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Rich kids say they’re willing to work

 
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Published by the Northwest Indiana Times and Medill Reports

By Christina Maria Paschyn
Feb. 20, 2007

Rich kids – they are all spoiled, bratty and far too eager to blow their parent’s money on decadent sweet-16 parties, right?

Think again. A study released Tuesday found that teenagers growing up in wealthy families are nothing like the ones portrayed on popular TV shows like “My Super Sweet 16” and “Laguna Beach.”  They are more responsible, hard-working and ambitious. But, surprisingly, most don’t get parental instruction about managing the family money.

More than half of affluent teens responding to a survey said they do not think they deserve to be rich just because their parents are rich, according to the study conducted by investment advising firm PNC Wealth Management, a member of PNC Financial Services Group Inc. in Pittsburgh.  Eight out of ten said they are willing to work for things they want to purchase.

“The results demonstrate that, even if these teens were born with a silver spoon in their mouths, they don’t expect life to be handed to them on a silver platter,” said Bruce Bickel, senior vice president of the firm, which provides financial counseling to families.  “We see a generation of wealthy young people who are generally well-grounded, willing to work hard and see eye-to-eye with their parents on important values like education and earning a living.”

The survey polled 210 wealthy teenagers, ages 14 to 20, and 272 affluent parents of children under age 18.  Families were described as being affluent if they had $500,000 to more than $10 million in investable assets.

Random interviewing by Medill News Service tended to substantiate the survey.  College student Kate Siegfried, 22, is an example of the responsible rich kid.   Even though her parents own ten McDonald’s Corp. restaurants in Ohio, she said her family taught her early to live on a strict budget.

“We weren’t allowed to go shopping whenever we wanted, we couldn’t go out whenever we wanted,” she said. “And when I turned 14, I went to work for my parents.  They made it very clear that it wasn’t a free ride, and it wasn’t until I got to college that I realized we had this wiggle room.”

The study found that two-thirds of wealthy teens ages18 to 20 have a full-time or part-time job, which accounts for their spending money.  Likewise, about 73 percent said they feel a strong sense of responsibility to manage wisely whatever money their family gives them, and nearly half said they do not think they should be able to buy anything they want.

“We were very pleased to find that not all teenagers are like Paris Hilton, like the media portrays them to be,” Bickel said.  “But there is a significant gap between what the parents say they want their children to do and what they actually put into practice.”

The problem, he said, is that most parents do not bother to teach their children about money management; indeed, only 28 percents of parents surveyed said they had the discussed the meaning of the family’s wealth with their children.

Attorney and author Rodney Zeeb believes this is why six out of ten affluent families will have lost the family fortune by the end of the second generation and why nine out of ten will have spent all of the family’s money by the end of the third generation.  His book “Beating the Midas Curse” explores this phenomenon.

“The kids before they get the money aren’t prepared for it,” Zeeb said.  “They didn’t have to deal with any of the issues to get the money like their parents did and there is a lack of preparation.  They’re like a lottery winner– they’re just not ready for it.”

Jim Huller, president of the Indiana-based wealth-management firm Maximum Wealth Advisors, said he sees the same thing with the children of his clients.

“I don’t see a lot of lazy kids, but I guess the bigger thing I see is they don’t blink an eye to spend money on things,” he said. “Parent should get them a piggy bank where they take an allowance and set some of it aside for spending and for savings.”

He suggests that parents also set aside a percentage of their children’s allowance for charity.

“A big part of it is just making them realize what they have and not taking it for granted,” he said.  “And if they start this at a young age, it’s not a shock to them when they get to be 18 or 19 years old.”

Bickel agreed, saying wealthy teenagers do not know the difference between a need, a want and a desire. He recommends parents practice his “five golden rules” of money management: earning, saving, spending, giving and budgeting.  But most importantly, he thinks well-off parents should stop trying to unconditionally please their children.

“Kids think they’re entitled to everything they desire and sometimes parents just don’t have the courage explain it to them that they can’t afford it,” he said. “Money inheritance should be a blessing, not a burden.  And when you’re responsible money becomes a blessing and when you think it’s a right it becomes a burden because you never get enough.”

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