Many children from wealthy families suffer from unhappiness, depression, and a general lack of motivation. If you’ve always been given everything you want, what’s the point of trying to provide for yourself? Yet many children of wealthy parents not only thrive in life, but even outperform those same wealthy parents. Why do some fail so miserably while others succeed?
Financial intelligence is one of the most important skills in today’s modern world. With it, you’re able to set yourself up for a future full of promise. Without it, you’re struggling day in and day out, with no hope of ever reaching the “American Dream”. Unfortunately, there is little to no teaching of financial skills outside of the home. Much of the information out there for you to find for yourself is misleading at best or just plain wrong at worst. Young adults starting out without a good base of financial knowledge can get themselves into trouble that can last years or even decades.
Many of the historical “Great Families” became well-known because of their vast fortunes. Some of these families fell into irrelevance, while many are still well-known today. The Vandebilts, Du Ponts, and Cargills all hold a certain station in the United States that few other families have. While many of these fortunes decrease through time- through fraud, bad investments, or just the act of dispersion with each generation being larger than the previous- the families and their descendants tend to stay wealthy decade after decade. Some are quite far-reaching, such as the Du Pont family, with an estimated 3,500 family members and a total family wealth of $14.3 billion. Others remain more concentrated, such as the Cargill/MacMillian family, which has 23 members and $49 billion in wealth.
Building a Great Family means preparing the next generation to continue and improve upon the traditions and the legacy you’ve spent your life building. Previously, we’ve discussed some of the basics to teach your children as they grow beyond the preschool age and begin to comprehend the world around them. As they grow into teens, you can go beyond the basic building blocks and into more concrete skills that will give them a leg up over their peers in the future.
From nearly the moment your children are born, the question of whether or not to pay for college begins forming in your mind or being asked by “concerned” friends and family. Can we have a few years to make sure this little one doesn’t stick a nail in an outlet or take a flying leap off of the top stair before having to worry about a major financial decision? Paying for college to many is a given – if you can afford to do so, of course you will. But I’m less certain. Are our kids really better off if we continue adolescence beyond its natural stopping point? Will they have better outcomes if we don’t pay versus if we do pay?
A Great Family does not come about by luck or by circumstance. It comes about due to intentional action, discipline and focus. Most people just meander their way through life. Some are more successful than others, but most move from one short term action to another. In business, companies that meander often don’t last long. They lose focus and are overtaken by competitors. Families can be the same way. While families generally don’t just fall apart and close up shop as businesses do (well, hopefully not), they can lose focus and underperform their full potential.
If you’re reading this blog, you’re likely interested in personal finance, investing, and building a great family. And if your family is like my family, then you are probably the one that does the heavy lifting when managing your family’s money. Your spouse might be involved, but as with any other organization, family members tend to specialize.