Acquirers' and Inheritors' Dilemma

Abstract

People come to wealth in essentially two ways: they acquire it during their lifetime through effort or circumstance, or they inherit it from someone else's reserve. The way in which a person becomes wealthy is an important determinant of how wealth affects his or her personality, profoundly influencing one's personal identity and sense of self. Armed with a better understanding of the stresses and adjustments of wealthy clients, financial advisors can tailor the relationship with accuracy, empathy, and sensitivity. This article reviews the psychological and sociological literature of the past several decades about individual and family dynamics related to wealth. The authors first explore the psychological experience of creating or acquiring wealth, with its impact on identity development, relationships in families, and the difficult process of parenting the next generation. They look at how acquirers of significant wealth must come to grips with their good fortune and how they must raise their children under novel circumstances, and examine the different experience of inheritors who are raised with wealth. As native-born citizens in a privileged economic culture, heirs of multigenerational wealth experience a stressful blend of advantages and pressures that can often be antithetical to personal growth. The authors finally propose a model of development for a person's wealth identity, beginning with a phase of conflict and confusion, and then reaching a level of personal reconciliation with, and integration of, one's wealth with one's self.