Photo: Kevin Systrom’s Instagram
Americans love a good rags-to-riches fairytale, but here’s a story people are far more interested in reading: Riches-to-rags.Take Business Insider’s coverage of this year’s record-breaking Mega Millions jackpot, for example. When we posted breaking news on the three-way split between the winners, the story garnered a little more than 3,000 page views.
A week prior, we ran a feature on 14 lotto winners who wound up blowing their fortunes. As of yesterday, it had nearly 400,000 page views.
Doesn’t take a statistician to figure that one out. Everybody loves to see the mighty fall, even if we’re too politically correct to admit it.
Eddie of the personal finance blog Money Will Change You fesses up to his own transgressions in a critical post on the dark side of joining the Nouveau Riche.
“We suspect them of having come by (new wealth) unfairly, of somehow not being “worthy” of their own wealth,” he says. “I’ve caught my self doing this many times.”
As much as others’ jealously plays a role, some people can blame themselves for alienating friends and family – and America at large, if you count reality TV personalities we love to hate like the Desperate Housewives or Octomom.
“In the step up to the higher level of spending, it’s dangerous from an economic point of view and it also tends to disturb social relationships that you have with friends and coworkers,” says Bill Harris, CEO of wealth management site Personal Capital. “When people confuse a windfall with a permanent change in their economic status … it makes you feel sometimes like, hey, I’ve got all this money and it’ll take a long time for me to spend it.”
So spend it they will, on new homes and cars and whatever else they felt they lacked in their old penny-pinching days. In the process, they come off to their peers like the grasshopper who sang all winter and still got first dibs on the worker ants’ haul.
Here are a few reasons Sam of Financial Samurai says it’s so hard to root for the newly minted rich:
-They constantly update their Facebook status with pictures of themselves in exotic places.
-They repeatedly tell everybody how much money they make.
-They drive to work in a car worth more than their colleagues and managers’.
-They often wear inappropriate clothing in the work place, including overly ostentatious jewelry.
Not that any of those actions are illegal or even unwarranted – whether they ‘earned’ it or not, it’s their cash to spend as they wish. The real friction arises when people who strike it rich don’t realise that their peers need to adjust to their old pal’s new lifestyle just as rapidly as they do.
Take Harris’ advice if you want to save yourself from losing more than just your windfall:
“Yes, it’s terrific to get a new car but do so mindful of the fact that you’re gonna need to support whatever lifestyle you have for a very long time,” he says. “It’s remarkably difficult to decrease the lifestyle at which you’re living. That becomes even more difficult as you get into responsibilities, not only yourself but your spouse, children, mortgages and all the rest.”
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