Conference Notes: Children of Wealth: Fact vs. Fiction
There are a number of assumptions around children of wealth. Some true, some not so true. Ed Monte, founder and principal of the Family Solutions Group, had a candid conversation with me sharing key insights on the topic. Check out Ed’s fact vs. fiction list below and see if your assumptions about children of wealth (and their parents) are correct.
FICTION: Most children of wealthy parents take longer to mature and lack self-confidence.
Fiction indeed. Children of wealth typically build a strong sense of self and self-confidence from a foundation of generational lineage far stronger than middle-class children.
FACT: Men are notorious for not talking to their children about money.
Sorry guys. Typically speaking, when it comes to talking about money, men usually go tight-lipped on the subject. Women on the other hand are more open to talking about it. The bottom line is that whether you’re a Mom or a Dad, if you want your child to have a healthy and responsible relationship around money, you’ve got to get over your own issues on the subject and have conversations with them.
FACT: The best way to talk to your children about money is by discussing your own experiences with wealth.
Completely true. Lots of parents think they have to approach the conversation as an advice giver. Instead, tell your children about the experiences you’ve had with money-good and bad-and try and assess what the child needs by asking questions. Sharing your stories will allow the conversation to happen naturally. And remember, the conversation doesn’t have to be perfect. Start with something that feels manageable and work on having multiple conversations over time.
FICTION: Spoiled children are products of their own making.
No matter how strongly they rebel against certain issues, there are other issues where children inevitably model themselves after their parents. If a child acts spoiled and entitled around wealth, it begs the question: how much of that behavior is a reflection of the parent? Did Mom or Dad ever talk to them about how to be a responsible steward? Did Mom and Dad demonstrate good judgment, values and vulnerability around money? Were boundaries ever imposed? Keep in mind: however kids show up around wealth is directly linked to how parents show up around wealth.
FACT: Children of wealth do what they want and live their own dream.
Knowing this truth, it’s incredibly important for parents to ask their children what they’re passionate about. How can this passion best contribute to the family business? If you translate the business to meet the needs of the next generation, you end up with a generation of people who are capable of reaching their highest and best purpose.
FACT: Left to their own devices, children will squander family money within one to two generations.
This circles back to the importance of having conversations with your children around wealth as early as possible. Four year olds can understand things at a basic level, while 7 and 8-year-olds can easily grasp the concept of family wealth. By the time they’re teenagers, discussions around assets and stewardship can begin. All of this is a building process and education and conversations around wealth should continue well into adulthood.
FACT: A person’s value comes from who they are, not how much money they have.
Here is the most important lesson of all. With so much talk about money, it can be easy to forget about what really matters. Wealth does not define a person. Parents who teach their children that they are valuable because of who they are, who teach their children how to be cooperative rather than oppressive, who teach their children the value of privilege and the responsibilities that come with wealth-these parents raise children who contribute to the world in extraordinary ways.
What are you doing to teach your kids proper wealth management?
How are you teaching your children about your values and about the stewardship of family assets?