Privileged kids: How to deal with “affluenza”

December 28, 2010

Belinda Goldsmith is a Reuters journalist. The opinions expressed here are her own.

Paris Hilton arrives at the Carousel of Hope Ball in Beverly Hills, California October 23, 2010.  REUTERS/Fred Prouser After 35 years as a wealth manager, James D’Amico was used to dealing with rich families and their privileged lifestyles but he never lost his fascination for one aspect of their lives — their children.

While some wealthy families raise successful, well-adjusted children, others produce sons and daughters who seem incapable of functioning in the world outside their gilded gates and, with their parents watching, careen out of control.

“I was disappointed in the level of dysfunctionality in way too many of the families we dealt with,” D’Amico, retired president and CEO of Genesee Valley Trust Company in Rochester, says.

“They just could not meet the challenge of developing a value system in the next generation in the face of affluence and all the distractions that goes with it.”

To explore this, D’Amico spent a year interviewing several wealthy families who had raised successful children, as well as, studying findings by researchers, educators, psychologists and other wealth managers.

From his research he developed a list of traits to avert what he calls the devastating infection of “affluenza.” He explains these traits in his self-published book, The Affluenza Antidote: How Wealthy Families Can Raise Grounded Children in an Age of Apathy and Entitlement.

D’Amico, who says he wrote the book as an ode to his nine grandchildren, said it was frightening how many wealthy families were dysfunctional and the knock-on effect this had on the economy when family businesses failed.

Figures from the Family Business Review suggest that only one-third of family firms survive into the second generation, and just 12 percent survive into the third. A mere 3 percent of family businesses make it to the fourth generation or beyond.

“Unfortunately the media celebrates some of the worst cases — Lindsay Lohan and Paris Hilton — and we make them into role models,” he says.

“You never hear anything about Chelsea Clinton that makes you think she is anything but very well grounded. It can be done. The bottom line is that affluence affects more families than it ought to and it comes more from parental failure than child’s failure.”

Instilling values

From his book he cites the example of one family with three generations of substance abuse. When one of the younger generation flunked out of college due to too much partying and not enough studying, D’Amico advised the family to make him take a job and realize this was not acceptable.

But after one day working as a laborer he quit — and his father gave him work in one of the family’s liquor stores and bought him a brand new BMW.

“I called them and told them they had just legitimized his behavior. He was not a bad kid but he was at a point of life where he could go either direction and he needed some guidance,” says D’Amico.

D’Amico said the trend for children from wealthy families to go astray should concern business leaders as business visionaries were needed, particularly when economic times are tough, to create employment and rejuvenate communities.

“Instead we see far too many of today’s privileged young people yearning more for flashy cars than for pursuing the rewards that successful business ownership can offer,” he says.

So what are traits he found to beat off “affluenza”?:

  • Strong family role models, particularly grandparents. Regular contact with extended family tended to reinforce the value systems of earlier generations.
  • A commitment to family time  — meals together, house and yard work, school assignments, or vacations, present an opportunity to nourish a child’s identity and pass along values.
  • The role of a prosperous family business in instilling a work ethic in younger generations, and in keeping those young people close to home.
  • A healthy respect for money and hard work, and an awareness that pursuing an engaging occupation and achieving one’s goals are vital to well-being.
  • Emphasis on philanthropy, volunteerism and job creation. In almost every case, respondent families demonstrated a strong commitment to the welfare of others and worked to instill a social conscience in succeeding generations.
  • Detachment from the urge to keep up with the Gettys. Several families bucked societal trends, shunning video games, excess consumption and exclusivity linked to high-income people.
  • A willingness to let children find their own way, take responsibility, make their own choices regarding college and career, and learn life’s sometimes painful lessons.

D’Amico says there was no foolproof recipe for success as DNA and birth order also strongly influenced children’s personalities and there was also the unknown risk factors for alcoholism, drug abuse, mental illness and depression.

“Nevertheless, I feel strongly that today’s affluent parents — many of them key players in family businesses — can do a much better job of meting out tough love and raising responsible children,” he says.

“Those who are patient, mature and well-rounded enough to allow their offspring to identify and explore their own passions, free of the taint of excessive wealth, have a better chance of seeing the next generation — and our society — reach its full potential.”

16 comments

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Valid premise , poorly supported.

Linday Lohan while a poster child for bad behavior did not come from an affluent background.

Chelsea Clinton, while privileged due to her father’s influence, is not a child of affluence. Additionally, a twenty something Stanford graduate who is incapable of responding intelligently to a question posed in a public forum by a five year old reporter to a school newspaper can hardly be described as “very well grounded’.

Based on this article it is no surprise that Mr. D’Amico’s book was self-published.

Vod

Posted by VodKnockers | Report as abusive

Lindsay Lohan used to come into the country club I worked at in high school and her entire family was spoiled rotten. This was years ago and they had been members for quit some time before.

Posted by Scapattack | Report as abusive

Interesting article yes. Speaking from a bit of personal experience dealing with several children from such families, you can’t say that “affluenza” is soley the result of nature or nurture.

Some of the children from these familes have been the most dysfunctional, poorly socialized and incompetent idiots I’ve ever had the misfortune of dealing with. However, others have been exactly the opposite, and it’s a pleasure knowing them.

Much depends on the family environment and whether or not the parents have been true parents to their children or merely enablers of bad behavior.

