Handling your children

The Ritcey Report

May 18, 2017

This is part four of a four-part blog about the, sometimes devastating, consequences of overnight wealth.

Affluenza – a condition that comes from being surrounded by too much money, and it can affect children very negatively. Our children, those in our family we care and worry about the most, are especially vulnerable to the consequences of sudden wealth.

This is the fourth of my blogs about the impact of overnight wealth and, despite the overwhelming evidence that the results of sudden wealth are usually more negative than positive (especially on children) I have located a source of good news.

Silver Spoon Kids

In their book Silver Spoon Kids: How Successful Parents Raise Responsible Children, authors Eileen Gallo, P.H.D. and Jon Gallo, J.D., offer some important clues about the do’s and don’ts surrounding a formidable issue. It comes down to three things:

  • Encourage your children to live your values, especially those you lived by before you hit the jackpot.
  • Teach your children about money through word and deed. Be responsible role models, in other words.
  • Raise givers not getters.

One insight from the that especially resonated with me was the following:

People have not been educated to raise children in an affluent society. Part of the problem is that many parents are first generation affluents. They grew up in households where money was scarce. As a result, they lack adequate models for their parenting attitudes and actions.

Modeling

Modeling is a key issue in all households, including wealthy ones, psychologists say.

“You are literally displaying a behavior and then younger people who are more prone to being influenced by things see it and there’s a sense of entitlement by some people with money, not all people, and there’s also a sense that you’re not being corrected if you’re getting away with things,” said Harris Stratyner, a Manhattan psychologist who works primarily with wealthy families.

Children do what they see, psychologists say, and that plays a big role in the kinds of values you instill in your children. If you’re the kind of person who stops at a traffic light to let an elderly person pass or picks up food for them in the supermarket, they watch this from when they are babies, and learn.

Follow the example of Warren Buffett

Perhaps there is no greater positive example of children modeling the values of their wealthy parents than the Buffett family, with the father, Warren Buffett of Berkshire Hathaway, one of the wealthiest people on the planet. And yet, his kids grew up never thinking they were wealthy. Buffett’s youngest son Peter, who is now 57, said he didn’t actually realize his father had amassed so much wealth until he was 25.

In a quote widely repeated when it comes to raising children with wealth, Buffett, the father, has said that he wanted to give his kids “enough so that they could feel that they could do anything, but not so much that they could do nothing.”

Hear! Hear!

Dave Ritcey, The Ritcey Team, Scotia Wealth Management