Being rich is not easy

If you are wondering what I mean by saying ‘being rich is not easy’ read on. First of all the rich are hated. Well if you think ‘hated’ is too strong, let me reiterate, I thought hard and then used the word!

First of all the rich 1% – to which many people reading this blog belong – and many, many more do not – are seen to be the people who ‘manipulate’ the world to maintain staus quo. They are hated for a variety of reasons ..and somebody did research…

It took some research (in the US, where else) for them to come to some conclusions about why the rich were hated. Their main 3 conclusions were the following:

  1. money ambivalence and cognitive dissonance – funnily and paradoxically those most likely to endorse anti-wealth beliefs were actually more likely to have money-worship scripts, lost money in get rich quick schemes, etc. suggesting that the dislike must have stemmed from the frustration of desiring wealth and struggling to achieve it – and failing;
  2. envy! which can increase the cognitive dissonance, especially in situations where the rich person had a similar prior background (potentially making us feel inferior for not achieving a similar result from similar circumstances); this explains why there is rivalry towards our neighbor(s), siblings, classmates, but not towards a famous man getting a couple of million or billion! and
  3. the ‘relative deprivation’ which recognizes that we assess our own well-being less based on the absolute level of our income or financial success, and more based on our relative results to others (such that the more acutely aware we are of the wealth of others, the more relatively inferior it can make us feel). (all 3 points taken from a research publication in NY).

This is true even in India. I have friends who call themselves middle class – and they have networth in excess of Rs. 20 crores at the last count. People who have monthly expenses of Rs. 4 lakhs also want to be called ‘middle class’.  I ask these ‘families’ of 4 what they think is the ‘rich’ and where are the ‘poor’ if 4L is middle!! So a lady with about Rs. 20 crores in various mutual funds will NOT PUT IT IN A website because she feels she might be targetted by somebody. She was surprised when I showed her how it was anyway available on Camsonline – without her even asking for it.

So rich people in India – and even in USA (remember Greed is good?) – people try to hide their wealth. They would keep the best furnishings for the bedroom and not for the front room. They will tell their servants wrong prices for things. I know one lady who tells her servant ‘this handbag is very very expensive..it costs Rs. 5000. In reality it is Rs. 100,000. Many of them would splurge ABROAD and not in India.  Even the wealthy struggle to find the socially acceptable balance between being wealthy and trying to convey that they are “middle class and thus morally worthy”. The wealthy underscore the hard work they put in to earn their wealth, as a means of distinguishing themselves from the stereotype of the undeserving, idle rich!! In most cases, the bulk of the assets may have been inherited and the “work” was not directly related to the wealth creation! Lika a professor who earns money by doing good portfolio management! The wealthy rationalized their wealth to themselves by doing some charitable endeavors, or by justifying their spending as necessary to help give their children the best possible lives! Forget the stereotypes of flaunting wealth and conspicuous consumption, many affluent individuals actually find their own wealth to be extremely distressing!

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3 Responses to “Being rich is not easy”

  1. Being a rich is a problem too if kids of rich people dont know anything about business and their expenses are like that their money will never dry.
    i personally know a rich family which will be in deep problems in future because their kids are burning cash doing following
    India vs Pakistan Match live in london
    trip to Europe every summers
    purchased high end cars worth more than crorers
    going to high class parties and purchasing teams
    no knowledge of cash flow and how much to spend on which service
    peer pressure of owing a startup without any knowledge of business and services
    and lots of other things

  2. it is smart not to stand out. and to periodically crib about falling FD rates.

    And I don’t even make the cut re that “middle class” .

  3. Though the article began very well, I was expecting more insight interms of what it takes to maintain their wealth, tips, word of caution and best practices etc. Look forward Subramoney for your brilliant write ups

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