Will Your Child Be As Lousy With Money As The Average Spoiled Accountant?

In his classic book, The Millionaire Next Door, Thomas Stanley writes about something he coins “economic outpatient care.”

In a nutshell, he suggests that if the average lawyer or accountant received cash gifts from family members during their lifetime, they’d lose part of their brain, and end up with far less eventual wealth than lawyers or accountants who didn’t receive handouts.

“Losing part of their brain”–those are my words, not Stanley’s.

With the exception of two vocational groups (school teachers and college/university professors) the statistics rang true for every profession.  If you receive financial “help”, you’re statistically going to hurt.

Here’s a list of the most hopeless professionals who end up with far less wealth during their peak earning years, if they actually receive gifts from family members.

The average accountant tops the list.  Give this guy or gal money, and they’ll statistically have significantly less wealth than if they didn’t receive handouts.  There’s serious irony here, no?  Lawyers are also financially challenged when receiving cash gifts.

Here’s a listing:

  • Accountants with 43% less wealth than professional contemporaries who didn’t receive cash gifts
  • Lawyers with 38% less wealth than their non-receiving contemporaries.
  • Advertising/Marketing and sales professionals end up with 37% less
  • Entrepreneurs?  36% less
  • Senior Manager/Executives?  35% less
  • Engineers/Architects/Scientists?  24% less
  • Doctors?  18% less
  • Middle Managers?  9% less

So here’s a question:

Would we see the same kinds of statistics for people who didn’t at least help, somewhat, with their college expenses?   I think we would.  Paying for a child’s entire educational expenses, I think, puts them at a disadvantage.  Of course, there are plenty of individual exceptions, but as a group, I think that kids who don’t help with their college costs will end up as useless with money as the average accountant, suffering from economic outpatient care.

Do you agree or disagree?

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Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (2nd Ed. Wiley 2017) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions. However, please read the Terms of Use, Privacy Policy and the Comments Policy.

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22 Responses

  1. essential reading for visitors to andrew hallam website

  2. I don't necessarily think that paying for education is wrong, for me, it's how it's being paid … Is it a blank cheque? Or is there an allowance that covers the cost but it's up to the individual to manage and handle the short fall when not planned properly. Even if it's paid for, there is a certain accountability and learnings to managing the money.

    Back in my days, I could not have received a loan for school from the government due to the income my parents had. So you are at a disadvantage if family doesn't pay to some extent or at least loan you the money. I am not sure what the rules are now …

  3. @The Passive Income Earner

    Hey Passive,

    I was thinking in terms of the children paying something, not the whole bill. The statistics above are based on adults receiving cash gifts, but not kids. But extending on the premise behind it, I think kids should contribute to their educational costs. My theory is that if they don't contribute at all, they could end up like cash receiving adults—less responsible with money, and therefore, less wealthy.

  4. Marco says:

    Hi Andrew,

    I think children should pay the entire bill if possible (I'm talking about children going to university/college). It seems that children "expect" their parents to foot the bill which I believe is not fair to the parents. If children pay their own way I believe they will work harder and will do their best to get the most out of the tuition cost. They will appreciate the value of a dollar and hence be more responsible when it comes to money matters in the future. The odds will be in their favour in not becoming part of the statistics you presented in the article.


  5. lovely leverage says:

    Hi Andrew,

    I completely agree. I think there's a negative correlation between the amount of hand-outs for education and financial stability.

    I have two friends one is becoming a doctor and the other a dentist. They have accumulated thousands and hundreds of personal line of credit, at the same time their parents are paying for their interests and some principal. They spend money on more expensive things, have a great desire for the finer things, but obviously they can't foot the bills as students. I see this will definitely become a big problem for them in the future.

    It's important to teach young adults that mom and dad are not their personal bank. I mean, of course it's easier to spend other people's money. However, it can become a deadly habit of careless spending. As soon as you have the ability to make money, you should start paying some of your personal expenses. Get a part-time job. Not only will it cover part of the expenses, it will also teach you financial responsibility and time-management skills.

  6. @Marco

    Hey Marco,

    You brought up some interesting points. First of all, I'm curious: what country do you live in? Few Americans suggest that their kids should pay the entire educational bill. I think that, until recently (the last 20 years) it wasn't that prevalent, culturally, for Canadian parents to pay for educational expenses. As a Canadian, I think I learned from The Cosby Show, that Americans culturally felt the need to foot the entire bill for their kids (even before American educational costs became so outrageous) When I brought it up with my dad, asking him if he would pay for my college expenses, he just laughed at me.

    That said, with college expenses getting higher, especially in the U.S., I can see how some might deem it necessary to significantly help their kids pay their college costs. But few of the Americans I work with seem to put any of the financial pressure on their kids. Most of the Americans I work with are behind paying 100% of their kid's college expenses. And I think that's a serious mistake.

    Considering the costs of education in the U.S., do you think kids should have to foot the entire bill themselves? It's a great question, considering a few aspects:

    1. Children can start saving/investing for their college expenses from when they're very young (putting away parts of their allowance, babysitting/newspaper delivery money, summer job money etc.)

