Raising Children Amidst Wealth: What You Need to Know

Raising Children Amidst Wealth: What You Need to Know

I am excited to have Richard Beaton and Linda Wagener, founders of Marigold Associates, provide a series of guest posts related to the topic of kids and money. 

Will your children be positively or negatively affected by the financial wealth you share with them?

In thirty years of working with families and children, we have never heard one family member express concern about the impact of wealth on their kids. Wealth is always assumed to be a good thing.  But the reality is that there are plenty of reasons to be concerned.

The value of wealth lies in its power to expand opportunities and resources that can strengthen families and provide a good life for children. There are extraordinary young people coming from families of means who are thriving and contributing positively to society. There are also extraordinary young people coming from families of means who are floundering amidst the wealth, overwhelmed by abundance and opportunity.

Affluence increases certain risks. There are far too many examples of young people whose lives have been distorted by wealth. The negative impact of wealth can result in a broad range of life problems, which include:

  • Lifelong financial dependency.
  • Loss of hard won family wealth due to mismanagement or unhealthy lifestyles.
  • Destructive values about money such as equating money with self worth or believing that happiness depends upon having all the latest trends.
  • Over use of credit, ending in unmanageable debt.
  • Family conflict and resentments about money and inheritances.
  • Loss of incentive to live a life of substance and meaning.

Gift that it is, wealth apparently has the power to build or destroy. What makes the difference?

We have been studying multigenerational families of wealth for many years, and here’s what we’ve found.  Some of the families we have observed have practices that consistently result in generations of children who become creatively engaged in life. They contribute to their families and communities through productive lives. Other families have struggled. Their children are voracious consumers of wealth who have failed to build their lives around a meaningful purpose. In the worst cases, there have been drug and alcohol problems, eating disorders, family alienation and estrangement.

We observed that the successful families have deliberately prepared their children for wealth. Beginning at a young age, they have provided financial education and training, formed their children to have strong values including a work ethic and integrated certain practices into their family life.

This is the first of a series on how to prepare children for living with wealth. We will tackle each of these topics – education, formation and practice – in the blogs that follow. In the meantime, here is something you and your family can do in preparation:

  1. Discuss with your spouse what you’ve done to prepare your children for wealth.  What concrete steps have you taken?  Where are you succeeding? Where could you improve?
  2. Talk with your children about their views about wealth.  What do they think money is for?


John Christianson
  • Rosie Perera
    Posted at 08:41h, 26 January

    Excellent post. Looking forward to the whole series.
    More Than Money magazine, which I subscribed to throughout its years of publication, put out a few issues specifically on issues to do with wealth and children. These are all now available for free online: http://civicreflection.org/online_tools/resource_library/mtm_archive. See in particular issues #9, #24 and #39. Also an article in #33 (“Parenting with a Silver Spoon”).

    • John Christianson
      Posted at 10:46h, 30 January

      Rosie: Thanks for the reminder about these resources.

  • Rick Beaton
    Posted at 11:03h, 30 January

    Thanks Rosie, we’re pleased you enjoyed the blog. It is a challenging issue. And thank you for the references. We weren’t aware of them.

  • Wealth Clarity Blog
    Posted at 08:33h, 01 February

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  • Jeff
    Posted at 17:23h, 02 February

    Love the Blog post John, spot on. Thank you for helping your client’s families with something this important.

    A couple thoughts about my own experience. I was not in the category of 2nd generation wealth that was “thriving” despite being fortunate to be in a wealthy household. Naturally, I thought that my lifestyle would continue as it seemed impossible for it all to go “Poof”. It was easy for me to not take life too seriously even into my early 30’s, due to the large safety net that was there. Sure I worked “hard”, paid the bills, but still………

    Well, long story short. “Poof” happened almost overnight. Yes, it can happen even with the best planning……

    For a while I was numb, I was mad, I was incensed! No Whistler Home? No Maui vacations? My hobbies and social circle were wrapped up in things that were not of my own doing or making, things which were now gone.

    Then, a strange thing happened out of necessity. I luckily realized that the only way I was going to survive mentally was to DO something for myself and my family.

    I discovered that just going through the motions would not cut it. To survive, I HAD to get creative and do something (I started my own business). I moved to a “lower rent” neighborhood (tough to do at the time, but I’m still here), spent down my remaining savings, and worked hard, really hard, gruelingly hard, “this-had-better-work-or-we’re-screwed” hard.

    The result is that I am happier, really happier, than I ever was before (despite still working ridiculous hours), I’m a better husband and father (I hope!), and much, much more patient and empathetic. I learned a lot about myself that I NEVER would have and am thankful for every small thing that I have and enjoy, knowing it could all go “Poof” again.

    Thus, I believe that if all children started off in a position of “necessity” instead of “entitlement” we might see a rebirth of incredible energy and creativity in our families and country as a whole.

    • John Christianson
      Posted at 09:41h, 03 February

      Jeff, this was a very transparent and helpful comment. I felt the same way when I was starting Highland and totally understand where you are coming from. I, too, wouldn’t change anything about how this part of my life has played out and the life learning and creativity that occured.

  • Wealth Clarity Blog
    Posted at 08:45h, 08 February

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