Best Practices: Financial Parenting
A Will to Work
Mary Lowengard
09/01/2004

For the Zaslows of philadelphia, hard work literally runs in the family. Arnold Zaslow is one of three sons in the second of four generations behind ATD-American, a firm that has grown from a small linen store to a 200-employee enterprise. Zaslow is an outgoing man, who will tell you with a twinkle in his eye how much he has to be proud of. There is his work, which he finds so pleasurable that he often jokes he is retired because he loves coming to his office. There is his family, which includes his and his brothers’ children—nine cousins who were raised like siblings. “Not a bum in the bunch,” Zaslow remarks. Now, the next generation is coming to maturity. His first grandchild, Jacob, 14, will soon start his first part-time job at ATD-American. What will Jacob do? “I have no idea,” Zaslow chortles. “But whatever it is, he’s going to be working very hard, I promise you that.”

Hard work, its lessons and the satisfaction it brings is something Zaslow admits he obsesses over. It may well be that his family’s success can be directly attributed to this obsession. Experts believe that paid work experience during our teenage years, and an understanding that work is the expected next step after a child’s education is completed, wards off a Pandora’s box of potential problems. For children of wealth, says Joline Godfrey, author of Raising Financially Fit Kids and founder of Independent Means in Santa Barbara, Calif., “It’s not about working for money as much as working for character. We see a huge difference in children who have grown up without ever holding a job and those who do. The former group is way behind their peers in terms of basic life skills, such as understanding the meaning of responsibility, commitment and, in general, becoming a whole person.”

Indeed, studies show that teenagers who hold part-time jobs actually do better in school than their peers who do not, according to Paul Schervish, director of the Center on Wealth and Philanthropy and a sociology professor at Boston College. Still, “parents need to communicate to their children that work is not about just holding a job or making money, but, ultimately, about being a productive member of society and a good human being,” Schervish notes.

“To give your children everything deprives them of the opportunity to learn how to get it for themselves.”
How should we as parents best communicate this to our children? “Family values are absorbed and observed on a day-to-day basis,” posits Barbara Hauser, Minnesota-based special counsel in Cadwalader, Wickersham & Taft’s Private Client Department and author of Mommy, Are We Rich? Talking to Children About Family Money. Hauser also advocates conducting ongoing and direct dialogs. “Family dinners provide a great venue to share successes and setbacks,” she suggests. “These dinners will pay off more than a thousand hours of lectures.” Moreover, experts say we should not shield our children from mistakes we have made. We must discuss them openly and instructively. As much as children gain from seeing us succeed, they learn much from hearing about our challenges, as well.

Work and Purpose
Work is a critical component of an affluent child’s financial education, akin to learning to manage money through an allowance or developing a social conscience through philanthropy, experts say. For any child, developing a sense of purpose in life is important, but it may be essential for a child who stands to inherit substantial wealth that they may not perceive themselves to have earned. “The healthiest families I’ve worked with—those with kids now in their 20s and 30s—have established a strong sense of self-esteem,” observes Anne Hargrave, a partner at Washington, D.C.-based educational consultants Wealthbridge Partners, and former director of planning and administration for the multiclient family office Rockefeller & Co. Work is one of the key ingredients to building self-esteem. “If you are simply the sum of your inherited qualities, psychologically you have no reason to exist,” explains New York psychotherapist Lauren Howard.

TOP VIEW
Exposing our children to paid employment during their teenage years can ward off a Pandora’s box of problems by building positive character traits. Experts aver four steps to guide our scions: serving as parental role models; allowing children to define their own passions; securing a work mentor; and giving positive verbal feedback.
In the Lauder family, matriarch and cosmetic industry powerhouse Estée Lauder set the tone. She “always talked openly about how she came from little and had to work hard to build her business,” recounts Laura Lauder, who is married to a Lauder grandson and is raising a fourth generation in California. She says her father-in-law, Leonard Lauder, embraced this idea and finessed it, emphasizing the importance not only of hard work, but also of philanthropy and downtime. “He preached that balance is just as critical to success,” recalls his daughter-in-law. In her own family, Laura Lauder and her husband set an example every day—they operate their business out of their home, where their own children witness them working diligently to run Lauder Partners, a technology investment enterprise that focuses on allocating their family’s capital.

