March 10, 2000
Silicon Valley Wealth Brings New Stresses on Children
By PATRICIA LEIGH BROWN
ALO ALTO, Calif., March 9 --
Every day after school, 13-year-old
Jeffrey Mendelman has a peanut
butter and jelly sandwich with
milk, finishes his homework -- and
checks his stocks.
Peter DaSilva for The New York Times
The peculiar challenges and stresses of wealth, often faced in many families in California's Silicon Valley, are addressed at the Child and Family Institute, where parents and children took part in an "Evening at the Hearth."
"My dad's stock was going up,"
Jeffrey says of his decision to
plunge into the market, and he now
follows stocks the way he collects
autographs and baseball cards.
"Most kids here are interested in
the market. Because a lot of their
dads have become pretty rich and
that's why they get to live in a
A new sort of American childhood is being forged in the land
where each day brings the dawn of
an estimated 60 new millionaires.
It is one in which C.E.O.'s are the
super heroes, family banter is
often likely to include talk of multiples and I.P.O.'s, and where a recent collision between two students
in a high school parking lot involved a Toyota S.U.V. Forerunner
and a Mercedes 500 SL.
But along with a new openness
about money, and the good things
it can bring, have come concerns
about the effect of Silicon Valley's
bountiful wealth on children, issues that are likely to escalate as
the post-adolescent entrepreneurs,
barely old enough themselves to
have graduated from Ramen noodles on a hot plate, come of age.
The peculiar challenges of
wealth, or what is now being referred to in the Valley as "the
sudden wealth syndrome," have
themselves spawned a variety of
enterprises dedicated to helping
the rich be rich, or what Judy G.
Barber, a marriage and family
counselor, calls "the unique issues
that children of affluence face."
Ms. Barber, with offices in Napa,
San Francisco and Palo Alto, also
publishes the newsletter, "Family
Money: Commentary on the Unspoken Issues Related to Wealth."
Three years ago, Dr. Stephen
Goldbart, a psychologist, co-founded the Money, Meaning and
Choices Institute, a private practice in San Francisco, to "explore
the psychological opportunities and
emotional challenges of having and
inheriting money." Dr. Goldbart
calls the Bay Area "ground zero for
the expanded upper class," foreshadowing the "largest intergenerational
transfer of wealth in history."
Financial institutions are also responding. Merrill Lynch, for one, recently instituted a "financial parenting" program geared toward children to "heighten awareness of
wealth's responsibilities," said Scott
Cooper, a senior client relationship
manager. It includes investment lessons for children as well as guidance
on the so-called "affluenza syndrome," helping clients answer such
questions as, "Daddy, why are we
flying a private plane?"
Answer: "We've had a little luck
but we've worked hard for it."
On El Camino Real, the Champs-Élysées of the new economy, Liz
Gannes, a senior at Palo Alto Senior
High, reflected on the unusual environment of her youth, of going to
organized "schmooze fests" for techies and weddings where people "eat,
talk and make deals."
"It's hard to ground ourselves
sometimes," Ms. Gannes observed,
echoing the feelings of many of her
peers. "The things we hear on the
news are happening all around us.
We're living on top of this bubble and
we're not able to see below us."
On jogging trails and bridle paths
here, money and how it affects children -- a subject once more taboo
than sex and death -- has become a
major topic of parenting. One high-net-worth mother in Portola Valley,
who spoke on condition of anonymity,
said: "My kids have absolutely no
idea we have more money than other
kids, but at ages 5 and 8 that's easy to
enforce. Soon, all they'll have to do to
find out their fathers' net worth is
look on the Internet or read the paper. It's embarrassing. I'm nervous
for my children."
The landscape of 17-year-old Alexa
T.'s childhood in Atherton is one of
swimming pools, guest houses and
where full-grown trees are helicoptered in, and it brings this view: "In
school you're learning as fast as you
can so you can apply it as fast as you
can so that you can become rich and
successful by age 24, because that's
what happens here."
Her mother, Elizabeth, complains:
"It's the money that comes first.
They're not talking about the Ph.D.
They're talking about the $20 million
and the house in Atherton."
The rapid pace of technological
change, the long hours required of
start-ups, the making of vast fortunes at an early age, have brought
with them new challenges for families, said Paul Schervish, a professor of sociology at Boston College
who is studying the effects nationally
of the recent surge in family wealth.
"The material life of this period
has accelerated way beyond our
spiritual understanding of it," Professor Schervish said. "For the first
time we can no longer use 'we can't
afford it' as a cultural limit.
"Parents themselves are living a
more intense life, working faster and
harder. Part of the new economy is
this notion that you either move forward or you'll fall back, and those
pressures and values are getting
passed on to children. Parents feel
more of a connection between what
their kids are doing now and their
fortunes in the future."
To Kris Goodrich, a co-founder of
the Child and Family Institute, a
nonprofit center in Menlo Park, the
fear "that you're the only one that
can't keep up" has become pervasive.
Her center offers stress classes
for preteen children and family discussion programs about values.
Goodrich said: "Children look at the
middle class as poverty and going to
Hawaii only once a year is considered the bottom rung.
"The loud voice, the Silicon voice,
says, 'If you're not constantly updating and going the next jump every
day you're replaceable.
That puts a
tremendous strain on parents. They
look at the children and think, 'I've
got to give them everything.' They
overprovide, because they want
them to keep up."
An 11-year-old boy she knows
made a fervent wish last year: to
simplify his overbooked life. "It's not
so much the money as the life style
they perceive they have to have,"
Ms. Goodrich said.
