One of many interesting revelations revealed to me in my Rich Habits Study was the importance of parenting with respect to your adult financial circumstances.
The impact parents had on the self-made millionaires and the poor people in my study was so profound, I decided to write my second book, Rich Kids, in an effort to shine a light on the right and wrong habits to teach children.
What’s most interesting is the fact that my self-made millionaires learned their wealth-building habits from parents who were either poor or middle-class. Somehow, later in life, their parents figured out what to do and what not to do. These Rich Parenting households did not want their children to make the same mistakes they made.
Those who are raised in Rich Parenting households wind up in the top 5% decile in America. This 5% do not struggle financially, have nice homes, vacation at the nicest places and are generally well educated. Having learned the Rich Habits from their parents, they pass along what they’ve learned to their children and their children, in turn, grow up to become happy, successful and wealthy. This generational cycle of wealth perpetuates itself from one generation to the next and it is the very reason why we have a growing wealth gap in America.
Until the rest of the 95% learn what to do and what not to do, with respect to habits, this wealth gap will continue to grow.
Those who are raised in Poor Parenting households represent about 30% of the population in America. They are one paycheck away from being homeless. This 30% struggles financially, rent small homes, are unable to vacation, do not place a high value on either formal or informal education, struggle with unemployment and generally have bad habits which they learned from their parents. Their children, by default, pick up the habits of their parents and, likewise, struggle financially as adults. This generational cycle of poverty perpetuates itself from one generation to the next and it is the reason most poor people remain poor, one generation after the other.
So, OK, it’s your parents fault that you’re poor. Now, what are you going to do about it?
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Tom Corley is an accountant, financial planner, public speaker, and author of the books “Effort-Less Wealth: Smart Money Habits At Every Stage of Your Life” and “RichKids: How to Raise Our Children to Be Happy and Successful in Life“. Corley’s work has appeared on CNN, USA Today, The Huffington Post, SUCCESS Magazine, and many other media outlets and podcasts in the U.S. and 27 other countries. Tom is a frequent contributor to Business Insider and CNBC.
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