If you’re a wealth creator, you’ve probably built a successful business and grown a substantial portfolio. You’ve earned the right to enjoy your wealth and live the life you’ve worked for. You deserve it.
But the question is, “What now?” Most likely, you are a person who makes things happen. So, what would you like to make happen next in your life?
If you’re like most people, your answer would be, “I would like to ensure that my children and grandchildren flourish and have successful lives.”
And that’s a noble goal. Because, in the end, what matters most in life is the depth of your relationships with your family and friends – the people you’ve been able to help along the way. That’s your true wealth.
Your financial wealth is not just an end in and of itself. It becomes a resource for nurturing family relationships and enhancing the lives of those you love most.
You Can’t Fly Average
Certainly, one of your jobs as a patriarch or matriarch is to protect your wealth. But it’s not your most important job. The most important thing for you to do is to protect and grow the people in your family and to protect the well-being of future generations.
It’s a big job that demands focus, commitment, time, and effort. In fact, if you want to give your children and grandchildren their best chance in life, you have to take extraordinary measures. As they say in AA (Alcoholics Anonymous), “Half measures avail us nothing.”
You need to think strategically with your family – just as you do in your business. You need to be lighter on your feet and better prepared to adapt to new situations and new people. As your family grows and expands, you will need new, more advanced tools and better systems to handle challenges. In order to prosper, your family requires the same vigilance, the same kind of hard work, and the same kind of agility to change as your business requires.
If you fly average – in either your business or your family – a lot will go wrong. You won’t succeed.
That’s because there are risks for affluent families. And the risks are real. Let’s take a look at what might happen with your children.
Lonely, Isolated, and Scorned
When kids are young, they often grow up feeling lonely and empty because parents are gone a lot – out of town on business and busy with social obligations. The kids come home to an empty house, eat at an empty table, and retreat to an empty bedroom. They can feel isolated from their parents and alone in the world.
These same kids are often scorned by other kids in the community for having money. No one understands that they could ever have any problems because, after all, they’re rich – and money solves everything, right? They are the brunt of anger and jealousy and have no idea how to handle that.
They can feel pressure to achieve more than they’re really capable of because successful parents expect it of them. They translate anything less than perfect as a failure.
I once had a client who admitted cheating on an important exam in high school because his father expected him to get into the Ivy League school both he and the boy’s grandfather had gone to. The young man cried in my office over what he had done in an attempt to please his father.
Boys who grow up under the shadow of a successful father can often feel “less than.” They feel inferior, knowing they can never accomplish half as much as their dads. One 50-year-old businessman told me he would never match up to his successful father, even though he has become CEO of his family business and grown it to be even bigger than when his father was in control.
What’s the antidote? Perhaps simply being aware of these pitfalls for your young children and teenagers can motivate you into managing your own schedules better so you can carve out more time to be with your kids. Perhaps you will be able to change attitudes and priorities and put more effort into interacting with them in a meaningful way.
Studies show that eating dinner with your children at least five times a week results in higher grade point averages; less alcohol, tobacco, and marijuana use; less anxiety and depression; fewer suicides; and higher self-esteem. Those are significant positive benefits simply from eating together!
It’s because the attention, the bonding, the sense of identity with a loving family, and the conversations with adults who care help kids feel worthwhile and valuable. It reduces the negative influences from jealous or competitive peers and an environment that often feels like it’s trying to chew them up and spit them out the other side.
The Risks Continue
Jackie Kennedy Onassis once said, “If you bungle raising your children, I don’t think whatever else you do matters much.”
That’s a powerful statement about the importance of your job as a parent. It doesn’t mean you have to be a perfect parent. No one is. You just have to be good enough. That means putting your children at the top of your priority list and spending time interacting with them, listening to them, supporting them, and letting them know how valuable they are to you.
Even when your children become adults, they still need your support – because the risks continue into adulthood.
They can be confused about what careers to choose because they feel a financial cushion under them. They can feel guilty for having money they didn’t earn. I’ve worked with a number of inheritors who felt “wealth guilt,” realizing the lifestyle they live and the luxuries they enjoy come primarily from the largesse of a parent or grandparent rather than from any hard work they have done.
Even when they have significant careers, it’s difficult to earn enough to accumulate the amount of money they have in trust. Thus, they feel unworthy of their privilege.
