Can parents really raise their kids to be wealthy? Author Tom Corley thinks so. A certified financial planner, he wondered why some of his clients succeeded, while others struggled. Corley wondered if a person's lifestyle impacted finances, so he spent five years interviewing more than 350 people whom he categorized as rich or poor to find out if a person’s daily habits, activities and mindset correlated with economic status.
Corley put people into the "rich" group if they earned at least $160,000 a year and held at least $3.2 million in liquid assets. Those in the "poor" group made less than $35,000 annually, and had less than $5,000 in assets.
One statistic that jumped out at Corley from his research highlighted the value of mentoring. His survey showed 93% of the wealthy group believed a mentor was an important contributing factor in their affluence. While many of his study participants cited a teacher or senior figure at work as their mentor, Corley realized the best, most consistent mentor most people have is a parent. He explored this in his latest book, "Rich Kids."
Corley says one-third of his "rich" survey respondents were not born rich.
“A lot of the wealthy people in my study picked up these rich habits from their parents, so it made me realize, ‘That’s how important parenting is to success in life and building wealth,” he said.
Corley says 70% of rich parents help their children build and nurture relationships with prominent people by volunteering at least 10 hours a week, versus just 3% who do that among the poor group. Since many non-profit organizations are run by successful people, he says volunteering provides a great opportunity to network with people who can open doors for you, while also giving back.
“Volunteering to help people is very important. But it’s a two-way street. You get something out of it besides just feeling good about yourself, you build these valuable relationships,” he said.
According to Corley’s research, the wealthy are also better at teaching their children about goal setting. His rich group understands that goals require action steps and hard work. Just 17% of poor people write down their goals compared to 67% of rich people who do.
“When you write down your goals and when you look at your goals on a regular basis, it does impact your subconscious, the way your brain works. It alters the way your brain is looking for information that is going to help you achieve your goals,” explained Corley. “Active writing is almost like creating a [neural] pathway.”
Arguably the most important value the wealthy instill in their children is the desire to continue learning. Rich parents read educational material and news at least 30 minutes a day and require their children to do the same.
Sixty-three percent of rich parents have their kids read two or more nonfiction books per month, while only 3% of poor parents had their children do that. When it comes to keeping up with current events, 94% of the rich parents made their kids follow the news, but just 11% of the poor group did so.