Posted by Cicero2520 | Report as abusive

Not having read the book I can only opine on the data from the Family Business Review that suggest only one-third of family firms survive into the second generation, and just 3 percent make it to the fourth generation or beyond. This has been the conventional wisdom for years and now it is supported by data.

There is too much self-serving false-myth surrounding business and our so-called capitalist system. Any quantitative effort to establish facts is welcome. The question is how to get politicians and policy makers to read, understand and incorporate this information into beneficial laws and regulations.

Posted by Seabird1956 | Report as abusive

It doesn’t take a celebrity study to see the truth in this. Paris Hilton is beyond worthless as a human but there are everyday examples of this everywhere.

You don’t have to be a billionaire to be spoiled and detached from reality. There are examples everywhere, even middle class families can spoil their children to the detriment of the child. They buy them a new house, a new car and the child never learns anything about life or saving or hard work.

I personally have friends who have been given hundreds of thousands of dollards worth of assets. These assets were given to them from their well-to-do parents to allow them to make a living after the chidren discovered they didn’t like working hard. Now these kids spend money like crazy, drive new cars, and don’t have a clue about hard work. And they are not any better off for it.

This is where the cycle begins and it will end with a few more generations. Their kids will be even more worthless than they yet the grandchildren will not have their grandparents money to live off of and then lower class living will result or hard work will be required.

And these people are not obnoxious or arrogant or rude. They are extremely kind, honest people – they just have no clue what its like to pay a mortgage or work hard.

With Paris Hilton is just glaringly obvious because she is foolish, loves the camera and is a waste of 02 (oxygen).

The article couldn’t be any more true. Examples are everywhere in society.

Posted by BHOlied | Report as abusive

Old story, recurring theme, with the usual prurient interest. Buddenbrooks ring a bell? Sense and Sensibility?

Chekhov please.

Posted by ARJTurgot2 | Report as abusive

@ ARJTurgot2… If you enjoy Chekov you might try “A Hero of our Time” by Mikhail Lermontov if you haven’t read it already.

Posted by Cicero2520 | Report as abusive

If they cannot handle a life without any real work or effort then perhaps we can help them out and redistribute their trusts to a more worthy cause.

Posted by anarcurt | Report as abusive

Dear Belinda Goldsmith,

Rather than going along with all the other millionaires who do opinion pieces for billionaires, a more relevant story would have been to report on the 20% of children in the the US who are living in poverty. How are these parents coping? Is there a euphemism for them? We have 10% unemployment, and 14% on food stamps. Meaning, even 4% of our fellow Americans who are lucky enough to have jobs can’t afford to feed themselves.

Belinda Goldsmith, you are a Reuters journalist. The opinions expressed here are your own, but in my opinion you bear some responsibility to reflect what is going outside of the top 2% of the US population. Paris Hilton’s parents don’t need you, the rest of us need someone. You could be our voice.

Posted by TeeTee99 | Report as abusive

Affluence by itself doesn´t change personal capabilities unless we assume that genetics plays an huge part on that.
I´m sorry to say that most of this issue come from press self-interest in promoting scandal.
People that inherit huge wealth are ordinary (and some of them are not) people with better-than-average opportunities that, exactly as any other person, could profit or not from them.

Posted by southmed | Report as abusive

@Cicero2520

Oh god, another Russian author. I’m working on Pushkin, but I have to take Russia [Lit] in small doses, and it detracts from the experience but is better for your sanity if you can read it outside, on a nice sunny day. I did Crime and Punish over winter break +25 years ago and still haven’t recovered.

Posted by ARJTurgot2 | Report as abusive

We are dysfunctional too… me I’m dysfunctional, me too says Spartacus… we just don’t have money and no one watches us much less cares.. but our media fancination and our sex symbols reflect us with money so we can enjoy vicarious super dysfunctionality… but nothing compares to our world superpowerdom dysfunctionality and superman complex as a country! Here we come to save the dayyyyyy!!! then we get our cape caught and we can’t escape!

Posted by wildthang | Report as abusive

Umm, Paris Hilton might be a bit scandalous, but has made more money with her enterprises than her parents…

Posted by ejg3 | Report as abusive

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Posted by About that inheritance tax…. | Pretirement | Report as abusive

I don’t think affluenza has anything to do with wealth generally. If a person is spoiled they are spoiled, and that’s a family problem just as much as personal issues.

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Posted by mini_cheong | Report as abusive

[…] came across this article written by Belinda Goldsmith, a Reuters journalist, and although it speaks to privileged […]

Posted by Affluenza? « DeclutterOrganizeRepurpose | Report as abusive

We have a Lancashire (England) saying from the late nineteenth century: clogs to clogs in three generations, and that was based on experience dating back a couple of hundred years before that.

The difference now is that the media now encourage bad behaviour in order to make a profit, so the actions of these ill-mannered uncontrolled brats is deemed by many, however much they criticise, to be desirable.

Posted by bogwart | Report as abusive

I just read this book and the author of this article doesn’t do it justice. The book itself delves much deeper into the reasons for behavior and applies the principles to a much broader audience than the wealthy elite that are mentioned here. I think the book is useful tool in today’s ‘me first’ society to take a look at setting your children on a path for real success not just financial or surface success.
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Posted by secmedsol | Report as abusive