One morning, John, a 52-year-old software designer, wakes up and realises he no longer has to go to work. For several years, he has toiled 70 hour weeks at his London based start-up company. Now his company has gone public and John is worth over £10m.
His dreams have come true, yet, after an initial spending spree, his life seems empty. What now? he asks himself. He doesn’t want to start a new company, but he no longer needs to work at the old. His friends, jealous, are unsympathetic. Instead of enjoying his new wealth flow, John is isolated and plagued by anxiety.
Like many multi-millionaires, John is afflicted with what psychotherapist Stephen Goldbart has identified as “Sudden Wealth Syndrome”. Symptoms include overspending, sleep disorders, guilt, marital breakdown, drug and alcohol abuse.
Most of us imagine our problems would be solved by an injection of cash, yet many recipients just can’t cope. In fact so many are traumatised that 10 years ago Stephen Goldbart and colleague Joan DiFuria founded the Money, Meaning & Choices Institute in California, where sufferers of “Sudden Wealth Syndrome” receive treatment.
Goldbart’s patients are worth between £3m and £36m and range from their mid-twenties to late forties. Like John, most did not grow up in wealthy families, and don’t have a history of dealing and living with money. “All of a sudden, they have more money than their parents ever had and far more than their friends. Getting money sends a shockwave. It is like going to a country you’ve heard about and is supposed to be fantastic. Once you’re there, you find you don’t know the language or what to do with your time,” says Goldbart.
The first reaction, of course, is often to spend, spend, spend. In London, a property tycoon reportedly offered £20m for a house plus £2m for the furnishings. Others have reportedly sent estate agents up to houses not even on the market, to ask the owners to name their price.
“They initially overspend,” says Goldbart, “but once their shopping spree is over, what are they going to do, buy yet another car? Spending is not an endpoint in itself; when they are past that high, an identity crisis sets in.”
Newly wealthy people fail to realise that suddenly coming into money means a change of life and identity. “They have more choices yet do not know what to do with them. They may also feel guilty about having so much. If you are from the middle classes then wealth separates you from your peers and you can get lonely”, says Goldbart.
Karen, who is 50 and recently inherited a substantial sum of money, came to see Goldbart because she was worried about how her friends would react. “I’m excited about my inheritance but afraid to show it, because it might turn off my friends. I fear they might think I’m just a spoiled `poor little rich girl’. I’m also worried how this money will affect my husband”, she says.
Many newly wealthy people discover old friends are quickly replaced by new “friends” who pester them for donations to help fund an artistic endeavour, new business, or help a relative in trouble.
“There is a lot of animosity towards those with money. It’s even worse in Britain where there is less sense of social mobility”, says Goldbart. At the institute, he treats patients in three stages: “First you must recognise you have a problem, second regain control over that problem, and thirdly rebalance your life.”