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Jonathan Heim

Professor Campbell

UWRT 1104

April 3, 2017

Effects of Wealth: The Good and the Bad

Its 1989, a year that saw the most devastating oil spill in history, the Tiananmen Square

massacre, the Tokyo stock market crash, and also the beginning of one of the most ruthless, and

fraudulent stock market schemes of the time, the creation of Stratton Oakmont. Stratton

Oakmont was founded by an ambitious twenty-seven-year-old male named Jordan Belfort.

Jordan Belfort grew up in a modest apartment in Queens with an accountant as a father. Growing

up, Jordan got a taste of the luxuries of life and that instilled a will and a drive within him to

reach the peaks of life and wealth. With this drive within him, he quickly began using his talents

as a salesperson to start a meat and seafood business. The meat business quickly went belly up;

however, the man he met because of that failure, Mark Hanna, set the foundation for Jordans

future ethics and morals when conducting business. Mark Hanna was a senior broker at L.F.

Rothschild who mentored Jordan during his time at the company. Mark Hanna took Jordan out to

lunch one day and explained to him the keys to success in the stock game was cocaine and self-

pleasuring. Those types of morals stuck with Jordan who by 1989 had become a money hungry,

ambitious, drug abuser, who would do anything it took to reach the top. In 1989, Jordan founded

his own Brokerage firm, Stratton Oakmont, which he would use to launder and steal millions of

dollars from his investors. Stratton Oakmont thrived on drug fueled brokers, money hungry

individuals, and mottos such as My warriors, wholl not hang up the phone, until their client

either buys or dies. By December 1996, Stratton Oakmont had ceased operation due to many
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lawsuits and settlements because of fraudulent tactics. By 1999, Jordan had been sentenced to

four years in prison after a plea deal. Somewhere along the way to riches and wealth an honest,

ambitious young man lost his morals and ethics and became a greedy, unethical, drug addict who

stole millions from his investors. This seems to be consistent throughout much of society, when

individuals strive for wealth. Along the way wealth makes people lose their morals, become

addicted to drugs and money itself, and can often cause divorce and depression. With that being

said, wealth can be used for good and to better society too, so the question becomes, what are the

true effects, good and bad, of wealth?

One of the most universally talked about effects of wealth is whether or not wealth can

buy happiness? To first analyze whether wealth can buy happiness we need to address a few

things when considering the definition of wealth. For my research, wealth will include not only

spendable cash, but also all possessions and assets. Most studies and articles argue that wealth

cannot buy happiness for two main reasons: first, because of relative income and second, due to

the fact that the pursuit of wealth is time consuming and exhausting. Bruce Headey, author of

Money Does not Buy Happiness: Or Does It? A Reassessment Based on the Combined Effects

of Wealth, Income and Consumption defines relative income or gains as Wealth of individuals

compared to those surrounding them and also states that that within-country relative gains in

economic well-being have only a very small effect on happiness. As an individual progressively

becomes wealthier, they tend to move into larger, richer, more upscale neighborhoods. Living in

an upscale neighborhood can show their wealth to outsiders and make an individual feel better

about themselves, living in a high class area. However, as time goes on people tend to compare

their possessions and spendable money to the people around them. This becomes a dilemma,

when the people that surround them are on about the same wealth level as they are due to the fact
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they congregated into a wealthy neighborhood. Being surrounded by the same wealth, makes

people feel as though they do not have much wealth, when in actuality, they have a lot compared

to the rest of the world. This causes people to not be happy with or even satisfied with their

wealth. Some people will then try to argue, why do rich people not just build large houses away

from others? This then ties into human nature, as humans we like to congregate and not be

lonely. A mansion in the woods sounds nice, but over time human nature will make individuals

feel isolated and long for something more and yet again lead to dissatisfaction and unhappiness

with their wealth. As people become unsatisfied and unhappy with their wealth they try to

acquire more to make themselves wealthier to beat the relative income hypothesis. That drive for

more wealth leads into the second reason wealth does not buy happiness, the pursuit is too time

consuming and exhausting.

