His parents were actually starting to get worried that he had an anxiety problem.
After all, he was only 14 years old but was displaying more nervous engagement with the family farm than even his dawn-to-dusk father had been showing. It was several days in a row during harvest season that the boy had been having a difficult time sleeping. He would wake at 4 a.m. and then rouse his father so they could both get busy with reconvening the harvest while the weather was good.
Although he may have been sick with worry, he wasn't sick. He was simply well-trained on what was at stake. He was also most certainly a part of the formula for keeping the business afoot.
He had been immersed in the life of the farmer since before he could tie his own shoes. He had been driving farm vehicles since he could see over the steering wheel - standing on the seat. As a preteen, he accompanied his dad on trips to buy equipment, and was involved in inspecting and even choosing the machines he would soon almost exclusively operate.
And most recently, he had accompanied his father in visits to his bank.
This is not some Depression-era story, but a true life example from just a short time ago in a British Columbia family. It contrasts starkly with the typical problems faced by parents of teenagers. Yes, summertime may find the typical child up at 4 a.m. with some sort of anxious attachment disorder, but not of family farm type.
On the contrary, it is usually some sort of sedentary electronic obsession. If they could create a conveyor belt of taco chips and pop, and somehow perform their gaming activities on a couch modified to double as a toilet, we might never see them again.
Am I economically relevant?
The teen angst issue can at least in part be explained by the level of engagement they have, or don't have, in the provision of the necessities of their own lives.
If they are detached from generating a meaningful family contribution, what then?
Economic relevance is especially difficult to replicate in families who have put away substantial resources, enough to last a lifetime or more.
But according to Fredda Brown and Dennis Jaffe, in their work, Overcoming Entitlement and Raising Responsible Next Generation Family Members, it is essential: "The expectation that a person do something that supports him/herself or at least that he/she learn to live on what is earned is an important experience for every young person, but we believe especially for the most wealthy. Successful personal development seems to demand a personal journey where the individual separates from the family and does something real, visible, and important on his or her own."
There is plenty of money there, but mom and dad don't want to share because they think I'm incompetent. Well, yes. There may also be complications with the parents having been preoccupied with the creation of wealth during the child's earlier years.
This creates a debt of sorts, but not a financial one. It is more a debt of knowledge, and possibly a debt in the relationship.
You've probably heard the adage rags to riches to rags in three generations. Let's run the numbers.
Let's say a family has tucked away a large estate worth, say $15 million, but only the generation who created the wealth has mastered the ability to make it grow. Between misspending and entrepreneurial mishaps, any gains on the base are offset by losses in generations two and three, and thus the core amount of money is static. (In reality it usually shrinks.)
Generation one: Mom, dad and three children. Just count Mom and dad, two people.
Generation two: Three families with two children each on average, for a total of twelve people including spouses.
Generation three: The six children from generation two. Each child partners-up and has two more children, for a total of eighteen new people (six spouses and twelve children).
Without accounting for divorces or anything more than replacement fertility, we now have a three-generation total of thirty-two people.
If the $15 million remains static, as noted above, then the amount allocated to each person works out to about $469,000. That's a nice sum of money, but by no means a lifetime supply in this country.
It works out to about $7,800 per year over say sixty years of adult life each, or $650 per month. That's hardly a fortune.
If we then add the complication that generation two (and perhaps three) have a spender's mindset, it gets worse.
On the other hand, the ability to work the money could grow it at a sufficient pace to keep many generations fed and housed, perhaps creating a surplus to give to those less fortunate. In other words, we all need to pass along more than money.
We need to pass along the ability to grow it, and the good sense to spend it at a reasonable pace.
Mark Ryan is an advisor in Prince George with RBC Wealth Management, Dominion Securities (member CIPF) and can be reached at [email protected].
