Money -- lots of money -- almost ruined Robert Gray.
His grandmother, whose family owned much of the land that became Beverly Hills, left him $5 million when he was 18 years old. Before that, Gray was a typical hardworking high school student and had been accepted to engineering school. But Grandma's life-altering bequest spelled the end of his desire to work hard to get ahead, he said.
Gray quit college twice and left jobs whenever things got tough. Parties and drinking became his chief interests. Finally, he said, at age 23, he enlisted in the Navy -- a move he credits with helping him get his life back on track.
Gray, now 35, manages his investments full time and says his most important job is saving his four children from allowing wealth to waste their potential.
"I want them to earn what they get," said Gray, who lives on Amelia Island in Florida.
His oldest, who is 10, "is a real go-getter," he added. She baby-sits, dog-sits and does other odd jobs for their neighbors to supplement her allowance. Gray and his wife are trying to instill a similar work ethic in their 7-year-old son but have had less success. (The other children are ages 2 and 4).
Gray, who says he still struggles with self-discipline, vows never to do what his grandmother did. When they reach 21, his kids will get some money but only enough to get them started with a house or a business -- not enough to live on for the rest of their lives.
"Having too much money handicaps self-motivation," he said. "Once you have that motivation, you find something to do with it and whatever you do contributes to your self-respect. I never had to do anything out of necessity. I dropped out whenever things got tough."
His plight is not unusual, said Gary Buffone, a Florida-based psychologist and author.
An estimated 5 million U.S. households have assets exceeding $1 million, and children growing up in these homes face challenges their parents may not even be aware of, Buffone said.
"At some point, many kids begin to manifest symptoms of what I call the silver spoon syndrome," said Buffone, who wrote about it in "Choking on the Silver Spoon: Keeping Your Kids Healthy, Wealthy, and Wise in a Land of Plenty" (Simplon Press, 2003). Those symptoms: boredom, financial irresponsibility, dependency, addiction, narcissistic entitlement and failure in business and personal relationships.
To be sure, poor children have far more serious challenges. Things the rich may take for granted -- ample food, education, healthcare and the social skills and contacts that help them get ahead -- are precious commodities to the poor, said Glenn Langer, who runs the Partnership Scholars, a nonprofit scholarship program for low-income children.
But raising children of affluence comes with a set of its own challenges that parents must address if they want their kids to grow up being responsible, motivated and self-confident, Buffone said.
Money itself isn't the problem. It's the way parents use money that creates troubled kids, he said.
When parents give their kids more money than time; when they fail to set limits on behavior and spending; when they give their children too much money too young (Gray's challenge); or when they grip the purse strings too tightly, they create negative connections that cause kids to react.
Buffone's clients include brilliant kids who drop out of one expensive private college after another; who fail to get jobs after graduating; who become addicted to drugs or alcohol; or who simply drift without real purpose, he said.
Most adults have to struggle to get through school and even to pay for necessities when they are working at their first few, often low-paying, jobs, he noted. Affluent kids frequently skip that struggle, which gives them a distorted sense of reality and the value of money.
"None of the parents I have talked to have done these things intentionally," Buffone said. "They mistakenly focus on giving their children a materially comfortable lifestyle while neglecting what is most important, which is time."
Kids need just five things, he said: food, shelter, good medical care, the love and attention of their parents and reasonable limits. Unfortunately, the rich and time-stressed tend to substitute material goods for love and attention -- the "love-for-money trade-off," he said. That's where the trouble begins.
Savvy affluent parents can prevent the silver spoon syndrome by applying five "immutable laws of financial parenting" from the time the kids are toddlers, Buffone said: Set reasonable limits; demand that the kids earn what they receive; provide necessities but not luxuries; require responsibility -- don't just buy a new car for the kid who crashed the old one; and practice what you preach. By and large, he said, parents who do these things raise healthy kids, no matter how much money they have.
Parents who realize that they have a silver spoon problem when their children are in their 20s or 30s have it tougher, he said. They have to start putting kids with gluttonous economic desires on a "material diet," which almost always creates acrimony.
One client, for example, said his daughter stopped speaking to him when he cut her allowance. Grown kids have threatened to stop letting the grandchildren visit if Mom and Dad aren't more forthcoming with the inheritance, Buffone said. Unfortunately, the problem only gets worse if it isn't addressed, he said, so parents should persist despite the pain involved.
"This is a problem that's a lot easier to prevent than to cure," Buffone said. "When a parent starts pulling the material plug, the child is going to buck. If they don't buck, you're probably not doing anywhere near enough."