Our Family Fortune

Motivating Children in a Wealthy Family

Many children from wealthy families suffer from unhappiness, depression, and a general lack of motivation.  If you’ve always been given everything you want, what’s the point of trying to provide for yourself?  Yet many children of wealthy parents not only thrive in life, but even outperform those same wealthy parents.  Why do some fail so miserably while others succeed?

We all want our kids to grow up healthy, happy, and living a good life.  A “good” life is by definition subject, but there are a few things that we can all agree on.  Performing satisfying work, paid or unpaid, and building towards something better are two traits of a good life most people would agree on.  Something better can be a business, a non-profit, a family, or even greater self-actualization.  Without these, a person is bound to just drift through life.  Central to building a good life is having the motivation to do so.  The lack of drive to change one’s circumstances means there’s no possibility of satisfying work or building something better.  How do we ensure that our children are motivated in life, even while having the ability to provide everything that they need?

What is Motivation?

Motivation is clearly a sought after trait, but one that needs to be defined well.  Motivation is the driving force behind goal-based behaviors.  It is the determination, energy, and initiative that prompt a person to get up off the couch and go accomplish something.  It’s literally the desire to get up and do things; the basis for all success.

Motivation comes predominately from a sense of autonomy and a sense of mastery.  Both of these are far more intrinsic than extrinsic (although there are shades of both) and both are important.  A sense of autonomy is what makes us realize that we have to be the ones to change our lives for the better.  If you’re under the control of someone else, doing anything to further your life will benefit them more than you.  Providing your children that sense of autonomy is the first step in making sure they understand that their life is their own.  Children naturally want more independence as they grow older – you just need to make sure that you provide it.  Second, a focus on mastering skills, as opposed to external rewards that may come from those skills, is vital towards keeping enthusiasm.   Focusing on the process and the skill provides a greater level of satisfaction in the long run than any short term accomplishment.  Consistently working on and mastering a new skill provides a continual level of motivation to get better.  It builds on itself in a natural positive feedback loop.

Motivation also comes from the desire to change what causes discontent.  It involves finding purpose.  Discontentment, and the desire to get rid of it, can be huge drivers of behavior.  Our life is not about just finding happiness.  Happiness is a short-term emotional high, not a long-term emotional state.  Instead, being content with periods of happiness sprinkled in should be the goal of a well-lived life.  Getting rid of that nagging source of discontentment can be a huge motivator.  How many of us have a feeling that we should be doing something more or could be something better?  Listening to that feeling and using it, and teaching our kids to do the same, can be a major source of motivation.

Show the Value of Work

Contributing to the betterment of yourself, your family, and your broader community is one of best ways to be content in life.  Honest work providing a service to people can be incredibly satisfying.  Hard work by itself is overrated.  But hard work combined with the sense of moving towards a goal can soothe the soul.  Even better if you can find a way to do that work better than the next person!

Work provides more than just a paycheck.  It provides both a sense of autonomy and, if done as part of a career path, shows that you can master a skill.  Without work, children can drift along without a sense of purpose, dragging on your financial resources and doing nothing to further their own lives.  Aimlessness is a dangerous situation.

The value of work is best demonstrated by you.  Talk to your children about what motivates you and show them how you put that into action.  Push your children to take a part-time job, especially during the summer.  Not only does a job give them experience and insights into the working world, it also can show them the value of getting an education and not having to do grunt work the rest of their lives!

Make Them Care for Themselves

At its most basic level, motivating your children involves giving them less.  The biggest benefit of making them do things for themselves is helping overcome their fear that they can’t do it.  When everything is given to you, you have a natural fear of not being able to provide for yourself if the provider is taken away.  Forcing your children to do their laundry, cook some of their own meals, and pay some of their expenses is a good way to give them confidence.  Giving them everything they need without requiring them to provide for themselves occasionally is a great way to raise entitled kids with no skills.

Making your kids care for themselves extends outside the home as well.  When your child has a problem with a coach or a teacher, discuss it with them and help them work out a solution.  Then let them take care of it.  Don’t just step in and handle things yourself.  Your children need to know how to handle conflict and how to speak with people from all walks of life and from different generations.  When your child is looking for their first job, help them prepare for the interview and fill out the job application, but make sure that they handle all communication with their future employer.  Too many parents are getting involved in job and pay discussions, even for their college graduated children!

