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In this episode, Chelsea dives into the factors that cause rich people to lose empathy and become, frankly, jerks — and why wealth makes them believe it's okay to get away with hoarding as much and giving as little back as possible. On that note, click here to check out our members-only bonus video about how the ultra rich scam America on their taxes (join our $4.99 membership tier to get access!):

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Hey, guys. It's Chelsea from The Financial Diet. And this week we are talking about rich people and why they are empirically assholes.

And for those who are subscribed to our society at TFD at the 499 tier or above, and if you're not you can do that at the join button below this video or by clicking on the video in the description, you can see an entire bonus video that builds off this one and talks about how all of these not so great mental health impacts for the wealthy allow them to feel good about and in some cases get away with actually paying a lot less in taxes than they should. Now, we all probably have some anecdotal evidence in our life experience to paint a picture of the wealthier amongst us as being overall perhaps less generous, less compassionate, and many, many other qualities that, in fact, the data does bear out on aggregate and we will get into all of that. But often on the personal level, we're talking about things like making very tone deaf comments about finance, feeling entitled to an over the top level of service, and then tipping very poorly on the other end of it.

I've gone into detail about my exploits and experiences as an employee of a yacht club for about a year in my hometown, enough times that I'm not going to do a deep dive here. But suffice to say it was definitely awakening to the way the super wealthy act when they are not just in a private club, but in a private club where everyone is basically their servant. And while this can be a generalization to some extent and there are incredibly generous good-hearted wealthy people, and if you're one of them feel free to move along, there is actually very good empirical evidence that the wealthier you get, the more you tend to lack the basic empathy and compassion of people in lower social classes.

Analyzing data from 46,000 individuals from 67 different countries, one study from the University of Agder in Norway found that "individuals who had grown up in environments with low resources had a stronger moral identity compared to others. They were more likely to donate money to charity and they place more emphasis on cooperation." So why is it that just having a bunch of money can actually have a lot of tangible net negative impacts on people's empathy and in some cases mental health? And that can run the gamut from being just kind of out of touch and stingy or being one of the many billionaires who's actively destroying the planet to better suit the whims of their crazy divorce filled lives.

And we have actually touched on this topic on the TFD website a while back, so we'll link you to that if you want to read more. But let's start with the inverse relationship between wealth and empathy. There have been many studies over the years that demonstrate the way in which there can almost be an inverse relationship between the accumulation of wealth and the possession of empathy, especially for people across all social classes, including ones much further below you.

In one study conducted by psychologists at UC Berkeley, driver behaviors were secretly observed at a four way intersection. "They observed that people who drove luxury cars were more likely to speed past other motorists instead of waiting for their turn to move. This behavior was constant irrespective of factors like age, gender, time of day, and traffic levels. And a separate study found that luxury car drivers are more prone to speeding past pedestrians using crosswalks, even after they make eye contact with them.

Explaining why such behavior persists among well-off people, researchers have said that this might be because wealth and abundance instill a sense of freedom in a person. The wealthier they are, the less they tend to care about other people's problems and feelings." And another study published in Psychological Science found that after conducting a series of experiments, people from lower socioeconomic classes were better at reading others' facial expressions than people from higher socioeconomic classes, an important measure of what researchers refer to as "empathetic accuracy." "Lower-class environments are much different from upper-class environments," explains Michael Kraus, the study's co-author. "Lower-class individuals have to respond chronically to a number of vulnerabilities and social threats. You really need to depend on others so they will tell you if a social threat or opportunity is coming around that makes you more perceptive of emotions." The term emotional labor has been bastardized into literally people talking about how they don't want to have to spend time with their kids.

But at its core, emotional labor often refers to the type of extra performative friendliness, happiness, and even acceptance of being harassed and degraded that many service workers are forced to perform on a day to day basis on top of the actual material work of their job. Almost any woman, for example, who's worked in food service can tell you about at least one time where she had to pretend that it was great that the drunk patron was hitting on her while his wife was in the bathroom. And knew that if you didn't smile through it and continue to serve admirably, that you risk not only getting a terrible tip but also possibly getting fired.

Having such a heightened awareness of how other people are reacting to you, what their facial expressions mean, et cetera, is something that lower socioeconomic classes can literally not afford not to cultivate. And in an earlier study, the same researchers as before found that "those of lower socioeconomic status were also more helpful and generous, suggesting that it's not just empathetic accuracy but empathy itself that may be enhanced by circumstance. Coming from an environment where you're more vulnerable, you solve problems by turning to others," says Kraus. "That increases empathy and strengthens social bonds." At the end of the day, it is just not shocking that people with extreme financial privilege are not going to worry as much about how they are perceived by others or how they make others feel.

They just frankly don't need them. This is a complete digression, but I have to just share this anecdote. I think I'm going to do a whole video about it at some point because it's just been such like sociological experiment.

