The Wealth Report

Billionaire Says Her Kids Aren’t Fit For Inheritence

Posted: 13 Mar 2012 08:12 AM PDT

If you ask the rich about the biggest problem created from their wealth, they will usually say their kids.

Most of today’s self-made rich didn’t grow up with money (surveys show 75% of millionaires didn’t inherit their wealth). And today’s rich parents expect their kids to grow up with middle-class values– just as they did.

: EPA

It-s a noble goal. But when those parents are flying the kids around on a private jet or giving them a Mercedes for their Sweet 16, it should come as no surprise that their kids lack the same work ethic and hustle as a middle-class kid.

And so wealthy parents today face an inevitable choice: leaving boatloads of money to kids who aren’t good with money.

Gina Rinehart, the Australian mining billionaire, has cracked open the debate with a strange court battle winding its way through the Australian legal system. In short, Ms. Rinehart inherited a mining empire from her dad. Her three kids were also left with a stake in the family trust. Yet Ms. Rinehart shut them out of their ownership stakes, and now the kids are fighting back.

Court documents cited in the Australian media show that Ms. Rinehart believed the kids weren’t fit to manage their fortune. She said none had ever held a real job, unless it was given to them by the family. “None of the plaintiffs (her children) has the requisite capacity or skill, nor the knowledge, experience, judgment or responsible work ethic to administer a trust in the nature of the trust in particular as part of the growing HPPL Group,” she claimed in court papers.

She added that the kids are “manifestly unsuitable” to manage the fund and that it would be in the “best interests of the beneficiaries to force them to go to work.”

Ms. Rinehart may well be right. But it raises a natural question: who raised these kids? And if Ms. Rinehart played a role, isn’t she basically using her own parenting as the reason to cut them out?

Granted, kids are only partially shaped by the parents. But for a rich parent to criticize their kids as lacking a work ethic seems, well, a bit rich.

Do you think it’s fair for rich parents to criticize their kids for being spoiled?

Ken Griffin: The Super-Rich Have ‘Insufficient Influence’

Posted: 12 Mar 2012 11:11 AM PDT

One of the common refrains in the inequality debate these days is that the one percent has too much influence in Washington. It’s become such a part of conventional wisdom that very few people are willing to refute it in public.

Until now. Hedge-fund billionaire Ken Griffin said in a rare interview with Melissa Harris of the Chicago Tribune that the very wealthy actually have too little influence in politics. When asked about the influence of people “of his means” he said:

: Bloomberg; Ken Griffin

“I think they actually have an insufficient influence,” he told the Tribune. “Those who have enjoyed the benefits of our system more than ever now owe a duty to protect the system that has created the greatest nation on this planet.”

Although he’s given millions of dollars to conservative causes and Super PACS, he said the money is aimed at helping the country, not himself. He says government has become too involved in financial markets and business.

“I think if you look at the realm we’re discussing, which is the political realm, I think it would be impossible to find an action by any politician intended to specifically favor either my firm or myself. That’s not the driver of my involvement.”

He said that the values of economic freedom are under attack in America and that “this belief that a larger government is what creates prosperity, that a larger government is what creates good (is wrong). We’ve seen that experiment. The Soviet Union collapsed.”

Griffin was also asked about the difference between gambling and financial markets and said that there is a “huge difference.”

“Gambling is entertainment…Financial markets, what one often refers to as speculation, is really the force by which we move capital to the best and highest use,” he said.

He doesn’t talk about taxes for the wealthy being at historically low rates. But he does say that the inequality debate has been harmful and that “some people go through an experience like ’08 and say, you know, ‘The world’s not fair. ‘ ‘”

“This is the first time class warfare has really been embraced as a political tool. Because we are looking at an administration that has embraced class warfare as being politically expedient, I do worry about the publicity that comes with being willing to both with my dollars and, more importantly, with my voice to stand for what I believe in.”

Do you agree that the wealthy have too little influence in America?