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“Affluenza” The Pitfalls of Inherited Wealth – Part I

By April 4, 2013July 12th, 2023Finance & Wealth Management2 min read

“It is like a magic sword: it gives the holder rare powers, but only the mightiest of warriors can keep from being nicked themselves by the blade.” – John Sedgwick, on inherited wealth, in Rich Kids

Are you doing the best you can for your children by doing all you can for them? Depending on the extent of your resources and ability to help your children out, the answer may be a resounding “No!”

While the advantages of wealth are undeniable, it comes with disadvantages that are real enough. The specific dysfunction that is associated with having copious amounts of money has a name – affluenza. And, despite the fact that anyone who complains the pitfalls of wealth is likely to be ignored or met with the ridiculing response “I wish I had your problems,” the manifestations of affluenza range from slight to severe. They’re especially prevalent among the second generation of money, those who have never been exposed to the lifestyle that the majority of Americans live.

What are the signs of affluenza? It may be an obsession with work, a driven workaholic compulsion to achieve exhibited by a child who feels he or she must match or exceed the outsized accomplishments of an extraordinarily successful parent. The fixation on achievement is often manifested – badly – in their involvement with the family business. Eager to prove themselves in comparison to their parents, they often take on more than they are ready to handle. They may be too willing to chance everything on grandiose scheme with huge payoffs but even bigger risks. Since grown children often hold substantial amounts of power within the family business, their over-ambition can easily jeopardize the welfare of the business and the entire family…

Check back for part II next week!

More from this series

“Affluenza” – Part 1
“Affluenza” – Part 2
“Affluenza” – Part 3