The pursuit of wealth is one of the two main reasons that wealth does not represent

happiness. As people acquire wealth, they then try to get more and more and spend many of their

waking hours focused on money. Over time, the pursuit takes ahold of individuals and starts

affecting their relationships in the real world. People become more focused on acquiring a

material piece of paper then strengthening friendships and relationships that have been proven to

actually provide happiness in life. This process overtime leads to middle aged adults who have

acquired large amounts of wealth but have no one to spend it on or with. As stated earlier, this

then ties into human nature, it does not matter how much wealth an individual has if they have

no one to spend it with. Therefore, the pursuit of wealth, many times, leads more individuals

towards loneliness, depression and divorce rather than happiness. Carolyn Gregoire, author of

the article How Money Changes the Way We Think and Behave published in the Huffington

Post says There is no direct correlation between income and happiness. And Extremely
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affluent people actually suffer from higher rates of depression. Some data has suggested money

itself doesnt lead to dissatisfaction instead, its the ceaseless striving for wealth and material

possessions that may lead to unhappiness. Again a key point to note is that money itself does

not necessarily cause unhappiness but the non-stop pursuit of it does. Not only does the non-stop

pursuit of money cause unhappiness, it can also be a stepping stone towards addiction.

Jacqueline Curtis, author of How Money Can Change People and Affect Their

Behavior published in Money Crashers defines a behavioral addiction as a compulsive

behavior not motivated by dependency on an addictive substance, but rather by a process that

leads to a seemingly positive outcome. Money can easily become a type of behavioral

addiction. There is no better feeling then seeing that paycheck at the end of a week, getting a nice

bonus, or getting a raise. Clinical psychologist Dr. Tian Dayton says She warns that the positive

feeling that follows obtaining money can cause a chemical reaction in the brain that feels good.

In turn, it can result in a severe preoccupation with money and put a strain on relationships

outside of those that relate to earning more. (qtd. in Curtis). The pursuit of money can very

easily lead to a behavioral addiction that causes individuals to only associate with people that can

feed their addiction and in turn negatively effects all other relationships. This addiction is another

reason why money itself does not necessarily cause unhappiness but the addiction to the pursuit

of wealth is one of the main reasons people see wealth as causing unhappiness or even

depression. Not only is money itself addictive, but there is a positive link between wealth and

substance abuse or addiction as well.

Wealth does not necessarily cause substance addiction but there is a high positive

correlation between the two due to the fact wealthier people not only have the ability to afford

drugs, but have more opportunities to do them during leisure time. As well as having more
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money and opportunities the wealthy have been proven many times over to have a cloudier

moral compass and therefore drugs are not out of the picture. The wealthy also tend to think

about themselves more and therefore the high of drugs is going to apply to wealthy more because

they will not worry about the consequences it causes others. A 2008 UC Berkeley study in San

Francisco, found that where the law requires that cars stop at crosswalks for pedestrians to pass,

drivers of luxury cars were four times less likely than those in less expensive vehicles to stop and

allow pedestrians the right of way. They were also more likely to cut off other drivers (qtd. in

Gregoire). This study shows that wealthy people do not care as much about others and their

moral compasses are cloudier, allowing for the opportunity of drugs and addiction to creep into

their lives. Carolyn Gregoire writes in adulthood, the rich outdrink the poor by more than 27

percent. This statistic helps prove that the wealthy are more susceptible to substance and alcohol

abuse. Substance and alcohol abuse is found in affluent children as well. In fact, substance and

alcohol abuse is more prevalent in affluent children than affluent adults. Affluent children have a

distinct handicap that their parents do not, the ability to have wealth and not work. This large

amount of wealth with loads of free time can only lead to bad decision making in many

situations. On top of all of that, many affluent children face extreme pressure from their parents

to get into the best schools, make a lot of money, and be overall better than their parents. Carolyn

Gregoire writes that Kids from wealthy parents are not necessarily exempt from adjustment

problems and studies show that these children may be more likely to internalize problems,

which has been linked with substance abuse. (qtd. in Gregoire). Even though wealth has been

linked to addiction, immoral judgements, depression, divorce, and studies prove that it cannot

buy happiness, people still strive for wealth. After all those negative effects of wealth why would

people still strive for it?

