 |
Technology
|
|
|
8 ways wealthy can teach kids responsibility |
|
|
|
Monday, 28 August 2006 |
Millionaires, for the most part, have it easier than everyone else.
They can afford most, if not all, the things they want, they don't necessarily have to work for a living and they frequently have access to the best jobs, health care and educational opportunities.
But that doesn't mean wealthy people manage their riches well or instill solid money values in their kids.
Famed stock picker and multibillionaire Warren Buffett recently went public with some wealth-management tips for his adult children, focusing on charitable giving and making a difference in the community.
Buffett's exercise got some private bankers at JPMorgan, which caters to some of the world's wealthiest people, thinking along the same lines.
Drawing from their own interactions with upscale clients, five private bankers from offices around the country recently put forth eight observations about wealth, kids, rights and responsibilities.
Here's a summary of their comments
• Greed is not synonymous with ambition.
Although it's easy to see these as different shades of the same motivation, they are distinct, JPMorgan's bankers insist. Greed typically involves a reckless desire to possess more than one needs or deserves, while ambition reflects an energetic pursuit of success. The dividing line might not always seem obvious, but it exists.
• Wealth does not confer entitlement.
Respect must be earned, not inherited. Kids growing up in wealthy households don't always make this connection.
"A child's family name or social standing does not endow him with unfair special privileges, or absolve him from the obligation to treat others with courtesy and respect," the JPMorgan bankers write.
Of course, the deferential treatment shown rich clients by merchants, servants and, yes, even bankers, can give kids the wrong impressions, they note.
• Philanthropy is its own reward.
Rich families have extended opportunities to support worthwhile causes.
Monetary donations are one way to do so, but wealthy people also can volunteer their time and become involved in other ways.
• Children are the stewards of wealth, not just its beneficiaries.
Rich individuals should try to use gifts and inheritances prudently and appropriately.
The goal is not to squander inherited wealth although some children or grandchildren clearly do just that.
• Wealth frees children to do great things, not to do nothing.
Kids of wealthy parents have an opportunity to cultivate their interests, pursue chosen careers and work hard at their goals without worrying much about money.
When rich parents encourage their children to take part-time jobs while still in school, for example, they can help counter any notion that the kids deserve a free ride, the bankers say.
• If it smells wrong, it is wrong.
Kids should be taught from an early age to steer clear of shady deals, whether it's buying term papers off the Internet, engaging in insider trading or parking money in offshore tax shelters.
Not only are such dealings unethical, they could lead to various punishments.
Rich people presumably are privy to more than their fair share of sleazy opportunities.
• Eschew parochialism.
Wealth can have a constricting impact on kids, the bankers note, limiting their circle of friends to a select few and fostering a narrow, if not elitist, view of the world.
Parents can help counter this by letting kids enjoy reasonably open contacts with a diverse group of people, and by underscoring the message that it's not right to judge others by social standing, net worth or similar factors.
In this and other areas, it's often best for parents to lead by example.
• Being wealthy is not shameful.
Highly affluent parents sometimes keep their kids in the dark about the family socioeconomic status, under the pretext that doing so will help the children lead more normal lives.
But any such lack of communication can cause problems in other ways, including feelings of guilt.
Rather, parents should candidly discuss the responsibilities of having a lot of money and the rewards of giving some of it away.
JPMorgan's bankers call these the "eight most important lessons you can teach your children."
That might be an exaggeration, but it's clear many parents worry about instilling good financial values in their kids, a challenge that cuts across income boundaries and social classes.
Recommend this article...
Views: 1511
Only registered users can write comments.
Please login or register. Powered by AkoComment Tweaked Special Edition v.1.4.2 |
|
Last Updated ( Monday, 28 August 2006 )
|
|
|
|
|
