How to bring up wealthy children

How to bring up wealthy children

Raising children in affluent families comes with a unique set of challenges. How do we instill resilience, purpose, and a responsible attitude towards wealth in our children?

Early Engagement: The Power of Financial Education

Delaying discussions about wealth often leaves children unprepared for their future responsibilities. Introducing the concept of money and wealth management early on is crucial.

For toddlers: Use simple games to teach the concept of value

For School-aged children: Involve them in budgeting for family events or projects

For older teenagers: increase financial responsibilities, perhaps working in the family office or family business

Building a Healthy Relationship with Money

Parents' attitudes towards money significantly impact their children's perspectives. It's essential to model a balanced relationship with wealth. Encourage self-worth beyond financial status by:

• Discussing the non-material aspects of success and happiness

• Rewarding efforts and achievements that are not financially driven

Building Resilience and Independence

Overprotection and a sense of entitlement can hinder a child's ability to deal with future financial challenges. Encourage resilience by:

• Allowing them to make small, manageable financial mistakes.

• Discussing the consequences and learning opportunities from these mistakes

Setting the Stage: Family Values and Mission

A family's approach to wealth should be rooted in its values and mission. Here's how you can involve your children in this critical aspect:

1. Discuss What Matters: Start conversations about what values are important to your family

2. Craft Together: Involve children in creating a family value statement or mission

3. Act on Values: Show how these values translate into real-world actions, such as philanthropy or entrepreneurship

Practical Wisdom: Financial Literacy and Beyond

Financial literacy is more than understanding money; it's about making informed decisions and understanding the consequences. Teach your children:

• Budgeting: How to manage their allowances or earnings.

• Investing: The basics of making their money grow responsibly.

• Philanthropy: The importance of giving back and how to do it effectively

Technology and Wealth: Navigating the Digital Age

In an era dominated by digital transactions and online portrayals of wealth, guiding children through the virtual financial landscape is vital. Encourage responsible digital consumption and discuss the difference between online portrayals of wealth and real-life financial management

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Raising financially savvy and well-adjusted children is a journey of learning and growth for both parents and children. It requires continuous adaptation and a willingness to discuss and evolve your family's approach to wealth and success

Additional Resources

• Books:

  • The Myth of the Silver Spoon by Kristin Keffeler

  • Raising Financially Fit Kids by Joline Godfrey

• Websites:

  • National Endowment for Financial Education: nefe.org

  • Jump$tart Coalition for Personal Financial Literacy: jumpstart.org

𝕏 highlights

One alternative to bringing up wealthy children is to make them poor…

Educational secrets from wealthy families:

My New Year’s Resolution:

Cutting family members off:

📚 what to read

Sticking with non-fiction - I was given The Seventh Son by Sebastian Faulks for Christmas and absolutely raced through it. Set in the near future, the novel explores the consequences of a highly unethical experiment orchestrated by a tech-billionaire

📻 what to listen to

A regular in my podcast rotation is Masters of Scale with LinkedIn co-founder Reid Hoffman. Successful entrepreneurs are interviewed to uncover the unique paths they took to scale their businesses

I’m sometimes amazed this stuff is free

📰 family offices news roundup

🔗 Family-owned businesses ‘make up 90%’ of UAE’s private sector - Gulf Business

🔗 Luxury in 2023: billion-pound hotels and record-breaking Picassos - Spears

🔗 Q&A: Peter Mondavi Jr. on managing his family's multigenerational wine business - Yahoo Finance

🔗 The Secret To Sustaining Intergenerational Wealth - Forbes

🔗 The billionaire gift guide: What the world's wealthiest are giving each other - Business Insider

And finally…

Last week I asked for feedback - thanks to all those who got in touch

So far, people have asked for more

• family office profiles

• regular family office asset allocation updates

• family office tech

• MFOs - the challenges of offering tailored services

Let me know if I missed anything

Right - no dry January for me, there’s a glass of wine with my name on it

🍷

Stay well!

X

𝕏 @MrFamilyOffice

✉️ [email protected]