Growing ranks of the suddenly rich afflicted with illness all their own
Instant millionaires need help coping, psychologist says

Veronique Mandal
National Post, Saturday August 19, 2000

    The high-tech world is making thousands of very young people very rich, but according to psychologists it is also creating a new illness -- sudden wealth syndrome.

    Some seek help because they are too rich and cannot handle their wealth, others because they crave more money or feel guilty.

    Dr. Stephen Goldbart, a psychologist, runs the Money, Meaning & Choices Institute near Silicon Valley, where 64 new millionaires are reportedly created every day. Most of them are people in their 20s and 30s who find themselves suddenly rich, a group Dr. Goldbart calls the "Siliconaires."

    He noticed a change about 10 years ago when people from middle-class backgrounds started coming into large sums of money. With the trend of the past five years, his client numbers have steadily increased.

    In April, Merrill Lynch reported that the number of millionaires in the United States and Canada has risen almost 40% since 1997 to 2.5 million.

    According to accounting firm Ernst & Young, Canada's millionaire population tripled since 1989 to about 220,000, and is expected to triple again by 2005.

    Young Baby Boomers across the continent are inheriting money in the largest intergenerational transfer of wealth ever seen.

    The transfer is estimated to be between US$41-trillion and US$136-trillion in the United States alone in the next 50 years.

    Becoming unexpectedly rich has its drawbacks, Dr. Goldbart says, and there should be some amount of sympathy for those who cannot handle sudden wealth.

    "It can ruin their lives, rip their families apart and lead them on a path of destructive behaviour," he says. "Money does not always bring peace and fulfilment. They lose balance. Instead of money solving all their problems it often brings guilt, stress and confusion."

    People who are used to working 80 to 100 hours a week on their fledgling enterprise suddenly find they no longer need to work and are able to retire at the age of 30.

    However, the newfound leisure puts them into a premature, mid-life crisis.

    Some experience panic attacks, severe depression and insomnia, Dr. Goldbart says. Others withdraw from society or go on maniacal shopping sprees.

    Some newly rich feel guilty about having so much money and feel they are not entitled to it, or that they do not deserve it. Others become paranoid, thinking they will be exploited because of their wealth, or they become obsessed with making even more money.

    People most affected are the "new rich," for whom wealth was not part of their upbringing and who expected to spend their lives working.

    Anxiety and depression can also come from "ticker shock" as they watch the vagaries in the stock market, particularly a plunge when they have not exercised their stock options.

    Dr. Goldbart believes the explosion of millionaires and their pre-occupation with money is more prevalent in the United States and Canada than in Europe, and that Canadians are "the most closely related" philosophically to their American counterparts.

    Part of Dr. Goldbart's cure for the unhappy rich is to get them involved in the community and not just writing cheques to charities.

    British Columbia's Rory Holland, executive vice-president of Itemus, made his millions when the company he was involved in for eight years was sold for US$103-million in 1998. He now devotes much of his time to four non-profit groups, serves on their boards and helps raise money.

    Dr. Goldbart believes he is the only psychologist, along with family counsellor Joan DiFuria, providing therapy for the rich, and would like to see more colleagues provide the service.

    "These people [the rich] are sensitive to how people feel and are reluctant to use our kind of service," he says. "But we help them regain the balance they've lost."