I know what you are thinking—how could there possibly be cons to being rich? While everyone has a different definition of what “rich” is, most can agree that becoming rich would be life-changing. But I would argue that it is not always life-changing in a good way. Find out what I mean in this episode of Best in Wealth!
Outline of This Episode
- [2:09] Who would not want to be rich?
- [3:16] The pros of being rich
- [7:58] The cons of being rich
- [13:41] How will becoming rich change you?
What if you won the lottery?
The other day, I had lunch with my dad and brother. Our lunch conversation centered around the Powerball jackpot being at $1.5 billion. We were all amazed by the cost of the chicken we had ordered, which led to the conversation about winning the Powerball. My dad said, “If I win the Powerball, I am gonna buy your company.”
But honestly—what would life look like if you won the lotto? What would the pros and cons of being extremely wealthy be? Let’s dive in.
The pros of being rich
Everyone wants to be rich, right? Who would not? I am sure being super-rich would be a nice problem to have. Let’s say you won the lottery, got a huge insurance settlement, or inherited a windfall from a relative and became super rich. So what are the pros?
- Financial freedom: Financial freedom allows you to make decisions based on things that bring joy to your life. I love what I do, so I would continue to run Fortress Planning Group when I am financially free.
- Go on vacations whenever and wherever you want: Maybe you can own or rent a yacht wherever you want.
- Build a dream home: You can build houses in different states or countries. We just built our house five years ago and my wife is already talking about things she wants to change.
- Fund your passions: You will be able to pay for all of your favorite pastimes.
- Wear the best clothes: My kids would wear Lululemon day and night.
- Pay for the best healthcare: You could have the best healthcare possible and pay for cosmetic surgeries not covered by healthcare.
You could put in a swimming pool, throw the biggest parties, and the list goes on. What would be on your list?
In his book, “The Psychology of Money,” Morgan Housel writes that “Money’s greatest intrinsic value is its ability to give you control over your time.” Is that not what financial freedom is all about? It is a luxury. If you are wealthy, you do what you want, where you want, when you want, and with who you want. Does that not sound amazing? But there are downsides.
The cons of being rich
Some people would say that there are no cons to being rich. But the reality is that there are. We have read stories about the curse of those who have won the lottery. Many become broke or their lives are far worse than they were before.
- Money will not make you happy: Once you hit a certain income level, your happiness does not increase. If you have nothing and you are living in a house that is falling apart, more money will make you happy to an extent.
- The end of your goals and ambitions: If your goal is becoming financially free and you reach that goal, what is next? If you get there on your own through hard work, you will feel satisfied. You need a substitute for your old goal of achieving financial freedom.
- Being judged unfairly: People might judge you because of your nice clothes, car, and house. Having money does not mean you are a bad person, but people might assume that you are.
- Someone is always richer than you: Being rich does not make you different or better than anyone else. Someone will always have more than you. It cannot be about “Keeping up with the Joneses.”
- Guilt: Who are you going to help? Parents, siblings, friends, distant relatives? How far will you go? When is enough, enough? Will you feel guilty when you have to say “no?” That is a burden of being rich.
- The constant scammers and fraudsters after your money: You will face different stress and anxiety than when you did not have money. You will have to pay financial advisors and tax accountants to handle your money. Can you trust them all?
What will money do to you? Will it change you? List out the pros and cons and make sure that if you become “super-rich” it does not consume you. Can you remain your true self?
- The Psychology of Money by Morgan Housel
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The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.