Relationship with money another important early lesson

By DAVID MOON, Moon Capital Management, LLC
March 3, 2013

John D. Rockefeller began his full-time employment as a bookkeeper when he was 16 years old. At age 20 he started his first business, later founding the company that would become Standard Oil. Adjusted for inflation, he is still the wealthiest person of all time.

On this day in 1885 Rockefeller retired. He was 58 years old and worth almost $400 billion in today’s dollars. For perspective, the US federal government had $49 billion of cash on hand last week.

At his retirement, Rockefeller committed the rest of his life to philanthropy.

Over the next 40 years, Rockefeller funded the creation of universities across the globe, including the prestigious University of Chicago. His medical research helped eradicate then-deadly diseases, such as hookworm and yellow fever.

Beginning somewhere deep in Rockefeller’s background, he understood the value of a dollar. He also understood something about the values of a dollar.

I wonder if he was born with it or learned it?

My perspective on the “nature versus nurture” debate has evolved since becoming a parent.

After 13 years of watching two kids who were simultaneously raised in the same house at the same, the only thing I am certain about is that I’m less certain about inherited versus learned traits.

I am certain, however, that our attitudes about money and our relationship with it are developed very, very early in life.

And those attitudes are very difficult to change.

Glenn is a 77-year-old client who grew up in a dirt-poor family in rural Alabama. Today he is a multi-millionaire. He didn’t win a lottery or rob anyone. He worked, saved, put his kids through college and always spent less than he earned. He gives his time and money to needy people and causes. But he couldn’t spend all of his money if he purposefully intended to. Buying a BMW automobile would make this gentleman miserably nervous, even though he can afford a small fleet of them.

He grew up poor and simply doesn’t know how to be not poor.

The daughter of another client is struggling to manage her finances. Her wealthy parents have regularly subsidized her often meager paychecks and sometimes poor financial decisions. She is currently unemployed – a common condition for her since graduating from college.

Her parents think it’s about time for Michelle to fully support herself.

Michelle is 49 years old.

By the time Michelle was 16 years old, she had already learned to be affluent.

She grew up rich and simply doesn’t know how to be not rich. She would be as miserable driving a Ford Taurus as Glenn would be driving a BMW.

Most of us develop our relationship with money by our mid-to-late teens. Like any repetitive generational characteristic, I wonder if these thought patterns eventually become embedded into our DNA.

How we teach and model those around us about the intrinsic value of work and thrift is critical. These lessons are not only important, they are difficult to overcome.

David Moon is president of Moon Capital Management, a Knoxville-based investment management firm. This article originally appeared in the News Sentinel (Knoxville, TN).

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