Children of rich parents tend to grow up to be rich adults

                 

Naturally, a child born into a high-income earning family has easy access to luxurious resources. Yet this environment has set them up with an unfair advantage compared to low-income children, as wealthy kids without fiscal responsibility are likely to stay wealthy at about the same rate as poor kids who work hard are likely to stay poor. In other words, the rich are likely to stay rich and the poor are likely to stay poor.

From the moment a child is born into a wealthy family, their parents’ spending habits determine if they, too, will be in a high income bracket as an adult. It stems from how wealthy parents spend money compared to their low-income counterparts: where low-income families focus on immediate needs, such as food and transportation, rich families invest more on future-oriented purchases that will ensure their wellbeing.

Researchers analyzed the adult net worth of various Swedes and then compared those figures to the net worth of their biological or adoptive parents.

"These numbers suggest that children who are raised wealthy owe their future financial success more to the household they grew up in than any inherent ability they possess," the Atlantic reported.

Conclusions could not be made as to why children raised by wealthier parents had improved economic outcomes, but the researchers speculated that children of rich parents are gifted with more money, which leads to less debt.

Steve Siebold, a self-made millionaire, interviewed 1,200 of the world's wealthiest people and found that "rich people teach their kids to be rich," according to Business Insider.

"The average family unconsciously passes down the same limiting beliefs they were taught about money from generation to generation," Siebold wrote. "These are the beliefs that have kept families at the same level of financial success for dozens, if not hundreds, of years."

According to a Brown University study, the majority of children pick up habits from their parents by age 9 that will set them up to succeed or fail in life.

Also,one study out of Harvard found that moving poor families into better neighborhoods greatly increased the chances that children would escape poverty when they grew up.

Growing up with affluence even impacts the college major a wealthy student is likely to choose. Kim Weeden, a Cornell sociologist, spoke with the Atlantic about National Center for Education Statistics data on the correlation between family wealth and choice in college major. She found that, for students with affluent backgrounds, the choice in college major tends to be in the humanities such as English, history, and the arts.

Meanwhile their lower-income peers seek majors in math, physics, and computer science. As low-income students may choose their majors based on financial necessity and marketibility, more affluent students experience the luxury of their families’ safety nets, and can explore majors that are less marketable:

For the most part you will end up at the same economic station as your parents, barring extraordinary circumstances (combination of skill, determination and luck).

This is largely due to a combination of network effects (if your parents grew up wealthy then their network will be wealthy and thus you will tend to have job opportunities that lead to wealth) of education (poorer people go to poorer quality schools and have parents who are less educated, and thus end up being less prepared for college.

They also frequently lack education needed for proper verbal and written communication) and of mentoring (if you don’t know what you need to do as a student to prepare for a successful application to a college or a particular career, you are unlikely to learn the necessary skills or take the necessary actions).

Extraordinarily conscientious and talented people can often over come those handicaps. Lucky individuals might stumble upon a mentor or get involved in something that results in the proper networking.

Although children of rich parents tend to grow up to be rich adults not in all cases but high probability especially when they are educated, hardworking, discipline and financially intelligent.

In a nutshell children from wealthy parents might have a 90% chance of getting a great network; a quality education; and a great mentor and a 95% chance of 4 out of 5.

A middle class person might have a 60% chance of getting a great network; a quality education; and a great mentor - and perhaps a 45% chance of at least 4 out of 5.

A poor person likely has less than a 35% chance of getting all three and perhaps a 15% chance of 4 out of 5.

In conclusion
Children of rich parents tend to grow up to be rich adults in most cases, rich kids have it easier - they have more access to education, they have proper food, they have more time to study and to be engaged in cultural activities and they most certainly have a larger networking where they can draw their connections and also a better safety net so they can be bolder and fail more often. But this by no means imply that every rich kid will be successful.