How might being wealthy impact your behaviour?
- Nick Perryman & Dr Baris Serifsoy
- Oct 3, 2024
- 7 min read
Updated: Oct 6, 2024
Let's consider whether being wealthy impacts your personality – the deep-seated traits that determine your day-to-day behaviour – whether inherited or learned. Is it possible that wealthy people share common personality types and characteristics? And do these determine who becomes wealthy or are these products of being wealthy?
Unsurprisingly, there are perceptions of wealthy people’s personalities that are not always complimentary. A stereotypical view suggests wealth can lead individuals to act in a self-benefiting [1], less collective and more individualistic [2], and less compassionate way. [3]
These generalisations might be interesting or explain how others treat you, but they are laced with potential bias and hide the reality. Fortunately, there have been specific studies exploring the personalities of both high-income and high-net-worth individuals. The prognosis is encouraging.
The most prevalent and accepted personality model is the five-factor model of personality, better known as the Big Five. With roots in the 1960s, but only really crystalised by psychologist John Digman’s work in the 1990s, the model has been validated and refined by numerous researchers. [4] At the heart of the model are five personality traits:
Openness to experience: appreciation for adventure, intellectual curiosity, enjoyment of culture and willingness to try new things. Not surprisingly, too much openness can lead to unpredictability or lack of focus.
Conscientiousness: tendency towards self-discipline, acting dutifully, striving for achievement. In extreme, this can lead to stubbornness.
Extroversion: likely to be energised by external means, and a desire to engage with the outside world and other people. In contrast, an introverted person would be quieter and low-key, and less naturally inclined to engage in social contact.
Agreeableness: general concern for harmony in relationships, kindness, generosity and an optimistic view of human nature. In excess, an individual can be too relational and unable to lead in specific settings, such as the military.
Neuroticism: a measure of emotional instability and a tendency towards negative emotions such as anger or anxiety. Being low in neuroticism is probably a desirable state, indicating calmness and stability.
The research convincingly demonstrates that personality is a predictor of many different real-life outcomes, including business success and achieving high status. But what does the Big Five model actually tell us?
We believe there are positive, but perhaps not surprising, findings. There’s a correlation between high-status and extraversion, conscientiousness and being low in neuroticism. [5] Similarly, a comprehensive meta-analysis linked career success and high salary with exactly the same traits (with the addition of openness to experience specifically for those with high salaries). From the definitions of these traits above, we suspect you share our view that these are positive and laudable qualities. Who wouldn’t want to be emotionally stable, self-disciplined and good at building social relationships? We know these are recipes for success in the world.
Moving beyond career success and high status, the German psychologist Marius Leckelt examined the personalities of a large sample of high-net-worth Germans – those that have actually attained or inherited meaningful wealth. They were able to extend the findings we’ve already described, relating to career success and high status to this new group (the wealthy). Identically, they found high levels of extraversion, conscientiousness and openness to experience, and low levels of neuroticism. This, perhaps, points to the fact that many people attain wealth for a reason. They possess personality traits that help them to be entrepreneurial, are often aligned with positive leadership styles, and are consistent with those characteristics needed to attain high status. [6]
In other words, and as we all know, it isn’t a coincidence that certain people end up being wealthy, and such personality traits are key drivers of how and why people get there. They represent the (often) hard-won success that the wealthy have had to attain. We know that these achievements will have come with many sacrifices, and the consistent personality traits point to why some people have the motivation to go the distance.
All good so far. Having said that, there’s one less positive attribute that arises from the research that’s worth discussing. It’s the prevalence of narcissistic tendencies in the groups we’ve been examining – high-net-worth individuals, CEOs, entrepreneurs, those of high status and high income. It’s important that we explore this a little further.
Narcissism – the affliction of the wealthy?
The term narcissism originated in Greek mythology, where young Narcissus fell in love with his own image reflected in a pool of water. It has come to characterise, in modern psychological theory, someone with an inflated view of self, perhaps with a certain grandiosity and heightened feelings of uniqueness and individualism.
In the extreme, this manifests itself in something called narcissistic personality disorder. This is a clinical condition where sufferers display symptoms of megalomania, with a truly excessive need for admiration and a huge lack of empathy towards others. To be clear, this is absolutely not what we’re talking about here. The evidence points to a far more subtle orientation towards narcissism that manifests itself in day-to-day life and relationships. Also, we’d point out – we’re talking “typically” or “on average”, as that’s what studies do, they approximate. We’re not saying that this must afflict every wealthy or successful person. It just occurs significantly more in wealthy people than the average for the entire population. [7]
Having spent the last two decades in privileged settings and the world of the wealthy, we’re not surprised by this prevalence of narcissism amongst high-net-worth people. Indeed, it’s similarly observed amongst business leaders, in general. If we’re honest, we’d put ourselves into this same category. After all, when you have significant choice in life – luxury vacations, support staff, the finest restaurants and privileged seats at major events – it’s inevitable that you feel special.
But why is that bad? Again, there’s nothing inherently wrong with any of this. Indeed, these are good things rewarding you for your hard work and ingenuity. However, the challenge comes when feelings of grandiosity and uniqueness spill-over into other realms of your life – for example, family, social or professional relationships. In heightened self-focus, it’s possible to miss important social cues and potentially disappoint others in the process. In particular, children can be deeply affected by the actions and attitudes of their parents.
