If you ask the rich about the biggest problem created from their wealth, they will usually say their kids.
Most of today’s self-made rich didn’t grow up with money (surveys show 75% of millionaires didn’t inherit their wealth). And today’s rich parents expect their kids to grow up with middle-class values– just as they did.
It’s a noble goal. But when those parents are flying the kids around on a private jet or giving them a Mercedes for their Sweet 16, it should come as no surprise that their kids lack the same work ethic and hustle as a middle-class kid.
And so wealthy parents today face an inevitable choice: leaving boatloads of money to kids who aren’t good with money.
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Gina Rinehart, the Australian mining billionaire, has cracked open the debate with a strange court battle winding its way through the Australian legal system. In short, Ms. Rinehart inherited a mining empire from her dad. Her three kids were also left with a stake in the family trust. Yet Ms. Rinehart shut them out of their ownership stakes, and now the kids are fighting back.
Court documents cited in the Australian media show that Ms. Rinehart believed the kids weren’t fit to manage their fortune. She said none had ever held a real job, unless it was given to them by the family. “None of the plaintiffs (her children) has the requisite capacity or skill, nor the knowledge, experience, judgment or responsible work ethic to administer a trust in the nature of the trust in particular as part of the growing HPPL Group,” she claimed in court papers.
She added that the kids are “manifestly unsuitable” to manage the fund and that it would be in the “best interests of the beneficiaries to force them to go to work.”
Ms. Rinehart may well be right. But it raises a natural question: who raised these kids? And if Ms. Rinehart played a role, isn’t she basically using her own parenting as the reason to cut them out?
Granted, kids are only partially shaped by the parents. But for a rich parent to criticize their kids as lacking a work ethic seems, well, a bit rich.
[Related: Kids Are Genius!]
Do you think it’s fair for rich parents to criticize their kids for being spoiled?