On February 1, 2012 Mark Zuckerberg and Facebook made it official. Facebook filed to go public and raise 5 billion dollars in a huge Internet IPO. According to The Washington Post, it is speculated that as many as 1,000 of Facebook stockholders can become overnight millionaires (although other sources claim a smaller number). Nevertheless, it is likely that Facebook’s filing for IPO will indeed create at least some overnight millionaires, which would spur envy in many hard working Americans who are not Facebook employees. One might ask, what is so alluring about overnight riches? It might be the thought of no more mortgage payments or a fully stacked college savings account. For others, it would mean financial ability to take your loved ones on a tropical vacation and pay cash for the whole thing. For me, it would probably mean living a debt free life, being more charitable toward people in need, buying a new house, and taking the family on adventurous vacations. Most of us would agree that there is something tantalizing about the idea of sudden riches. However, objectively speaking, what are some pitfalls of overnight riches? Here are just some observations:
Sudden riches could change our identity from a regular Joe or Jane to a fantasy image of ourselves; a rich Joe or Jane who now lives a life in luxury detached from the real world. One’s identity might change from Joe the husband and father to Joe the millionaire (and Joe the husband and father becoming secondary identities). There are numerous stories about lottery winners who eventually faced bankruptcy and became miserable after winning the big prize. They squandered their money and made foolish decisions following their newly minted status as millionaires. One can also look to the world of sports where many athletes earn millions of dollars a year. According to Yahoo! Sports, a majority of NFL players end up having financial problems after they retire from professional football. Other notable examples of athletes being poor financial stewards include former Phillies slugger Lenny Dykstra, Mike Tyson, and numerous others who never managed to get off their “living high train” until they faced financial ruin or even jail (as reported by www.foxnews.com). Overnight riches can also give us a false sense of security and happiness. Family, friendships, faith, and purposeful work bring more joy to life than mere money. A few million dollars cannot buy us happiness- money is a means to an end, not the end itself. Finally, overnight wealth is often not secure, particularly wealth gained through the stock market. It is here today, and can be gone tomorrow (ask big investors from the 2008-2009 financial crisis).
My point is not to trash capitalism or the “1 per cent.” Wealth, like other things in life, can be a blessing, but it is fleeting, and cannot guarantee us lifelong security and happiness. Being rich is not necessarily a problem, but the challenge lies in how we allow wealth to change us.