Cheapskate Wisdom … About the Downside of Having Too Much Money

By Brad Tuttle | @bradrtuttle | March 29, 2011 | +

“Money is like fire: it will warm your feet or it will burn your socks off.”

This insight comes from Paul G. Schervish, a sociology professor at Boston College and the director of the college’s Center on Wealth and Philanthropy. Schervish studies the lives and philanthropic habits of the super-wealthy, and many of his surprising findings are summed up in a fascinating new story in the Atlantic.

The main takeaway is that too much money can lead to stress, isolation, distrust, and, because when you’re rich there’s not much reason to work, feelings of uselessness.

Robert A. Kenny, a developmental psychologist who also works with the Center on Wealth and Philanthropy, told the Atlantic that the richest folks out there stress about money as much as anyone else—perhaps more so because they simply have more money to stress over:

“Sometimes I think that the only people in this country who worry more about money than the poor are the very wealthy,” Kenny says. “They worry about losing it, they worry about how it’s invested, they worry about the effect it’s going to have. And as the zeroes increase, the dilemmas get bigger.”

Related Topics: Boston College, Center on Wealth and Philanthropy, cheapskate wisdom, psychology, relationships, rich, wealthy

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    In a math challenged world, anyone with even half a brain can understand the social dilemma posed in this parable:

    A billionaire gives a dollar to a beggar as he enters a room, where everyone in the whole world sits. Going to the front of the world, he is given an award for Best Philanthropist of the Year.

    As he accepts the award with a beaming smile, the speaker holds the microphone to him, smiles, looks at the silent audience (with international live cameras rolling), and says: “As a gesture of your generosity, we have told the audience that you will give each one of them a dollar as a gesture of your desire to help mankind.”

    The billionaire, who was an honor student and excelled in math, suddenly shows the expression of the proverbial deer in the headlights, his eyes glazing over. “Mr. Speaker, there are $6 billion people in the audience” he says with quivering voice.

    The speaker smiles, and displays his worldly math as he replies, “Well yes. With a huge net worth of $6 billion dollars, we thought a dollar was reasonable considering the large audience here tonight! We got the idea when we saw you give a beggar a dollar outside the auditorium!”

    I have to laugh at all the lottery winners who have gone broke “generously” giving family and friends (and acquaintances whose cars broke down) just a few thousand dollars each. Then I have to marvel at the ingenuity of Bill and Melinda Gates who have remained philanthropists over their lifetimes, while remaining billionaires to allow their generosity to live on perhaps for centuries in our future.

    Getting rich is the easy part compared to staying rich. And the worst part is that our odds of getting rich are, well, like the odds of winning the lottery. That’s why the rich are so stressed, knowing if they lose it, they likely won’t get it back. It’s not like the character Blake Carrington in the hit 1980′s TV series “Dynasty” who boasted that he could be repeatedly stripped of wealth, and insisting he could get it all back in just a few years!

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