Karen's mother, too, chose to defuse the issue by deflecting it. "Children are mean," she told Karen, "and if it weren't your dad's business, they'd find something else to pick on you for." She termed the school-bus incident "rude" and said it was an example of the kinds of things "nice people just don't do." Still, the incident left its mark on Karen. From that time forward, she avoided doing or saying anything that might cause schoolmates to label her a rich kid. Karen's mother even had a hard time getting her to wear new clothes.
At the age of 11, Karen took a job in the family manufacturing plant answering phones. Today she is working alongside her father and brothers in the family business. She already knows there'll be no inherited windfall for her -- not in a lump sum of cash, anyway. All of the family money is tied up in the company, and her father has no plans to cut it loose. She can sell stock whenever she wants money, but she's actually invested more. "It's as good an investment as any other available to me," she says. "The company's prosperous, it's growing, and because I work for the company, I have control over it. Really, I can't imagine a better situation. If I didn't have this one, I'd go looking for one just like it."
* * *
John Katzman, the 29-year-old founder of The Princeton Review, a franchised college and graduate-school entrance-exam coaching program and a 1988 Inc. 500 company, isn't counting on an inheritance either. His family owns Kaz Inc., the New York City company that invented the electric vaporizer. It ought to be impressed on every rich kid, he says, that parental wealth is just that -- parental wealth. "My parents made it pretty clear that I didn't have money; they had money." He admits he had "trouble with the distinction" from time to time. But "the wall came up," he says, whenever he began to think of his family's wealth as a birthright, and he's glad it did.
What does Katzman think of growing up wealthy? "I like it, I like it," he says with a laugh. "Living well, eating well, attending good schools -- it's like starting life on the 30-yard line." Unlike Peter Kalmus, Katzman believes the wealth in his background made him all the more venturesome. "It's not clear to me that I would have taken the chances I've taken with The Princeton Review if the downside would have been having nothing in the world.
"My parents have got my proxies," he continues, "and they can give the whole nest egg to charity, as far as I'm concerned [although he'd prefer that they didn't]. As I said, I started life on the 30-yard line. Do I really need somebody to kick it into the end zone for me?"
Many children, however, develop an ever-increasing appetite for Mom and Dad's money. "You find yourself fantasizing about the accidents your brothers and sisters could have," says one heir, only half joking. "You want more and more money, hoping that someday you'll get enough to fill up all those holes inside you, but knowing you won't."
"There are a lot of pained young people out there who want the money and want it now," consultant John Messervey agrees. He's seen a significant number of family-business heirs, maybe a third of the ones he's met, demand advances on their inheritances in recent years. "In many cases," he says, "the kid has been bought off his whole life for the Boy Scout meetings and the Little League games that his parents missed. Over and over again he's heard his father assuage his own guilt by saying, 'I'm doing this all for you. Someday all of this will be yours.' " Asking for the money, Messervey says, "is simply the child's way of accepting the bargain and collecting on the debt."
* * *
What Roger and Sybil Ferguson want for their five children is what most entrepreneurial parents want for their kids: a challenging yet fulfilling life, with at least a taste of the satisfaction they've known in building something from the ground up. But they can't help but think they failed their children and threatened that dream four years ago, when the Rexburg, Idaho, pair -- founders of Diet Center Inc., the international chain of weight-loss centers -- decided to use the proceeds of a private placement and a public offering to establish multimillion-dollar trusts for each of their kids. At the time the move made them feel generous. (It also reduced the company's taxes and provided expansion cash that otherwise would have had to have been borrowed.)
"There's no doubt it was great for the company, but the kids, well, you look back and you think maybe you ought to have done things differently," says Roger Ferguson.
Not that the Fergusons didn't raise good kids; they did. Some are more gainfully employed than others, and some are more grateful for the inheritance than others, but "they're fine citizens, all five of them," Roger says. Still, he broods, "Sybil and I just wonder if they're really happy having gotten all this money before the age of 30 . . ."
"Whether they'll ever know the thrill of achievement we had," Sybil interjects, "in watching our dreams come true."
"And whether they know what it takes to survive," Roger emphasizes.
"Maybe they'll never need to find out," Sybil points out.