But I've been working on a personal project and I have decided that my favorite place to work on them is in hotels in the middle of the afternoon when basically like no one's there and it's like really nice. And I've gone to several hotels on the Upper East Side, which are great for this purpose. And the people watching there is fucking bananas.

And more than that, the way that those people will speak to the Maitre d', I have just never seen anything like it in my life. This woman literally came up to the Maitre d' while I was sitting at a table and was like, we need a table for two. And the Maitre d' was like, we have reservations.

And she was like, that table's empty. He was like, unfortunately, that table has been reserved. I can show you another area.

She didn't even look at him. She was turned away from him. She put up her hand like this and she was like, it's fine.

We'll go somewhere else. And I was like, this is how this woman moves through the world. I cannot even tell you.

I'm honestly going to do a whole video just talking about the shit that I have seen over the past several weeks. And wealthy people also on aggregate don't have to rely on others for things like social and financial support. Which brings us to our next point, which is the social connection gap amongst the wealthy.

One key factor in cultivating empathy is taking the time to really understand and connect with others. And the more affluent someone is, the more they can generally pay someone to do something that they would otherwise have to form a connection in order to complete. For example, taking an Uber to the airport rather than having a friend drop you off or hiring someone off TaskRabbit for a home chore rather than getting help from a neighbor.

A 2016 study analyzing results from the General Social Survey and American Time Use Survey found that on average people with higher incomes spend 10 minutes more alone every day than people with lower incomes, as well as 26 minutes less per day with family. And this increase in isolation amongst wealthy Americans has had a trickle down effect as we become more and more dependent on our technology and our social media and less dependent on in-person social interaction. "For instance, Americans are talking less and with fewer people about quote, 'important matters.' From 1985 to 2004, the percentage of Americans who said they had no one with whom to talk about important matters rose from 10% to 24.6%. And further, voter turnout in the 2014 midterm elections 35.9%, was the lowest of any midterm since 1940." And here's the thing, it's one thing to not make meaningful, social connections with those around you because you don't need to.

But another problem amongst the wealthy is when they are making social connections and talking about important issues, they're pretty much exclusively doing it with other people of their own socioeconomic class. In a 2014 study that randomly assigned research participants with online chat partners from various socioeconomic backgrounds, "participants were less interested in spending time and becoming friends with the person when the profile described a cross-class partner, compared to a same-class partner. This was especially true of upper-class participants, who were much less interested in engaging with lower-class person than with an upper-class counterpart.

When we analyzed why participants were more or less interested, we found that they reported that their values and interests differed too much from those of cross-class partners for the interactions to be successful." So of course, if the wealthy are only generally socializing with other very wealthy people, they're going to quickly become quite out of touch with the financial realities of basically the average American, let alone someone from a low socioeconomic class. But they're also going to have constant affirmations that their position of entitlement or lack of empathy are basically the right ones to have. And as they're continually moving in higher and higher social circles, it's likely that they are going to continue to reduce down those networks to people who, to some extent, are aspirational for them.

Because money, which brings us to our next point, is an actually addictive thing. One of the secrets about wealth is that once you have money, it is basically infinitely easier to make more of it. Money begets money in many cases.

But that cycle can also become dangerous. And in fact, money addiction does fall under a category called process addictions, which also includes things like sex addiction or gambling addiction. "Process addictions are addictions that involve a compulsive and/or out-of-control relationship with certain behaviors. With process addictions, engaging in a certain activity, like say viewing pornography, compulsive eating, or an obsessive relationship with money, can kickstart the release of brain and body chemicals, like dopamine, that actually produce a 'high' similar to the chemical high of a drug.

The person who is addicted to some form of behavior has learned, albeit unconsciously, to manipulate his or her own brain chemistry. And as with substance addictions, the effects can be detrimental to a person's well-being, including affecting their actual relationships. Gradually, just as the case is with any addict, their preoccupation with money becomes their primary preoccupation, and money becomes their primary relationship.

Their personal drives and identity becomes so wrapped around having money, the wealthy person, accumulating money, the big earner, spending money, the big spender, or even giving money away, the big donor, that they don't know who they would be without it." And as we see things like executive compensation and bonuses continue to spiral out of control, we're so past the point where the very wealthy are actually feeling meaning material increases to quality of life the more money they earn. The difference between earning $100 million and $300 million doesn't really actually matter all that much when it comes to the psychology of it. The difference in happiness and quality of life between $300 million and $100 million is actually negligible.

However, what is meaningfully different between those two numbers is a validation and a rush from that sense of addiction to earning more to having higher status and to simply accumulating a higher number on your net worth. But even if all of those boxes are being checked, it still doesn't necessarily mean you're going to feel good because there is actually a meaningful link between wealth and depression. Because things like this addictive relationship to money and lower social connections are huge contributors to the fact that in some cases, wealthier people in a given society are actually more likely to experience things like depression.

