"Who Wants to Be a Millionaire?” is one of television’s top-rating shows.
But what if you won? Could you cope? How would you handle the
responsibility, the investment decisions, the envy of friends and
relatives, the realisation that work is no longer a necessity? Would
you start daydreaming about downshifting and returning to a life of
modest poverty?

This is not just a question for overnight millionaires in Silicon
Valley or lottery winners. With what economists call “the largest
wealth transfer in history” looming as baby-boomers begin to shop for
grave plots, many people will be inheriting more money than they could
ever have imagined. And the experience of many financial planners is
that many people won’t be able to cope — they will succumb to
“affluenza”, a buzz word amongst American
financial planners.

Estimates have varied widely over the past decade as to how much wealth
rapidly ageing boomers will pass on to the next generation. These range
from US$25 trillion up to a staggering $136 trillion over the next 50
years. The most often cited wealth transfer number is $41 trillion,
based on research by  Paul Schervish and John J Havens of the
Boston College Center on Wealth and Philanthropy. (1) More recently,
the life insurance company Allianz Life estimated that the figure is a
mere $25 trillion, with $7.2 trillion going to boomer heirs.(2)

How will people cope? Dr Schervish points out that most people are
prudent and will use it wisely. He foresees a new
generation of philanthropists. Looking at IT billionaires like Bill
Gates and Paul Allen, he says: “Never before have so many people, with
so much wealth, energy, and entrepreneurial instinct concluded that
applying finances to meet the needs of others is a path of
self-fulfillment.” (3) His work, like that of many other consultants
interested in managing the transfer, has a slightly New Age feel to it
-- teaching the comfortable rich how to forge a spirituality out of the
pleasure of giving to others.

But there may be a down side to the enormous legacy that some
people will receive. Milwaukee psychotherapist and author Jessie H.
O’Neill has made a
career out of counselling people who have too much money. She claims
that affluenza is a serious illness in the world’s richest and most
powerful nation.

“We’re not good at sitting with the pain and putting off the reward,”
says Ms O’Neill on her website, The Affluenza Project. “And we
basically have a culture of that now. I’m not saying that having the
stuff is necessarily bad. It’s the loss of balance. People tend to
become so focused on the money. Everything else gets pushed aside.”

Affluenza is a real disease, insists Ms O’Neill, with many symptoms,
such as loss of personal and professional productivity, an inability to
delay gratification or tolerate frustration, a false sense of
entitlement, low self-esteem, depression, workaholism, and compulsive
and addictive behaviour.

Clients seek her out after a personal crisis. “They’re sort of confused
and surprised,” she says. “Most of them have started out making the
money because they want to do well for their families. Some of them are
a little bit shocked, a little bit angry. ‘This is the American dream,
I lived it, I did it and now my wife’s divorcing me, my kids aren’t
speaking to me. It didn’t work. I did what I thought I was supposed to
do, and it didn’t work.’”

Ms O’Neill, who has also written The Golden Ghetto: the psychology of
affluence, has seen it at first hand. The granddaughter of Charles
Erwin Wilson, a president of General Motors and Secretary of Defense
under Eisenhower, she grew up in a “disfunctionally affluent home”. Now
she runs seminars on how to be rich and still be happy.

Most people find it difficult to sympathise with miserable
millionaires. Sudden reverses in the fortunes of tycoons normally
inspire sentiments which are best captured by the charming German word Schadenfreude or joy in another’s pain. But O’Neill, and other
therapists who are mining the rich lode of monied unhappiness, do have
a point. It is an old point and it sounds trite on the lips of a
finger-wagging parent, but people ignore it at their peril: money can’t
buy happiness.

The problem is that Western society – especially the United States –
has become so accustomed to wealth and comfort that conspicuous
consumption no longer seems greedy. Ms O’Neill cites an anecdote about
the legendary American plutocrat John D. Rockefeller. He was once
asked, “What is enough?” Rockefeller’s reply was: “Just a little bit
more.”

“When I began this work ten years ago, understanding the downside of
wealth seemed a meaningless and frivolous joke to many people. No one
is laughing now. Now that there are more wealthy, the topic and its
profound importance have reached critical mass. There’s no stopping it
now,” says Ms O’Neill.

O’Neill says that she has three types of clients.

The suddenly wealthy – the dot.com millionaires and winners of
lotteries – the victims of “sudden wealth syndrome”. Because this
species is so numerous and affords so many highly-publicised examples
of self-destructive wealth, many are well prepared and try to use their
good fortune carefully. Some cope through philanthropy. Some wrestle
with what she calls a variant of “survivor’s guilt” – “Why me? How do I
deserve all this?”

In another group are the hard-driving types who made their money
through their own hard work. Often they are talented control freaks and
perfectionists who have neglected their families to build up their
business.

Finally there are the people who inherit the wealth of their workaholic
parents. These men and women, says Ms O’Neill, are the most damaged by
riches.

“Often raised by surrogate caretakers and absentee parents who confuse
material gratification with love, these children grow up with a myriad
of dysfunctional personality traits that frequently doom them to
personal and professional failure. Some of the more devastating traits
are: an inability to delay gratification and tolerate frustration, a
loss of future motivation, a false sense of entitlement, low
self-esteem, lack of self-worth, loss of identity, loss of
self-confidence, and much more.”

The symptoms have a familiar ring – you can see them in any high school
in a posh neighbourhood. But O’Neill points out that the shortcomings
of these young people could snowball and end up having an immense
impact on the economy in the coming wealth transfer.

Most people who unexpectedly become rich act like drunken sailors.
“All of a sudden you can spend, but there is no way to satiate all
desires, so you spend, spend, spend – and never are fulfilled,” says
one financial planner.

And Ms O’Neill comments: “Without immense changes in the ways that we
raise our children and prepare them for their legacy, we will continue
to see an alarming increase in affluenza. Because they continue to
confuse financial security with emotional security, and are driven by a
wounded psyche with little self-confidence, it is also difficult for
them to determine what is ‘enough’.”

She cites the old saw , “Shirtsleeves to shirtsleeves in three
generations” and warns that unless the younger generation learns how to
cope with its wealth, down the plughole it will go.

“Traditionally it was thought the reason most fortunes were lost in
three generations was poor financial planning. We now know due to
extensive research in the field, that only 10 per cent is lost for this
reason. A full 90 per cent of this wealth is dissipated due to poor
emotional and financial preparation of the heirs. This figure
underlines the importance of preparing our children, whatever their
ages may be, for this tremendous responsibility.”

Michael Cook is editor of MercatorNet

Notes
(1) Why The $41 Trillion Wealth Transfer Estimate Is Still Valid: A Review Of Challenges And Questions.  By John J. Havens And Paul G. Schervish. Jan 6, 2003.

(2) American Legacies Study Overview. Allianz Life. July 27, 2005.

(3) Paul Schevisch. “The New Philanthropists”. Boston Globe. March 2, 2002.