about how to teach their kids the value of work and money. When the family cars have already been washed by a member of staff it isn’t already easy. “There are so few opportunities for wealthy kids to actually do normal things that middle class kids do,” said Grubman.
–A different attitude towards money within a marriage. This is especially the case when one poorer partner has migrated into wealth through the marriage. One partner may want to spend like there is no tomorrow and the other may be much more frugal.
–Arguments over badly crafted prenuptial agreements.
–A reliance on inherited investments that may be completely inappropriate for the times. He had counselled two women clients who had held onto certain stocks because they were bought by a dead husband or father. They held on while the stocks plunged.
–Insecurity over inherited wealth, particularly concerns that they didn’t earn it, and that they could be deported from the land of the wealthy. Those who took risks to create their own wealth feel less vulnerable, he said. Those who were born into wealth are often too risk-averse with their investments and don’t get the investment returns they might otherwise.
–Being too suspicious after being warned that people may be only interested in your money. They are taught the fears but not the skills to handle them.
But not to despair, Grubman says that the kids of the rich are generally growing up better than it might sometimes look like from the TV images of Paris Hilton and her ilk.
Grubman himself comes from an affluent family and has managed to cope. “My background, pyschology, really helped,” he said.