Rich Parents Who Are Cheap

Rich Parents Who Are Cheap

Thursday, July 24, 2008

filed under: celebrity logic

If you had hundreds of billions of dollars, would you give it to your kids? Some super wealthy parents are telling their kids to get off their butts and make their own money!

When we heard that Sean Connery cut his son off financially, we realized this may be a new trend, given the fact that Warren Buffet didn't want to give his children money and Bill Gates limited his children's inheritance. Tough break for the kids.

We decided to go straight to a rich kid for his take -- one who has been analyzing the inner workings of this world for years through his documentaries. Jamie Johnson is an heir to the Johnson & Johnson fortune and the director of Born Rich and The One Percent.

Things aren't always as they seem. Johnson says that although he has no knowledge of the inner workings of these families, saying you aren't giving money to your kids may have loopholes. "I think when a lot of people say they're not giving their kids money, it's not true. In wealthy families, kids can get money through a lot of different channels. You can get money through grandparents and aunts. In a lot of cases, people will create a trust fund. They think this doesn't count because it's not a bulk of their wealth, but it can often amount to a huge sum."

Even charitable acts have their perks. He implies that even for those who give most of their money to charity, their power remains the same, which gives you plenty of opportunity to make money. "Warren Buffet said he gave a billion dollars to each child for their foundations. That is charitable money, so it can only be used for charitable spending. Legally, you do have to give away 5 percent of that money each year. It does, however, give you huge influence in the world."

Money is great -- in the right hands. When asked if it's a good thing to give your child a lot of money, Johnson said, "I wouldn't say it's a good thing. For some families it has backfired when their children have gotten huge sums of money. Huntington Hartford is the ultimate story when it comes to inheriting money. In the late 60s, he became the richest person in America after inheriting the A&P fortune. He ended up declaring bankruptcy and destroying his life through expensive living -- like partying and excessive spending. There are other people where it's worked out well -- where people have done amazing things. Ivanka Trump is a good example. I think it depends on the circumstance. I'm not opposed to it."

The financial gap is growing. What does Johnson think the reason is for all this recent fascination in the rich? "I think one of the reasons is the growing wealth gap. The space between the bottom of the socioeconomic ladder and the top is increasing. When the disparity in wealth is so significant and the people at the top are so much richer than everyone else -- there is a tendency to focus on them. People are fascinated by them because their wealth seems unattainable and mobility between classes is more difficult."

Click here to find out which famous parents aren't happily handing down their fortunes.

If you had millions, what would you do?

Rich Parents: Smart or Greedy?

5 comments so far | Post a comment now >>

I think it’s a good idea for wealthy parents NOT to give their kids money because it’s a way of instilling a work ethic and an understanding of the value of a dollar…too many kids are spoiled rotten & have no clue about an honest day’s work! I’m all for it!

- Work It

Posted 07/24/08 01:34 PM

But look at this Johnson guy. He has all the privilege and access and turned it into something good. You can give them money and still instill the value of a good work ethic. I would love to be able to give my kids the best of everything.

- Jordan

Posted 07/24/08 02:54 PM

this is so refreshing. parents this rich will inevitably give their children money, how can they not? i don’t know one parent who doesn’t do their best to give their kids what they want if it is within reason and they can. however these parents at least had the good sense to instill their children with responsibility and a good work ethic. kudos to them!

- maggie

Posted 07/24/08 03:22 PM

I think if you’re extremely wealthy and you raise your kids with a sense of resposiblity, integrity, community service and good financial sense, then you should feel great in leaving them your fortune. However, if you know you’ve raised a brat, don’t bother. I think it’s unfortunate that most of these “trust fund” babies are raised by their nannies and absentee parents who spoil them. I have a friend who’s a doctor and makes 6 figures in a tiny town in NC, her kids get one pair of shoes and don’t get another until the one is unwearable. smh. Now I think that’s cruel to a certain extent, but I think they will value what they have a lot more than the kid who has 10 pairs of shoes.

- natalia

Posted 07/25/08 09:30 PM

Hey, I’m 13 1/2, and my parents are rich and they never told me until i found out when i started hearing them talk late at night when they thought i was asleep. yea, im very spoiled, but maybe if u keep it a secret and use disipline on your kids like any good parent and know when to draw the line, go ahead and give your kids money. if they spend it all, too bad. responsibilty with money is a tough thing. Time to learn. :)

- Kait

Posted 01/24/09 04:52 PM