    2. They'd learn self-marketing strategies necessary to find work

    3. Pride and a respect for money would also be instilled.

    They'd definitely start behind the 8-ball, likely getting out of college with some debt. But they might end up better off in the end.

    What do you think Marco? Should they pay the whole bill? Or could they still reap the same benefits I listed while just paying part of it?

    Kids could

  7. @lovely leverage

    Hey Lovely Leverage,

    Your friends who receive economic outpatient care are textbook examples.

    Reading your comment made me think of something. I wonder if kids who earn an education through the military end up with the same issues, pertaining to a lack of financial discipline. They get a free ride, right? Or does the military discipline positively impact their financial discipline?

  8. 101 Centavos says:

    we're starting to condition our boys now to expect very little. No allowance, for starters. They want money (other than what they get for Christmas and birthdays from relatives), they have an option do to "money" chores around the house, over and above their regular chores.

    For university, we'll help foot the bills, but only to a state university.

  9. @101 Centavos

    Hey Centavos,

    It's interesting that you say you'll "help" but not "pay" the bill. Have you set any parameters, in terms of how much or how little you'll help?

    It sounds like your boys are getting a fabulous financial education from home.

  10. BadCaleb says:

    Hey Andrew,

    Nice topic. My wife's parents are very frugal but paid for her education, car and anything she needed during her time in university. She had no chores and received no allowance but only needed to ask for money because they wanted her to concentrate on school only (no job). Since I've known her she's always lived within her means and been responsible with her money. The best part is that she likes to be the one to pay the bills, verify each entry for bank/credit card statements and do the taxes (maybe not the last part but she doesn't complain). Guess that's what you get for marrying an accountant.

  11. Alex G says:

    @andrew hallam

    about the military education : I was in the officer training program. You are enrolled as an officer cadet and you earn a small salary while going full time in university (and being at the military college is not a walk in the park) but you have to stay in the army 4 years after graduation it is much more for those who become pilots .

    You don't pay tuition fees with money but with your time and sometimes your health (one of my buddies lost a leg in Afghanistan)

  12. Marco says:

    Hi Andrew,

    I'm from Canada, born and raised, first generation. I started working when I was a kid, started off with the usual paper route. Then I managed to get a job working in a service truck yard when I was midway through high school and kept working there until I graduated university. During the school year this meant working two 12 hour shifts per weekend (so, I didn't have much weekend free time). Working all those years helped pay for university and at the same time taught me the value of a dollar. I wasn't willing to just throw money around so carelessly after working all those hours!

    I believe that children should foot as much as the bill as possible. Parents should only make up the difference if the children make a legitimate effort to actually try to make up the difference on their own (in other words don't expect a free handout from the parents!). It's better for the children to get a dose of how the real world works instead of coddling them until they graduate. Coddling only sets them up for failure as they will expect the same behaviour from the rest of the world only to be dismayed when it doesn't happen. I also believe that parents have to stop thinking of their children as "my baby" especially when they are in university. They are adults at that age and should be responsible and accountable for their actions. They should fully understand by then that if they want something they have to work hard for it and not expect a hand-out.

    Don't misunderstand me, I don't mind that parents help their children when required but I find that children (or should I say adults!) today are not appreciative of the effort and sacrifice that their parents went through to pay for the education. So because of that I tend to say "get up off your ass and get a job, any job!"… then after, only after we can discuss next steps to make up the difference. Just my two cents…


  13. 101 Centavos says:

    @Andrew Hallam

    We haven't set any hard guidelines, but will probably spring for tuition. Books are a toss-up. Living expenses will be their own responsibility. Luckily the two state universities here in Oklahoma, OU and OSU, are good schools.

  14. @Marco

    Hey Marco,

    Thanks for sharing your story. The same theme, it seems, rings true for a lot of financially successful people. Few of them have a really easy ride, allowing them the opportunity to build essential skills.

    It's a bit like training for a running race, I think.

    You have to stress the body and "train" before you race. It hurts a bit. The body and mind have to work. And then you get tossed in a race, and you can deal with it based on what you've learned and adapted to.

    But of course, there are people who are genetically gifted. They can run reasonably well without any kind of training. They might jog once in a while, but they're genetically wired to kick butt. After reading Bad Caleb's comment above, I think his wife was one of those people. She worked hard in school, but didn't take that for granted, and seemed to possess some great tools herself (probably from modeling her parents). Although I know that there are a lot of people in her shoes who have succeeded, I think they're in the minority. According to Thomas Stanley's statistics, they certainly are. Especially accountants, it seems.

    I can imagine your job at the service truck yard, and some of the valuable lessons you learned. My guess is that you worked with a variety of people: some of them wise, some of them foolish. Is that the case? Was it an education in itself? When I worked my part-time jobs, I sometimes said to myself, "OK, this is what you'd be doing the rest of your life if you don't follow through with a plan." My plan, in that case, was my teaching degree.

    One of the most interesting things is this: when I was working part-time jobs while paying for my tuition, the people I worked with (working in a supermarket, working at a transit busyard, landscaping etc) weren't any less intelligent than the people I work with today. We measure intellect in funny ways. So Marco, did you learn any financial lessons from those guys/gals you worked with?

