The Life Choices of Wealthy Men, Part Four

Introduction

In the ‘90s, I interviewed 17 men who knew at an early age they had some independent wealth. In Part One of this three-part series, I provided information on their backgrounds, how they dealt with “money issues”, and how their parents influenced them in making life choices. Part Two covered how they were influenced by their schooling and the military. It also contrasted the “risk takers” with the “risk avoiders”. Part Three covered the role of chance along with the reflections and regrets of the men interviewed. This part will spell out the significance of this work for today’s parents and children, rich and poor.

How Times Have Changed

The world is not the same as it was when the people I interviewed went to school. Back then, I sensed the college advisor at Milton Academy (where I went) was getting a commission for every student he sent to Harvard. Competition is much stiffer: grades and test scores now count and there is financing for the less well off. In addition, women have become career-oriented– there are now more women earning college degrees than men.

Nevertheless, I believe my interviews and what I learned from them has relevance for the life choices of children today. I also believe they say something about the appropriate “influencing role” of parents.

The Role of Parents

Ask any parent: they will say they want “the best” for their children. But do they, and what does that really mean? I suggest that most parents have a pre-conceived notion of what “the best” means. For most, it means they want the following for their children:

  • getting good grades;
  • going to good schools;
  • getting a high paying job;
  • getting married, and
  • providing us with grandchildren.

This list is a disaster waiting to happen, and it often does. Unlike Lake Wobegan, the home of Garrison Keillor, not all children are “above average”. In fact, just under 50% are below average. So parents should accept the fact that their children just might be below average. And that could mean they cannot get into “good schools” or get high paying jobs. Getting married? Times are changing. Why push it?

And then there is the self-centered and potentially most disastrous parental wish of all – the wish for grandchildren. Of course, it is part of the American dream. But for most couples, having children will mean they spend most of the rest of their lives working to pay for their children’s expenses. To be fair, couples might want children, even though the world does not need more children. Many want children because it provides them with a near full time structure for their lives. And most people want and need structure. That is why religions have done so well over the years. But parents, let your children decide.

There were several egregious examples of excessive parental influence in my interviews. S1 wanted to be a musician. His parents were large contributors to the New York Philharmonic and did not want to be embarrassed. So what did his father say? “If you make it to the top that is fine. Anything else would be self-indulgence. Make it to the top while giving the appearance you were so naturally endowed that you were able to do it without really trying.” S1 gave up his music career. He said “I think I could have been a good musician: it was my biggest talent and I threw it away.”

And then there was this comment by M4: “In early days, typical of most people like me, I was fulfilling other peoples’ [his mother’s] ambitions – A sense of appropriateness which overpowers anything else. We are limited by experiences, etc. But given these limitations, I would have done it totally differently. I would have developed more of myself somewhat earlier in life in terms of what I wanted to do, who I wanted to be.  I have come to where I am in life through a series of compromises. Yankees not successful because they kill their own, especially the talented ones”.

So what is key for parents? C8 suggested: “…each person has to travel his own road. I like a person to stand, believe in something. To take risks in whatever, job, another person, climb a mountain. The important thing is to take an interest and pursue with energy and commitment to make a difference. It is not appropriate for another person to say what that interest should be. I would like my children to have that choice.”

Most certainly, “you can lead a horse to water”. And parents can provide children with relevant information. But for anything to work, the kids have to buy in on it.

What Is Relevant Information?

The following information from the Bureau of Labor Statistics is relevant. It shows that the more education you have, the more money you will make and the less likely you will be in unemployment lines.

Some claim that education costs will wipe out any higher income benefit from more education. This is nonsense. The average schooling costs (tuition, room and board, etc.) for a public college in 2112 is $22,261 annually and for a private college $43,289. If you calculate the net present value (NPV) of the earnings streams after allowing for years you don’t work while in school and the costs of schooling, you still come out way ahead (Table 1) with more education.

