Do Rich Parents Matter Round Up?

By: Roshawn Watson

Does parent wealth decide kids ultimate intelligence? There’s a loaded question with no easy answer, but a new paper has shed some light on this age-old question.
Many parents will argue that even some of the most basic acts of parenting, such as choice of daycare or time allocated for television, can significantly impact their child’s success. Nonetheless, much research examining many different traits (i.e. self-control, intelligence, etc.) suggests that the home environment has a much less profound impact than genes and peer group.
A recent study evaluated the mental ability 750 American twins at 10 months old and then again at 2 years old. The thought was by contrasting differences between fraternal and identical twins, researchers could better understand the impact of genetics and home environment. Also, the babies came from a variety of different socioeconomic statuses (SES), so the influence of wealth and home environment on test scores could be studied as well.
The Results
  • The home environment of 10 months olds was the key determinant of mental ability across every socioeconomic level.
  • However, at 2 years, wealth made a big difference. For 80% of the children from lower SES, their mental ability was still determined by the parents. Genetics had negligible effects.
  • For wealthy 2-year olds, the outcome was starkly different. Genetics accounted for nearly 50% of all differences in mental ability. This determination was made because identical twins performed much more similarly than fraternal twins. Home environment was much less important (“a distant second”).
Conclusions From Research
Increases in wealth are inversely correlated with the impact parental choices have on kids’ mental ability. That’s because “(w)hen you remove the environmental variance, the genetic variance remains.” (Razib Kahn) The results also suggests that the genetic potential of 2-year olds may be held back based on the SES of parents. Attempting to eliminate home environment inequalities in early years would not correct for the impact genetic variation has on mental development. I would be interested in longitudinal studies following these kids as they progressed throughout life to see if these same associations persist, and it would also be nice to see if the results of this study are replicated. Perhaps an equally interesting question is what impact does mental ability have on overall success (this is not an indictment on being smart…just food for thought).

Thought Question: What do you think of this research and what kinds of things do you do (or your parents) to give children the edge?

Now, it’s time to do the weekly Uncommon Money News and Yakezie Round Up.

Uncommon Money News and Round Up
In preparing to write my posts, I often come across noteworthy and sometimes bizarre financial and business news. Below are links to some of these sites. Enjoy!

To my readers: I am so honored by your support. Together, we are telling thousands of the importance of financial literacy. I absolutely could not do it without you: you are vital! Thank you sincerely.

Personal Finance (Yakezie and other PF bloggers)

Which Financial Author Should You Follow? at Money Reasons – Don writes about the distinctions between popular personal finance authors: Dave Ramsey, Robert Kiyosaki, and David Bach.

How To Calculate A Time Weighted Return? at DIY Investor – Robert challenges DIY investors to  monitor their portfolio performances more closely by using this calculation.

Spend $10 Cash or Use $20 Store Credit at Retire By 40 – Talk about an interesting dilemma, RB40 poses a dilemma that we’ve all faced. What I found even more interesting than the question was that every came up with an identical answer!

Up From The Projects at The Biz Of Life – I’m not much for book reviews, but the Grouch makes an easy case for reading Walter Williams’s autobiography. This is the aggregate wisdom this trailblazer has accumulated over a lifetime.

Centavos Dividend Stocks at 101 Centavos -Andrew gives a peak inside of his dividend-generating holdings.

10 Home Renovation Tips Learned From Experience at Everyday Tips and Thoughts – Kris explores 10 ways to get the most out of a home renovation.

How Much Home Can You Really Afford at Invest It Wisely – Oldie but goodie… It’s quintessential to not overextend yourself for the reasons we discussed earlier this week.

100 Words on Credit Cards at Len Penzo – Len challenges the “credit cards are evil” camp.

Business
How Education Impacts Your Income

Google CEO surprise: Larry Page replacing Eric Schmidt

Groupon CEO says exploring IPO; no decision

Google to hire more than 6,200 workers this year
Housing
US Home Prices Slump Again 

Secretary Geithner Sends Debt Limit Letter to Congress



Entertainment Money News

Zsa Zsa Gabor’s Mansion for sale for $28 million (pics)

Regis Philbin Quits over pay cut (from $18-$20 million…)

Hollywood Comedy Queens – How Much Do Their Movies Rake In?

They’re Rich and Famous and In Foreclosure


Offbeat Money News
The End of Credit Cards

Carnivals that I’ve participated in:
Festival of Frugality at Spruce Up Your Finances – What Are Your Financial Regrets? (Editor’s Pick) 

Round ups that linked to posts from this site

Non-Round Up Mentions

Thanks for subscribing to Watson Inc: Personal Finance and Commentaries. If you are reading this on a site other than Watson Inc, you may be reading a stolen article.

Copyright 2012, Roshawn Watson, Pharm.D., Ph.D. All Rights Reserved.

18 comments

  1. Thanks for the mention. The studies with separated twins are interesting because presumably they are able to separate out the impact of home life, wealth etc. For the others there are a lot of correlation issues.
    I also have a bit of a problem because I'm sure that the studies recognize all the forms of intelligence.

    In my own anecdotal types of observations a high level of intelligence is sufficient, but apparently not necessary, to go a long way in the accumulation of wealth but super smart people are typically challenged when it comes to understanding how wealth is accumulated.

  2. Very interesting study. I wonder how much diet has to do with intelligence in young ones. Think about how much those brains are growing. If the body is fueled with convenience food vs. healthy fruits and vegetables, you would think it would have an impact.

  3. I totally agree with the research. We read to them every night, taught them how to read when they showed interest, talked to them like an adult in complete sentences and exposed them to enriching experiences such as museums, plays, and other things. We encourage them in everything they did. Last, perhaps most important we modeled good behavior. They saw us read, work hard and how we problem solved issues.