Some studies have shown that 80% of beneficiaries consider their trusts to be a burden. That’s because they feel controlled by them, often being told, by a trustee they barely know, when they can and cannot have access to their money. They become angry and resentful of parents or grandparents for holding so much sway over their lives. Other beneficiaries feel that they are being kept dependent on the trust creators because they rely on someone else’s money for their survival.
This is certainly the case with a young man I worked with recently who said, “If I just knew I had to rely on myself, I would be able to make a better decision about my career. But having the dangle of my parents’ money always in front of me keeps me mixed up and unable to make a definitive decision. It would be better if they just said I will get nothing or I will get X amount – whatever that is. Not knowing is really difficult for me.”
In other words, money can become a curse instead of a blessing. The job of parents is to help kids learn to balance their two worlds: the world of middle-class values — which includes a strong work ethic and a sense of frugality and responsibility — and their other world: their reality of being affluent.
Even if kids don’t have money of their own, they have likely grown up with privileges other middle-class kids did not have. They know and have lived in “Wealthlandia,” and it’s a big part of how they see the world. They have to learn to assimilate these two worlds. You can set up systems and programs within your family to help them accomplish that.
An Increasingly Complex System
In one of the families I worked with, the in-laws brought with them a wide variety of perspectives that created tension in the family. One daughter-in-law was resentful of the family’s affluence. She scorned her father-in-law, considering him an entitled rich man, even though he was humble, generous, and he lived a low-key life. Her sister-in-law lapped up the money and ostentatiously displayed it every chance she got. And the brother-in-law avoided all appearances of money, working hard to grow his own business.
This is not an uncommon scenario as children marry and have families of their own. Undoubtedly, when “immigrants” – the spouses of your children – come into the family, you find yourself in a very complex family system.
Your core values and family traditions will likely compete with those of the newcomers. Everyone in the family will be influenced by their new ideas and perspectives, and the way you do things will become increasingly challenged by these outside forces. If you don’t figure out how to assimilate them into your family culture, they’re likely to work against you and what you believe in.
But even if you have wonderful sons- and daughters-in-law, family problems arise. They just happen. Conflicts and jealousies among your kids; bad marriages that can take a toll on the entire family; illnesses, mental health issues, learning disabilities, or deaths in the family. These can all change how people relate to each other and how family members get along.
There is a whole menu of things that can happen to families as time goes on. Just the ordinary things of life. But if you’re not prepared, they can spell disaster for the whole family.
Fortunately, you don’t have to be an expert in resolving these problems. But you should have resources available and a professional ready to help when they show up in your backyard.
Looking to the Leaders
Peter Drucker, management guru, once said, “The bottleneck is always at the top of the bottle.” He meant that in business, when a problem comes up, you look to the leaders, not the employees, to analyze and fix it.
The same is true with your family. As parents, you can’t control your kids, but you are the top of the bottle. You have to be able to focus on potential problems before they become too big and too destructive and then do something about them.
You don’t want to be the bottleneck in your family. You want to be the bridge that carries your kids from troubles and barriers to greater prosperity.
You have the opportunity to guide your family through the tough spots, help your children find their way through the maze of life, and set your family on a path for high performance.
In order to accomplish this, you may need to adopt two principles:
- Willingness to change – This means you have an open mind, embrace differences, and accept new perspectives.
- Clarity on what you stand for – This includes a well-articulated family value system that all family members have bought into.
And then you need to be able to balance the two so you don’t end up giving up on one of them to accommodate the other.
In business, they say, “Adapt or perish.” In your family, you have to develop an open system that, over time, takes in new people, new ideas, and new ways of doing things – while simultaneously holding on to the core values that define you as a family.
If you resist change, your family will likely become angry, uncooperative, disloyal and out of control. If you simply stick your head in the sand and avoid problems, your family will gradually fall apart.
But if you explore issues openly and honestly and engage in meaningful change, you will guide your family into happiness and harmony. You will enhance the lives of your children and grandchildren and benefit your entire family. That is where your true wealth lies.
© Joanne Stern, PhD. All rights reserved. Originally published in the Bonner & Partners Family Office Strategic Review, Volume 4, Issue 2, February 2016 • www.bonnerfamilyoffice.com