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Jonathan Heim

Professor Campbell

UWRT 1104

April 3, 2017

Effects of Wealth: The Good and the Bad

Its 1989, a year that saw the most devastating oil spill in history, the Tiananmen Square

massacre, the Tokyo stock market crash, and also the beginning of one of the most ruthless, and

fraudulent stock market schemes of the time, which would be ran by Jordan Belfort. Jordan

Belfort was a young, ambitious stock broker who somewhere along the way became corrupted

by the power of money. He would eventually start his own brokerage firm and run one of the

largest fraudulent pump and dump schemes of his time. He would eventually steal millions from

his investors and have movies made after him like The Wolf of Wall Street. By 1999, Jordan had

been sentenced to four years in prison after a plea deal. Somewhere along the way to wealth an

honest, ambitious young man lost his way and became a greedy, unethical, drug addict who stole

millions from his investors. These types of stories seem to pop up more and more every day.

Jacqueline Curtis, author of How Money Can Change People and Affect Their behavior

published in Money Crashers says that a 2012 study published in Proceedings of the National

Academy of Sciences of the United States of America found that From cutting off another

vehicle at a stop sign, to cheating at a game, to taking more candy than offered, the wealthiest

subjects were those most likely to break the rules The studys authors, Paul K. Piff, et al. noted

that those who perceived themselves to be in a higher class were the most likely to engage in

unethical behavior Along the way, the pursuit of wealth is making more and more people

become less inclined to their morals and to the feelings of others, becoming addicted to drugs
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and money itself, and often leading to divorce and depression. With that being said, the pursuit of

wealth can be used for good and to better society too, so the question becomes, what are the true

effects, good and bad, of wealth and the pursuit of wealth?

One of the most universally talked about effects of wealth is whether or not wealth can

buy happiness. To first analyze whether wealth can buy happiness we need to address a few

things when considering the definition of wealth. For my research, wealth will be the same as a

persons net worth. Most studies and articles argue that wealth cannot buy happiness for two

main reasons: first, because of relative income and second, due to the fact that the pursuit of

wealth is time consuming and exhausting. Bruce Headey, author of Money Does not Buy

Happiness: Or Does It? A Reassessment Based on the Combined Effects of Wealth, Income and

Consumption defines relative income or gains as Wealth of individuals compared to those

surrounding them As an individual progressively becomes wealthier, they tend to move into

larger, richer, more upscale neighborhoods. Living in an upscale neighborhood can show their

wealth to outsiders and make an individual feel better about themselves. However, as time goes

on people tend to compare their possessions and spendable money to the people around them.

This becomes a dilemma, otherwise known as the relative income hypothesis developed by

James Duesenberry. When the people that surround them are on about the same wealth level as

they are due to the fact they congregated into a wealthy neighborhood. Being surrounded by the

same wealth, makes people feel as though they do not have much wealth, when in actuality, they

have a lot compared to the rest of the world. This causes some individuals to not be happy with

or even satisfied with their wealth. Some people will then try to argue, why do rich people not

just build large houses away from others? The answer is simple, isolation. Many people prefer to

socialize and be part of a group. So the idea of moving to a more secluded area just does not
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appeal to them. For many individuals when they become unsatisfied and unhappy with their

wealth they try to acquire more to make themselves wealthier to beat the relative income

hypothesis. That drive for more wealth leads into the second reason wealth does not buy

happiness, the pursuit is too time consuming and exhausting.

The pursuit of wealth is one of the two main reasons that wealth does not represent

happiness. As people acquire wealth, they then try to get more and more and spend many of their

waking hours focused on money. Over time, the pursuit takes ahold of individuals and starts

affecting their relationships in the real world. People become more focused on acquiring a

material piece of paper then strengthening friendships and relationships that have been proven to

actually provide happiness in life. This process overtime leads to middle aged adults who have

acquired large amounts of wealth but have no one to spend it on or with. As stated earlier, this

then ties into human nature. For most people, it does not matter how much wealth an individual

has if they have no one to spend it with. Therefore, the pursuit of wealth, many times, leads more

individuals towards loneliness, depression and divorce rather than happiness. Carolyn Gregoire,

author of the article How Money Changes the Way We Think and Behave published in the

Huffington Post says There is no direct correlation between income and happiness. And