  15. @BadCaleb

    Hey Bad Caleb,

    It sounds like you married well! I've read that financial incongruencies can add serious stresses to marriages–so you and I are both really lucky!

    I made reference to your wife in my comment to Marco. I think she's in the minority, but based on her parent's modeling and her genetic wiring, she was made to rock.

  16. @Alex G

    Hey Alex,

    Thanks for giving us perspective from a military viewpoint. There's no doubt that you guys are at risk when putting yourselves on the line like that. I do have another question for you. My guess is that the discipline associated with your jobs/training transcends to financial discipline, far more so than the average college/university person who had their educations paid for by parents. What are your thoughts on that? Of course, I understand that there's no real way of knowing, but based on your rough observations, I'd love to hear what you think.

  17. Marco says:


    I did work with a variety of people but I would have to say that the majority were more wise then foolish. There was a different mind set back then and I found that most were just happy with having stability in their lives. There wasn't the "me, me, me" attitude nor the high demand for consumer goods, that is, the keeping up with the Jones' mentality. I think people were content with what they had but if they wanted something they were patient and disciplined to save up for it. I guess that was the financial lesson that I indirectly learned from them, pay cash rather then go into debt for consumer goods, along with i) make sure you have cash reserves for tough times and ii) don't live only in the present think about the future as well. These were lessons my parents taught me at a young age so having others tell me the same just validated my parents teachings.

    I believe financial lessons start at home and if the parents can't provide these lessons then they should find an appropriate mentor to teach them as well as their children. This does not mean seeking out a professor, going to financial school, etc. You will be surprised how often you can find a mentor or knowledgeable person via your social circle, that being family, friends or friends of friends. It's up to the individual to make the effort to do so and you can't force the lessons on to someone that does not want to listen. There is truth in the saying "you can lead a horse to water…"


  18. Hey Andrew,

    Great lil' article here. Totally agree. For the most part, "help" is OK but I think children should pay part of the bill whenever possible, even if the parents are well-to-do in terms of income.

    Children will forever learn what they live. If they learn to work hard and earn their wages, this will undoutedly fuel their work ethic and give them another life lesson. Value of money is something that can only be learned, not gifted.

    Great discussion on this post.

  19. @Marco

    Hey Marco,

    I really appreciate your detailed, thoughtful comments. They're definitely enriching this blogsite. You mentioned a different value, relating to money, when you were a kid earning money for college. I wonder if respect for money becomes cyclical. Obviously, we're history's greatest credit junkies (at least the current era is) but what about the next era? Will they drop back to more of a ground-roots level of responsibility? When I look back about 12 years and compare with what finance bloggers say today, relative to what the majority of online chatters espoused then, there's a significant difference. Twelve years ago, if you touted a stock because of its consistently rising dividend, you would have been laughed off the web.

    In the 1920s or the late 1950s we had easy climates for making crazy stock market profits (for those who invested in the markets). Both post-war eras were more free with money and responsibility than generations in between.

    So I come back to that question I started with. Do you think a 5 year old kid will find (when they get old enough to pay for college via a part-time job) that the workforce they labor in will be as prudent and wise as the one you came from as a kid?

  20. @My Own Advisor

    Thanks for the compliment on the thread Mark. I'm really enjoying reading what other people think on this issue. What was your deal? Did you pay for your own college expenses, or at least some of them? You're obviously doing well. I'd love to hear from someone, firsthand, who got a free ride but is currently "ripping it up" financially. "Ripping it up" is a good thing in my world, which I figured I'd clarify, just in case. I'm ruling out anyone who was in the military (I don't exactly call that a "free ride" and I think the discipline they establish sets them up to be pretty responsible). Bad Caleb's wife's voice would be a great addition. She worked her butt off at school, got a free financial ride in the process, but is ripping it up financially. It would be great to hear from her, to see if she thinks she's in the minority.

    Calling all people who got free rides during college and university, please respond. Let's hear the flipside!

  21. @101 Centavos

    Hey Centavos,

    That's a nice, strength building compromise for your kids. Even if they have to go into debt to pay their accomodation, I think it's going to make them stronger in the end.

  22. Marco says:

    Hi Andrew,

    Hard to say if the future workforce will be as prudent and wise compared to when I was a kid, only time will tell. However I believe that the mindset of future generations will be shaped by significant global events, things such as war, recessions, another great depression, etc. Until such significant events happen though, I believe future generations will become complacent and will forget that these risks can occur. How they deal with these events if they occur will reshape future labour environments/work forces and in addition will be the lessons they pass on to their children.


  23. Clint says:

    I think the causation here is backward. If you are an accountant or lawyer and you need “help” along the way, then you are going to be poor. Conversely, people who never need financial help are going to be rich.

    Whether or not you are/are-going-to-be rich is probably an excellent (lagging) indication of if you need to take a handout. To be rich, you have to be consistently good with money. If you are consistently good with money, then you won’t need money gifted to you.

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