Ultra-high-net-worth families ('UHNW') are predicted to pass down more than $16tn to future generations over the next three decades, according to the analysts Wealth-X.
So, here are some thoughts about what we should teach the UHNW NextGen:
It’s not about money: A healthy relationship with wealth starts with a message that may sound counterintuitive: It's not about the money. Communicating those values means de-emphasizing the amount of wealth the family has. Preserve and stimulate the kids' sense of purpose and drive, help them to find their own way, learn to struggle, fail and persist the way they did."
Learn early what work means: Wealth managers indicate one of the challenges is that families are not communicating well within themselves, i.e. parents are not preparing their children to face their new wealth management role. For UHNW families, de-emphasizing the family wealth often means not telling children the family's total net worth until very late, when they really must take responsibilities. But if they grow up without connection and understanding of what work means, and then they graduate from college and have to work for the first time, they are not prepared for that kind of investment and experience. Children who come from successful families need to have the opportunity to create, to collaborate, to fail. This means having them learn the value of a hard-earned salary, the satisfaction of a hard day's work, even though the family does not necessarily need the money.
Give back: Making the effort to give back creates an abundance mentality which can help all families, regardless of their wealth. NextGen should learn early that what you put out in the world comes back magnified . The experience of work will help NextGen to understand the foundations and philanthropic trusts their families have set up.
Use the wealth wisely: The world’s richest families are increasingly investing their money in good causes, giving a boost to the growing, if still challenged, impact investing space. More than a quarter (28%) of UHNW family offices are now putting money into social and environmental areas. And, as younger generations take the reins, that percentage is likely to rise significantly in the years ahead. This is the time to step up the NextGen education on sustainable business.
No such thing as too early: teens have the capacity to become real sustainability advisors in their families.