The Rich Friends Tax

The aspirational lifestyle

Recently, I’ve been seeing a lineup of self-styled gurus wildly gesticulating in my Instagram feed. They tell me that I need to get their seven-figure globetrotting lifestyle right now. Elsewhere in my feed, I see posts reminding me that quality friends are the ones already living (my) ideal lifestyle. Truly, many people are willing to mutter affirmations, sign up for courses, and pay for private consultations to become rich. “Rich” is an elusive club, and $19.99 is a small price to pay for access.

What these gurus won’t tell you is that you’re paying the “rich friends tax”. This tax is an unspoken social contract in which you agree to spend money to remain friends with people who are richer than you are.

There is nothing wrong with paying for business advice, or even access to good information. But when it comes to relationships with wealthier friends, the costs seem to be calculated on the backend. You might feel pressured to pay up to avoid being labelled “gold digger” or “free loader” by people you care about.

Unfortunately, even genuine, organic friendships with rich friends come with a hidden price tag. Grumbles over expenses are never about the money itself. They are likely about deeper issues like financial incompatibility and feeling undervalued in the relationship.

In one Reddit post, we are told of a lavish dinner for a rich friend’s 40th birthday, which ended up costing a couple the eye-watering sum of $1,100. Though the hosts knew that these guests earned a modest income, they gave no warning about the high cost of the meal. Not only was the couple blindsided by the subsequent payment request, they were also offended by the nonchalant attitude of their friend.

Most redditors suggested that the couple learn from the experience and stop supporting their friends’ high maintenance lifestyle. After reading this story, the phrase “rich friends tax” came to my mind as the hidden cost of materialism. Then I remembered that last year, a socialite friend of mine sent everyone in her contacts list an email demanding an outrageous sum of money.

Her parents had burned through millions of dollars in two years. Imagine a long list of public figures, high ranking diplomats, and entrepreneurs reading, “It’s expensive and you need to send money,” to cover the costs of her parents’ lifestyle. The wording of the email was so caustic, I had to forward it to a lawyer. After being assured that the request was legally out of order, I deleted the message. Clearly, our friendship had moved into the ‘pay to play’ phase, and I was happy to drop out.

Our society pays lip service to sustainability, wholesome values and authenticity. What many people are really after is the feeling of relief they believe will come when they have expensive things, good social standing, and influence. Some are happy to pay if a relationship is openly transactional because the power balance feels equal.

The ‘my boyfriend’s rich friends’ problem

In romance, things can get complicated if it’s your partner’s rich friends who have an expensive lifestyle. Your relationship can become unstable if you cannot afford to hang out with them. Back in 2014, it was reported that Cressida Bonas expected her boyfriend at the time, Prince Harry, to cover the $1,000 flight cost for her to attend the wedding of his friend, Guy Pelly, in Memphis, Tennessee. Cressida wasn’t financially comfortable paying for it herself, especially given that the relationship appeared to be on shaky ground. Harry reportedly refused to pay, leading to an argument which further strained their relationship.

Research highlights a negative correlation between materialism and well-being. When people feel they must prioritise material things, they will feel lower levels of happiness, life satisfaction, and self-esteem.

The ‘dating a billionaire girlfriend on a millionaire’s salary’ problem

What if your partner is a billionaire with rich celebrity friends? Your misery might go off the scale if you start buying things to try and impress them. Travis Kelce, for example, spent about 10% of his annual salary on a single event, the Super Bowl, so his girlfriend and her celebrity friends could watch him play.

On his podcast, he complained, “… counting how much money I’m spending on this damn Super Bowl for family and friends to come. Just making sure I’m on top of those finances and losing all this money.” Even really rich people said they would never spend $1 million for a luxury suite on Super Bowl Sunday. I think it was too much of a burden, considering the short duration of an NFL career.

Materialism is bad for you

When we contemplate the negative effects of materialism on well-being, we think of social comparison. Every day, we are encouraged to compare ourselves to others, and this causes unfair judgements, envy, and anxiety. Anna Sorokin played this game in reverse and tricked her rich friends into funding her lifestyle. She understood that wealthy people were scared about becoming less wealthy, and in their anxiety, they kept pursuing material gains. Then, as they got swept up in the cycle of desire and dissatisfaction, she swiped their credit cards.

Many of Anna’s victims could afford to write her off as a grifter. But her non rich friends went into debt to remain in that exclusive social circle. Unfortunately, they paid the “rich friends tax” and it cost them immense financial and mental damage.

Outro

In each of the stories I have shared, it should be clear that when we think about social relationships, we should strive to find a balance between what works for us and what others expect us to do for them. Perhaps now is a great time to remember that when we spend money, we make choices that bring us the biggest relief. Thus, the “rich friends tax” is an invisible transaction fee for an aspirational lifestyle. And we usually never see it until we start feeling either a huge financial burden or a persistent lack of relief.

The best lifestyle we can have is one where we never feel the need to compare ourselves to others. It’s okay to worry about losing what we have. But might we also recall the hidden costs of our aspirations? On reflection, we may find the motivation to seek after genuine happiness, and friendships, on our own terms.