There are many advantages to being very wealthy, but there can also be drawbacks—especially for rich entrepreneurs.
For many self-made millionaire and billionaires, the creation of a significant personal fortune often comes with significant trade-offs, such as missing out on special family moments with family because of the great deal of effort and time it takes to build wealth. Tradeoffs have to be made, and sometimes these tradeoffs detract from the family’s quality of life.
Entrepreneurial wealth creation is rarely a straight shot to the top. Along the way there are probably going to be a few intense failures. Consequently, the path to building a great company and amassing a sizable personal fortune can be quite intense and stressful. While some people thrive on severe stress, others can be hobbled by it in terms of the impact on their health and their families. In extreme cases, the stressful life of a wealthy entrepreneur can lead to drug addiction.
“The stress of building a great company can easily have negative affects on their marriages that might already be affected because of a dearth of time and energy," said Peter Sasaki, managing member of SDS family Office and co-author of "Maximizing Your Single-Family Office: Leveraging the Power of Outsourcing and Stress Testing."
"Divorces or loveless marriages that are no more than tacit arrangements because of the high cost of a divorce, the potential loss of privacy, and the fact that the process would be painfully distracting are not uncommon among some hard charging accomplished entrepreneurs," he added.
Another potential trade-off is attracting the wrong kind of attention, such as from criminals of all stripes, including burglars to hackers.
“For obvious reasons, affluent individuals are prized targets,” said Cliff Oberlin, chairman and CEO of Oberlin Wealth Partners. “To ensure their safety and confidentiality, a large percentage of them take significant precautions to protect themselves as well as their property. While there are many sophisticated and clever ways to make sure they’re safe and sound, criminals are working very hard to devise ways to steal from them and hurt them badly.”
Great wealth does not come without a price. For a percentage of very successful entrepreneurs, the price is not important compared to the outcome. Many times the price is not immediately obvious. No matter what the situation, seldom are there no personal costs to creating a tremendous personal fortune.
Russ Alan Prince, president of R.A. Prince & Associates, is a consultant to family offices, the ultra-wealthy and select professionals.