I was interviewed last week on social trends in 2009 for a feature story in the Sunday Times magazine in Perth. In order to illustrate my ideas, I coined a term, Wealth Adaptation Syndrome, or WAS.
(One of the great things about the growth of Internet content and search engines is that when you invent a phrase you can check whether anyone has ever written it before. This post is the first ever appearance of the phrase ‘Wealth Adaptation Syndrome’. However note that Sudden Wealth Syndrome (a quite different phenomenon) was commonly referred to during the dot-com boom.)
Wealth Adaptation Syndrome is, quite simply, the process of adjusting to significantly different perceptions of your personal wealth. This applies quite differently depending on starting levels of wealth, but in all cases requires adjustment of not just wealth status, but also social status, and usually behaviors including spending patterns.
Many people who just one year ago had very high levels of financial assets, business wealth, or income believed they had extraordinary talents. In many cases they had simply ridden the wave of asset inflation and associated financial activity. Bankers in London, real estate developers in the US, entrepreneurs in Australia who lost leveraged holdings in their own companies all are illustrative of the many who have rapidly shifted from feeling like Midas to destitute. As the supposed fruits of their brilliance has vaporized, they are having to reassess themselves (given that they have usually already decided that money is the best measure of a person’s worth), their role in society, and what they do with their lives.
For many more the wealth adjustment has not been as great, simply resulting in their personal assets in their home and shares being worth less, but still requiring an adjustment in spending patterns. Currency movements may have put overseas holiday plans on hold, while daily habits may shift to frequenting different restaurants or eating more at home.
For all, a significant adjustment in wealth requires a change in self-perception. Some adjust readily, having already lived through many vicissitudes in their life, whereas others find the adjustment very difficult to make.
Opportunities abound in this adjustment. ‘Cheap luxuries’ that allow people to feel as if they are living a luxurious life without spending big will thrive. A great example is the rapid rise of premium chocolate shops, which sometimes charge almost as much as silver for their smooth creamy wares, but allow people to experience the best without (fully) depleting their wallets.
Escapism and fantasy, already a strongly rising trend over the last few years, is likely to boom even further. Entertainment and experiences which allow people to live briefly in different worlds will allow people to briefly live a life other than their own.
There are plenty more opportunities in this world (other than for psychologists) – any suggestions?
I expect a lot more attention to be paid to Wealth Adjustment Syndrome in 2009.