My father started making annual announcements to me for several years beginning when I was ten or eleven. They went something like this: “Barbie, your mother and I have given you your gift.” I never knew what he meant and was afraid to ask, but I knew I was expected to express appreciation and I dutifully said my thank-you. But what kind of gift was this? I wondered. There was no toy or book or dress. Nothing tangible. Only disappointment.
My father’s pronouncements were always solemn and pompous, but it was not until I was in my early twenties that I learned that every year he was taking advantage of an IRS gift-tax-exemption rule to give me $10 thousand, tax free. Those annual “gifts” were the beginning of my inheritance.
My father never actually told me that he was gradually accumulating a large amount of money for me. When I think about it now I’m appalled. I was given no financial education whatever and was never told what was in store for me. When I was in my late twenties, my father called me and said, “Barbie, Jack Cobb will send you some papers. Please sign them and send them back to him.” Again, he didn’t explain what the papers were about, and again (typical for me, I confess) I didn’t ask. I was completely ignorant about money and how it would change the course of my life.
The papers I signed—without even reading them—were the basis for a large but excessively rigid irrevocable trust. After my trust officer’s retirement he felt safe enough to tell me (in response to a very direct question) that my trust was the most restrictive he had ever come across.
Since my parents had never taught me any financial skills or skills that could have helped me find a job, or even help me begin to think about what I could do, it took a very long time to essentially teach myself—by trial and error, and more error than success—to earn money. This reminds me of a famous quote attributed to billionaire Peter Buffett, who is famous (among other things) for counseling wealthy parents to give their children “enough money so they would feel they can do anything but not so much that they could do nothing.”
I became curious about what, exactly, Warren Buffett had given to his children. I got a good start from an article I stumbled across an article by Sarah Hamson in the Globe and Mail (September 6, 2012) called “Peter Buffett’s rich life doesn’t come from family wealth”
Buffett’s advice to wealthy parents is not just cant; he actually walks his talk. Although he has given his children substantial amounts of money, it came with strings attached. Bufett expects his children to give away the fortune he accumulated, not spend it on themselves. Writes Hamson: “He has heavily endowed [his three children’s] independent foundations. In 2006, he gave each of his children a billion [dollars] to pursue their own vision of philanthropy.” [emphasis added]
I can’t help comparing the Buffett parents’ vision for their children with my parents’ ideas. “My” will, written by my father without my knowledge or consent, allowed me to give at death to nuclear family members (but explicitly excluding my adopted stepson), and to Wellesley College and Yale University, my parents’ alma maters. There were no other options. It was only after I broke my trust—after a three-year legal battle—that I was able to untangle myself from the prison of my parents’ view of what I should be and do.
Now, back to the Globe and Mail article and Sarah Hamson’s 2012 account of Peter Buffett, who is indeed a counter-image of my own experience with wealth, and he’s someone I’ve come to admire. He was lucky, and he is making the best of his gifts, both financial and creative. Yet for all that he has done, he is not even a millionaire, although his father could have made him one many times over.
“The 53-year-old second son of Warren Buffett . . . has an unusual relationship with money and his famous surname, which he admits ‘can be both a blessing and a curse.’ An award-winning musician and composer and first-time author of a new book, Life Is What You Make It: Find Your Own Path to Fulfillment, Mr. Buffett is an unexpected mixture of down-home American candour and Zen-like aphorisms about the ‘quest to be yourself’ and ‘true wealth being your values.’
“He is also a compelling paradox. He talks about making life what you want when his wealth has clearly been made by his famous father. Despite his family’s wealth, he doesn’t consider himself rich – not with money, anyway. His grandfather left him $90,000 when he was 19. At 40, his father gave him enough to pay off some ‘equipment loans’ for his music business and the mortgage on his $194,000 home in Milwaukee. He doesn’t speculate on investments. ‘I have never bought a share of stock.’
“It would seem that while the famous patriarch was telling his children to do anything and follow their passion, he was, at the end of the day, giving them the job of stewarding his millions. ‘Yeah,’ the younger Mr. Buffett laughs. ‘He never actually asked.’ His father’s directive did cause him consternation about how the responsibility would affect his musical career. . . ‘I wondered, Will this pull me off track? Will it in some sense be a burden?’”
So far, I’d say he is on track.
“The balance [Peter Buffett] enjoyed as a child is what he most reveres about his upbringing in Omaha, Neb. . . . His father, who is famously frugal, never moved from the house in Omaha and still drives himself to work. He gave his children 75 cents a week for allowance. Once, when his daughter, Susan, asked her father for a $41,000 loan to renovate her kitchen after she had a child, he refused, telling her to ‘go to the bank like everyone else.’
“But if [Peter] learned about a strong work ethic from his father, his mother taught him emotional values. ‘She would radiate compassion, love and acceptance,’ he explains. He would walk home from the local elementary school every day for lunch and find his stay-at-home fifties-era mother, talking with other people, often less fortunate, from different parts of town. ‘The warmth in that room was amazing,’ he recalls.
“As children, they were never taught about the importance of philanthropy. ‘What we learned was love of people, and that’s what I think philanthropy is,’ he says, adding that those principles were inculcated in them through ‘a mysterious osmosis’of family culture, never spoken but simply demonstrated through action.
“In Toronto to speak to parents and children at Havergal, a privileged private girls’ school, Mr. Buffett [explained that he] had been leading a simple, anonymous life until he was asked about six years ago to speak to a banking audience about the issue of intergenerational transfer of wealth and values. ‘I was Exhibit A of a child with wealthy parents who was quote-unquote normal,’ he says.
“Unlike many people who have an intimate experience of money, he is unabashed in talking about it. ‘I am frugal. I don’t believe in spending money on things to show you have it.’ He may not be his father in terms of wealth and career choice, but he is similar in his pursuit of doing something he loves. And in the end, while he worried that stewarding a foundation with his father’s money may distract him from his career, he has found that the two come from the same desire – to speak about humanity and equality. ‘There is no line between them,’ he says of the two interests. Maybe his father is an oracle, after all. ‘It’s his uncanny ability to foresee the future.’”