"Rich Kid Syndrome" By Jennifer Senior

"America’s burgeoning money culture is producing a record number of heirs—but handing down values is harder than handing down wealth."

Interesting, albeit a bit obvious. I wish they'd given more advice to the kids of rich kids (hi) on how not to eff up. But at least this way I can continue to blame everything on my parents?

Article.

Highlights:

Recently, I phoned Andrew Solomon, heir to a substantial pharmaceutical fortune and author of the beautiful depression memoir The Noonday Demon, and asked if he’d discuss the psychological effects of inherited wealth. In the most gracious way, he declined. I pointed out that in his book, he was willing to talk about a depression so profound he attempted to contract HIV in order to have a reason to kill himself; yet he was too shy, on the phone, to talk about his inheritance. Why was that?

He thought a moment before replying. “Because I think talking about money causes people not to take you seriously when talking about other things,” he said.

In 2000, there were 7,000 American households worth $100 million or more; in 2003, there were 10,000; and today, though the data isn’t yet in, Boston College estimates that the number will be 14,000 or 15,000, or double what it was at the beginning of the millennium. If you pare back the standard from eight zeroes to seven, the numbers are even more surprising: Boston College has calculated that in 2004, the last time the Fed provided data, there were 649,000 American households worth $10 million or more, a nearly 300 percent jump since 1992.

By 2004, he notes, the richest one percent of Americans were earning more than the total national income of France or Italy.

Yet the newly rich inevitably discover that it’s very hard to have your cake and eat it while raising healthy, hardworking children. “I just met this morning with a very sharp 48-year-old,” says Charles Collier, author of Wealth in Families and senior philanthropic adviser at Harvard University. “And he said to me, ‘I don’t want my children to be entitled, but I want to have a jet. I came from nothing. Haven’t I earned my jet?’”

And perhaps this fellow has earned his jet. But his children haven’t. The problem with money, as he doubtless discovered, is that it sets up its own paradox: Hard work may yield it, but growing up with it often discourages hard work. The aphorism “Shirtsleeves to shirtsleeves in three generations,” commonly attributed to Andrew Carnegie, has proved prophetically true not just here but across cultures

It means helping families cope with the many psychological distortions—and moral questions, responsibilities, and obligations—that come from having lots of money. Just as poverty produces its own pathologies, so too does inherited wealth.

“We are not just talking about the children of multimillionaires and billionaires who have to worry about the effects of money,” says Suniya Luthar, a psychologist at Columbia Teachers College. “Think of any white-collar professionals who want their children to lead the same lifestyles and have the same opportunities that they have themselves. The critical question is how to strive for those things while also striving for their equanimity as human beings. And that’s often harder than it seems.”

In a sample of 314 tenth-graders in a wealthy suburban community, the rate of “clinically significant anxiety” was 5 to 9 percent higher than the national average, and among girls, the rate of “clinically significant depression” was three times the national norm. Drug use exceeded not just national averages but that of low-income high-school kids she followed in a parallel study. In part, she says, it’s because so many children of the wealthy are overworked, trying to live up to their parents’ high standards, or at least to take full advantage of the extraordinary possibilities laid out before them. But in part, she adds, it’s because some wealthy children are underworked, not held to responsibilities and obligations, and therefore suffering from a certain crisis of utility, of agency—they’ve never had to do anything for themselves.

Then what, I ask Stratyner, do the most distressed rich kids fantasize about when it comes to their family money? That they didn’t have it?

“Rarely,” he answers. “They’re not stupid.”

Having less?

“No, not really.”

So what, then?

He thinks for a long moment, then finally gives an answer. “That they’d made it themselves.”

George Vaillant, a Harvard psychiatrist who’s spent the bulk of his career devoted to the study of adult resilience and coping, argued that childhood capacity for work is one of the best predictors of adult mental health and the capacity to love.

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Those who demonstrated the greatest capacity for work as 14-year-olds were five times more likely to be paid well for their work at 47 than those who scored lowest, and sixteen times less likely to have experienced unemployment—and intelligence, Vaillant was careful to note, did little to mediate the latter outcomes. They were also twice as likely to have warm relations with a wide variety of people and almost twice as likely to still be enjoying their first marriages. But perhaps the most striking datum was what Vaillant wryly called a “value-free definition of health”: Those who had the poorest ratings were six times as likely, at age 47, to be dead.

But here’s a question: How do you drum a work ethic into those who, strictly speaking, don’t have to work?

Most advisers to wealthy families have a simple answer to this: You make sure that the kids do have to work. You give them chores. You insist on summer jobs. You restrain their spending with allowances. And above all, no matter what, you keep the children’s trusts out of their hands until they’re at least 35, unless they need health insurance, more education, a down payment on a house, or seed money for a decent business idea.

Let’s say you’re a normal person with a normal income and struggles,” says Tommy Gallagher of Tiger 21. He’s the Crown Heights–born son of a toll collector and school crossing guard and, as such, still looks at his money a bit as an outsider would. “You have a child,” he continues, “and that child decides to do something. You’re going to try to help them in a way you can help them. But I can really help my child if he wants to do something. I can pay his rent. I can buy a house for him. I can enable him forever. And that’s really tempting.”

“The funny thing is,” he adds, reflecting on it, “if you’re sitting around with the members at Tiger, four or five of them will always say, ‘The most important thing I ever learned in my life is, when I fell down, I could get up.’ And that’s one of the things you’re taking away from these kids. We don’t let them fall down.”

The uglier face of this protective instinct, of course, is wanting to control every aspect of your child’s life—limiting their pursuits, trying to mold them into Mini-Mes. Again, it’s an urge that most parents have, whether they’re rich or poor—seeing their own children as extensions of themselves, fighting their own vanity in order to allow their kids to become who they’re supposed to become. But wealth tests this instinct to the breaking point.

“When I was active,” says Jay Hughes, a retired estate planner who wrote Family Wealth and Family: The Compact Among Generations, “one of the things that happened almost every time I was working with a new family is that they’d all start out by saying work was critical. But every single time, they’d also say, ‘Well, we can’t have anyone in this family become a surfer.’ And I’d say, ‘Well, what if they had a life-goal to win the medal at Waikiki?’ Because if you found the journey of your family on the premise of your child dreaming your dream, you’re founding it on a fallacy.”

“But at some point in time,” he says, “you make an evaluation of your kid, and how they treat money, and how respectful they are of other people, and how generous they are. Me, I’m lucky. I have plenty of issues with my kids, but them taking advantage of me? Or wanting more than they should? No. One’s in the military and has been for ten years. And the other one’s a communist, a self-hating rich kid.” He thinks. “Of course, he’s a self-hating rich kid who’s been to Cuba, India, and China—twice. Who the hell paid for all this stuff?” Then he stops himself, realizing that perhaps this boy deserves more credit than he’s giving him. “I want to walk down Madison Avenue and have people think I’m a super in one of their buildings,” says Gallagher. “But my son, he always says, ‘Dad, they’re going to look at your watch and they’re going to know you’re rich.’”