I recently read an interesting book titled, Fables of Fortune. The subtitle caught my attention and was probably the reason I purchased the book—What Rich People Have That You Don’t Want.
The book was written by Richard Watts, an attorney and graduate of Harvard Business School. He is the founder and president of Family Business Office and his firm manages some of the country’s wealthiest families and their family office enterprises. He has a bird’s eye view of what he calls the “super-rich.” These are families that have over $100 million in net worth.
In this book Watts reveals some of the pitfalls of having enormous wealth. He contends that these problems are very common in wealthy families, but are often hidden from the outside world.
He first observes that the super-rich miss out on the goodness of life. They often don’t experience the joy that we find in every day blessings: a healthy marriage, a close family, a position of respect in the community, or time with good friends.
A second problem Watts sees so often in the lives of the super-wealthy is the struggle with boredom. They become easily bored with even the most remarkable experiences. Watts shares this example.
Imagine learning the art of fly-fishing. The super-rich hire an instructor who schools them quickly in the skill of casting. A professional guide takes them to a stream in Montana or Patagonia, Chile, to a spot where the fishing is epic. The guide selects the proper fly for the water’s speed and clarity, the size of the fish, the time of year … and surprise! They immediately catch the limit their first time out! Challenge met. Fly-fishing is checked off the list. Another outing would be redundant.
Watts observes many of the super-rich lose any sense of value when money is no object. He says “The super-rich crave the passion that materialism has depleted. But without a sense of value, satisfaction remains elusive.”
The author writes a good bit about the danger great wealth can do to the children of the super-rich. Left unmanaged, children, even adult children, typically drink the Kool-Aid of wealth a lot faster and with less regard or even recognition of the consequences.
Watts says:
Wealthy parents usually don’t notice how easy it is for their children to have everything they desire and do whatever they want. Children don’t have a built-in warning light. They have no foundation from which to understand that such behavior will cause them to take their privileges for granted. Any sense of appreciation or gratitude falls by the wayside in favor of the belief that they are entitled to or are supposed to have everything they want.
Generally, the first generation who created this super wealth are individuals who started a family enterprise or business. They often start with little or nothing, and thus understand value.
The second generation will be impacted based on how the parents employed their wealth in the lives of their children. The bottom line is, “Do they spoil their children?” A few parents may channel the flow of their wealth for the benefit of the family, company, and community. But according to Watts, the majority of children of the super-rich will be swept away by the promise of unbounded materialism.
If the second generation has difficulty understanding self-denial and what it means to sacrifice, the third generation, according to Watts, hardly has a chance.
The final tragedy in the lives of the super-rich, according to Watts, is that the divorce rate soars to seventy percent, with the majority happening in the second and third generations of wealth. He says, “In my experience, the high rate of divorce among the super-rich does not reflect the high number of spouses who might as well be divorced. They remain in their marriages for the sake of convenience and preserving financial stability. Love isn’t part of the equation any longer.”
Clearly, there are exceptions, particularly when the super-rich possess the wisdom to recognize the dangers of wealth to their families, and understand the true riches of life. Finally, Watts makes this insightful observation:
I have spent my career dealing with problems created by wealth. As a man of faith, I know true wealth does not come from money, and people in the most modest circumstances can lead wonderful and fulfilling lives.
Richard E Simmons III is the founder and Executive Director of The Center for Executive Leadership and a best-selling author.
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