The Wealth Report

Posted: 09 Mar 2011 07:07 AM PST

The research on wealth and happiness is filled with contradictions. For ages, studies showed that more money didn't bring more happiness and that happiness plateaued at a certain income or wealth level once certain needs were met.

Last year brought contrary research showing tha

: Bloomberg News; Don’t worry. He might be unhappy.

t more wealth did, in fact, make people more satisfied with their lives, even if they still had day-to-day frustrations. A new study co-funded by the Gates Foundation, however, portrays the ultrarich as lost souls burdened by the fears, worries and family distortions of too much money.

According to an article in The Atlantic, “the respondents turn out to be a generally dissatisfied lot, whose money has contributed to deep anxieties involving love, work, and family. Indeed, they are frequently dissatisfied even with their sizable fortunes. Most of them still do not consider themselves financially secure; for that, they say, they would require on average one-quarter more wealth than they currently possess.”

The respondents–120 people with a net worth of $25 million or more–were asked to write responses to certain questions. Here are some of their responses.

ON ENVYING WEALTH. "If we can get people just a little bit more informed, so they know that getting the $20 million or $200 million won't necessarily bring them all that they'd hoped for, then maybe they'd concentrate instead on things that would make the world a better place and could help to make them truly happy."

"I feel extremely lucky, but it's hard to get other, nonwealthy people to believe it's not more significant than that. … The novelty of money has worn off."

ON WHY THE POOR SHOULD BE HAPPY: "Nobody has the excuse of 'lack of money' for not being at peace and living in integrity," writes one survey respondent of his family, with a touch of bitterness. "If they choose to live otherwise, that's their business."

ON LOVE: One mom writes that the men in her daughters' lives could feel "powerless," and that "their role as provider has been usurped."

ON CHILDREN: Money "runs the danger of giving them a perverted view of the world." Adds another: "Money could mess them up—give them a sense of entitlement, prevent them from developing a strong sense of empathy and compassion."

"We try to get our kids to do chores," one survey respondent complains, but it's hard to get them to mow the lawn when "we have an almost full-time gardener."

ON MEAN, RICH DADS: "I have grown up with a father who never wanted to give up control of his business but kept taunting me with the opportunity to step into his shoes." His wife adds, "It has been difficult to feel financially independent when [my] spouse's parents hold tight control over [our] children's inheritance."

WHY THE RICH AREN'T SMARTER: Other people "glorify wealth and think that it means that the wealthy are smarter, wiser, more 'blessed' or some other such crock."

ON INHERITING: "Financial freedom can produce anxiety and hesitancy. In my own life, I have been intimidated about my abilities because I inherited money."

ON LUCK: "I just happened to hit the jackpot by choosing to work for the right company at the right time. I have never thought that I in any way earned this amount of wealth. I'm just now feeling like I'm getting the hang of it."

ON FRIENDS: "Wealth can be a barrier to connecting with other people," writes the spouse of a tech wizard who cashed in to the tune of $80 million. "Not feeling you should share some of the stressors in your life ('Yeah, wouldn't I like to have your problems'), awkwardness re: who should pay at a restaurant."

ON HATING THE HOLIDAYS: Robert A. Kenny, one of the study's authors and partner at North Bridge Advisory Group, says the wealthy dread holidays "because they were always expected to give really good presents."

Of course, the survey, like most wealth surveys, has an underlying message. The Gates Foundation and the Boston College Center on Wealth and Philanthropy–directed by Paul G. Schervish–set out in part to encourage the wealthy to be better and more effective philanthropists. Showing the burdens of wealth helps the case for getting the rich to give more. “We believe the survey will make an extraordinary contribution toward helping us understand what drives donors to give and what they need in order to give effectively,” William Deich, deputy director of public policy at the Gates foundation told me in 2007, when the study was announced. (They aimed for more than 1,000 people with a net worth of $25 million or more. They got 120, proving that studying the superrich may be the hardest sociological job of all).

Indeed, there may be plenty of super-rich people who are genuinely happier because of their wealth and the freedoms, choices and adventures it allows.

Do you agree or disagree with any of the statements above?

Wealth Report Named Top 25 Blog

Posted: 08 Mar 2011 12:14 PM PST

We're never above the occasional piece of blatant self-promotion here at the Wealth Report. So I'll take the chance to thank all of the readers and commenters who helped the Wealth Report make Time magazine's list of 25 Best Financial Blogs.

Time said it searched for blogs that offered “the most useful financial advice, offered the best insight into the state of the economy or were just fun.” Clearly, we fall into the last category.

You can read the review from Stephen Dubner of Freakonomics fame here. It's comforting to know that at a time when wealth is more divisive than ever — generating truthy screeds on both sides – some readers still respond to coverage that “neither panders nor sneers.”

Thanks for your continued contributions, as well as your occasional sneers.

The New Accessory for Yachters: Guns?

Posted: 08 Mar 2011 10:16 AM PST

Yachting has become a dangerous pastime–at least to judge by the headlines. Four American yachters were captured and killed off the coast of Somalia last month, while a Danish couple sailing near Somalia last week was kidnapped.

: Getty Images; Size matters when it comes to yacht security

Granted, these are all relatively small sailboats near the most dangerous pirate-infested waters in the world. The big motoryachts of the Carribean and Med still seem to be safe (unless you are an Italian tax evader).

That hasn't stopped some rich yachters from packing heat. According to an article in the Palm Beach Post, billionaire sailor Bill Koch always stocked his 90-foot cruising boat with shotguns and semiautomatic weapons. “If I could have, I would have bought a cannon and a couple of machine guns,” Koch said. “You can’t get them, but that’s what you’d want if some of these guys were coming after you.”

The International Maritime Bureau advises yachters not to carry guns, since they have to be declared at every port and can be confiscated by governments. The Bureau recommends putting lots of dummies on deck and sailing quickly through bad areas. (I'd still prefer the gun).

Several yacht brokers told me that today's yachters are certainly concerned about safety, but no more than usual. They said people who are security-obsessed usually bring their own bodyguards, who are armed and trained.

What is more, today's bigger yachts–120 feet or more–are tricked out with so many security cameras, klieg lights and defense mechanisms (like high-pitch "sound canons"), that guns aren't necessary.

Boats that have to pass near Somalia or through the Suez canal usually hire specialized security teams. One yacht that passed through the canal was recently outfitted with barbed wire on the deck to keep out pirates.

“Usually the clients aren't on board for those trips,” said one broker. "It's just to transport the boat. The clients join the boat in the Med or in the Sychelles or Maldives.”

Do you think more yachters will start packing heat?