Table 1. – Annual Earnings by Education Level And NPVs[1]

And while these figures speak for themselves, they do not include the benefits from connections made in school. And these connections have been shown to be important for business advancement.

C3’s father was a mechanical engineer at Pratt/Whitney:”he felt the production of physical products product was what made the economy tick and he had little patience with doctors, lawyers and others in service industries. That view got banged in fairly hard.” Then there was M2’s father who gave him a doctor’s bag on graduation from college. M2 tried medical school and failed.

In retrospect, it appears that the opinions of C3 and M2’s fathers reflected uninformed biases that messed their sons’ lives up for some time. Contrast that with the information provided in the Bureau of Labors Statistics. It includes ten-year projections on incomes and number of jobs in almost 1,000 occupations. A selection from that database is presented as Table 2.

Table 2. US Labor Force Projections (in mil.)

Source: US Bureau of Labor Statistics, Employment Projections

When kids get to high school age, parents should introduce them to this data. Don’t tell the kids what occupation to choose, just acquaint them with this data and how to use it.

And speaking of relevant information, I think that when children get to 16 years of age, they should be told exactly how much money they can expect and when from their parents.

One final observation on the role of parents: provide all the relevant information to them that you can. But whatever they choose to do, be supportive. And I key point there is to be supportive when they fail. M4 failed often. But whenever he did, his father would fly up from NYC and take him out to lunch. That made a difference to M4.

The Role of Children

In looking back C4 suggested: “Do something that has a payoff for others, but don’t do something for others – there are no rewards in doing something for someone else only. While there is nothing wrong with making money, the fun is to improve the operation. You should not sacrifice just to make money.”

C8 had similar thoughts: “”Is there a way to guide people? Maybe each person has to travel his own road. I like a person to stand and believe in something, to take risks in whatever – a job, another person, or to climb a mountain. The important thing is to take an interest and pursue it with energy and commitment to make a difference. It is not appropriate for another person to say what that interest should be.”

It is interesting to contrast the attitudes of young Americans and Chinese in entry level service jobs. The young Chinese appear to be trying as hard as they can: “that this might not be the most important job in the world, but it is for me right now”. Consider young Americans with jobs in fast food chains: they mostly appeared bored.

Successful kids will approach tasks with enthusiasm and approach everything they choose to do with enthusiasm. Dull kids will drift through life being bored. Some snap out of it. Others do not.

I think every child who gets to college should be required to read “The Parable of the Grand Inquisitor” appearing in The Brothers Karamazov by Dostoevsky. It is a story about Jesus coming back to earth and wanting to give man his freedom. The Grand Inquisitor tells Jesus to leave. He says Jesus is wrong: man does not want freedom – it scares him. The Grand Inquisitor says man wants structure: structure is provided by the church and other social institutions.

After reading the Parable, students should be required to write an essay on what type of person they think they are (wanting freedom or structure). Those few wanting freedom should think very hard before getting married and even harder about having children.

Children are now under tremendous parental pressure to do well in school so they can go to good colleges. It is significant that only one person I interviewed had a clear idea while in college of what they wanted to do when they got out of college.

Conclusions – Resiliency

There is a danger in getting too caught up worrying too much about life choices. And keep in mind the role of chance: it was important for the men I interviewed and it will continue to be so. So it is heartening that most children are quite resilient – most of us have a strong drive to survive. We go down numerous paths that in retrospect appear mistaken. Mistaken? Maybe just interesting experiences from which we learn. Macbeth keeps me enjoying life and not taking anything too seriously:

“Life’s but a walking shadow,

a poor player, that struts and frets his hour upon the stage,

and then is heard no more;

it is a tale told by an idiot, full of sound and fury, signifying nothing.”


[1] For the NPV’s, a 4% discount rate was used and it was assumed all would work until they were 65 and start as soon as they finished their education.

The content above was saved on the old Morss Global Finance website, just in case anyone was looking for it (with the help of archive.org):
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