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One of the key arguments for the effects of wealth is based on how an individual views

life. Many people view life from a very capitalistic and materialistic standpoint and these are the

types of attitudes that lead to all the negative effects above. The way to break through the barrier

and find the positive aspects of wealth is to approach life from not from a materialistic view but

from a simple life standpoint. A simple life standpoint, is the view in life where people embrace

the little things and live not only for themselves but for the benefit of others. It is consistently

seen through research that the individuals who are happy with their wealth are those who not

only would be happy without it but also are willing to donate it to the less fortunate. Brady

Josephson, author of Want to Be Happier? Give More. Give Better. Published in The

Huffington Post, writes that when you make a donation to charity, your brain acts in a similar

way to when you are having sex or eating chocolate. and In a study on charitable giving when

people donated to a worthy cause, the midbrain region of the brain lit up. This is the area of the

brain that is responsible for our cravings (food and sex) and pleasure rewards, showing the link

between charitable giving and pleasure. These studies go to show that we are hardwired as

human beings to give back to the community and help out our neighbors. Another great place to

see the effect of charity is Forbes. Forbes website is littered with articles on the amount of money

raised for charities and the feeling those individuals felt afterwards. Forbes article Combining

Charity and Capitalism: MyBucks Spreads Financial Services Across Africa written by Doug

Bandow is a great piece relaying the ideas behind the potential wealth can have in changing the

world. The amount of change these companies can deliver to underdeveloped continents like

Africa are limitless and the joys the individuals working at these companies receive from helping

the lesser fortunate is priceless. That is why, finding the good effects of wealth are simple: if an

individual can value the simple things in life and give back to the community they are destined to
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be happy wealthy people. Wealth also has many practical purposes, money makes up most

arguments in less fortunate families, so with wealth comes less arguments about money. Also

with wealth comes the ability to do all the things in life that an individual has wanted to do, and

if one pairs the satisfaction of completing a bucket list with the happiness one receives from

giving back, that is a perfect formula for a successful and well-rounded happy life. The ability to

not argue about money, spoil loved ones, do all things an individual desires to do material wise,

and be able to give back to the community are all good effects of wealth. The key to achieve

these good effects though is to enjoy the simple things in life; therefore, one is less likely to get

sucked in the addictive void of acquiring money. If one can avoid the addictive power of money

and give back to the community, the potential wealth can have on their happiness in limitless.

The effects of wealth are great on both sides of the spectrum. The line dividing both sides

is thin and whether and individual will experience the good effects or the bad effects all depends

on how they view the world and how they are willing to use their wealth. Anyone is capable of

being consumed by the addictive power of money and in the process lose their morals, abuse

drugs and alcohol, and face depression and divorce. On the other side anyone is capable of

giving back to the community and enjoying the simple things. Which will allow for their

relationships to thrive and allow for less arguments about money, give them the ability to spoil

loved ones, and also the ability to do or experience almost all things in life. Happiness and

wealth are many times intertwined but at the end of the day true happiness is first determined by

how individuals conduct themselves, and how they interact with others and the community.
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Works Cited

1. Curtis, Jacqueline. How money can change people and affect their behavior. Money

Crashers, Money Crashers, 2014, www.moneycrashers.com/money-changes-people-

affect-behavior/#comment-1242061737. Accessed 25 Feb. 2017.

2. Forbes, Steve. Forbes. United States, Forbes Media LLC, 1996, www.forbes.com.

Accessed 8 Mar. 2017.

3. Gregoire, Carolyn. How money changes the way we think and behave. The Huffington

Post, The Huffington Post, 2014, www.huffingtonpost.com/2014/01/06/psychology-of-

wealth_n_4531905.html. Accessed 4 Mar. 2017.

4. Headey, Bruce., Muffels, Ruud., Wooden, Mark. Money Does not Buy Happiness: Or

Does It? A Reassessment Based on the Combined Effects of Wealth, Income and

Consumption. Social Indicators Research, vol. 87, no. 1, Springer Netherlands, 2007,

pp. 65-82, link.springer.com.librarylink.uncc.edu/article/10.1007%2Fs11205-007-9146-y.

Accessed 19 Feb. 2017.

5. Josephson, Brady. Want to Be Happier? Give More. Give Better. The Huffington Post,

The Huffington Post, 2014, http://www.huffingtonpost.com/brady-josephson/want-to-be-

happier-give-m_b_6175358.html. Accessed 1 Apr. 2017

6. Jordan Belfort Biography. Biography.com, A&E Television Networks, 2016,

http://www.biography.com/people/jordan-belfort-21329985. Accessed 7 Apr. 2017.