When Being Wealthy Doesn’t Equal Having Money
Things Aren’t Always as They Seem
There are all sorts of wealthy people in society, and you may think that you know how to tell them apart from “regular” folks.
And, on many occasions, you’d be completely wrong.
Not only that, you’re as likely to make errors in both directions: overestimating and underestimating.
Even within the same family, attitudes towards wealth, and how one goes about putting it on display or carefully concealing it, vary greatly. This happens between generations, and also within them.
Today we’ll be looking at this from a few different angles to see what we might learn from this nebulous area.
Immigrants and Natives to the Land of Wealth
One of the reasons that parents and their children often differ in their views on wealth is that for the “wealth creators’” generation, there’s often a process of “immigration” to the land of wealth.
I wrote about this in 2015 in Independently Wealthy vs INTERdependently Wealthy where I wrote about the book Strangers in Paradise, by Dr. Jim Grubman.
Grubman details that parents are often born into a lower class life, but then make the journey to a new land of wealth, much like immigrants who uproot their lives to move to another country.
The children of those immigrants, though, are born into the land of wealth, and therefore typically consider themselves natives.
How Parents Treat their Offspring
I’ve been involved in youth sports much of my life, and the way that parents who coach their children’s sports teams has always fascinated me.
The vast majority of the fathers I’ve witnessed who had their sons on the team they coached would either severely overestimate or underestimate their child’s ability.
For every coach who thought his son was the next Gretzky and always put him on the power play, there was another whose child actually was the best player on the team, but was constantly treated more harshly.
Few could find the proper balance.
And so it seems quite often with parents and their children when it comes to wealth.
Entitled Kids Showing Off on Social Media
Many of us are familiar with one extreme, where the entitled children of the uber-rich have huge social media followings where their excesses are on display for the world.
Like the sports example, there’s another side to this coin, and it doesn’t get any press coverage.
There are plenty of cases where families are quite wealthy, financially, by any measure, but where the offspring spend much of their lives without much access to any amount of liquid wealth that they can actually spend.
I was part of a group Zoom call recently where a colleague referred to this by quoting a typical sentence uttered by one of these wealthy family members as follows:
“Yes, we’re rich, that’s nice, thanks.
Now, can I also have some money?”
Testing the Limits of Patience
This phenomenon is present in many families, and sometimes it gets passed down from one generation to the next.
Other times, when one generation has been forced to wait decades to have any real access to the personal benefits of their family’s wealth, they might realize the negatives of this reality and adopt an attitude of sharing the wealth with their offspring at an earlier age .
Getting back to the quote from above, when I heard it, I was reminded of something I once heard from an Asian-American who wasn’t good at math, who lamented that it wasn’t easy for her to deal with that because it doesn’t fit society’s expectations.
Some professionals who work in the family wealth space refer to such offspring as “waiters”, and when they do, I’ll typically add “Yes, and they don’t work in a restaurant!”
Is There a Cure for This Phenomenon?
I touched on this in Great Expectations in Enterprising Families last summer. My view is that the rising generation have a right to know what they can expect, and that it must be a lot more specific than “someday this will all be yours”.
Many professionals who advise wealthy families convince the senior generation to maintain a tight grip on their wealth and happily provide them with horror stories to make them believe that grip is necessary and actually beneficial.
It’s also typically self-serving for those advisors.
All I know is that I have personally told my offspring that I won’t set things up in a way that’ll make them hope I hurry up and die so they can have some money.