Super rich parents are setting ‘deprivation benchmarks’ to teach their kids patience - Boodle Hatfield

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17 May 2021

Super rich parents are setting ‘deprivation benchmarks’ to teach their kids patience

When one parent is a prince and the other one is a duchess, the odds of bringing up grounded children may seem slim.

But that’s what Harry and Meghan have in mind for two-year-old Archie and his unborn sister-and they’re far from alone among their super-rich contemporaries, even if being a Mountbatten-Windsor comes with extra baggage.

With the number of billionaires shooting ever higher-rising by 30 per cent during the past 12 months according to Forbes magazine-more ultra-high-net-worth parents are trying to give their offspring the sort of childhood the rest of the world might recognise.

For Archie, this might mean feeding the chickens in Archie’s Chick Inn, or getting a ride on the back of his father’s bicycle, something Harry recently spoke about. Two little slices of ‘normal’ life that were apparently hard for the couple to achieve in the UK, and which explain the Duke and Duchess of Sussex’s move to the Californian hills.

“As parents we should be doing the most we can to say, ‘You know what, that happened to me, I’m going to make sure it won’t happen to you,’” Harry said in a recent interview.

The trick, says parenting coach Nadim Saad, who has written several books about raising children, is treating them as closely as possible like any other child their age. “It’s how to achieve that that’s the difficult bit, when you have staff and [the children] don’t have to do anything.”

One mistake richer parents often make is removing the challenges normal children face, he says. “But they need to be allowed to fail, which can be hard when failing would reflect badly on the parent. They need to develop their frustration and disappointment muscles the same way as any other child.”

Hayden Bailey, a partner specialising in private-client issues at elite law firm Boodle Hatfield, thinks parents need to be upfront about their assets. “I’ve seen a number of families, especially first-generation wealth, where they think money is quite a dirty word and they’ve completely shielded their children from the responsibility of wealth, thinking, ‘Because I want them to be grounded and have a normal life, we’ll have trusts and manage it for them so children don’t have to be burdened.’”

This is understandable, but can sometimes be the wrong approach. “Through communication and education parents can equip their children with the skills to manage their wealth in the right way,” he adds.

Some parents impose constraints on their children, says Ron Lieber, a New York Times columnist who wrote The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous and Smart About Money. “You can choose not to send them to private school,” he suggests. “You can choose to live in a socially and economically diverse area. And even if you don’t do that, for whatever reason, you can make choices about what they have and what they are allowed to do.”

One rich father operates a 30th percentile rule when his daughters want, say, some piece of tech or a fashion accessory, adds Mr Lieber. “If each daughter has 10 close friends, he wants them to be the seventh person [among their friendship group] to get the thing. Often by the time the sixth person gets it, the first person has moved on. He sets a benchmark for deprivation so his kids learn patience.”

Patricia Milner, partner in the private client and tax team at law firm Withers, says the main risk from wealth is wiping out children’s work ethic. “Children need to be encouraged to be aspirational and to be their own person, whatever that might be. They should have a modest income as a young adult rather than too much too soon. Significant sums should be delayed until they are more established, perhaps, say, at 30 or 35.”

Like many, Ms Milner thinks philanthropy is a good idea. “The most successful philanthropy is whatever interests the child,” she says.

Pupils at Switzerland’s exclusive Institut auf dem Rosenberg, an international boarding school popular with some of the world’s richest families, have been raising money to fund girls’ education in Cambodia by sponsoring some of the younger students to read, says headmaster Bernhard Gademann.

He advocates frank discussion about issues faced by those far less fortunate. “It helps that we are so international. It’s quite an eye opener for some students to hear about some of the very basic issues some countries have. This attitude encourages them to do more.”

Another recommendation is that the newly rich should teach their children about their own origins. “Families need to keep the family legend alive. In almost all cases, someone will have lived in poverty but have done something unique in their life. If you continue to tell your children this narrative, they’ll have a better understanding of where their privilege came from and then it isn’t taken for granted going forward.”

He adds: “When it comes to being grounded, we have one philosophy we firmly believe in, because the vast majority of our parents are entrepreneurs, there is a strong association with merit and hard work.”

That said, ultimately, the notion of bringing up a grounded child is “absolutely subjective or relative” for the super rich, according to Mr Lieber. “We should talk about these things as much as possible. If we think we can just shut up [about privilege] we have another think coming, quickly.”

This article first appeared in The Telegraph on 17 May 2021.