Avoiding the Dangers of Inherited Wealth
How can a person avoid doing harm to their family through inherited wealth?
Any time you give someone something for nothing, there will be a negative consequence. Often, because a person has risen from poverty to success, they want to give their children all the opportunities that they never had growing up.
Giving Anyone “Something for Nothing” is Damaging!
Whether a person wins the lottery or inherits money from a family member, there is a level of experience and maturity that has to be in place, or the money will be a burden instead of a blessing.
How do I protect my kids from the perils of inheriting wealth?
- Let them see it coming when they are children and youth. Discuss finances and future around the dinner table, let them understand how you are using it and why.
- Make your children work for their money. Don’t give them something for nothing. Let them learn the value of a dollar the same way you had to learn it.
- Don’t use your wealth to bail your children out of bad decisions. Just because you can write a check and have problems disappear from your child’s world, doesn’t mean you should. In fact, letting them feel the consequences early on in life will ingrain the lesson deeper into their memory. It’s better for a 9 year old to suffer the consequences of a financial mistake than a 32 year old, responsible for much more on a much larger scale.
- Involve them in your charitable contributions. Your children need to know that you are giving and be involved in that giving from a young age. Whether you are offering tithing to the Lord through your church, donating to charities, providing service in person (soup kitchens, shelters etc.) or all of the above, let them see your example and follow it. This will teach them that there is peace and satisfaction in service that far outweighs the pleasure money can buy.
In a perfect world, our children will grow up in our homes and they will automatically know how and why our homes are happy and be able to replicate that in their own homes… In the real world, that is never the case. We need to be aware of the damage our money can cause and we need to actively address these issues with our kids so they know what to expect and how to handle it.