Giving That Takes
“Not encouraging or allowing children to work, in effect, robs them of the satisfaction of achievement,” asserts Steven Leder, senior rabbi at Wilshire Boulevard Temple in Los Angeles and author of More Money Than God. “To give your children everything deprives them of the opportunity to learn how to get it for themselves.” Our children need to experience firsthand the power of earning money and the vicissitudes of managing it—even to the extent that they may mishandle or run out of it. Wealthbridge’s Hargrave notes, “It’s really important for children to experience disappointment that they have to work through. If you make it too easy for them, they will never develop the resilience or courage to face true adversity as adults.” Children without work experience of any sort are somehow adrift and prone to depression—or worse, add experts. “We’ve all seen the results of kids with too much time and too much money,” adds Leder. “It’s a potentially deadly combination.”

Along with developing self-worth and teaching income management, employment imparts other valuable lessons. Leder points out that his own early experiences working in his father’s scrap yard business were invaluable. Those early undertakings gave him an understanding and appreciation for those who toil at low-level tasks. “There’s a lot to be said for starting at the bottom,” he maintains. Indeed, the value of the work may be found more in the exposure it offers children to the realities of the world than in the paycheck at the end of the week.

“It’s really important for children to experience disappointment that they have to work through. If you make it too easy for them, they will never develop the resilience or courage to face true adversity as adults.”
Godfrey suggests that young people should—at least once in their lives—take part-time or summer jobs that are mundane, even boring. “What they take away from the experience is the importance of showing up and facing the challenge of making something more out of their lives,” she explains. Other experts suggest that if part-time or summer positions are available at a family-owned business, they should not be sugar-coated. Laura Lauder indicates that her husband, Gary, worked in a low-level job in the information technology division of Estée Lauder before he set off to pursue a career outside the family business. For those of our children who are preordained to work in the family business, there is a critical need for us to provide them with outside experience that summer and after-school jobs can offer.

Four-Point Plan
A sound work ethic involves more nurture than nature, according to Bonnie Brown of Oregon-based Transition Dynamics, who advises families in planning, communications and relationship management. She outlines four steps to help parents cultivate a will to work in their children.

  • The parent must be a solid role model. “Do good work yourself,” Brown says, “whether it’s in a conventional career or a philanthropic endeavor.” Thomas Rogerson, director of wealth preservation services for Mellon’s Private Wealth Management group, says he has seen many parents grasp this concept intellectually, but fall short in practice.
  • Allow children to define their own passions and competencies, then create their own identities and jobs directly from them. For example, a child may have a passion for art, but may also need to simultaneously develop the acumen to deal with the family foundation portfolio. We can suggest that the child work in an art gallery or an art supply store to pick up these additional skills.
  • Secure a work mentor for our child who will supplement our parental role through positive modeling. They can also offer the fresh perspective necessary to get through to teenagers who are pushing their envelope of independence. A mentor can be a knowledgeable relative, a business associate or even a hired coach. “Your child might only need one encounter with an influential mentor, or may respond better to an ongoing relationship,” explains Godfrey. “Either way, you are broadening their learning experience through others.”
  • A constant flow of positive verbal feedback goes a long way toward encouraging young people in their endeavors, particularly when it coms to their work. As Hauser puts it, “Praise works wonders—lectures backfire.”
Is it ever too late to start developing a work ethic in our children? Mellon Bank’s Rogerson cites the dramatic example of a fifth-generation young person whose family had always bestowed, as birthrights, lush gifts such as automobiles, luxurious real estate and generous living allowances. This individual approached Rogerson at a family retreat. Although much of the discussion that day had been about the positive legacies the family had established, the 20-year-old man was deeply concerned about the negative aspects of being on the receiving end of these handouts. With Rogerson’s help, he was able to compile a list of all his living expenses, and make a reasonable sublist of those he thought he might be able to cover through employment. He subsequently got a job to cover those expenses. “It was remarkable to watch this young man self-instill a work ethic,” notes Rogerson. “And now he is able to honorably accept the gifts of money from his family without feeling he has a dependency on them.”

Illustration by Isabelle Arsenault.