Ultra Wealthy Families Need to Educate Children About Finances

Educating younger family members about finances should be taken more seriously because it helps high-net-worth families control their money through successive generations. Anne Shumadine, a financial management professional, says that childrens’ attitudes and beliefs about money are formed by the time they’re twelve, and by that time, they need to understand that money is a reward for working rather than something that supports their traveling and gambling.

Ways to educate your children include:

• Charitable giving. For families who avoid money talk, getting children involved in charitable giving is a good way to teach them about investing, budgeting, and family values.
• Formal education. Older family members can send the younger family members to classroom-style lectures, theatrical presentations, or role-playing exercises about wealth management.

See Education is Core to Family Wealth, Private Wealth, Aug. 13, 2010.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this to my attention.