Dr. Gerald D. Bell, a consultant
and professor at the graduate school
of business at the University of North
Carolina, spoke of a father here who
recently took his three daughters for
a ski vacation in Gstaad, Switzerland. The father told each daughter
they could bring a friend. "They
spent two weeks in luxury, with unlimited room service," Dr. Bell said.
"When they came back to school, the
friends were telling friends, and the
girls suddenly started getting a lot of
social invitations. Even the coaches
on teams were being deferential.
"Other kids see the preferential
treatment and get mad. So these kids
get a double-whammy, asking themselves, 'Do they like me or do they
just want to get invited to Gstaad?' "
The flip side of parents staking
their claim to Silicon Valley gold can
be desolate. Laura M., 17, spoke softly in recalling her mother's plunge
into a start-up: "My mom said, 'I'm
going to spend a lot of time at work.
Is that O.K. with you?' I would have
felt bad saying no.
The big problem
was I was used to having her around
to say, 'Don't talk on the phone' and
'Don't watch TV.' "
Laura's grades plummeted,
prompting her parents to pull back
on their hours somewhat. "The thing
I really hate is coming home to the
dark," Laura said.
"It's a big house."
An undercurrent of parental regret runs through the conversations
of some teenagers whose parents
feel they have somehow missed the
boom. "My parents are doctors,"
Lisa M., 17, said.
"But when they see
tons of money, I think they feel sort
of left out. Compared to the C.E.O. of
Cisco Systems, my dad feels totally
At Palo Alto Senior High, a school
with robotics classes and electronic
lockers, Esther Wojcicki, a revered
teacher, has noticed a change in role
models among her students. Rather
than Michael Jordan and Michelle
Kwan, Ms. Wojcicki said: "Their heros are the 20-year-olds with start-up
companies who've made $20 million.
It's made more intense, because they
Audrey Shehyn for The New York Times
Minal Hasan, 17, daughter of an
entrepreneur mother and a venture-capitalist father, seems acutely
aware of how unusual her life is.
In a milieu that respects divergent
thinking, even students themselves
are becoming legends for their exploits.
Among them is Hans Pang, 17,
the son of a bank teller and an acupuncturist. Three years ago, a
friend's father, Dominic Orr, the
chief executive of Alteon Web Systems, in San Jose, offered Mr. Pang a
summer job after hearing about his
computer wizardry. Mr. Pang's performance during the summers was
such that last year, the company,
which was going public, offered him
employee stock options in lieu of
salary in recognition of his work.
"I said yes, since I'd heard about
I.P.O.'s skyrocketing and had a good
feeling about the company," Mr.
Pang said. His shares are currently
worth about $75,000, on paper.
"I was earning $10 an hour, which
wasn't bad," said Mr. Pang, who has
a buzz cut and doles out business
cards. "I was happy. But obviously
this has made me more happy."
Eric Bloom, an economics teacher
at Paly, as the high school is known,
realized the culture had shifted when
he began noticing that some students
were becoming bored when simulated stocks were introduced in class.
"It turned out they already had their
own real ones," Mr. Bloom said.
A positive side of all this, some of
the parents and children say, is a
feeling among young people that success is just a step away, rather than
a climb up the ladder.
Yet as the dot-com millionaires
come of age, parents, educators and
mental health professionals worry
that the sense of entitlement that has
long characterized the proverbial indolent trust-funder will flourish. "It
used to be, 'My daddy can beat up
your daddy,' " said Mark Walsh,
founder of VerticalNet Inc., a Web
site company in suburban Philadelphia. "Now it's, 'My daddy can buy
your daddy.' "
Joan Lonergan, head of the Castilleja School, a private school for girls
here where community service is
required for graduation, said wealth
is one of the biggest issue facing
parents. "People here aren't brain-dead," Ms. Lonergan said.
looking hard at values, because everything in the community is focused
Some parents are using their
wealth to reconfigure values. Richard Lowenthal, 47, for instance, retired three years ago after his telecommunications company, Stratacom, was bought by Cisco Systems.
The father of two daughters, ages 15
and 11, he now spends half his time in
community service and is mayor-elect of the Valley town of Cupertino.
Mr. Lowenthal, noting that there
are no 12-step programs for workaholics, said: "I've been through that
intensity. People whose own self-worth is measured by how much
money they have are far more common here than people who can give it
a rest. We need more people to set an
example for being more whole."
Debra Engel, 47, a single mother of
two, retired recently from the 3Com
Corporation, which she joined as a
start-up. Ms. Engel said she had set
"a number I aspired to" that she felt
would financially allow her to be at
home full time with her children, now
10 and 13. "I'm a great believer that
making your own way in the world is
important to who you are and who
you become," she said. "Many of us
have come by this wealth serendipitously. How do my children develop a
sense that that's unusual?"
One of Ms. Engel's strategies has
been to involve her children in philanthropy, including helping make
decisions on where the money goes
and visiting inner-city nonprofit organizations she has helped finance
through the Community Foundation
of Silicon Valley, a private nonprofit
group in San Jose.
Of having money, she observed:
"It can make you think, 'How should
I live?' You not only get tested in life
when bad things happen, but when
good things happen, too."
Young people like Minal Hasan, 17,
daughter of an entrepreneur mother
and a venture-capitalist father, seem
acutely aware of the unusualness of
their lives, of intense family discussions about first- and second-round
financing, school lunch chatter about
Bloomberg, of endlessly winding
driveways with underground garages.
"Some day," she observed,
"this whole time period will be in the
textbooks, like the Vietnam War."