10 Parenting Rules for Raising Productive and Financially Successful Children
Posted on January 18th, 2013
Book notes from: The Millionaire Next Door: The Surprising Secrets of America’s Wealthy by Thomas Stanley, William Danko
Affluent parents are likely to benefit from several important research findings:
Parents with nonworking adult daughters and “temporarily” unemployed adult sons have a high propensity to provide these children with heavy doses of economic outpatient care (EOC). These children are also likely to receive a disproportionately large portion of their parents’ estates.
The more economically successful offspring are likely to receive smaller levels of EOC and inheritance.
Many of the most highly productive sons and daughters receive no wealth transfers whatsoever.
Affluent parents feel rather strongly that women, even working women, must have “money of their own.”
If you are wealthy and want your children to become happy and independent adults, minimize discussions and behavior that center on the topic of receiving other people’s money.
Rules For Affluent Parents And Productive Children
1. Never tell children that their parents are wealthy.
Why is it that many of the adult children of Under Accumulators of Wealth are more likely to earn high incomes than to accumulate wealth? We believe one of the major reasons is that as children they were constantly told their parents were wealthy.
Adult Prodigious Accumulator of Wealth whose parents were wealthy have told us time and time again: I never knew my dad was wealthy until I became executor of his estate.
2. No matter how wealthy you are, teach your children discipline and frugality.
Kids are very smart. They will not follow rules that their parents themselves do not follow. We [my wife and I] were well-disciplined parents… . We lived the rules … we taught by example… . They [the children] learned by example. There must be congruency between what parents tell their children to do and what we as parents do. Kids are very perceptive in pointing out inconsistencies.
What were some of the rules Dr. North’s twelve-year-old daughter listed on the poster?
Be tough . .. life is. In other words, there is no promise of a rose garden.
Never say “poor me” … [or] feel sorry for yourself.
Don’t walk on the back of your shoes… . Waste not, want not. In other words, don’t abuse your belongings. They will last longer.
Close the front door… . Don’t waste your parents’ money letting the heat out.
Always put things back where they belong.
Say “yes” to those who need help before they ask.
3. Assure that your children won’t realize you’re affluent until after they have established a mature, disciplined, and adult lifestyle and profession.
Once again, Dr. North said it best: I have set up trusts for my children … some estate tax advantages. But my plan will not distribute money to my children until they are forty years of age or older. Because in this way my money will have little effect on their way of life at that age. They will have already adopted their own lifestyle.
Cash gives them too many options, … especially in the case of young children. Media, especially TV, controls the values of our young. Just like they try to control what we think is funny with canned laughter…. [There’s] too much emphasis on consumption. I have never just given cash for this reason. What I have always told my children [is] if you need to make a major purchase, you first must fund a good bit of it yourself.
4. Minimize discussions of the items that each child and grandchild will inherit or receive as gifts.
5. Never give cash or other significant gifts to your adult children as part of a negotiation strategy.
Give because of love, even obligation and kindness. Adult children often lose their respect and love for parents who submit to high-pressure negotiating tactics.
6. Stay out off your adult children’s family matters.
Please note, parents, that your vision of the ideal lifestyle may be diametrically opposed to that of your adult son or daughter, as well as that of your son-in-law or daughter-in-law.
Let them run their own lives; ask permission even to give advice.
7. Don’t try to compete with your children.
Never boast about how much money you have accumulated. This sends a confusing message. Often children can’t compete with their parents on this basis, and do not really want to.
8. Always remember that your children are individuals.
They differ from each other in motivation and achievement.
9. Emphasize your children’s achievements, no matter how small, not their or your symbols of success.
Teach your children to achieve, not just to consume.
His father was a physician and a full-fledged member of the PAW group. He often told Ken: I am not impressed with what people own. But I’m impressed with what they achieve. I’m proud to be a physician. Always strive to be the best in your field… . Don’t chase money. If you are the best in your field, money will find you.
10. Tell your children that there are a lot of things more valuable than money.
Good health, longevity, happiness, a loving family, self-reliance, fine friends … if you [have] five, you’re a rich man… . Reputation, respect, integrity, honesty, and a history of achievements!
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