This article by Business News Daily quotes one study which found that 68% of ultra-high-net-worth individuals (UHNW = $30 million or more) were self-made. The article refers to a second study by Fidelity Investments which found that 88% of all millionaires are self-made. In these studies, “self-made” means the wealth was not inherited.
While this article focuses on how the UHNW wealth creators tend to get and stay rich (and their characteristics), I’m viewing it through a different lens – the lens of bias against inheritors, people who are not “self-made” but have been given their wealth.
I have worked with several wealth creators who grew up working class or were downright poor. Through the determination that can come from such a disadvantaged start, they worked unbelievably hard and created incredible financial wealth. We tend to love the underdog as they are rising up. Do we love them as much when they have made it? Do we love their inheriting kids and grandkids?
People seem to like the idea that a majority of wealth is self-made rather than inherited. While there may be several reasons for this, I believe part of this preference reflects a bias against inheriting and inheritors.
There are many derogatory names for inheritors: trustafarian, for example, is just one of many. I won’t list the others I have heard as it simply plays into a negative stereotype. Whether through jealousy, envy or distasteful experiences with the behavior and choices of inheritors, there is significant negative energy toward them. Like so often with stereotypes, a bad example can be perceived as the norm. Hollywood usually does not help in this regard.
In my work with wealthy families helping to develop the rising generation, I often see the senior generation instilling deeply held values about humility, service and social impact. Inheritors learn to manage wealth with an eye toward sharing it with future, often unborn generations. Rather than squandering it frivolously as in movie depictions of the stereotype, the inheritors I interact with tend to live simply and make the world a better place. And those who do not live so simply but enjoy luxury and expensive things, do so with a spirit of gratitude and sharing with others. When lucky, they do so without deep feelings of shame around unearned wealth (a whole other topic for another post!)
In some of the families I work with the senior generation members are inheritors – children or grandchildren of the wealth creators. Sometimes, they are even further removed with inheritors guiding the next generation of inheritors without any of them ever having met the wealth creator! In my experience, the families who commit to developing a positive and healthy family culture around money/wealth avoid the stereotype of the selfish and lazy inheritor, who adds little to society.
In the last 30 years in particular, a professional field around the dynamics of family and wealth has blossomed. Experts now exist who can help families develop (or build upon) a culture in which wealth serves deeply held values as parents look to raise amazing people who defy the stereotypes. When these young people are known socially to be an inheritor from a family of significant financial means, there is not a negative connotation to inheritance because the character of the family member is so strong. They represent a fresh image of inheriting to those who have only heard or experienced the darker side.
If you are reading this and are not an inheritor, and have bought into some/many of the negative stereotypes, look around you more carefully. There may be inheritors in your midst who are unnoticeable due to their stereotype-defying character.
If you are reading this and are parenting a current or future inheritor, know that there are resources to support you in your journey.
If you are reading this and are an inheritor, the emotional and financial complexity is real. Get the support you need to make sense of it and if you already have made sense of it – please, mentor others!