There is this saying that, from a financial point of view, you are the average of the top 5 people you spend time with. While I find this to be completely true in real life, I think it’s incomplete, though. There’s a deeper, more subtle layer to this.
Not only you are the average of the top 5 people you spend time with, but the deeper truth is that you unconsciously chose those 5 people, in order to comply with a very early conditioning. You actually (and unconsciously) “targeted” those people, it’s not by chance that you are spending time with them. And you picked them out from the crowd because “you feel good” in their company. And that specific “feeling good” is enforced by a very, very early conditioning.
I call this: “the ancestor syndrome”. In short, it means that your current financial behavior (or status, if you want: like being rich or poor) is heavily influenced by your upbringing. In other words, rich parents are raising rich kids, poor parents are raising poor kids.
If you’re poor right now, or if you feel you don’t have enough money, then stop for a while and think at it. If you are on the “rich side” of the scale, you don’t need to stop and think. You already know it’s true.
I was born and raised in an average family. Every once in a while we were going through some rough times, but not for long. We always had a comfortable roof above our heads and food on the table.
But the bottom line is that I wasn’t raised in a rich family. I don’t remember having rich friends for long. And when I had them, we were hanging around just for a few months, and then I was kinda “coming back” in the same circle of people who were making me feel comfortable.
And, financially speaking, I was always swinging back and forth from periods of financial expansion, to periods of financial shrinkage.
So, at an emotional level, I always knew that this saying was true. I had some sort of intuition that my upbringing was shaping my current financial status. But you can’t always trust your emotions, you know? Maybe I’m biased. Maybe it’s not at all like this. Maybe I’m wrong.
So, after 17 years of entrepreneurship, a successful exit and a few business blunders (and while I am still working on a new startup), I started a more serious research on this topic. Is this really like this? Our upbringing is shaping the way we act, financially speaking, without us even realizing this?
The results of this research: both liberating and shocking.
In short, I was right. But don’t take my word for it. Here’s proof.
In a study as recent as February 2016, I learned that:
“[…] even more striking is the strength of the relationship between parental and adult income for both sexes. Children from poor families are much less likely to work in adulthood than children from middle-class families. Only about 60 percent of children from the poorest families are working at age 30, compared with 80 percent of children from median-income families. And the relationship extends beyond the very poor; the higher a person’s parents were on the earnings ladder, the more likely he or she is to work as an adult — at least until the very top, when employment rates dip again.”
The study was made by a social research company, based on data provided by IRS (it takes into account only rough data, like wether the person works or not and how much money that person makes, and not other data, like race).
But hey, this was a bit general. Let’s see if I can find something more specific.
In another recent study, dated June 2015 I learned this:
“So what exactly is it about being raised by a wealthy family that improves economic outcomes? A closer look at the data yielded possible answers, but none of them were conclusive. The researchers’ best guess was that, surprisingly, it had little to do with teaching kids how to buy and sell stocks, putting kids in touch with useful professional contacts, or paying tuition to send them to private schools. Instead, what might matter a lot is that wealthier children develop a tendency to save money. Or, the researchers say, it could be even simpler: Richer parents gift their children with more money (and less debt).”
I felt I was going closer with this one, so I continued reading. And, as I was browsing through the same search result set, I found out something that really stroke a chord within me.
“From the moment a child is born into a wealthy family, their parents’ spending habits determine if they, too, will be in a high income bracket as an adult. It stems from how wealthy parents spend money compared to their low-income counterparts: where low-income families focus on immediate needs, such as food and transportation, rich families invest more on future-oriented purchases that will ensure their wellbeing.”
That paragraph was really enlightening. The “immediate needs” and the “long term investments” were the missing pieces from my analysis. Because when you’re poor (or even in an average family) your focus on immediate needs simply blocks the habit of creating and maintaining long term investments.
The Ancestor Syndrome – Explained
I continued the research for a few weeks and I eventually came to a more detailed description of the whole thing.
The “Ancestor Syndrome” is the constant inability to overcome your initial, family bound, wealth level. Every attempt to go beyond that level will eventually end with an even bigger swing back, sometimes throwing the subject into poverty, as a form of “punishment” for going overboard. This limiting status can be challenged and eventually surpassed, though, but only with considerable stretch and a lot of psychological struggle.
Probably the most recognizable symptom of the syndrome is focusing on immediate needs. Living in the now of money, without any medium or long term vision. Without saving, investing or planning. Let’s make money for the sake of making money. As a side note, I observed that many people who are eagerly embracing the entrepreneurship path are having this type of mindset: let’s make money for the sake of money.
