Some rich people might like to show off their money, but most of them don’t like to talk about it—at least, not with their kids.
Just 17 percent of parents who make more than $100,000 per year said in a recent survey that they had told or will tell their children before age 18 how much money they make. The survey, conducted by Spectrem, a market-research firm, found that 18 percent of parents said they had no plans to have that conversation at any point in the future.
The top explanation, cited by 32 percent of respondents, was that earnings were “none of their business.” Two other concerns—each expressed by about a tenth of those surveyed—were that parents feared their kids would share the information and that this new knowledge would change them for the worse, perhaps making them cockier or more complacent. Among the parents surveyed who did tell their kids about their incomes, the majority did so because they thought it was an important emergency precaution. A smaller number said they did so in order to teach their kids about budgeting. (The survey, alas, only covered the wealthy. After all, it was administered by a division of Spectrem that goes by the name of “Millionaire Corner.”)
To children, money is this mysterious power that dictates where they live, what they wear, and what schools they go to. I wouldn’t advocate for having your six-year-old balance your checkbook anytime soon, but anything that makes that power less mysterious can help kids understand that there are reasons for things that otherwise may seem unreasonable. As Sara Solnick, a professor of economics at the University of Vermont, told The New York Times, “If you are not talking to them, then they are drawing their own conclusions.”
On top of improving children’s financial IQs, being made aware of earnings could also make children more conscientious. Nearly half of millionaires say they don’t feel wealthy, even though 95 percent of households make less than $167,000 a year. Without knowing more about what their parents earn and how that compares to American averages, rich children probably default to assuming that their standard of living is common.
The most practical argument for why parents ought to tell kids about their income, though, is that they’re bound to find out someday, either from a tax form or, eventually, an inheritance. And it’s probably not such a secret to begin with anyway. Glenn Kurlander, a managing director at Morgan Stanley, once wrote about a time when one of his ultra-wealthy clients was worried about not having told his children how much money he made. “You live in a 25,000 square foot house, and your kids have never been on a commercial plane—they’re always on your private jet,” Kurlander responded. “I think they’ve figured it out.”