Why wealth is more likely to lead to anxiety than happiness

The origins of the word ‘wealth’ date back to the mid-13th century where it was used to describe ‘happiness’ or ‘prosperity in abundance of possessions or riches’. Over the last 700 years, the etymology has evolved to take on a more fiscal definition and, as our insight shows, now wealth is just as likely to invoke anxiety as it is contentment. 

We recently conducted a piece of research with OneLife to explore how high net worth individuals (HNWIs) perceive their wealth, individually and in the context of wider society. What we found was that the wealthy are active social citizens, prioritising activities like tax compliance, fair business practices and obeying regulations in their wealth creation. 

And yet in spite of this socially-minded nature, half of high net worth individuals say their wealth makes them feel more concerned than happy. Among the under 35s, this anxiety is more commonplace.

Take advantage

This concern may, in part, reflect the way that society chooses to engage with the wealthy. A majority of HNWIs believe that the most frequent reaction among strangers who gain insight into their wealth level is negative. Indeed, 22 per cent indicated a belief that people would attempt to take advantage of their socially-minded nature.

The result is a broad reluctance about speaking about wealth publicly. Just one in four HNWIs say that they are relaxed when speaking about their wealth openly; the remaining 75 per cent avoid the subject entirely or will only address it when asked directly. 

While this is not something of an immediate surprise considering our own personal sensitivities around income and wealth, it does create additional challenges in the HNWI context.  

Taboo subject

This trepidation to communicate about wealth appears to be transmitting itself to discussions, or rather, a lack of discussion, with close relatives. Almost half of affluent individuals aged over 55 have never spoken to their children about how to discuss their wealth with others.  

Actually, it appears that wealth sits squarely in the middle of awkward conversation topics that HNWIs can discuss with relatives. Only death and relationships are considered to be more taboo. The challenge, of course, is that wealth actually touches on these subject areas too, which can make it harder to talk about than many may be willing to acknowledge. 

The failure of families to speak openly about wealth is dually problematic for wealth managers. For the client, it prevents the delivery of complete wealth advice that incorporates their full financial needs. For the firm, it could impact on the opportunity to manage multi-generational wealth or inhibit possible referral flows. 

So, perhaps it is time to revert to the original definition of wealth, one which indicates that wealth should be about happiness. But it is up to our industry to speak up in defence of wealth and help individuals find the confidence to engage openly with the world around them. 

Annie Catchpole is an associate at wealth management think-tank Scorpio Partnership