Risks of Too Much Wealth: Family Feuds

One of the major risks from having too much wealth: Family Feuds

Wall Street Journal’s Robert Frank writes,

One reason more wealth doesn’t always bring more happiness is family conflict.

According to the study, conflicts are more likely with higher wealth levels. When asked whether wealth creates family conflict, 40% of those with net worths of $1.5 million to $3 million agreed. Yet among those with $15 million or more in wealth, 46% agreed.

The Philippines has not been a stranger to this. Some of the famous family squabbles has been covered or reported by media.

For instance this from the Philstar.com (2002)

In the Philippines, among the famous family feuds include that of the Cojuangco clan, with the Cory Cojuangco-Aquino side versus the branch of first cousin Danding Cojuangco (a feud which crossed over to the level of national politics); the Zobel-Ayala split between first cousins Jaime Zobel de Ayala and Enrique Zobel; the disagreements among the third-generation Soriano siblings of Anscor; the recent and much-publicized Ilusorio family feud involving warring spouses with three children on each side; the Uytengsu-Young conflict between brothers-in-law in General Milling and Alaska Milk; and the feud between the late Senate President Gil Puyat Sr. and his sister, which caused a split in the Puyat business empire, among many others.

The article cites more cases and attributes the unfortunate familial disputes to the failure to “institutionalize an orderly and clearly-defined succession” or from not having a succession planning-management.

While the lack of succession planning management could signify as a substantial variable in the partitioning of the inherited property rights, I would add that, to my opinion, divergent value scale of members of the family and the base impulse to appropriate than to generate wealth as the other contributing factors.

Parenting To Be Remembered

The conventional view of parenting is that parents shape their children's lives. But this perception is misguided.

Professor Bryan Caplan argues why, (Wall Street Journal) [bold emphasis mine]

``Parents may feel like their pressure, encouragement, money and time are all that stands between their kids and failure. But decades' worth of twin and adoption research says the opposite: Parents have a lot more room to safely maneuver than they realize, because the long-run effects of parenting on children's outcomes are much smaller than they look.

``Think about everything parents want for their children. The traits most parents hope for show family resemblance: If you're healthy, smart, happy, educated, rich, righteous or appreciative, the same tends to be true for your parents, siblings and children. Of course, it's difficult to tell nature from nurture. To disentangle the two, researchers known as behavioral geneticists have focused on two kinds of families: those with twins, and those that adopt. If identical twins show a stronger resemblance than fraternal twins, the reason is probably nature. If adoptees show any resemblance to the families that raised them, the reason is probably nurture.

``Parents try to instill healthy habits that last a lifetime. But the two best behavioral genetic studies of life expectancy—one of 6,000 Danish twins born between 1870 and 1900, the other of 9,000 Swedish twins born between 1886 and 1925—found zero effect of upbringing. Twin studies of height, weight and even teeth reach similar conclusions. This doesn't mean that diet, exercise and tooth-brushing don't matter—just that parental pressure to eat right, exercise and brush your teeth after meals fails to win children's hearts and minds.

``Parents also strive to turn their children into smart and happy adults, but behavioral geneticists find little or no evidence that their effort pays off. In research including hundreds of twins who were raised apart, identical twins turn out to be much more alike in intelligence and happiness than fraternal twins, but twins raised together are barely more alike than twins raised apart. In fact, pioneering research by University of Minnesota psychologist David Lykken found that twins raised apart were more alike in happiness than twins raised together. Maybe it's just a fluke, but it suggests that growing up together inspires people to differentiate themselves; if he's the happy one, I'll be the malcontent.

``Parents use many tactics to influence their kids' schooling and future income. Some we admire: reading to kids, helping them with homework, praising hard work. Others we resent: fancy tutors, legacy admissions, nepotism. According to the research, however, these tactics barely work. Dartmouth economist Bruce Sacerdote studied about 1,200 families that adopted disadvantaged Korean children. The families spanned a broad range; they only needed incomes 25% above the poverty level to be eligible to adopt. Nevertheless, family income and neighborhood income had zero effect on adoptees' ultimate success in school and work."

This doesn't suggest that parents should leave or abandon their children to their own fate. Instead parents should just relax and take life in stride.

Professor Caplan writes,

`` Watching television, playing sports, eating vegetables, living in the right neighborhood: Your choices have little effect on your kids' development, so it's OK to relax. In fact, relaxing is better for the whole family."

This also means that parents should relieve themselves of what one might call self-imposed pressures of forcing their children to live a life designed according to their ideals, because the ultimate goal, is according to Professor Caplan, to be remembered, " The most meaningful fruit of parenting, however, is simply appreciation—the way your children perceive and remember you."

Happy Father's Day!