Financial Independence, Retire Early has revolutionised the way a generation approaches work and finances. But as more parents achieve financial freedom in their 30s and 40s, a troubling question emerges: What happens to our children when they grow up watching us live without traditional financial stress?
This isn’t about leaving kids financially unprepared. It’s about something potentially more damaging: raising a generation that expects life to be easy.
About the author: Abhishek is part of a freefincal’s curated list of fee-only financial advisors and a fee-only India member. He can be contacted via his website, sahajmoney.com.
The paradox of wealth
During an episode of his show “Comedians in Cars Getting Coffee” with fellow comedian Kevin Hart, Jerry Seinfeld revealed his approach to handling questions from his children about his wealth. When his kids ask, “Are we rich?” Seinfeld’s response is characteristically direct: “I am. You’re not.”
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For decades, financial advisors like me have witnessed a consistent pattern. We learned work ethic by observing our parents’ struggle — watching them juggle job or housework or both, watching them stress over monthly bills, witnessing the family make sacrifices for long-term goals. These experiences, while challenging, instilled us with crucial life lessons about effort, delayed gratification, and the value of money.
Today’s FIRE parents like me present their children with a dramatically different reality. Instead of 6 AM commutes and weekend overtime, kids see parents working flexible schedules, pursuing passion projects, and taking spontaneous vacations. While this lifestyle represents the ultimate financial success, it may inadvertently communicate that money comes easily and life should be perpetually comfortable. That’s what many people I speak to feel.
The entitlement trap
The concern isn’t entirely theoretical. Wealth psychology research consistently shows that children who grow up with abundant resources often struggle with motivation, resilience, and appreciation for hard work. When basic needs and many wants are effortlessly met, children can develop what these psychologists call “affluenza”: a disconnect from the effort required to create wealth and success.
This creates a unique challenge for FIRE families. Traditional wealthy families often continue working in high-pressure careers, modelling work ethic even after achieving financial success. But FIRE parents, by definition, have stepped away from traditional employment. Their children may never witness the grind that built their financial foundation.
Parenting strategies that could help
Fortunately, we as parents can take deliberate steps to raise grounded, motivated children without returning to financial stress.
Raising responsible kids over monetary rewards
The key is separating chores from allowances. When kids receive money for basic household contributions, they learn to view family participation as transactional rather than fundamental. Instead, assign chores as family responsibilities where everyone contributes because everyone benefits from a functioning household.
This builds team mentality rather than employee mindset. That’s why we make it a point to ask our son to help us with household chores without any allowance. It’s not penny-pinching in our view but about imbibing a value system where household work is our shared responsibility and not a paid activity that we can just outsource to house help and be out of it.
Financial transparency with purpose
Many families avoid money conversations, believing it protects children. The opposite proves true. Kids need to understand that their family’s financial position resulted from specific choices, sacrifices, and efforts. Share stories about early career struggles, investment mistakes, and the deliberate decisions that led to financial independence.
This context helps children understand that their comfortable lifestyle isn’t an entitlement or guaranteed thing. I remember an incident when Warren Buffett’s daughter wanted to redo her kitchen and asked for a loan from him. Buffett’s response was simple and direct: “Why not go to the bank?” rather than providing the funds himself.
Even when money isn’t genuinely limited, creating artificial boundaries teaches valuable lessons. Say “no” to some requests, require kids to save for desired purchases, and establish clear limits on spending. This isn’t about being cheap—it’s about maintaining healthy money relationships and preventing the assumption that all wants should be immediately satisfied.
Modelling purposeful life
Perhaps the most crucial aspect is to resist the urge to eliminate all discomfort from your children’s lives. Grit develops through overcoming challenges, not avoiding them. Let kids experience academic pressure, social disappointments, and project failures without immediate parental rescue. These experiences build resilience that wealth can’t purchase.
Additionally, early retirement doesn’t necessarily mean a permanent vacation. Children need to see their parents engaged in meaningful work, whether through volunteering, creative projects, business ventures, or community involvement. The goal is to demonstrate that human value comes from contribution, not just consumption.
The deeper challenge
The real issue isn’t teaching kids about money. It’s about helping them develop internal motivation and self-worth independent of external circumstances. Children who grow up in abundance often require additional support in finding their own sources of meaning, challenge, and achievement.
This requires ongoing conversation about values, purpose, and contribution. What matters beyond financial comfort? How can they contribute to their communities? What challenges excite rather than intimidate them?
Finding balance
FIRE parents shouldn’t feel guilty about achieving financial independence. The goal isn’t to recreate artificial struggle but to ensure children develop the character traits that lead to fulfilment and success, regardless of their starting financial position.
The irony is clear: parents strive for financial freedom to provide their families with better lives, but this very freedom requires more intentional parenting to ensure their children develop strong character. It’s a worthwhile challenge, the one that successful FIRE families can navigate with awareness and effort.
The ultimate measure of success isn’t just building wealth, but raising children who could build their own wealth if necessary, and who find meaning beyond material comfort.
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Dr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter(X), Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! ⇐ More than 3,000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market condition is!! Watch the first lecture for free! One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
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