According to a recent Wells Fargo study of children in families with a net worth of at least $1 million, children see the most important inheritance not in wealth, but in values and legacy.
In this study we are hearing directly from the children, and not from parents or grandparents, and we hear some encouraging things:
- More than four out of five (84%) say they want to sustain and build on their family’s legacy.
- Four in 10 children want to have more say in their family’s philanthropic strategies.
- The next generation is confident and wants to take on the responsibility of managing the family’s wealth and legacy, yet realizes it needs to first gain the financial acumen and preparation to do so.
- Few children report that their families meet to discuss finances; more than half think it would be a good idea.
Many families need help interacting on topics related to wealth because those discussions can be scary. Many of us are taught that talking about money is taboo; some parents are afraid that sharing facts and figures with their children might make them lazy or entitled. It is crucial to talk with your children about money and your family’s money culture, and to do so regularly.
Philanthropy can be a tool to help navigate discussions about wealth, values, and priorities. The Wells Fargo study shows that two out of three families give as a family. Children want to take an even more active role in deciding how much their family gives and to what causes. You can give your children a set amount of money to donate to a charity they choose, but first ask them to answer some basic questions about how they want their donation to make an impact.
Even though a majority of respondents (65%) say they are confident they can manage family wealth, the children of millionaires give themselves mediocre grades (B- average) on their overall financial literacy. Business leaders build pipelines of up-and-coming leaders, educating and mentoring them to eventually lead the business, and enterprising families can apply these same principles to prepare the next generation of wealth stewards.
For more information, please read:
What Matters Most to Children of Wealth | Kiplinger