Finally, caring for themselves also means allowing them to suffer and fail occasionally.  Life can be tough and there are just as many downs as there are ups.  These setbacks help your children build resilience, a crucial skill as they continue into adulthood.  If the cost of failure is too great, then obviously step in – that’s still your job as a parent.  But if failure involves life lessons and just a bit of misery, then it’s better that your children learn to deal with that now when the stakes are low, instead of experiencing failure for the first time later in life when the stakes can be much higher.

Help With Goal Setting

Goal setting itself doesn’t lead to a motivated life, but it does help crystalize what all the work is for.  Helping your children with goal setting provides many benefits beyond motivation.  It teaches a lifelong habit that can be used in all aspects of life.  It helps to teach responsibility about taking control of their lives.  While there is no guarantee it will help with motivation, setting goals can actually help develop that can-do attitude.  It’s easier to do a difficult task when there’s a known and desired prize at the end.

Helping your kids with their goals can be broken down into four steps:

  1. Let Them Choose: Do not pick their goals for them! Nothing would guarantee failure more than doing that.  On the other hand, using nudges can be a good strategy.  While we can’t know for sure what’s best for our children, we still have a good idea.  Ask them questions that allow you to help shape their goals, but let them come up with the answers.
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  2. Why That Goal Was Chosen: The purpose of the goal will be almost as important as the goal itself.  That purpose, the intrinsic part of goal-setting, is likely to be a bigger motivator in behavior than the end result.  Ask what the biggest benefit of the goal will be.  How will it improve your child’s or other’s life?
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  3. Big Goals Need Small Goals: A big goal or project is a very intimidating thing.  Many children will see a big goal and shrink in the enormity of it.  Saving for college is a huge goal.  Becoming a state-level athlete takes an incredible amount of work.  Here’s where your experience can come in handy. Help them break that big goal into more manageable steps or micro-goals.  Walk them through the process and talk about the different paths you can choose to get to the end goal.
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  4. Solve for Obstacles in Advance: Anything worth doing in life is going to have obstacles and the things most worth doing are going to have the biggest obstacles.  The best way to tackle an obstacle is to plan for it in advance.  Brainstorm with your children to figure out what problems will likely stand in the way.  Then, help to come up with creative solutions.  If and when these problems arise, the shock will be less and working through the obstacle will be easier.

What to Say About Your Money

Deciding when, where, and how much to share with your children regarding your wealth is a difficult decision.  Most parents, rich, poor, or middle class, put this off as long as possible.  However, failing to discuss your wealth or outright lying about it leaves your children unprepared for the future.  Not only will you likely be leaving them wealth when you die or passing it along to them while alive, you have a great story and real life experiences to share about how to earn and grow family wealth.  This knowledge can be far more valuable than the actual money itself.

Radical transparency is often the best bet.  Since you’ll be teaching your children along the way in age appropriate ways, you can slowly begin to include them in discussions about net worth, investments, and how to allocate money.  As they get older, you need to be explicitly clear about what kind of help they can expect in college and beyond.   Without these conversations, they may see any support as simply a continuation of what you provided in childhood and continue to be financially dependent on you even in their 20s.

One of the greatest gifts you can give your children is being open about what they will be responsible for and what you will help with.  For example, we plan on sitting our kids down around the age of 12 to let them know how much of their college we will help with.  We’re willing to pay tuition and fees at an in-state public school, but they will have to pick up the rest.  This includes room and board as well as any additional costs associated with a private or out-of-state school.  If they get scholarships, then we will give them a lovely gift each year in a savings or brokerage account that they will have control of when they graduate.  We also plan on using a very generous savings match when our kids earn money from their jobs and save it for the future (up until they leave for college).  Doing something similar at different stages of life is beneficial for everyone.

Can Motivation Even Be Taught?

I don’t know the answer to that question.  I hope that what we do as parents helps, because otherwise, there’s no point in worrying about it!  Since most motivation comes from within, can anything we do even work?  Research has shown that an internal locus of control (e.g. the belief that one has power over one’s circumstances) is far more valuable than any external motivation.  Doing the above, from giving your children examples of you controlling your destiny to making them care for themselves to helping them set and succeed with goals can all help.  Providing them with the opportunity to succeed or fail on their own right is key.

Keep building my friends.

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