The past 18 months have been filled with speaking and presenting in various forums around the globe on the psychology of Money and Wealth. During this time, the topic that was of main interest with the attendees revolved around the subject of preparing our children to be responsible custodians of the family wealth.
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 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 report being very concerned about the financial, emotional, and mental well-being of their children in a technologically advanced and fast-paced exposure-ridden environment. 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.