Well, it’s Friday morning and I’m running a little behind. So instead of a brand new post, you get this one recycled from December, 2010. That was a while ago, and I bet even if you’ve already read it, you won’t remember. So sit back, relax, and arouse your eyeballs. It’s on entitlement.
My buddy Andrew Hallam posted an absolutely terrific post on entitlement called The Toughest Financial Challenge of All. It’s the best post I’ve read on the subject since, well, ever. While Andrew’s post focuses on the children of the wealthy, the lessons learned can apply to anyone.
I recently overheard a conversation between two friends. They were talking about a third person who is all of 22, just recently married and has just moved into a brand new 1200 square foot house with her husband. It turns out that they are going to move into a new house because the current house isn’t big enough for the two of them.
I understand where these people come from. They’re used to living in a big house, a house that is probably pretty nice and fairly new. Chances are they’ve had some (if not all) of their college education taken care of by the same parents who can afford a house like that. They’ve gone from a comfortable existence as kids to good jobs and therefore a comfortable existence as adults. They’re just doing what comes naturally.
From the parents’ perspective, probably one of the main reasons why they work so hard is to provide for their kids. Every parent wants their child to have nice things and nice experiences. And therefore, every parent does what they can to give their child a head start. No one can argue that their hearts aren’t in the right place.
Getting back to this girl, it seems like she is destined to live beyond her means. We all know that eventually leads to debt, whether it be consumer debt or debt from the bank of mom and dad. Often though, money borrowed from the bank of mom and dad comes with little to no expectation of being paid back. I’d be willing to bet that most parental loans aren’t paid back with the same sort of diligence that the mortgage gets. Who’s fault is this?
One school of thought would place the blame solely at the feet of the parents. What motivation does a child have to dig themselves out of a financial hole if they know getting out of the hole is as simple as a call to mom? Taking the easy way out of problems isn’t generally the way to build character.
Parents are just doing what comes natural as a parent – taking care of their kid. We’ve all gone back to our parents for help with problems at some point as adults. Perhaps it should be up to the parents to put their foot down and say “no”.
Other people (myself included) place more blame on the child. I have little sympathy for someone who has gone out and bought too much crap and now can’t afford it. The child then takes advantage of the parent knowing they’re an easy source for cheap money. As far as I’m concerned that’s barely better than blackmail or exploitation. But, people get desperate and will do whatever it takes to get back on the gravy train.
How do we stop entitlement? I don’t think we can.
One point Andrew brings up in his post is making people aware of it, especially those in that situation. This would most definitely help, but for every person who got it there would be 10 who would dismiss the information for whatever reason.
Another proposed solution is for families to live below their means, instilling a sense of frugality in their kids. As I demonstrated in an earlier post, children get bitter when wealth isn’t passed along to them and they’ll rebel. Imagine being a child who knows their parents are wealthy but still wears hand-me-downs or clothes from the thrift store. Kids aren’t smart enough to figure out why we’re frugal.
So what are we to do? I have a radical idea:
Let’s do nothing.
I believe that a large number of children with wealthy parents have a bit of an inferiority complex. Their parents are successful, so they want to be too. Since our culture equates success with big houses and nice things they rush out to buy that stuff. Maybe having entitled children is one of the downfalls to being wealthy.
Let’s give each set of parents the choice of what they want to do with their entitled kids. If they feel the need to bail out junior, perhaps we can just view it as stimulating the economy. After all, their kids are going to get that money and piss it away sooner or later, right?
What I plan to do is to give each of my kids a token amount (say $100k) in quarterly increments at certain milestones in their lives – when they go to college, buy their first house, when they have kids and when I kick it – and let them know that the rest will be going to charity. It’s not the perfect solution and many of you may label me as selfish and whatnot for planing to do it, but for me I think it’s the best way to avoid entitlement.