I have worked with many wealthy families and many of their children. Some are first and second generation and some are third, but there are not that many fourth or fifth. Why?
The wealth has most often dissipated across the family, be spent or been taxed.
I have the following advice for wealthy parents:
Consequence - build consequence into your children's life. The first generation had it and the less well-off have it. They had to get out of bed and put bread on the table. There must be consequence in their lives or else they will never get out of bed.
Skills - in the 21st century, the young are going to need to learn skills and keep learning new skills. The world is changing fast and careers and businesses are changing fast as well. If the family business was mountain guiding, then the next generation need to learn the skills to climb a mountain. They cannot just expect to walk into the family business and be chief guide taking people up the mountain, if they have never climbed some own mountains of their own, having obtained the essential core skills.
Experiences - the next generation need to go and get some 'experiences'. That is not sitting on a private jet or yacht quaffing champagne off St Barts. They need to go and get real life experiences. It has been shown that experiential learning changes the brain for the better.
Make Money - I hear many people advising the young to learn how to manage money. I say find out how to make money. There are thousands of people in the world who can manage your money, but there are not so many individuals who can make money. This skill is essential for the family wealth to be maintained and in many respects for the rich kid's self esteem. Wealth dissipates or gets spent very quickly.
Guardian of Money - the young should act as guardians of the money that they are given or inherit and not use it to show off as if they are some billionaire entrepreneur. Protect the wealth - it does not last forever.
Fear and Anxiety - Fear and Anxiety are two of the biggest issues that I come across when working with the next generation. It is what holds them back. Push your children out of their comfort zone. The rigid academic environment that they go through can create self-imposed barriers to their confidence, intellect and beliefs. I recently wrote a blog called 'Why are some people so amazingly good at what they do?' This explains how to be an expert at something or perform at a high level. Have a read of it.
These are just some of my tips for parents. As you know, most children do not listen to their parents. They do seem to listen to mentors.
As that well know saying goes, "When I was 16, I thought my parents knew nothing. When I was 21, I was shocked to discover how much they had learnt in the last five years".
If you want help or advice with the next generation, please do get in touch with me. I have worked with over 500 young one on one or in workshops.
For parents who have worked their entire lives to get to a place of privilege, the sight of their children recklessly spending money and showing off their extravagant lifestyle can leave a bad taste in the mouth. According to the Harvard Business Review, children who don’t learn how to value money can end up destroying their families’ wealth by the second or third generation.