When you are focusing on solving immediate problems, you’re basically in a continuous survival mode. But the trick is that, even if you make more money, the mindset won’t change. Although the income may grow, the mindset will stay the same.
And you won’t be able to save enough money to enjoy a wealthy lifestyle on a long term. Because you are trained to solve the survival situations, any situation will look like survival, even if you have 1 million dollars in the bank.
Hence, you will “solve” whatever situation you have to solve and keep yourself on the same wealth level (where wealth equals the total amount of money you own, minus expenses). And, no matter how much money you make or you have, you still don’t have a significant amount of wealth. Your income is barely making up for the expenses.
I’ve been there. I made a lot of money with my first exit, but just 2 years after I was in the same situation as before. Because for me, at that time, every situation looked like a “survival situation”, no matter the actual cost to solve it.
I just didn’t have the mindset to change it.
Going Over The “Ancestor Syndrome”
Statistics don’t lie. We saw above that this is a pattern. But as common as it is, this pattern doesn’t completely rule out the possibility of a breach. In other words, nothing is set in stone, and, even if you’re “inclined”, or “brain wired” to limit your wealth based on your early childhood programming, it doesn’t mean you can’t overcome this.
Of course you can do this (that’s the beauty of our lives, we can literally do anything). Of course you can make more money than what your initial set up taught you you’re capable of.
But it will cost you. And that’s where the conflict arises.
We’re so inclined to stick with our childhood patterns (because we’re perceiving that period of our life as a happy one, a time when our needs were taken care of) that we can’t isolate the overall feeling of security from the spending or making money patterns.
In other words, the most important inner conflict is that we will feel like “betraying” our family, as a group or just as family values, if we make more money than them. And, unconsciously, we’re choosing entourages that are enforcing our parental financial habits.
The good news, as I said, is that this inner conflict can be solved. We’ll see at the end of the article a few possible actions that will help you in this endeavor.
My Personal Story
10 years ago, when I was making sensibly more money than I make now, I bought an extra car. At that time, purchasing an extra car didn’t feel like a burden. I could afford that.
And, happy as a kid seeing the first day of spring, I decided to give that car to my parents, as a gift.
To my enormous surprise, my parents declined. They were pleasantly surprised, though, but still declined.
Needless to say, I was baffled. I couldn’t find a way to properly digest that situation. So, although on the surface I acted like I understood and went ahead, in fact I buried it deep down, on the shelf of “unresolved issues, we’ll see how I deal with this shit later on”.
Fast forward 10 years, to the present day.
My business style dramatically changed and so is my revenue. I don’t aim anymore to generate a lot of money, I focus more on enjoying what I do. I focus more on the “how” I live my life, not on “how much money do I generate” with my life.
It’s a huge shift.
In many areas this change generated unspeakably good results. I have a much more rewarding experience in the relationships area, for instance. Both business and personal.
But in other areas, not so much. For instance, I don’t make as much money as I was making 10 years ago. I can’t afford the same lifestyle I was affording 10 years ago (big villa in the suburbs, two jeeps lined up in front of it and traveling whenever I felt like).
But the very, very good news is that now I know. Now I understand what made me swing back to a lower income. This shift in approaching life created the space in which I could understand all the patterns I was describing so far. I understood why I had blockages and why I needed so much to comply with my roots.
And I was finally able to digest the “refused gift” situation.
For my parents, that car was a significant shift over their perceived level of wealth. I was going over board and my parents couldn’t understand that. The bad news is that I couldn’t digest it too. At that time, the refusal of my parents accounted more than the value of the car. In other words, I ended up feeling bad because I had more money they were able to own and receive.
Let’s make something very clear now (it will be even more clear at the end of the article). I’m not trying to find escape goats here. My current financial status is not my parents fault. On the contrary, they did a tremendous job in keeping me healthy and taking care of me and I am deeply grateful for that. All I’m saying is that, factually, we were just an average family. And that fact shaped a specific way of managing money. I’m talking about that way of managing money.
So, now I’m working on it. Not from the blind, unconscious place where I was before. But from a place where I can integrate it in a balanced way with all the other stuff in my life. From a place where I don’t feel I “betray” my family if I can make more. From a place where I don’t have to sacrifice my relationships and time for the sake of money.
Let’s see how I do this.
What follows is a list of actionable approaches, that, combined, can lessen the tension of that inner conflicts generated by early childhood conditioning.
In a very short list, here they are:
- build the saving habit
- build your own assets
- start and keep investing
- stop judging people by the amount of money they make
- forgive your parents, it’s not their fault
Let’s take them one at a time.
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