Understanding Generational Thinking About Wealth
Wealthy people broadly come in two flavours – wealth creators and wealth inheritors – and each have very different characteristics.
Attitudes to money and wealth are usually established as we grow up and largely remain with us for the duration of our lives. Creators often grow up without a lot of money and therefore have different attitudes to spending and the value of a dollar, are uncomfortable talking about it with their children, and often look at the wealth they created through an “ownership” rather than a “stewardship” lens. If they have created the wealth through starting a business, they also have a set of beliefs (resilience, confidence, sense of invincibility) common among business founders and entrepreneurs.
Inheritors view the world very differently, sometimes feeling conflicted or guilty for the “sin” of not having to earn it like most others. Depending on their upbringing, they may not have a sense of the value or spending power of money. They are often challenged to develop their own identity – not wanting to be known as “the child of …”, and needing to make their own mark. Their mark may often be in the non-financial arena (because their parents already made it financially).
In order to effectively transmit or transition the wealth to the next generation, both creators and inheritors need to understand their difference, and learn new skills (raising children with healthy money attitudes, adopting a “stewardship” approach, finding meaning beyond money).
Consider This: Have you considered how your attitudes to wealth might differ compared with your parents or children? Have you had family discussions about these differences and what they mean to each of you?
- Why wealthy parents who bankroll their adult children are hurting them
- Russ Prince: Among Super-Rich, Self-Made Wealthy And Inheritors Think Differently
- 5 lies you’ve been told about generational wealth
- Better Together: Stewarding Wealth and Wisdom to Prevent “Affluenza”
Here is more on reading on next gen wealth transfer.