Being rich is a piece of cake, right? With their fancy sports cars, well-stocked wine cellars and exclusive club memberships, you'd think the wealthy would be insulated from the stresses that make life a struggle for the rest of us.
Wrong. While plenty of wealthy people are happy and well-adjusted, some are downright miserable. Having a large pile of cash hidden behind a painting in your living room is no guarantee you'll go through life with a smile on your face.
"When you're wealthy it can bring along surprising complications and challenges. It can actually sometimes be a little bit more trouble than it's worth," says Sara Plant, national director with BMO Harris Private Banking, which caters to clients with a net worth of at least $1-million.
What challenges do the wealthy face? What keeps them up at night? And why should we all pray never to win the lottery? We asked Ms. Plant to share her insights on what it means to be rich.
Some people think that if they could just become wealthy it would solve all of their problems. What's wrong with that notion?
People underestimate the emotional complexity that wealth can bring. There is a whole layer of concerns that perhaps the non-affluent clientele wouldn't necessarily experience. It can make life easier in some ways but in other ways it can just make it that much harder.
How do you mean?
You've got to make sure that you're using your wealth properly, that you're not getting bad advice, that you aren't spoiling your children. Are you taking advantage of the tax opportunities that are there? If you have this wealth and you want to give back to the community, how can you do that most effectively?
You've mentioned that wealthy clients worry about passing money on to their children. Why?
I think they are increasingly concerned. They're looking at the generation behind them and seeing that they're growing up a little bit later. They're not marrying as early, they're not necessarily starting careers as early. The parents are concerned that their kids are potentially going to be inheriting money and may become responsible for the family business, but that they're not going to be able to deal with it responsibly.
That would explain why you hold financial education seminars for the children of wealthy clients. You also want to keep them as clients, right?
Absolutely. We're trying to approach our client base very much from an intergenerational perspective to help not just the one client but their parents and their children.
How did your clients make their money?
It comes from all sorts of different places. Some of it was inherited, a lot of it is self made. Those are the two primary sources. A few of them are lottery winners. The person who wins the lottery, if they're not equipped to deal with it and they end up in a lifestyle that they really aren't ready for, it can actually make them pretty miserable.
If they're not familiar with how to handle finances, they can find themselves spending it very quickly. They can find themselves with a bad crowd. People who win significant funds are often called upon to loan money or donate money, so the expectations placed upon them can be hard. They also can find themselves in some unhealthy habits. If there is more money, there are more opportunities for substance abuse.
What do you think the general public's biggest misconception is about the wealthy?
I think it would be that they have unlimited spending ability, and that is just not necessarily the case at all.
Because their lifestyle has gotten more expensive with things like private schools and exotic cars, you mean?
Yeah. It could be their financial commitments increase at the same time. It could be that they're contributing more back to the community so they're dedicated to that. And absolutely, when income rises lifestyle tends to expand along with it.
If money isn't the secret to happiness, what is?
I honestly think it's attitude. It's working with what you've got, and how you feel about it and the people around you and the life you lead. And being thankful for what you have.
This interview was edited and condensed.Report Typo/Error