Parents often teach their daughters less about money than they do their sons; they don't answer as many questions about money; and they don't offer as many opportunities to either make money or gain experience. Daughters thus come away with more discomfort and more guilt.
Rachel remembers coming home from her first baby-sitting job, triumphantly waving her earnings -- only to be told she was wrong to have accepted payment. "You know you don't need that," she was scolded. "Now go give it back." Looking at the incident through adult eyes, she can see that perhaps it stemmed from long-standing guilt within her family that so much of its wealth was earned on the backs of others, by buying up cheap stock at the height of the Depression. Still, Rachel says she can't help but wonder if this incident doesn't explain her tendency to underbid her film projects. "Whether they knew it or not, my family was telling me my work didn't deserve to be rewarded."
* * *
How the money was made," explains John Messervey, director of the National Family Business Council, in Northbrook, Ill., "will tell you a lot about how it will be spent. Families who truly believe they created their wealth from hard work will usually continue to create wealth of hard work, while parents who for one reason or another feel undeserving of their riches will tend to raise kids who will also feel undeserving."
"The message we got," a 36-year-old New Yorker we'll call "Cathie" says, "was that we could be independent and nobody would have to take care of us -- except my father." Instead of congratulating her for her frugality when as a youngster she saved up enough money to buy a camera, her father, co-owner of a wholesale food operation, became furious. "He had wanted to buy it for me," she remembers. "Love and power and money were all blurred and mixed up in our family. Dad would buy us things when he couldn't spend time with us. That -- and yelling at us -- was his way of showing love. Maybe it was the only way he knew how."
Cathie suspects her father was motivated by his insecurities, both as a father and a business executive. "He never really felt successful," she says. But she also sees a power motive behind many of his actions. "There were always strings attached to the things my father did, emotional strings that required people to continue doing things as he wanted them done."
He probably was not an exception. "Entrepreneurs may not be conformists," wealth consultant Levy says, "but they seem to want to make their kids that way. They're often quite willing to dictate what everybody in the family should do, how they should vote, where they should live."
No matter how well intentioned, using money as the solution to every problem poses a direct threat to a child's self-esteem. "It's hard to recognize your own talents and goodness when you've grown up in a privileged way," Cathie says. "You tend to assume good things come to you because you went to Yale, never stopping to ask yourself if everybody who went to Yale can do the things you can. I'm constantly having to remind myself that there are things that set me apart and make me a person of value."
"While it's very much OK to make money in this culture," explains Anne Lieberman, a financial planner in Larkspur, Calif., who is working on a book about inherited wealth, "it's not OK merely to have it, as many children of wealthy entrepreneurs do. Self-esteem is essentially about what's yours. Yet for many of these people, there's nothing that's really theirs. Everything they have and everything they are seems -- to them, anyway -- to have come from the money."
In an attempt to mitigate society's effect on both themselves and their children, some parents go to great lengths to hide their wealth from the rest of the world. "I've seen a number of circumstances, particularly in small towns, where self-made people live extremely frugally in the hope that no one will figure out that they're wealthy," says psychotherapist Barber. "The kids often follow the example of their parents. They lie about how they live, where they go on vacation, and what they buy. It becomes of utmost importance that they look just like anyone else."
"Whatever the motivation, it's absolutely hypocritical for parents to pretend they're poor," says Ed Stanley, an international compensation expert based in Portland, Ore., who has studied inheritors of entrepreneurial wealth for the past several years. "Not only are the kids smarter than that, it tends to overvalue money. Money is merely a means by which things are accomplished, and that's how it ought to be portrayed."
Cathie's family maintained a modest lifestyle. "We lived in a lower-class area in a G.I. Bill house, our parents sent us to public schools, and instead of doing artsy stuff, we went bowling or to the racetrack. I remember my father joking that we might have money, but we sure didn't have class."
"It took the kids in town to tell me I was rich," says 32-year-old "Karen," whose family manufactures building-construction materials in a tiny community in the upper Midwest. One day in grade school an older boy accosted her and demanded her money as she got off the school bus. "He said my family had more money than it needed, and I remember feeling so confused," she says. "I mean, my parents didn't give us any money that we didn't earn through hard work, so what did I have in my pocket, a quarter maybe?"
