Children Take Classes on How to be Rich

Wealthy parents are beginning to realize that it is not easy for their children to be rich.  There is a growing trend to start educating them on the ins and outs of being rich even before they start high school.

The following excerpts are from Sharlene Goff, Rich kids learn how to protect their inheritance, Financial Times, May 27, 2008, at 8:

Wealthy families are devoting more time to educating dependants on how to approach financial matters for fear that their legacies could be eroded by unwise decisions. * * *

Giving too much too soon can make it more difficult for the recipients to develop their own work ethic and personal ambition. But delaying the moment when money can be handed over can increase the risk of a high inheritance tax bill and can leave the next generation unprepared to deal with the windfall.

Private banks say some families are beginning to educate their children about money before they even reach high school.

Barclays Wealth has held discussions with children as young as eight to start identifying potential future leaders within a family. * * *

These next-generation courses evolved in the US. Groups such as Merrill Lynch and JPMorgan Private Bank have been offering them to their high-end clients for several years.

Courses take place over a number of days.

They include practical sessions on how to construct investment portfolios, make sensible asset choices and understand family dynamics. They also tackle the psychological and emotional aspects of inheritance – how, for instance, recipients can align their own interests with that of their family legacies and how to deal with the responsibilities that accompany such wealth.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.