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Tess Vigeland: So winning the lottery is one way to assure your financial independence. Another is to grow up rich. But the wealthy have their own problems. Problems the rest of us wouldn’t mind having, but problems nonetheless. I guess. Like, when’s the right time to tell your kids you’re rich?
A recent survey commissioned by PNC Wealth Management asked 15-hundred wealthy Americans that question, and a lot of others about wealth and parenting. The results show that a lot of moneyed moms and dads tend to duck the issue, possibly to the detriment of their sons and daughters. Oh no. Marketplace’s Sean Cole has our story.
Sean Cole: For the purposes of the survey, wealthy is defined as having investible assets of half a million to $10 million or more. And while half a million might not seem wealthy in this day and age, it’s enough to make some parents all squirrelly around their kids.
About 40 percent of parents surveyed said you should wait until your kids are 21 before talking to them about the family estate. And about 9 percent of those folks said you should wait until they’re 31.
Bruce Bickel: It’s too late in my judgment.
This is Bruce Bickel, senior vice president of PNC Wealth Management. He helps family foundations manage their assets. But what they really need, he says, is help managing their lives.
For instance, he says kids should start learning how rich they are and how to manage wealth when they’re still in grade school. But a lot of parents just don’t know how to bring it up.
Bickel: The way I start out, you know, is to take a pie, for instance with young children, and say we’re gonna show you where mommy and daddy spend our money. And you cut it in different slivers. And say now this is how much we pay for our house, and this is how much we spend on our clothes. . .
Then give them an allowance, he says, and teach them how to slice that pie up, always leaving some aside for charity. You should also encourage your kids to get an after-school job, he says, and to differentiate between what they need and what they want. All of this will prevent kids from growing up feeling entitled, he says, which is exactly what 45 percent of parents in the survey are worried about.
Bickel: It’s really important that we help our kids learn to become responsible citizens. Rather than grow up with an attitude of greed or griping, we help them grow up with an attitude of gratitude.
Which is quite a platitude. The question is, how do you even hide the fact that you’re rich from your kids, especially if you’re really rich?
Luke Weil: I remember, you know, being picked up from school to go on holidays in a limousine, being this huge thing I remember being. . . ]
This is gaming heir Luke Weil being interviewed in a documentary called “Born Rich.” He’s one of 10 heirs and heiresses that appear in the film, all from families that make $10 million look like lunch money. The film was made by Jaime Johnson — as in Johnson & Johnson. He says in the movie that he grew up in a big house in the country, but he didn’t learn how rich he was from his parents.
Jaime Johnson: I was 10 years old. It was in fourth grade during a free reading period in the library. A kid in my class found my dad’s name in a copy of Forbes magazine — with a list of the 400 richest people in America.
I got a hold of Johnson at his office in Manhattan. He says rich parents who don’t tell their kids how to handle money early on can end-up with messed up kids, as evidenced by this moment in the film.
Weil: If you ever have an encounter that rubs you the wrong way, and I’m up at boarding school and this kid’s from some [bleep] town in Connecticut, you know I don’t know. I can just say [bleep] you, I’m from New York, I can buy your family. Piss off.
Johnson: I think parenting is a huge problem amongst rich families. I think that when you have someone saying things like “[bleep] off, I can buy your ass,” that becomes an issue of parenting.
The thing is, the majority of parents in the survey said being open with their children about finances was important. But more than half have never discussed the responsibility that comes with family wealth.
One parent who doesn’t talk much about money with her kids is Lucy. She didn’t want her last name used.
Lucy: Well, I just don’t like to be very public with finances.
Lucy has two kids, 18 and 20. The family is worth more than $50 million from when her husband’s telecommunications company went public. But she says her kids learn by example, because the family doesn’t live extravagantly.
Lucy: Well, that’s a little bit not true. We do have probably a few more houses than we can properly deal with but . . .
Cole: How many is a few more than you can deal with?
Lucy: Well let’s see, we have . . . five houses, I guess, effectively.
Both of her kids have had summer jobs. Then again, each of them also has a car and a charge card.
Lucy: I mean, I haven’t been good in training them about money. You know, when they need something that seems reasonable, I guess they get it, but they don’t spend exhorbitantly.
Cole: When you say, “I guess they get it,” you mean you give it to them.
And she says “no” sometimes. But that “no” doesn’t always stick.
Again, Bruce Bickel of PNC:
Bickel: The reason most people don’t want to say no is because they don’t want to disappoint the kids.
Cole: Is it me? I feel like these are wonderful problems for people to have.
Bickel: But I think, Sean, you’d be surprised how the families say, you know, this is really difficult.
Cole: But I mean I’m just like “Awwwwww, poor baby. . .” You know I mean like. . .
Bickel: Well I’m with you, I understand that. But we are essentially our brother’s keeper in that regard. And how is it that we can help the next generation become more responsible individual families and when you have more individual responsible families, you’re gonna have a more individually responsible community and a city and a state and hopefully a nation and a world.
Cole: So you’re trying to lower the population of spoiled brats in the world.
Bickel: Good statement. That’s a good summary statement: Lower the population of spoiled brats.
After all, fewer spoiled brats, fewer people telling you that they could buy your family. In all fairness, the kid who said that in the documentary admitted that it was petty and underhanded. “But it’s so easy,” he said.
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