The Dark Side Of Being Born Into A Wealthy Family, According To Experts

Given today's economic disparities, and the ever-growing wealth inequality between classes (not to mention the racial wealth gap in America today), it can be difficult to feel sympathy for wealthy families. It can be even more difficult to find compassion for multi-generationally wealthy families –- and the wealthy children born into this privilege. However, despite seemingly advantaged trappings, there can be significant downsides to growing up wealthy. As Earl Yaokasin, CFA, CEO of WealthArch Investment Services, explained to Money Digest, "An affluent upbringing provides luxury, security, and opportunities that many can only dream of. Yet, these very advantages can become liabilities." This can be especially true in the event of a change in circumstances.

Money Digest also spoke with Dr. Sanam Hafeez, a neuropsychologist and Director of Comprehend the Mind, about the mental health downsides that can affect the children of wealthy families. For starters, she explained that there is a "particular kind of loneliness that tends to follow wealthy kids around, since it's difficult to know whether people actually like you or whether they're drawn to what your family can offer them." Beyond loneliness, issues with resiliency, money management know-how, depression, and even substance abuse can all plague those born into wealthy families and leave them with lifelong struggles as adults.

As Dr. Sanam Hafeez explained, "Growing up wealthy can quietly rob you of something most people take for granted, the satisfaction of earning something through your own effort. When everything is handed to you, it becomes genuinely hard to develop resilience, because you've never really had to struggle through failure and come out the other side." She also added that "being shielded from consequence makes it harder to develop a real sense of identity, because you never quite get the chance to figure out who you are when things get tough." This can further contribute to other issues related to mental health.

Earl Yaoskin agrees, explaining that the "children of rich parents will likely get used to a higher standard of living" meaning they're unlikely to experience more frugal decisions growing up -– let alone have any life experience with living in a financially leaner household. This, unfortunately, means that many are ill-prepared to live independently, and even less prepared for any potential hardships. In fact, Yaoskin predicts that, for many, "Their ability to adjust to setbacks has been materially impaired."

This lack of resiliency is also likely exasperated by the fact that many children of wealthy families have little in the way of money management education. When you consider how few states even require financial education for students, also removing any real-world applications of financial principles -– like what often occurs among wealthy families -– leaves these wealthy children without the necessary foundation to properly manage money as adults.

Dr. Sanam Hafeez told us, "A lot of people raised in affluent households also carry an invisible pressure to live up to a legacy or maintain a status they had no hand in building, which can create anxiety that's hard to even articulate." In fact, there are many well documented studies of higher rates of anxiety among those born into wealthy families. However, that isn't the only mental health struggle that this group is likely to face. As Dr. Hafeez elaborated, "Beyond anxiety, depression is surprisingly prevalent among wealthy young people, often stemming from a sense of emptiness that comes when material comfort fails to fill a deeper emotional void."

While depression alone can be a significant and even lifelong struggle, there is also the risk of depression leading to an even more destructive domino effect. This can be especially true when it comes to substance abuse. According to Dr. Hafeez, "There's also a well-documented pattern of substance abuse in affluent communities, partly because the means to access drugs and alcohol are readily available, and partly because numbing out becomes a way to cope with pressure that feels too abstract to talk about." In fact, research has shown that having access to increased disposable income directly correlates to having greater access to the kinds of high-quality designer drugs that young people are more likely to get addicted to.

Other considerations for wealthy children include things like personality traits, and even disorders, that can warp a wealthy young person's interactions not just with others but also with money in general. Dr. Sanam Hafeez explained that, in addition to depression, "Identity disorders and a fragile sense of self show up frequently too, since kids who grow up insulated from real-world feedback often hit adulthood without a solid understanding of their own values or capabilities." This can lead to lifelong interpersonal issues that affect things like graduating college or getting and keeping a job — all of which can further affect financial health. Dr. Hafeez added, "Perhaps most overlooked is the prevalence of narcissistic traits that can develop when a child is raised in an environment where their needs are always centered and accountability is rarely enforced."

While these issues are certainly more prevalent in those born into wealthy families, it doesn't have to be a guaranteed outcome. While there are many different approaches to becoming a financially educated and independent adult, Earl Yaoskin recommends some specifics, "My advice for young adults is to strive to make ends meet without help from your parents. There is an incredible sense of accomplishment if you can live without any help from them." While this might feel increasingly difficult given economic conditions, financial illiteracy can seriously cost you. As Yaoskin believes, you should "think of frugality as freedom, not deprivation."