Six ways the rising generation can productively integrate wealth into their lives:
Having worked with affluent families for over 20 years, when I ask them what keeps them up most nights, roughly 90% of them respond with fear surrounding raising their children in a wealthy environment. Many of these parents didn’t grow up with wealth, while those who did regret that not enough attention was paid to the experience of inheritance and its challenges, rather than the obvious benefits and responsibilities.
Wealth inheritors face many challenges that are often difficult to discuss. As a minority, they must deal with a degree of social alienation—but as a privileged minority, it feels unseemly to complain or to ask for help. Social media, political rhetoric, and popular culture (movies, television) shape the narrative that inherited wealth is bad and that inheritors are out of touch, selfish, and even unpatriotic. Growing up in an environment where inheritors often feel disliked or ridiculed can have a devastating impact on kids who had no choice in the circumstance to which they were born.
For young inheritors, negative messaging around wealth in the media like political rhetoric “Tax the Rich” or pop culture shows like Schitt’s Creek perpetuate the casting of the wealthy as entitled, selfish, out-of-touch, and can make it difficult for young inheritors to form positive self-images and sustain meaningful, interpersonal relationships.
Early intervention is crucial to empower rising gens to build self-esteem, find their passion, and claim their voice within their family, social, and professional circles. Therefore, it is important for families to invest in educational resources for next gens on what we call family wealth integration, or, how family members integrate wealth successfully into their lives.
At Continuity, we help multigenerational families navigate through challenges and assist them in integrating wealth into their lives productively. Below, we offer inheritors six pieces of advice on how to understand the bias against the wealthy and develop strategies to better deal with it when it occurs in their lives.
1. Understand values and beliefs
Emotions and beliefs around money are incredibly important. Because inheritances are often not just about money, the goal of financial education should extend beyond the promotion of responsible financial behaviors. It may involve ensuring future generations understand the family’s values that underlie their vision for how the wealth will be used. The translation of these values across generations may help extend the family’s legacy in informing career choices or shaping philanthropic activities. In some cases, preserving values may be just as important as sustaining financial capital.
2. Know the family history
A sense of legacy pulls things together for inheritors. Understanding where the money came from helps to create a sense of pride in the values, hard work, and entrepreneurial spirit of those who created and managed the wealth before them. Keeping that legacy alive through cherished family traditions can be a source of meaning and pride for the inherited wealth.
What is the purpose of wealth and how can the next generations work together to carry the family legacy forward? Voices of younger family members need to be included to incorporate new perspectives on what matters to the next generation.
3. Develop self-confidence without dependence on money
Inheritors who most successfully manage the impact of wealth are able to establish personal identities and life paths that are enhanced by their wealth, not absorbed by it. How they would function and succeed without having money is something inheritors need to know. Having a sense of ‘how much does it cost to be me?’ is an important question that can help inheritors better understand the ‘energy’ consumed by their lifestyle and how much they contribute to providing that energy.
Self-confidence comes from experiences that require self-reliance. Having successful and meaningful experiences such as managing one’s finances, starting a business, earning a living, and learning a new skill are a few ways inheritors can prove that family money, while helpful, doesn’t define them and isn’t necessary to lead a successful life.
4. Develop an attitude of stewardship
An attitude of stewardship can be vitally important. The practice of entrepreneurial stewardship is intended to promote and nurture entrepreneurial efforts in succeeding generations. Giving or investing for the benefit of society can provide a sense of meaning and purpose.
5. Navigate relationships
It’s important for inheritors to understand how others may perceive wealth so those around them are not enabled to exploit them. Those who grew up without wealth may misunderstand its complexity. They develop their own assumptions and biases. When it comes to wealth, those that do not have it may resent those that do. As with most cultures that are misunderstood, they are often met with judgment rather than curiosity.
Inheritors frequently speak of feeling alienated or isolated because their exceptional wealth creates a gulf between them and other people they encounter in the course of their lives.
6. Understand the business of family
Encouraging transparency and fostering information about family enterprise and wealth across generations is critical. It’s crucial for inheritors to understand family governance structures and how decisions in the business are made. Similarly, it’s important for inheritors to understand why participating in family meetings, joining committees, and being engaged with the family and business are significant. Wealth is perpetuated by the innovation and entrepreneurship of successive generations. A family that trusts, respects, and encourages the participation of its younger generations is laying a path for success that benefits everyone.