As a primary-school child in suburban New Jersey, Jordan Roth says he didn’t quite grasp the dizzying extent of his family’s wealth, though he got a tart first clue as a six-year-old, when a classmate opened his birthday gift and said: “Humph. I thought I’d get a bigger present from you.” His family had a live-in housekeeper, but that wasn’t especially unusual in his area; more unusual was the family driver. But because Roth started attending Horace Mann, a top private school in New York, when he was 10, he was less self-conscious about this than he might have been, as a fair number of the students got dropped off each day by someone, rather than taking a bus. It wasn’t until he was a teenager and moved to Park Avenue that larger disparities began to reveal themselves. His father, for example, had a private jet. “During the holidays, people would ask things like, ‘What flight are you on?’ ” says Roth. “How do you answer that?”

His father is Steven Roth, CEO of Vornado Realty Trust, and estimated by Forbes to be worth $1.3 billion, making him the 897th-richest person in the world. His mother, Daryl Roth, has produced five Pulitzer prize-winning plays and has a theatre in New York that bears her name. I guessed he’d be thoughtful about the complications of inherited wealth. He’s 33, and he is vice-president of another theatre group.

Discussing money is considered vulgar – it’s a taboo worse than sex. Sigmund Freud famously decided money was a metaphorical stand-in for faeces (repellent, hoarded, tightly controlled). And inherited wealth was a topic even Freud couldn’t handle without conflict. Apparently, according to the late economist Peter Drucker, the doctor was ashamed of his family’s bourgeois roots and instead promoted the myth that he grew up in penury.

Recently, I phoned Andrew Solomon, heir to a pharmaceutical fortune and author of the depression memoir The Noonday Demon, and asked if he’d discuss the psychological effects of inherited wealth. In the most gracious way, he declined. I pointed out that in his book he was willing to talk about a depression so profound he attempted to contract HIV in order to have a reason to kill himself; yet he was too shy, on the phone, to talk about his inheritance. Why was that? “Because I think talking about money causes people not to take you seriously when talking about other things,” he said.

Roth was willing to talk about his money. But even he had his limits. He tells me, for instance, that he had his first “crisis of wealth” when he graduated from Princeton and found himself installed in a beautiful two-bedroom apartment in New York’s West Village. He wasn’t working, yet was luxuriating in its splendour. “It’s very clear if you don’t want [the money],” he says. He’s long, lean and handsome; when he speaks, he looks you right in the eye. “It’s less clear if you do want it but don’t like what that necessarily means.” Right, I say. We sit in silence for a moment. So how much was the rent on a nice two-bedroom apartment in the West Village in 1997? He smiles. “I’m totally not telling you.”

We live in a culture of unprecedented, voluptuous wealth. In America, in 2003, the most recent year for which figures exist, there were 10,000 households worth $100m or more. New York has already evolved from a place of aspirational wealth to one of inherited wealth – if the average price of an apartment is $1.3m, who besides investment bankers can afford one without parental assistance? “There are already examples of whole societies out there like this,” says Dalton Conley, author of the forthcoming The Elsewhere Society. “Like the Gulf states. I’ve compared Manhattan to the United Arab Emirates before. They have a non-native working class that comes in and does all the labour, and the natives don’t have to do anything.”

Blue-bloods, perhaps, have a strategy for coping with their inherited wealth – wearing the ratty sweaters, pursuing the eccentric hobbies – namely, pretending it doesn’t exist. But this strategy is hardly applicable to any generation that makes its fortune. Members of that generation almost always believe it’s their right to flaunt it, to savour it – they’ve earned it, haven’t they, through ingenuity and hard work? Yet the newly rich inevitably discover that it’s hard to have your cake and eat it while raising healthy, hard-working children. “I just met a very sharp 48-year-old,” says Charles Collier, author of Wealth in Families and senior philanthropic adviser at Harvard University. “And he said to me, ‘I don’t want my children to be entitled, but I want to have a jet. I came from nothing. Haven’t I earned my jet?’” (Family advisers to the mega-rich say you’d be amazed how often this question about private jets comes up, as anxious business executives seek expiation.)

And perhaps this fellow has earned his jet. But his children haven’t. The problem with money is that it sets up its own paradox: hard work may yield it, but growing up with it discourages hard work. The aphorism “Shirtsleeves to shirtsleeves in three generations”, commonly attributed to Andrew Carnegie, has proved prophetically true across cultures.

“The dramatic growth in the number of people who are serious wealth-holders has set into motion a new set of questions,” says Paul Schervish, director of the Center on Wealth and Philanthropy, “and the one facing us presently – and it will become more important as this trend continues – will be: what is the quality of choice that wealth-holders will make? Will they choose consumption? Or a more productive use of their wealth?” He wonders what it would take, what subtle swing of “the moral compass”, to make people weigh their choices towards the productive distribution of their money – which might mean giving less to their heirs and more to charity. “We can go in either direction,” says Schervish. Clearly it says something that Bill Gates, currently worth $58 billion, has proclaimed his intention to leave each of his children only about $10m. Warren Buffett, worth $62 billion, has said: “I want to give my kids enough so that they could feel that they could do anything, but not so much that

they could do nothing.” It suggests that two of the three richest men on the planet see their fortunes as a ticking time bomb – and potentially corrosive to their children’s future wellbeing. “You don’t want a whole culture of kids who will be unreliable,” says Schervish.

The prospect of a new, expanded generation of unprepared heirs has spawned an entire industry, a shadow world of financial advisers and estate planners and psychotherapists who work for newly minted organisations with self-explanatory names: Wealthbridge Partners (for families whose net worth exceeds $200m), Family Wealth Alliance (which helps ultra-high-net-worth families find the right kind of staffing), Relative Solutions (which helps heirs make sure their relationships don’t destroy family-run businesses and vice versa), the Sudden Money Institute (counselling those who stumbled abruptly into vast sums). Most of these organisations didn’t exist a decade ago. All share one long-term aim: to ensure their clients never succumb to Carnegie’s supposed prediction. But what that often means, in the short term, isn’t simply coming up with succession plans or preventing financial innumeracy in the poet and boat-builder sons of the superwealthy. It means helping families to cope with the many psychological distortions that come from having lots of money. Just as poverty produces its own pathologies, so too does inherited wealth.

“This is the single most important issue our members deal with: not screwing up your kid,” says Tommy Gallagher, CEO of Tiger 21, a New York investment group whose barrier to entry is investable assets of at least $10m. To most conscientious rich people, all you have to say are two words to put the fear of God in them: Paris Hilton. Advisers to the rich structure entire symposiums for their clients around the idea of avoiding her fate. (She comes up as often in Q&As as private jets.) Yet most philosophers of wealth will tell you the pathologies and complications associated with money aren’t confined to those who stand to inherit lots. “We are not just talking about the children of multimillionaires and billionaires who have to worry about the effects of money,” says the psychologist Suniya Luthar. “Think of any white-collar professionals who want their children to lead the same lifestyles and have the same opportunities they have themselves. The critical question is how to strive for those things while also striving for their equanimity as human beings. And that’s often harder than it seems.”

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