January 6th, 2017
One of the greatest challenges financially successful families have is how to talk about their wealth with their children. More specifically, we at Legacy Capitals are commonly asked by parents (aka, wealth holders), “Should we talk about our family wealth with our children?” “If so, at what age do we start talking about the money?” There are two primary reasons for this challenge. The first is…parents are concerned that if their children knew the amount of their family’s financial wealth, they may unintentionally foster dependence, a lack of work ethic, and/or entitlement in their children. The second is…the erroneous idea that they have to talk about their actual net worth. Regarding the latter, for 99% of families, we do NOT believe that the family wealth conversation begins by talking about the family’s financial balance sheet or the intended inheritances for their children.
In a Harvard Business Review article (Sept 2016) titled, How to Talk to Your Kids About Money When You Have a Lot of It, the author John Christianson writes: “In my experience, money acts as an amplifier: It will turn up the volume on whatever values are already present in your family, healthy or not. Parents can turn up the dial on the healthy values, and foster a healthy relationship between kids and family money….” In short, the family wealth conversation begins with a discussion about the family’s shared values, the opportunities and responsibilities of wealth, and the purpose of the wealth.
To learn more about how to have the wealth conversation with your family, read my article titled, When to Communicate about Family Wealth.
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