How to Raise Rich Kids Who Don't Suck: A Guide for Wealthy Parents

Full transcript and show notes @ www.sunnybranchwealth.com/blog/raising-rich-kids

Your kids are already learning money lessons, whether you're teaching them intentionally or not. 

They're watching how you relate to money, how you talk about wealth, and how you handle your privilege. 

In this episode, I'm breaking down exactly how to get conscious about the money values you're passing down and how to have honest, age-appropriate conversations about family wealth. 

The big takeaway?

Stop hiding your wealth from your kids - it's doing more harm than good. 

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Transcript

How to Raise Rich Kids Who Don't Suck: A Complete Guide for Wealthy Parents

Introduction: Welcome to Heir Necessities - Financial Education for Inheritors

Katherine Fox (00:00) Hey, I'm Katherine and thanks for joining me at Heir Necessities, the podcast that turns complex financial topics into real talk for Gen X, Millennial, and Gen Z inheritors. Each week on this podcast, I break down a different topic related to generational wealth and inheritance.

My goal is that you can stop asking Google or ChatGPT what to do with your inheritance. This podcast is the real talk that you need to figure out what to do next.

The Most Common Question: How to Raise Rich Kids Without Creating Entitlement

On today's episode of the podcast, we are diving into a question that I get asked so frequently, which is some variation of how do I raise kids who are rich and don't suck? I'm paraphrasing here. Obviously, everyone loves their kids. I love my kids. But this is a real fear that people have is that I'm raising these young humans. We are a wealthy family, but I don't want them to grow up and be entitled

and think that they don't have to work or they can just coast through life because their family has money. And how do you deal with that? So we're gonna be tackling some of the lessons that I've learned both as a parent, as someone who grew up in a family that successfully passed down wealth and values around money across generations, and also as someone who has worked with countless families

as an investment advisor and has seen what happens when this goes right and all of the ways that it can go wrong.

Beyond Spend-Save-Give Jars: Teaching Real Money Values to Wealthy Children

I want to frame this conversation. When it comes up about raising money smart kids, the first thing that a lot of people are going to say is, are you using those spend, save, give jars? And I'm not coming for that approach at all. I think those spend, save, and give jars are a great first step. I think they can be a really useful tool, especially for families who have younger kids, kids who are sort of learning about money and want to be more involved in an age-appropriate way around family finances.

I'm talking about a lot more than that.

I'm talking about raising kids who understand their place in the world, who understand their privilege, who are comfortable accepting that privilege, but who also want to be independent, to use that privilege for good and to forge their own path in life. When you're thinking about raising money smart kids, kids who don't grow up entitled, rich kids who don't suck, whatever you want to say, the first question that you need to ask yourself is,

Step 1: Examine Your Own Money Story and Unconscious Attitudes About Wealth

I want you to stop and promise me that you will have a really honest answer to this question is what money lessons are you teaching your kids? And I'm not talking about, oh well, you know, yesterday, like, we went to the grocery store and I had a really intentional moment where like they wanted something and I said we couldn't have it because it was too expensive. I'm not talking about

those really intentional teaching moments that you try and fit in throughout your life. I'm talking about how do you talk about and how do you relate to money. Your own unconscious attitude about money is what your kids are gonna get. We know kids pay attention, they pick up on these things.

How do you relate to money? Are you wealthy but you grew up with a scarcity mindset and you still feel like even though you have a multi-million dollar fortune you could lose it all tomorrow? Did you grow up in a restricted money environment whether you were wealthy or not and now you feel like a lot of freedom in spending and you get a lot of joy from spending freely and not having to think about money? Those are the lessons that your kids are watching. Do you work hard?

Even if you don't have traditional employment, are there things that you're passionate about that you're invested in? Do you build community around those things? Do you judge other people for how much money they have or don't have or how they spend money? Do you compare yourself to other people, what they're doing, how they live their lives? All of these subtle things are what your kids will pick up on.

How Your Money Story Affects Your Children's Financial Values

Our children are constantly learning the money stories that we grew up with. And so especially if you have young kids, the first step in raising the kind of kids you want in terms of their relationship to money is thinking about your own relationship to money. And what in your money story is serving you well? What is something that you're proud of? What's something that you want to pass on? And what are some of those things that are holding you back

or that you feel like really need to stop with your generation? Asking yourself these questions and if you're in a relationship, if you have a partner, being honest with your partner about these same questions is really, really important because that's another area where kids can get really confused is when you have two parents that have two vastly different money stories

and they haven't taken the time to sort out and come together on a new shared money story for your family. Kids don't know what to do.

I hear this all the time from inheritors who are older who are in their 20s and 30s who are talking about, well, if I talk to my dad, he'll say this about money. If I talk to my mom, she'll say this about money. It's really confusing. And not having that consistent narrative around money is something that will do your kids a disservice in the long term.

