Children of successful entrepreneurs discuss the advantages and disadvantages of growing up wealthy.
When it comes to passing on the wealth, every so-called expert has an opinion. Why hasn't anyone asked the kids?
Let's find out what it's like being the child of a wealthy company owner. Are these kids different from other rich kids? What do they feel about their inheritances? Their parents? And what about their parents' concerns? By giving too much too soon, are they depriving their kids of the chance to make their own way in the world? Of the opportunity to follow in their footsteps? Maybe we'll find that money isn't the issue. -- E. W.
As a child, Peter Kalmus enjoyed the best that life had to offer -- a fine home in New York City, top schools, a maid to clean his room, and busy but loving parents who anticipated his every need. "I always had a car and driver on call, even in grade school," he remembers, chuckling with some embarrassment. "So whenever I didn't want to eat cafeteria food, I'd call Nat and tell him to go to Nathan's Famous and bring in franks for me and my friends. Pretty nervy, wasn't I?"
Doing odd jobs and saving pennies were not much a part of Kalmus's coming of age. He had an allowance, and his parents insisted on covering the big-ticket items -- a car, his college expenses, and when the time came, his law-school tuition.
But Kalmus found a less accommodating world waiting beyond his doorstep. His first job in an accounting firm ended like a bad marriage, with misunderstanding and regret. "I couldn't get used to being told what to do," he recalls. "Their definition of paying dues was different from mine." Yet as disenchanted as he was with the rigidity he found in that job, he couldn't bring himself to turn his back on the security of his J.D. degree and pursue the career in psychology that beckoned.
"For a long time I was a kind of wealth junkie," Kalmus explains, sounding glad to have the monkey off his back. "Money had the same effect on me as a drug would on a drug addict. I wanted it. I spent most of my time thinking either about how to get it or how to hang onto it. I became panicked every time I thought of trying to do without it, because I'd never had to, and I wasn't really sure I could. My self-worth seemed completely tied to my net worth." Which was ironic, he acknowledges, because his parents' focus was on work and family, not money. "My mother and father had an idyllic marriage built on love for each other and for their commercial furniture business," Kalmus says admiringly. "Money was the last thing on their minds. All they ever prayed for was their health, the family's togetherness, and the happiness of their children."
It was happiness and togetherness, in fact, that underpinned their generosity. "My parents figured, 'Hey, someday all of this will go to the two boys anyway, so why wait? We don't want our whole relationship to revolve around money, do we?' Of course they didn't. So they gave my brother and me everything they either didn't have as kids or couldn't find time to enjoy as adults." Kalmus sighs ruefully at his own words. "Sounds wonderful, but it ain't.
"When you always get what you want, just by asking," he continues, "that important step in the middle of having to wait for it or work for it is missing. And that's the part that turns dreams into realities. So it hit me pretty hard when I got out into the world and realized, my God, there isn't any magic. I've got to work for what I want." He pauses. "I would never criticize my parents for anything they did, because they gave me a wonderful childhood. But, frankly, I wish I hadn't grown up feeling so . . . well, free, I guess. I wish my parents had concentrated a little less on keeping me happy and a little more on building my character."
Today at age 33, Kalmus has left the law -- but psychology remains a fascination, not a vocation. In January, following the death of his father, Kalmus joined his mother in the management of the family business. He is working harder than ever before and enjoying the challenge of entrepreneurship more than he thought possible. Money still matters, but it no longer rules him. Time, experience, and plenty of serious self-evaluation have left Kalmus with a more well-rounded philosophy of life. Still, like many rich kids, he will always consider wealth "full of booby traps."
Wealth is no less problematic for entrepreneurial parents. They wonder, Will an inheritance ruin their children's lives? Could it be that the family's affluence is already preventing their kids from developing independence and ambition? And is there anything that they, as parents and businesspeople, can do about it, short of taking their own oath of poverty?
A southern financier's dilemma is typical. He could easily afford to establish some six-figure trust funds for his kids in the not-too-distant future. But he's not at all sure he'd be doing them a favor, and a little informal networking has convinced him he's not alone in his concern. "I think it's something that everybody who's successful in business faces sooner or later," he says. "How do you cash in on and share what you've built in the business without destroying that other big investment -- the one you've made in your children?"
These are timely questions. Financial planners and family-business counselors say at least half their clientele consists of rich parents, mere millionaires to near billionaires, seeking advice on what they call wealth-related issues. "It's like sex education was 20 years ago," says Minneapolis family-business consultant Tom Hubler, co-founder of the Hubler/Swartz division of McGladrey & Pullen. Whether they're inclined to set their kids up for life or leave them without a dime, "people are becoming very thoughtful and purposeful about handling wealth," he says. "It's a new frontier for family life."
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