Extremely affluent people actually suffer from higher rates of depression. Some data has

suggested money itself doesnt lead to dissatisfaction instead, its the ceaseless striving for

wealth and material possessions that may lead to unhappiness. Again a key point to note is that

money itself does not necessarily cause unhappiness but the non-stop pursuit of it does. Not only

does the non-stop pursuit of money cause unhappiness, it can also be a stepping stone towards

addiction.
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Jacqueline Curtis, author of How Money Can Change People and Affect Their

Behavior published in Money Crashers defines a behavioral addiction as a compulsive

behavior not motivated by dependency on an addictive substance, but rather by a process that

leads to a seemingly positive outcome. Money can easily become a type of behavioral

addiction. There is no better feeling then seeing that paycheck at the end of a week, getting a nice

bonus, or getting a raise. Clinical psychologist Dr. Tian Dayton warns that the positive feeling

that follows obtaining money can cause a chemical reaction in the brain that feels good. In turn,

it can result in a severe preoccupation with money and put a strain on relationships outside of

those that relate to earning more. (qtd. in Curtis). The pursuit of money can very easily lead to a

behavioral addiction that causes individuals to only associate with people that can feed their

addiction and in turn negatively affects all other relationships. This addiction is another reason

why money itself does not necessarily cause unhappiness but the addiction to the pursuit of

wealth is one of the main reasons people see wealth as causing unhappiness or even depression.

Not only is money itself addictive, but there is a positive link between wealth and substance

abuse or addiction as well.

Wealth does not necessarily cause substance addiction but there is a high positive

correlation between the two due to the fact wealthier people not only have the ability to afford

drugs, but have more opportunities to do them during leisure time. Carolyn Gregoire, author of

How money changes the way we think and behave writes that A number of studies have

found that affluent children are more vulnerable to substance abuse issues she also states that a

UC Berkeley study done in San Francisco found that Where the law requires that cars stop at

crosswalks for pedestrians, drivers of luxury cars were four times less likely than those in less

expensive vehicles to stop and allow the pedestrians the right of way. As well as having more
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money and opportunities the wealthy have been proven many times over to have a cloudier

moral compass and therefore drugs are not out of the picture. The wealthy also tend to think

about themselves more and therefore the high of drugs is applies to the wealthy more because

they do not worry about the consequences it causes others. Carolyn Gregoire writes in

adulthood, the rich outdrink the poor by more than 27 percent. This statistic helps prove that the

wealthy are more susceptible to substance and alcohol abuse. Substance and alcohol abuse is

found in affluent children as well. In fact, substance and alcohol abuse is more prevalent in

affluent children than affluent adults. Affluent children have a distinct handicap that their parents

do not, the ability to have wealth and not work. This large amount of wealth with loads of free

time can only lead to bad decision making in many situations. On top of all of that, many affluent

children face extreme pressure from their parents to get into the best schools, make a lot of

money, and be overall better than their parents. Carolyn Gregoire writes that Kids from wealthy

parents are not necessarily exempt from adjustment problems and studies show that these

children may be more likely to internalize problems, which has been linked with substance

abuse. (qtd. in Gregoire). For those individuals who still hold tight to the notion that money can

buy happiness, the studies prove otherwise. Carolyn Gregoire writes that After a certain level of

income that can take care of basic needs and relieve strain (some say $50,000 a year, some say

$75,000), wealth makes hardly any difference to overall well-being and happiness and, if

anything, only harms well-being: Extremely affluent people actually suffer from higher rates of

depression. The only amount of money we really need to be happy is enough to survive. The

studies show that once wealth reaches a certain point happiness does not follow and can even go

down. Carolyn Gregoire writes that Materialistic values have even been linked with lower

relationship satisfaction.In rare occasions, the pursuit of wealth can actually lead to divorce
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Even though wealth has been linked to addiction, immoral judgements, depression, divorce, and

studies prove that it cannot buy happiness, people still strive for wealth. After all those negative

effects of wealth why would people still strive for it?

One of the key arguments for the effects of wealth is based on how an individual lives

their life. Many people view life from a very capitalistic and materialistic standpoint and these

are the types of attitudes that lead to the negative effects above. The way to break through the

barrier and find the positive aspects of wealth is to approach life from not from a materialistic

view but from a charitable standpoint. A charitable standpoint, is a way of life where people are

willing to give back to the community and people in need and live not only for themselves but

for the benefit of others. It is consistently seen through research that the individuals who are

happy with their wealth are those who not only would be happy without it but also are willing to

donate it to the less fortunate. Brady Josephson, author of Want to Be Happier? Give More.

