The past 18 months have been filled with speaking and presenting in various forums around the globe on the psychology of Money and Wealth.The attendees at the event showed a significant interest in the topic of preparing children to be responsible custodians of family wealth. Another area of focus during the event was family financial therapy and its role in addressing wealth transfer issues. Parents’ challenges in achieving successful wealth transfer were also discussed extensively by the participants.
One of the main challenges facing wealthy parents today, regardless of geography and culture, is the digital reality and exposure to their children, as well as a generalized difficulty in those children understanding and managing the pressure and responsibility that comes with their inheritance.
Questions about family wealth that continually arose during my talks have been:
- How do we ensure a smooth transition of wealth to the next generation?
- At what point do we involve the younger generation about the family’s wealth?
- Is there an optimal age to involve the next generation in the family wealth?
- How can elders help the next generation to “buy into” the structures set up by the parents or grandparents?
Parents voice their concerns about the financial, emotional, and mental well-being of their children in an environment of technological advancements and constant exposure. Parents report struggling not only with traditional peer-pressure. But also the additional pressure of social media’s unattainable standards of beauty, material gain, wealth, and fame as the only measure of success. Aspects that facilitate or bring about self-absorption, self-centered and entitled individuals.
Many parents focus on developing their children’s mental ability and skillsets using a traditional, private education system. But, families of wealth must be aware of the three other pillars of parenting education in high net worth and influential families.
Preparing children for successful wealth transfer does not happen overnight, it’s an educational and emotional process that takes time, and should be an integral part of wealth parenting.
The development of the next generation is key to healthy succession, because as we all know, financial success presents both opportunities and challenges. The key is learning how to use money as an empowering tool for the next generation, so they can lead fulfilled, content and harmonious life. If they do that, they run their lives. If they don’t, money runs their lives