Children of the wealthy have been caught in the headlights recently. The Atlantic recently reported on The Secret Fears of the Super Rich, a study originating out of Boston College’s Center on Wealth and Philanthropy that points out the high level of anxiety parents have about transferring capital to their children. They don’t want to take away the incentive to work or otherwise burden their kids. The NYT’s Bucks Editor comments on a thoughtful Paul Sullivan column with the headline: Keeping Affluent Kids from Turning into Brats, and the respected consultant Lisa Grey recently asked in her blog, Does Wealth Really Spoil Heirs?
From Silver Spoon Kids to The Price of Privilege, families—and experts—are vigilant to the tendency of kids to “spoil,” like apples or strawberries that grow soft and mushy if not kept properly chilled. I am not naive about the impact of wealth on the social and psychological lives of children. I see the same things all the experts see and families worry about.
But I see them differently.
Wealth does not spoil children. It does not make them decay and grow rotten. But like a strawberry left too long unattended on the kitchen counter, children who do not receive thoughtful coaching, consistent mentoring, world class instruction, and copious support to use family wealth (and by this I refer to the human capital of the family—TRUE wealth—as much as the financial capital) are indeed vulnerable to the dangers that accompany financial amateurism.
It is self-evident that one does not send a child onto a tennis court with a racket and no prior instruction to play world class competitors like Roger Federer or Serena Williams. And you don’t have to be a Tiger Mom to know you don’t send a kid onto a recital stage to perform without providing a great instrument, proper teaching, and ample practice.
But when it comes to the so-called “spoiled brat”—there is a sense that wealth or the oblivious child, is the problem. And instead of providing world class instruction, families react in fear, withholding or limiting the scale of their gifts, potentially robbing the next generation of the possibility of becoming the next visionary philanthropist, the next world class artist. Kids who receive training commensurate with the resources of the family have the potential to develop the skills and capacity of leadership, bold vision, and deep compassion.
I am a Maine girl, born and bred. Frugality and a strong work ethic are the human capital I inherited from my grandparents and my mother (she was an early, minor version of a Tiger Mom). I have a romantic ideal of the power of “overcoming odds,” and “pulling oneself up by one’s own bootstraps,” etc. But if you really listen to kids who grow up in the context and culture of their family’s wealth, you know they have their own hardships to deal with. Yes, I know the violins are playing and few people have much sympathy. I’m just saying: kids who have wealth need education to accompany it. They can do great things if they are not left to “spoil.”
I boringly remind colleagues and clients, endlessly, that every family has good intentions to raise financially thoughtful kids. Great families are intentional about providing continuous financial coaching, mentoring, skill building and knowledge. Children who will inherit capital are—whether you like it or not—world class beneficiaries by default. And they require—and deserve—the same thoughtful support we would give if we identified an early facility with golf, a great voice, or an ability to play chess.
Preparation for the responsibilities of wealth is not an amateur sport—it is serious work. I know, save your outraged tweets. I hear the rebuttal now: “I want my child to be a kid! I don’t want them to just think about money!” Families who raise kids with great values communicate that life is not just about the money by the behavior they model. They provide good solid boundaries for their kids and at least as much instruction for financial skills as they do a tennis swing. Wealth corrupts—and children spoil—when they are left without guidance and support and tools.