ESPN recently did a movie on what happened to poor people who suddenly became multi-millionaires when they joined a pro sports team.
TLDR: they quickly spent it all and wound up with nothing. It turns out to be amazingly easy to burn through a million dollars.
On a similar note, I do understand the peer pressure that comes with being on a team like that. "tradition" where you buy your entire team dinner for a night on the order of high 5 figures as a start. I can start to sympathize with how that spirals when the environment itself pressures you. More reason to make a financial planning class mandatory in school. Won't save everyone, but it'll at least bring awareness.
After all, we live in a market society, shouldn't students be at least able to read a simple P&L statement and balance sheet?
I always wanted to start a business, so on summer break I took a course in basic accounting from the local community college, and it has served me very well ever since.
Will Smith is another cautionary tale. As a teen, he made it big with his Fresh Prince rap songs. He blew all the money on partying. Then the IRS came knocking. It had never occurred to him he had to pay income tax on his millions, which no longer existed. He made a deal with the IRS. On his show "Fresh Prince of Bel-Air", all his earnings other than an allowance went to the IRS.
Is there a word for this phenomenon? What makes everyone believe they're a special case?
Consider that the type of people who are more inclined to accumulate wealth are the ones faced with this choice.
The people who'd rather strum guitars don't often find themselves in that position. So your observation is painfully anecdotal and not really useful.
I have some "relative" taste of it in that I'm a lot better off than the past 3 generations of my family minimum. But I was still far from what I consider "wealthy" even within the tech community, let alone to the country at large. I didn't feel it fundamentally changed how I approached finances outside of being more willing to splurge on some tech (something I've always wanted to do) after I put away 20% for savings.
But that's only one magnitude. Who knows, money corrupts for a reason.
The issue here is that it depends what you're trying to do. If you have eight figures then you have all the housing and vehicles you need and more money is not going to make a big difference in that regard.
But that's not what people use it for at that point. Mostly what money past that is used for is business. You own a company and you want to get into the auto industry? You're going to need to pay designers to design the cars well before you make any revenue, and then you're going to need factories and raw materials etc. Suddenly a million bucks is chump change and if you want to make it work you need a lot more.
My goal isn't to make money for money's sake. Nor even leaving oodles of money to my kids. I'd metaphorically just spend my days strumming a guitar for the rest of my days. The economy is just a distraction from what I really care about.