The patriarch is married with three adult children in their 20s and 30s. He arrived as an immigrant to the United States at age 18 and immediately started work as a taxicab driver. He grew up on a farm in the rural countryside of eastern Europe where farm chickens were his “toys”. He was raised in extreme poverty with nothing but yet developed the mental fortitude, initiative, smarts, and wherewithal to conquer life’s hurdles and successfully achieved the American dream beyond what most people ever attain. Now almost 40 something years later sitting for a meeting in his conference room, he asks “How do I teach my children to work hard and to not solely rely on their trust funds? It’s not as if I can just drop them down in my home country and tell them to make their own way.”
His children had never known anything but extreme wealth and had never held a paying job in their lives yet enjoyed all the riches their parents had worked so hard for and provided to them – the mansion, the yacht, the cars, vacations, you name it. They were now young adults who grew up in one of the wealthiest zip codes in America and dropping them into an underdeveloped country would have been too traumatic for their psyche, never having encountered any hardship which may have given them an experience to build resilience. If you are reading this, you are likely to have a similar story of your own – whether you are the trusted advisor or the wealth creator. The theme of the story is ubiquitous among families of significant wealth.
The Challenge of Wealth
One of the biggest challenges for affluent families is balancing the need to provide a comfortable life for their children, giving them access, opportunity and advantages unavailable to most people, with the desire that their children become contributing members to society in their own right. Adversity builds character and making mistakes or failing at something are some of the most effective ways for children to learn and build resilience that simply cannot be taught academically in a classroom. Children born into significant wealth – the type of wealth that will surpass their own generation – rarely experience a life lacking much of anything let alone basic human needs; quite the opposite, everything is available at a much grander scale or in excess. Consequently, they normalize this, and entitlement can ensue. They never had to work for anything and believe they’ll never have to; because everything is available to them, there is no felt need to do anything to earn it. They are consumers.
While there is nothing shameful in having a life of privilege, the type of experiences that come with not having financial security are some of the greatest internal motivators for personal development and active engagement. When we learn about Sarah Blakely’s humble beginnings when she started Spanx, and how she landed on Forbes list in 2012 as the youngest self-made female billionaire, we are captivated because we know she spent two years and $5,000 of her savings to develop Spanx while still working at the office supply company where she first started selling fax machines door to door. 1 The story is illuminating because of the achievement of success through true grit – defined by having a commitment and passion for something while maintaining that commitment long term and in the face of adversity, failure, and challenges.
When you are given everything without earning it through your own efforts, there is little opportunity to experience personal failure and challenges, and even less of a need to commit to anything. This can lead to an underdevelopment of self- identity and purpose. For those of us who aren’t born rich, our lives will be full of challenges and failures. For children of affluent families, how will they learn to commit and discover their purpose beyond the money? Ironically, the best intention of giving your children everything money can buy can also rob them of developing their own personal identity and raison d’etre.
Eat Your Cake & Have it Too
Achieving a status of great wealth and raising actively engaged productive children with a healthy self-identity and commitment to some purpose is not a zero sum game. You can do both. It is never too late to start but like most things that take time to develop, early is better because by the time a child reaches teenage and adult years negative habits and belief systems have cemented in and become more difficult to reverse. Still, it can be done, though it is not a transaction but a process requiring time, resources, commitment, patience, and putting in the work – by parents and children. This is no small feat because the absolute first thing that must happen is a willing participation from the next generation. Forced behavior is not synonymous with internally driven lifelong learning. Sustaining the drive for continual self-improvement and taking action to achieve long term goals for the benefit of a larger group or cause beyond one’s “self” is a never ending journey that can only be successful if everyone involved is present of their own free will. There are existing methods, tools, practices, and workshops that can support a family to actively engage the next generation and teach them to view their good fortune as an opportunity to steward, not merely consume, the wealth.