Risk of Sudden Wealth . . . Over Rated? Are you Nic Cage, or Keanu Reeves?

“What’s in the bag? A shark or something?” – Nic Cage, The Wicker Man

How I imagine Elon Musk hunts for ducks.

In panning for gold, I can’t help but wonder what would happen if I found a whole bunch, all at once.  My mind wanders.  All the beef jerky I could wear.  All the Lear® Jets I could eat.  I’d be fine, right?

Well, it seems like there are a pair of psychologists (Joan DiFuria and Stephen Goldbart, LINK) who described “Sudden Wealth Syndrome.”  They describe the following symptoms (my comments in parenthesis):

• Anxiety/Panic Attacks (Try the Panic Attack from not being able to pay your Pez© dealer, I assure you they don’t take kindly to folks who can’t pay for the sugar)
• Worries About Money (Hmmm, this seems a bit forced?)
• Worries About Stock Market Volatility (Elon Musk probably doesn’t lose much sleep in his orbital habitat)
• Insomnia (I can see millions of dollars keeping me awake all night – especially since I’d be partying in Elon’s orbital habitat)
• Irritable Mood (Yes, I can see being irritable because I was too flush with cash, and I get mad because my pancakes are too fluffy)
• Guilt About Having Money (This is real – otherwise explain why every Hollywood actor wants ME to pay more in taxes)
• Identity Confusion (Once I found a twenty dollar bill, and became convinced I was Luke Skywalker© – but in truth, I was 12)
• Fear of Loss of Control (The idea of being without a mortgage should make us all shake with fear)
• Paranoia (Are you threatening me?)
• Depression (I’m so sad, I can’t count as high as my money, no matter how long I live!)

From that description, it sounds like winning sucks, eh?  I assure you that, in the choice between having money and not having money, I MUCH prefer having money, and as a business model, catering to very, very wealthy people with neurosis is probably very profitable.  I like the way those guys think!

But let’s put this in context.  Think about the behavior of the typical twenty-something starlet or rock star that’s rolling in cash?  They tend to make a lot of poor choices, primarily because nothing in their experience has prepared them for the sudden onset of cash.  By contrast, many of the folks who do really well with money at an early age (Think Bill Gates and Paul Allen) had a really well-to-do upbringing.  Not rock star rich, but they were going to exclusive private schools.  They’d been taught how to deal with money early on, and, likely never had to worry much about not having it.

But let’s pick on Nicolas Cage.  Why?  Face/Off is probably reason enough.  Really?  Swapping faces with John Travolta?  That’s the movie plot?  I won’t pick on Shia Lebeouf because that’s like a velociraptor picking on a kitten.

Nic Cage (he told me he didn’t mind me calling him that when I imagined talking to him) made millions as an actor.  He could have done that if they only paid him a dollar a movie, but he made much more, at least $20 per movie.  Again, he made millions.  $150,000,000.  Yes.  ONE HUNDRED FIFTY MILLION dollars.  American dollars, not fake ones like they print in Canada.

He spent it all.  ALL OF IT.

On what?

• An $8 million dollar castle in England. He spent millions fixing it up.  Never spent a night there.
• An island.
• Four yachts. At the same time.
• A pair of rare albino king cobras.

Let’s face it, the man had a whole small country plus a navy (yes, four boats is more than in all of Canada) plus king cobras.  I’m not sure why he didn’t get three albino king cobras, but, he settled for two.

Seriously – was Nic Cage trying to live exactly like the bad guy in an Austin Powers movie?  No, I think that there’s something missing, plus nobody can figure out how to tell a guy not to blow all of his money on shiny things.

From observation, I do think that sudden wealth, or worse, sudden wealth and fame is not really good for you.  I think that it can greatly distort the sense of self.  Bill Murray said that everyone is a jerk (not exactly the word he used, but you get the idea) for the first year after they become rich and famous.  He then followed up with the observation that some people never snap out of it.

And, from the way that stars handle fame, it looks like many of them fall into DiFuria and Goldbart’s Sudden Wealth Syndrome.  They’ve got money but the feelings that they have wrapped up around the money give them a lot of guilt.  Some, however, seem a bit more grounded:

It has been reported that Reeves gave approximately US$80 million of his US$114 million earnings of The Matrix sequels, The Matrix Reloaded and The Matrix Revolutions, to the special effects and makeup staff. – Wikipedia

That seems a bit more grounded.  Warren Buffett lives in a house that (per the Intertubes) is worth $652,000.  I’m pretty sure it’s paid for, since Warren is worth $76.7 billion dollars.  That also seems pretty stable, since he bought it in 1958.

Lottery winners also seem to have a problem.  The first problem they have is the inability to do math.  Now, if there’s a tax that I like, it’s a tax on folks who can’t do math.  But the general saw is that some sort of karma hits the lottery winners, and makes them miserable.  And those stories are the big ones in the news.  But the reality?  85% of winners keep going to work (based on one study I saw) and most of those (60%) were still working at the same place they were before they won the lottery.

It seems that we almost want to hear the tragedy, because it suits our sense of fairness – this poor person who didn’t know math lucked out, but, boy, karma got ‘em in the end.  Nah.  Most of them seem to do just fine – more like Warren Buffett, less like Nic Cage.

Me, if someone bought me a lottery ticket that one, or I hit a pocket of gold worth $150,000,000?  An 8,500 pound (that’s about 17 kilograms) pocket of gold?

I’m headed to the Musk’s space habitat.  Beer’s on me.