Common Scenarios
One way the newly wealthy respond to the challenges of parenting is to follow Warren Buffett and other prominent role models in giving most of their money away rather than to their children. This is unselfish and socially responsible. But if done without an explanation or discussion, it can send a confusing message to the next generation, who may feel punished or confused about what is expected of them.  

Another path is to create restrictive trusts and assign trustees perpetually in loco parentis to monitor choices about spending, education and even relationships. This results in children feeling their parents do not trust them-as indeed they may not. Succeeding generations then feel they will always be children, albeit to surrogate parents-the trustees.

Allowances are another tough spot for many immigrant parents. Some adopt the middle-class playbook rigidly and say, "I didn't get money for being part of my family and I won't give 'handouts' to my kids." Others become human ATMs, supplying their kids with ready cash but little decision-making experience.

Some parents create a false middle-class life in which the wealth is denied, no one talks about money and children learn to resent wealth rather than learn how to preserve it. Or they forget the old-country values altogether and only learn how to spend.
None of these strategies is necessarily wrong. But when these methods lead to stasis or, more commonly, infighting within the family, immigrants and natives are unable to sustain the outpost settled by the founders. They move "from shirtsleeves to shirtsleeves in three generations," as the common proverb has it.  The point is that immigrants to wealth have to face whether their choices about money reflect their own experiences and uncertainties or a true understanding of what their children need for guidance.  

Getting Help
It's rare for wealthy families to transform themselves from founding pioneers to established citizens in the Land of Wealth. This difficulty may explain the failure of outposts across generations and most natives' return to the economic old country. But there is hope. Just as waves of immigrants inspired mutual aid societies, religious groups and governmental agencies to help newcomers adjust to American culture, the same is happening in the Land of Wealth.

Several resources exist to guide wealth-creating families and their native children. These range from classic texts on parenting for financial literacy (Silver Spoon Kids, Children of Paradise, Raising Financially Fit Kids) to guidebooks on what it takes to sustain families of wealth (Wealth in Families, Family Wealth: Keeping it in the Family). Parents can attend educational seminars for themselves and their children. Advisory firms offer in-house consultants and external counselors as part of wealth management. Perhaps most powerfully, peer communication within the wealth holder community-whether through philanthropic organizations or membership groups such as the Institute for Private Investors, Family Office Exchange or Tiger 21-allows families to share difficulties and solutions. The insularity and secrecy typical of wealth is dissolving.

Affluence does make life easier.  But while everyone seeks relief from economic stress, few are prepared for the impact money has on relationships and parenting. It does not have to be so. With careful guidance and thoughtful attention, families of wealth can meld the best of the old country with the new land's good fortune.   

Dr. James Grubman of FamilyWealth Consulting in central Massachusetts is a consultant to families of wealth, family businesses and the advisors who serve them. For more information visit www.jamesgrubman.com.  Dr. Dennis Jaffe is a partner at Relative Solutions, a consulting firm, and a professor at Saybrook Graduate School in San Francisco. For more information visit www.relative-solutions.com. Dr. Keith Whitaker is managing director of family dynamics at Calibre, a division of Wachovia Wealth Management, and a research fellow at the Boston College Center on Wealth and Philanthropy. For more information visit www.calibre.com.