Giving Compass’ Take:
• Mike Joslin gives advice to parents and guardians about having an open conversation about wealth with children to instill financial responsibility and a sense of legacy.
• How can we embed these lessons in our daily lives when thinking about family philanthropy? In what ways are we passing along value to the next generation of impact givers?
• Learn about the opportunities to advance equity in family philanthropy.
By the time kids are eight to ten years old, they know if their family has some level of wealth. The toys they receive, the cars their parents drive, the clothes and shoes they wear, the size and location of their house, the restaurants and vacations they enjoy, the schools they attend — all these data points are collected in their young minds and help build the grid through which they view themselves and others …
In a 2015 U.S. Trust survey of households with investable assets greater than $3 million, 64% of those polled indicated that they had shared nothing or nearly nothing about their net worth to their kids. Keeping information about family wealth close to the vest is usually advised, but raising children ignorant about money matters, especially if any legacy is involved, is not.
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As a parent, how should you respond to these questions? How much information should you reveal? We all want our kids to feel secure. But we also want them to be motivated to go out in the world and kill a few dragons. We want to see them make their own way, learn to be independent and eventually to stop drawing from the National Bank of Mom and Dad.
9 ways parents should address family wealth:
- Tailor conversations to your child’s age and maturity
- Keep your answers simple
- Teach the value of a buck
- Tell stories about how and why you built your wealth
- Talk about money as a legacy
- Disable the entitlement mentality
- Include your kids in family money meetings
- Be a curious coach
- Skip the proselytizing
Money is a touchy topic, whether you have a lot or a little. Don’t let that keep you from giving your kids the gift of financial literacy as well as a sense of legacy.
Read the full article about family wealth and how to talk about it by Mike Joslin at Joslin Capital Advisors, via Medium.
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