We often talk here about how money means freedom. Because to be honest, while having more money may not necessarily make a person happier automatically, not having to deal with the day to day stresses of not having enough is a huge mental load off your plate regardless of the rest of your mental health factors. But we often don't talk about the kind of mental health damage that can come from having too much of that freedom, which does things like remove consequences, enable addictions, reduce social connections, and can result in that poor little rich boy stereotype that we see in characters like Kendall Roy on Succession, my number one boy.

Generally speaking, lower incomes are associated with higher levels of depression. However, a 2010 study from Princeton suggested that the returns are diminishing after a certain threshold. And "below the threshold amount cited in the study, which Dr.

Meghan Marcum estimates is about $95,000 a year in today's economy, money serves to meet basic needs, such as shelter and access to health services. Being able to have your basic needs met can help your mental health. And Marcum says that while having money can help people meet universal needs, wealth can also cause stress.

However, the psychological and social factors may look different for people with low versus high income," she adds. "For someone who can't afford basic necessities like food and shelter, the stressor is obvious. Well-off people, on the other hand, may experience stress factors that relate specifically to being wealthy," Marcum says. These include, "feeling pressure to live up to certain expectations, being the sole supporter of other family members, feeling obligated to maintain a social status.

And all of these factors can lead or contribute to symptoms of depression." And Clay Cockrell, a psychotherapist for the ultra-rich, wrote an article in The Guardian explaining the trends he sees in his sessions. "What could possibly be challenging about being a billionaire, you might ask. Well, what would it be like if you couldn't trust those close to you? Or if you looked at any new person in your life with deep suspicion?

I hear this from my clients all the time, what do they want from me? Or how are they going to manipulate me? Or they're probably only friends with me for my money.

Then there are the struggles with purpose, the depression that sets in when you feel like you have no reason to get out of bed. My clients are often bored with life and too many times this leads to them chasing the next high, chemically or otherwise, to fill that void." And more often than not, he sees these struggles at their most pointed with people who grew up wealthy, who never needed or got to experience what it means to be normal or really even have anything to compare their insanely high standard of life to. It is, to some extent, a very obvious King Midas effect.

If everything is easy and glamorous and the best of the best and completely available to you and without consequence, well, very few things are going to feel all that satisfying anymore. All the more so if you've grown up with it your entire life. I mean, if you're a six-year-old flying business class around the world, I'm sorry, but everything else is going to be kind of downhill from there.

Which brings us to our last factor, the damage of growing up rich. Several studies have demonstrated the link in children who have grown up in substantial wealth having levels of anxiety and depression that outpace their peers of lower socioeconomic classes. And whether that is a case of correlation or causation is unknown, but as Cockrell wrote in his aforementioned Guardian article, "very wealthy children start out by going to elite boarding schools and move on to elite universities, developing a language and culture amongst their own kind.

Rarely do they create friendships with non-wealthy people and this can lead to feelings of isolation and being trapped in a very small bubble. There are few people in the world to whom they can actually relate, which of course, leads to a lack of empathy. The next time you watch Succession, see how the Roys interact with their staff and others outside they're circle.

Notice the awkwardness and the lack of human connection and how dreadfully they treat each other. It's fascinating and frightening. When one leads a life without consequences, for being rude to a waiter or cruel to a sibling for example, there really is no reason not to do these things.

And after a while, it becomes normalized and accepted. Living a life without rules is simply not good for anyone." And maybe it is a generalization to say that growing up very wealthy sort of condemns you to being a jerk. But when you look at the factors that we've discussed before that lead to a diminished capacity for empathy and a reduced feeling of consequences for bad behavior, it really is no surprise that people who have been raised in that environment since birth are going to have an easier time developing those habits.

Especially if behaving in these ways will have no material impact on your standard of living. We all saw Scott Disick shove that dollar in the waiter's mouth. And he's doing just fine.

And as a reminder, if you want to get into our bonus video all about how this stuff translates to paying less in taxes and feeling great about it, click on the member's only bonus video at the link in our description and check it out. Now, none of this, let me be clear, is to say that wealthy people are worse off than poor people. They are not.

Nor is it fair to say that, oh, money doesn't buy happiness. Because up to a certain level in terms of meeting basic needs and having a little flexibility and freedom in your life, it absolutely does. However, it's important to understand that our cultural tendency to frame very wealthy people in an aspirational way is part of what allows them to continue to get away with psychological and social behaviors that are objectively not up to snuff.

On aggregate, they do tend to treat people with lower socioeconomic classes as less than them. And by constantly lionizing the wealthy in our society, we continue to say that on some level that's OK, which we should probably stop doing. As always, guys, thank you for watching.

And don't forget to hit the subscribe and join buttons. And to come back every Monday, Tuesday, and Thursday for new and awesome videos. Bye.