Thursday, July 29, 1999
I read with interest the "Reflections on Wealth and Leisure" Fribble recently. One summarization of that Fribble might be that Warren Buffett's alleged practice of not sharing his vast wealth with his children deprives them of the opportunities that vast wealth allows: the opportunity to develop oneself, contribute to the world, etc. I also noticed that one of the recommendations made in the book The Millionaire Next Door echoes Mr. Buffett's practice of not sharing wealth. The authors contend that children whose parents sponsor them tend to develop less wealth in life than children who are forced to make their way for themselves.
I have reflected on this "less creates more" theory for quite a while, largely because it contradicts my personal observation that, in most of the success stories I am familiar with, somewhere along the way the successful person had someone who they could count on in a pinch -- someone who would lend them money, back them up, or help them out in a jam. In many cases, this backstop person was a parent.
Conversely, I have heard that many homeless people arrived at their desperate situation simply for lack of a backstop. Something bad would happen, and they did not have someone to bail them out, etc.
However, perhaps there is a nuance that would explain this contradiction between what The Millionaire Next Door seems to demonstrate, and what I have observed. It seems to me that if I suddenly came into a large amount of money without a plan for its use, I might end up spending my days in front of the television set. On the other hand, if I needed money to realize a dream, and if no one would back me up on that dream, I imagine it would go unrealized.
So perhaps the missing factor that would help explain these contradictions has a lot to do with goals. Perhaps if one does not have a goal, the money gets wasted; but if one does have a goal, the money is more likely to be put to good use.
I do not imagine that this is the last word on this topic, but I hope that I may encourage someone to take that lock off his or her wallet if their kid wants to pursue a dream.
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