
Wealthy families are taking steps to prepare their children for the responsibilities of affluence from a young age. This approach helps protect wealth for future generations. Wealth managers say talking to kids early about the privileges and dangers of wealth increases the chances of success.
Nji Lorimer, a senior wealth planner, cites the saying “Clogs to clogs in three generations.” It highlights the risk of entrepreneurs seeing their wealth lost due to lack of planning. “The second generation often guard and cherish the wealth, having seen their parents’ hard work and sacrifices,” Lorimer explains. “But the third generation, who have only known affluence, can end up losing the wealth without proper guidance.”
Lorimer says early coaching on how to protect, grow, and spend wealth responsibly is key to breaking this cycle.
He stresses that educating the next generation is a team effort. It involves wealth creators in the family and advisers who provide counsel. Wealthy families are turning to banks and wealth managers for formal financial education.
“Next Generation Academies” teach about the responsibilities of wealth. They include games, role-playing, discussions, and hands-on training. They also offer networking and a chance to build relationships.
UBS Global Wealth Management runs programs to bring together NextGen investors of different ages and experiences.
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