David Rubenstein, co-CEO of The Carlyle Group, one of the world’s largest and most successful private-equity funds, recently explained that children who are born into wealthy families are usually at a disadvantage.
Last week, Rubenstein was interviewed on “Wall Street Week,” where he talked on private equity, investing in energy and, most notably, leaving behind a legacy.
Rubenstein, whose net worth is estimated at $2.9 billion, said that the real key to success is attained through unconditional love from one’s parents. He told Wall Street Week:
“Warren Buffett said to me once he had the advantage of having two parents who gave him unconditional love, and that is what he thought was the most important thing that made him successful.”
While Rubenstein believes that unconditional love is one of the most important parts of success, he also said that he does not believe that children who are born into wealthy families can ever truly understand the concept of self-dependency. He said:
“When you grow up in a wealthy family, it’s much much harder to feel that what you’ve achieved is on your own. And it’s much much harder for people to think that what you’ve achieved is on your own. So my children have a bit of a disadvantage — yes, they have money and they have a good education and so forth — but they have to achieve things on their own. And it’s a much harder thing for them to do that.”
Rubenstein comes from what he describes as a “blue-collar environment” in Baltimore, Maryland. His father was a post office worker, and his mother was a housewife; neither graduated high school.
“I grew up in what could’ve been called a ‘disadvantaged’ upbringing. But actually, in hindsight, it was extremely advantaged. Because if you have the unconditional love of two parents and they let you try to do whatever you want to do, you don’t need money to be successful.”
Although Rubenstein was not born into a privileged family, he went on to graduate magna cum laude from Duke University in 1970. He then attended the University of Chicago Law School, where he later graduated in 1973.
After law school, Rubenstein worked for a corporate law office but eventually became more interested in government. Rubenstein was hired as a U.S. government domestic policy adviser after helping President Carter win the presidential campaign in 1977.
Rubenstein co-launched the Carlyle Group when he was 37 and now manages over $200 billion in assets.
Rubenstein’s parents always told him to do whatever made him happy, but because he had very little financial help early on, his path was paved much differently in comparison to his three children. His children were brought up privileged with heavy financial support, enabling a dependent mindset early on.
“[…] I try to let them succeed on their own. But it’s very difficult for a parent to want to just say to their child, ‘Do what you can and I’m not going to help you.’ Because you want to help your child, but you want the child to be independent and strong enough so they can achieve on their own.”
Rubenstein told “Wall Street Week” that for most people, the only legacy they will leave behind is their children. He said that parents should make sure their kids are happy, productive and able to lead their own lives. While money can benefit a child’s happiness, according to Rubinstein it can also lead to a dependent mindset that is detrimental to forging a successful legacy independent of their parents.