Give Better. Published in The Huffington Post, writes that when you make a donation to

charity, your brain acts in a similar way to when you are having sex or eating chocolate. and In

a study on charitable giving when people donated to a worthy cause, the midbrain region of the

brain lit up. This is the area of the brain that is responsible for our cravings (food and sex) and

pleasure rewards, showing the link between charitable giving and pleasure. These studies go to

show that we are hardwired as human beings to give back to the community and help out our

neighbors. Another great place to see the effect of charity is Forbes. Forbes website is littered

with articles on the amount of money raised for charities and the feeling those individuals felt

afterwards. Forbes article Combining Charity and Capitalism: MyBucks Spreads Financial

Services Across Africa written by Doug Bandow is a great piece relaying the ideas behind the

potential wealth can have in changing the world. The amount of change these companies can
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deliver to underdeveloped continents like Africa are limitless and the joys the individuals

working at these companies receive from helping the lesser fortunate is priceless. That is why,

finding the good effects of wealth are simple: if an individual can value the simple things in life

and give back to the community they are destined to be happy wealthy people. Wealth also has

many practical purposes; money makes up most arguments in less fortunate families. I can

personally vouch for this statement that when money is scarce, for most families that will be the

number one cause of their arguments. With wealth comes less arguments about money and in

return, comes a greater sense of joy due to the lack of fighting. Also with wealth comes the

ability to do all the things in life that an individual has wanted to do. With wealth comes the

ability to travel to exotic lands, go snowboarding, kite surfing or anything else that could be on a

bucket list. If one pairs the satisfaction of completing a bucket list with the happiness one

receives from giving back, that is a perfect formula for a successful and well-rounded happy life.

The ability to not argue about money, spoil loved ones, do all things an individual desires to do

material wise, and be able to give back to the community are all good effects of wealth. The key

to achieve these positive effects though is to enjoy the simple things in life; therefore, one is less

likely to get sucked in the addictive void of acquiring money. If one can avoid the addictive

power of money and give back to the community, the potential wealth can have on their

happiness in limitless.

The effects of wealth are great on both sides of the spectrum. The line dividing both sides

is thin. An individual can easily get sucked up into the corporate world of materialism. They can

easily leave college and get their first taste of a large paycheck and become addicted to the

sensation of achieving another one. That same individual can easily ignore a society full of greed

and despair and give back to their community. They can spend their time donating and helping
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out their community and in turn experience a life full of happiness and joy. whether an individual

will experience the positive effects or negative effects of wealth all depends on how they view

the world and how they are willing to use their wealth. Anyone is capable of being consumed by

the addictive power of money and in the process lose their morals, abuse drugs and alcohol, and

face depression and divorce. On the other side anyone is capable of giving back to the

community and enjoying the simple things, which will allow for their relationships to thrive.

Being wealthy and giving back to the community not only leads to a happier life, which in turn,

leads to less arguments. Having that money also gives individuals the ability to spoil loved ones,

and also the ability to do or experience almost all things in life. Happiness and wealth are many

times intertwined but at the end of the day true happiness is first determined by how individuals

conduct themselves, and how they interact with others and the community.
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Works Cited

Curtis, Jacqueline. How money can change people and affect their behavior. Money Crashers,

Money Crashers, 2014, www.moneycrashers.com/money-changes-people-affect-

behavior/#comment-1242061737. Accessed 25 Feb. 2017.

Forbes, Steve. Forbes. United States, Forbes Media LLC, 1996, www.forbes.com. Accessed 8

Mar. 2017.

Gregoire, Carolyn. How money changes the way we think and behave. The Huffington Post,

The Huffington Post, 2014, www.huffingtonpost.com/2014/01/06/psychology-of-

wealth_n_4531905.html. Accessed 4 Mar. 2017.

Headey, Bruce., Muffels, Ruud., Wooden, Mark. Money Does not Buy Happiness: Or Does It?

A Reassessment Based on the Combined Effects of Wealth, Income and Consumption.

Social Indicators Research, vol. 87, no. 1, Springer Netherlands, 2007, pp. 65-82,

link.springer.com.librarylink.uncc.edu/article/10.1007%2Fs11205-007-9146-y. Accessed

19 Feb. 2017.

Josephson, Brady. Want to Be Happier? Give More. Give Better. The Huffington Post, The

Huffington Post, 2014, http://www.huffingtonpost.com/brady-josephson/want-to-be-

happier-give-m_b_6175358.html. Accessed 1 Apr. 2017

Jordan Belfort Biography. Biography.com, A&E Television Networks, 2016,

http://www.biography.com/people/jordan-belfort-21329985. Accessed 7 Apr. 2017.