Entrepreneurs

4 secrets to raising wealthy kids, according to the billionaire Rockefeller family

In many cultures, there is an age-old saying that wealth is made and lost in three generations. In the U.S. we say, "shirtsleeves to shirtsleeves in three generations," and in Japan it's "rice paddies to rice paddies in three generations."

Wealth, in other words, rarely lasts much beyond the grandkids. Taxes, spending, the dilution of wealth through children and their children's children, and the inevitable spoiling effect of so much money, eventually take a toll on family fortunes.

Yet the Rockefeller family has defied all of that. Now entering its seventh generation with as many as 170 heirs, the Rockefeller family has maintained substantial wealth — they had an $11 billion fortune in 2016, according to Forbes. That's more than 100 years after John D. Rockefeller became America's first billionaire after founding Standard Oil Company in the late 19th century.

Even more unlikely, however, is that the family has remained largely united, without the public scandals, feuds, lawsuits and tragedies that typical plague other gilded dynasties. There are now over 250 members of the family who are direct descendants of John D. Rockefeller and Laura Spelman Rockefeller.

Rockefeller family portrait, summer of 1920, Seal Harbor, Maine/ From left: Laurance, Babs, John D III, Abby Aldrich Rockefeller holding David Senior, Winthrop, John D Rockefeller Junior, and Nelson.
Rockefeller Archive Center
Rockefeller family portrait, summer of 1920, Seal Harbor, Maine/ From left: Laurance, Babs, John D III, Abby Aldrich Rockefeller holding David Senior, Winthrop, John D Rockefeller Junior, and Nelson.

Sure, the Rockefellers started out very rich, which helps over time. But so did the Vanderbilts and Carnegies and Astors, but you don't see them still giving away billions like the Rockefeller family. In May, Christie's will auction off the collection of the late David and Peggy Rockefeller, including art and valuables expected to go for over $500 million, and possibly as much as $1 billion, with all the proceeds going to charity. During his lifetime, David Rockefeller gave away more than $1 billion.

So what's the Rockefeller secret?

In a rare interview, David Rockefeller Jr., chairman of Rockefeller & Co., said that the family has developed a system of values, traditions and institutions that have helped the family stay together and preserve their wealth. They are useful to any family trying to raise children with good money values — even if you're not wealthy.

David Rockefeller Jr. and Susan Rockefeller
Getty Images | Monica Schipper
David Rockefeller Jr. and Susan Rockefeller

He pointed to four main components.

The first is regular family meetings.

Courtesy of Rockefeller Archive Center

"We meet as a family twice a year, often more than 100 of us in a same room for a Christmas lunch for example," he said. "We have something called the family forum. When you are 21, you get invited to those meetings." At the gatherings, the family talks about its direction, projects, new members and any other family news related to careers or important milestones. It's important that everyone feel a part of the family, even if they married into it.

Rockefeller says it's also important to maintain family history.

The Rockefellers do this in part via their family "homesteads," where they can gather and connect with their past.

"It's places that were familiar and that were passed down over generations," he said. "I can go back to the place where my great grandfather lived over 100 years ago and see how he lived and see how his son and their grandchildren lived."

No longer having a family business is important as well, says Rockefeller. Many of the disputes within rich families start over business — who should run it, how it should be run, and who should benefit.

The Rockefellers haven't had a family business to fight over since 1911, when Standard Oil was broken up by the government into publicly traded companies due to then-new antitrust laws. With that single stroke, the Rockefeller fortune was transformed from a single giant company to multiple publicly listed companies. Combined with a well-written series of trusts, the stocks and financial holdings were more easily passed down to future generations and less subject to financial battles.

"The wealth in our family, of course, came out of the oil business, of Standard Oil," Rockefeller said. "But the business hasn't kept us together and there are many families who it's pulled apart, frankly. By chance, I think, we were lucky that we didn't have a business that was pulling us apart. We had a business that supplied — through generation-skipping trust — wealth that went down through the generations and dispersed through more and more people, but still was retained. But we didn't have a core business."

The strongest glue keeping the Rockefeller family together is family values, specifically philanthropy. Their various family foundations, including the Rockefeller Foundation, the Rockefeller Brothers Fund and the David Rockefeller Fund have a combined endowment of over $5 billion.

Family members are encouraged to be involved in the foundations and help choose the causes they support. By making giving the center of the family's identity, the Rockefellers have maintained the core values of John Rockefeller Jr., whose mantra is inscribed in stone at Rockefeller Center: "For every right implies a responsibility; every opportunity, an obligation; every possession, a duty."

David Rockefeller Jr. remembers giving to charity with his very first allowance at the age of 10. He would get his allowance on Sunday and give a portion of that to church or another cause — just as John D. Rockefeller tithed his salary from his first paycheck.

"If the values weren't lived, the words wouldn't have had an impact," David Rockefeller Jr. said. "So I think the family has tried its best to live those values, to whom much is given, much is expected."

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