Practical Suggestions for Preparing the Next Generation of Wealth - Susan Schoenfeld
Susan Schoenfeld, an expert advisor to families of wealth, spoke on Governance and Single Family Office at the Opal Group’s Virtual Family Office and Private Wealth Forum. Susan talks about how to prepare your children to handle money from a young age.
“My first suggestion is that there is no ‘magic age.’ There is no one time that you are going to sit your children down and have ‘the money talk’ with them. Parents know their children; some kids handle money well and some don’t. Either way, one practical suggestion is to plan distributions after they’ve worked for a few years. Nothing is more sobering than a paystub. In this case, withholding taxes are your friend. Remember that shock the first time you saw how much of your salary goes towards all of those taxes? Studies show that people who have worked are more likely to take better care of even inherited wealth.
“Over the course of my career, I have had many conversations with ultra-high net worth families, those who have successfully navigated this issue of raising their children to be productive, contributing members of society. The number one suggestion that comes up time and time again is that they insist on summer jobs or even sometimes after-school jobs for their kids.
“There are three keys that I suggest to families when they talk about raising children in an atmosphere of wealth:
“Key number one is to start while young, of course in age-appropriate ways. There are always ways you can begin educating your children. Whether it is teaching them to be able to differentiate and to determine if something is ‘worth it’ or to be able to differentiate between ‘wants’ and ‘needs’. Even at very young ages, start teaching them the responsibility of being a member of the family and being a member of the community.
“My key number two is to model the behavior you want them to emulate. As we all know, kids follow what you do more than they follow what you say. Be mindful of the behavior that you are modeling for them. They are watching you and they are taking your nonverbal cues and learning from them.
“Key number three is to find teachable moments. They are everywhere and often at the least opportune times, but take them where you find them and treat them as teaching opportunities for your kids.”