The Californian psychotherapist, Joyce LeBeau, called this the “silver-spoon syndrome”. She highlighted the link between affluence and narcissism in families and observed a number of unwanted consequences. Parents who focus on their work and each other, can ignore their children’s emotional needs. Others feed their egos by placing huge demands on their offspring to match their own high achievements. With such a sense of privilege, some children develop a distorted idea of their importance in the world, leading to later frustration and disappointment. LeBeau regularly came across feelings of depression, emptiness, boredom, low self-awareness, high pursuit of pleasure and a belief that wealth can overcome any obstacle. In effect, a legacy of narcissism being passed from one generation to the next that we need to consciously guard against. [8]
Beyond relationships with children, narcissism – in its extreme form – can have other negative effects. It can lead to:
In business, narcissistic CEOs tend towards more volatile performance but ultimately – over time – perform no better. [14] They negotiate faster in mergers and acquisitions, are more likely to initiate deals, but those deals are less likely to complete. [15] These business leaders engage more frequently in aggressive corporate tax sheltering [16] and are more likely to institute bold globalisation plans. [17]
So, what does this all mean? Well, let’s be clear – there’s no perfect personality profile. For every strength we have, there’s the danger that it goes into overdrive and becomes a weakness. And there are trade-offs. For example, being low in neuroticism brings calmness, but could others think you’re unemotional, non-responsive or inactive?
Conclusion
To be clear, we’re not talking about narcissism as a clinical condition, just a potential tendency that can arise in everyday life. The most important thing is to recognise and understand it and consciously counteract its worst excesses. Think about what the trigger might be, even if it’s unconscious. Could it be when you can’t control a person or situation, face a potential embarrassment, or exclusively focus on your business’ success? Whatever it is, we encourage you to consider the underlying drivers of your behaviour and to confront them. It doesn’t always mean you’ll take a different decision (although you might), but it does ensure you take actions driven by logic and self-knowledge rather than emotion or instinct. As a result, we hope – and believe – you’ll take better decisions.
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References
[1] Dubois, D., Rucker, D.D. and Galinsky, A.D., 2015. Social class, power, and selfishness: When and why upper and lower class individuals behave unethically. Journal of personality and social psychology, 108(3), p.436.
[2] Guinote, A., Cotzia, I., Sandhu, S. and Siwa, P., 2015. Social status modulates prosocial behavior and egalitarianism in preschool children and adults. Proceedings of the National Academy of Sciences, 112(3), pp.731-736.
[3] Oveis, C., Horberg, E.J. and Keltner, D., 2010. Compassion, pride, and social intuitions of self-other similarity. Journal of personality and social psychology, 98(4), p.618.
[4] Digman, J.M., 1990. Personality structure: Emergence of the five-factor model. Annual review of psychology, 41(1), pp.417-440.
[5] Anderson, C. and Cowan, J., 2014. Personality and status attainment: A micropolitics perspective. In The psychology of social status (pp. 99-117). Springer, New York, NY.
[6] Leckelt, M., Richter, D., Schröder, C., Küfner, A.C., Grabka, M.M. and Back, M.D., 2019. The rich are different: Unravelling the perceived and self‐reported personality profiles of high‐net‐worth individuals. British Journal of Psychology, 110(4), pp.769-789.
[7] For further explanation, see Paulhus, D.L. and Williams, K.M., 2002. The dark triad of personality: Narcissism, Machiavellianism, and Psychopathy. Journal of research in personality, 36(6), pp.556-563.
[8] LeBeau, J., 1988. The “silver-spoon” syndrome in the super rich: The pathologic linkage of affluence and narcissism in family systems. American Journal of Psychotherapy, 42(3), pp.425-436.
[9] Campbell, W.K. and Foster, C.A., 2002. Narcissism and commitment in romantic relationships: An investment model analysis. Personality and social psychology bulletin, 28(4), pp.484-495.
[10] McNulty, J.K. and Widman, L., 2014. Sexual narcissism and infidelity in early marriage. Archives of sexual behavior, 43(7), pp.1315-1325.
[11] Sheldon, P. and Bryant, K., 2016. Instagram: Motives for its use and relationship to narcissism and contextual age. Computers in Human Behavior, 58, pp.89-97.
[12] Campbell, W.K., Foster, C.A. and Finkel, E.J., 2002. Does self-love lead to love for others? A story of narcissistic game playing. Journal of personality and social psychology, 83(2), p.340.
[13] Campbell, W.K. and Foster, J.D., 2007. The narcissistic self: Background, an extended agency model, and ongoing controversies. The self, pp.115-138.
[14] Chatterjee, A. and Hambrick, D.C., 2007. It's all about me: Narcissistic chief executive officers and their effects on company strategy and performance. Administrative science quarterly, 52(3), pp.351-386.
[15] Aktas, N., De Bodt, E., Bollaert, H. and Roll, R., 2016. CEO narcissism and the takeover process: From private initiation to deal completion. Journal of Financial and Quantitative Analysis, 51(1), pp.113-137.
[16] Olsen, K.J. and Stekelberg, J., 2016. CEO narcissism and corporate tax sheltering. The journal of the American taxation association, 38(1), pp.1-22.
[17] Oesterle, M.J., Elosge, C. and Elosge, L., 2016. Me, myself and I: The role of CEO narcissism in internationalization decisions. International Business Review, 25(5), pp.1114-1123.