Wealth 'Poisons' Kids, Says Aussie Finance Tycoon
Graham Tuckwell is not exactly a household name, even among his fellow tycoons.
The Australian entrepreneur who built the multi-billion-dollar financial empire ETF Securities has long avoided the press, scandals and flashy spending. But he's making headlines recently with his announcement that he's giving $50 million to Australian National University for scholarships.
The big news was not so much the gift, but the reason for the donation. Wealth, he said, can ruin your children, so much better to give it away.
"Lots of money is poisonous to have," he said of his kids. "If they create things themselves, then it's a sense of achievement. Whereas if you just give them stuff, it almost destroys their desire to do things and you actually end up with kids that are a lot worse off."
He said that while many of today's rich are giving their fortunes to charity, "in some cases they pass the wealth down to later generations who have behaved badly. And I think that's a really bad example."
His gift to the university will go to scholarships for kids with "innate smartness" and who have a well-rounded life.
Of course, Tuckwell is generalizing about kids and wealth. Plenty of families manage to pass down wealth without ruining their kids. Donald Trump's kids often seem more polished and savvy than their billionaire dad, despite their Silver Spoon lives.
But the Tuckwell Principal is part of a sweeping change in the mindset of the wealthy when it comes to inheritance. Throughout the world, self-made millionaires and billionaires who didn't grow up with money are seeking to instill the same middle-class values, hunger and independence in their kids.
Warren Buffett, of course, is the high priest of the anti-inheritance movement, saying that the wealthy should leave their kids "enough to do anything, but not so much that they can do nothing." (To be sure, Buffett's kids aren't exactly struggling: they've inherited hundreds of millions in their foundations).
Tuckwell may also be looking at the more egregious examples of rich-kids-gone-wild in Australia. Mining billionaire Gina Rinehart is engaged in a highly public lawsuit with her kids, whom she says are spoiled and unfit for work. The country has also become a playground for wealthy kids from China, Indonesia and other countries in Asia.
"Generally speaking, if you look at the people in Australia that have got huge amounts of wealth, without naming any, they generally have not put the majority of their wealth behind strong philanthropic causes," he said.
He told reporters that his four children will receive "a bit of money" and "a great education courtesy of their parents." Other than that, he said, they would have to have earn their own success.
We have yet to hear comment from his four kids.