  4. Thanks for the mention!
    I heard about the story on NPR. Pretty fascinating. Baby is joining us pretty soon so we'll see if we can raise a good kid in 20 years or so.
    The conclusion I took from the story is to marry the smartest most physically gifted gal you can find. 🙂

  5. Super-intelligence as a handicap seems counter-intuitive, but if with that higher IQ comes arrogance, then he or she will always be trying to reinvent the wheel instead of just going for the ride.

    Like you, I love twin studies!

  6. Great point. Now that I know the results, there are so many variable that I'm curious about with respect to this study. I've always been amazed at the difference in mental ability attributable to diet (of course, this serves as the basis for free lunch in some public school districts)

  7. I think it does make a big difference. Kids and even babies are a lot more resilient and capable than we give them credit for sometimes. I would hate to think what my life would be like if my family didn't take an interest in my academic development from an early age.

    One good part about it is all the things you mention can be considered as fun to a little one!

  8. Ha! I don't see anything wrong with your conclusion LOL!

    Congrats on the baby, and I think it is funny that you say you'll find out in 20 years. You know the old saying, if you haven't given them at least something to go to the therapist about, they haven't truly had their rite of passage JK

  9. Kids are the absolute best but sometimes they are not easy to raise. Each of my 3 got me to do something in life I wouldn't have done and to me that's what it's all about. My son lives in Alaska and I doubt I would have ever gone without him. Landing on Mt. McKinley and seeing the base camp of the mountain climbers was the thrill of a lifetime. My oldest daughter studied abroad in Italy for her architecture degree. Visiting her in Venice was a thrill. My youngest did an externship at Stella restaurant in the French Quarter ( part of the Culinary Institute curriculum to get a degree to be a pastry chef) in New Orleans the year after Katrina. She lived in the lower ninth ward for 2 months and got an eyeopener as we did when we visited her.
    Enjoy your baby…the years go too fast. I envy you!

  10. Thanks for the mention. I take all of these studies with a big grain of salt. These studies usually tell us more about the people conducting the study than the people that are part of the study. Parenting matters a lot in how kids turn out. I wouldn't say the super-rich are great parents or produce great kids. Quite frankly, they delegate a lot of the parenting to others while they pursue making money. I guess I'm saying there's a lot more to being a success than IQ. I think kids raised in the lower to middle classes by ambitious parent who instill drive in the youngsters have a lot better chance of being a successful than those born with a silver spoon in their mouths.

  11. Thanks for the mention.

    This is unusual, but I disagree with Biz of Life for once.

    If you are poorer (or say a single parent), you might have to work multiple jobs or perhaps you aren't educated yourself. In that case, it's hard to teach your child if you are exhausted every night after work or you don't know how since you weren't educated yourself.

    I know it's somewhat of a status statement if your wife is a SAHM. And if you are very rich, you can have educated nannies raise your kids in addition to your wife, not to mention tutors…

    In my household (even though we aren't rich), my wife is a SAHM and so far, our kids are turning out great. My daughter (7) is now starting to taking music lessons. I wish I had my daughter learn a foreign language as a younger child though…

    I think a lot of success and mental abilities have to do with the drive you have. If you don't have drive or ambition you have a harder time at big time success, or so it would seem to me…

  12. If the rich were such great parents, there wouldn't be that phenomenon known as the second-generation curse (or 3rd gen, in some cases). I agree with both
    What we try do to with our kids is spend time with them, and try make them as self-reliant as possible — sometimes a hard enough task with #2 son . We'll avoid repeating our own parents' mistakes, and make brand new mistakes of our own. But one thing is for sure and I agree w/ DYI investor's sentiment: the years sure are flying by!
    By the way, thanks for the mention, Shawn.

  13. Kids get you to do things that you don't normally do. That's very interesting food for thought. I suppose it may also be true that kids can help you become someone that you would not be otherwise.

    Cheers!

  14. That's a great point. I've made it before, but it certainly needs to be repeated. When evaluating research there are always biases, assumptions, limitations, etc. to applying the data that don't often get discussed except by experts in a given field. That confounds their interpretation and often leads to erroneous understanding of data.

    I understand your concern about super-rich, but it really seems like it depends. Donald Trump, love him or hate him, is my most people's definition "super-rich." Although he has two that are under 18, by all accounts all his three grown children appear well-adjusted, contributing members of society. They avoid tabloid fodder, attended school, worked outside of daddy's company, and ultimately are taking on projects that extend the Trump brand.

    The same could be said about Dave Ramsey's kids although I would not describe him as "super-rich," but rather merely rich 🙂

    Your point about children from poor to middle class with ambitious parents really strikes home because that stories resonates with me and many of my friends. Most of us got graduate degrees and/or high-level jobs. While the jury is still out on whether some of us become financially successful, I do feel like many of us are probably considered accomplished by our peers.

    As I see below, your comment has already spurred a little controversy 🙂

    Cheers!

  15. Don, I agree with you that it is very important not to make far-reaching generalizations about parents contribution to one's success. That's only one factor, and as I suggested earlier, I wonder what this data would look like as these kids got older.

    Here's what I mean, parents may exercise a great deal of control at a young age, but what happens if/when that child begins to rebel, follow their own pursuits (interest in music or other low-paying vocation), etc.

    I 100% agree that parents can only do so much, yet are important.

  16. You are welcome, and I think it is funny that you said "we'll avoid repeating our own parents' mistakes, and make brand new mistakes of our own." I think everyone feels that way 🙂

    Cheers!

  17. Yes a brilliant article I am pleased to have found it.This actually emphasises on how children and parents think and react upon each others activities and doing.

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