If you've done the work to think about your own money story, to be really conscious in how you talk about money, how you talk about wealth, how you talk about status and privilege in your own mind, then those are the ideas that you're projecting forward in those moments when you're not even thinking about it. The second thing that I want you to think about is, do your kids know how you feel about money? And now we're getting into a little bit of the older kids. Less of that

unconscious, my kids are picking up on this, and more of your kids are a little bit older now, you can have more intentional conversations with them about money.

Step 2: Teaching Your Kids Your Family's Money Values (Ages 11+)

And once you think your kids are old enough to start understanding money, and I'm not talking about understanding family wealth, I'm not saying you should sit your 11 year old down and tell her you're worth $30 million, but is she old enough to understand how you think about money

and understanding the values that guide money decisions in your family? Because all of our money decisions ultimately are driven by values. For some people those values might be spending money, having the biggest house, having the flashiest cars, whatever. Okay, if wealth is important to you to show off status, to show off power, and that's what you want your kids to get, then tell them that. It's not how I choose to live my life, but I'm not gonna come at you. You wanna

raise the kind of kids you want to raise. If you are a person who has a lot of wealth and lives a more modest lifestyle relative to the amount of wealth you have, I'm not saying that you actually live a modest lifestyle, which is more of where my family fits and more of where my clients at Sunny Branch fit, then it's about introducing the concept of why that is. We have wealth, so when we say things are too expensive or those aren't things we do,

we're not saying that we can't afford them. We're saying that we choose not to do them. Why? Why do you choose not to do them? These are the kind of questions that little kids and pre-teens, early teenagers have about money. And when you're thinking about how you want to form someone and their attitudes around money, they need to know these things because they're looking at you and they're wondering why. And so you can start supplying these answers with

values-based discussions around money

and then use those values-based discussions as kids get older and older to start putting some numbers there and start introducing a little bit more about family wealth and money.

Why Hiding Family Wealth From Your Kids Is a Mistake

I should have said this at the top, but I do not think hiding the amount of money that you have from your kids is a good idea. Again, I'm not talking about telling a 13-year-old that you're worth $30 million, but when you have older teenagers or kids in their young 20s,

I hear over and over and over again. I don't want to tell them, I don't want to confuse them, I don't want them to think they don't have to work. Your kids are not blind. They can figure out that there's money there. And conversely, if you have done such a good job of living a modest lifestyle that they can't, they are going to be so confused when they find out. I deal with the repercussions of people hiding information about family wealth every day

when I'm working with inheritors in their 20s and 30s and 40s and no one, no one says, I'm so glad that my parents didn't share these details with me in an age appropriate way when I was ready to handle it. And as your kids get older, as they get into their later 20s and their 30s, you now have fully formed adults and waiting to share information until they're trying to make decisions about their own lives

and sort of incorporate their own attitudes towards money doesn't do anyone a service. So as I work with clients on these issues at Sunny Branch, I always push, again, in an age-appropriate way, in a way that works for families, but for more honesty, openness, and transparency around family wealth conversations. Which leads me into my third point.

Step 3: Teaching Kids That Money Is a Tool, Not Good or Bad

Do your kids understand money? And this question is about the dollars and cents of credit cards and checking accounts and savings, how the financial system, the personal financial system works. But it's also about do they understand that money is a tool? Do you think that money is a bad thing? Do you think that money is a good thing? Or do you view money as a tool?

And this is where education is a really important part of things to teach your kids about that financial system, how it works, but also to explain how money is used in this world, that money is a tool. It's not something that is inherently good or bad in my view. It's a tool that can be used to benefit yourself. It can be used to benefit others and explain and show that money is a tool that money doesn't convey inherent worth,

money is something that can be talked about. Because this is, again, going back to the secrecy, this is the biggest trap that families fall into. They don't know how to talk about money and so they never get started. And then it's too late and you have people in their 60s and 70s with kids who are in their 30s saying, I don't know how to talk to my kids about money, I don't think they're ready.

The Importance of Open Communication About Family Wealth

I'm not saying you can't come back from that, but for most people that ship has sailed. And now you have people who are trying to build their own lives and want to have these conversations with you about family wealth and about all of these questions they have. But there's no openness because these conversations have never happened. We as parents are never going to be perfect. I'm gonna mess this up, you're gonna mess this up, that's fine.

But like with all other parenting challenges, the key piece is creating open lines of communication, setting your expectations, setting your boundaries, and then creating a safe space where kids can ask these questions. And as they grow up and they ask harder questions, you're not afraid to answer them. It's gonna be uncomfortable for you, but I promise it will benefit your kids in the long term.

Join the Kids and Money Group for Wealthy Moms

I wanted to let you know that in the next 6 to 12 months I am working on creating a group about kids and money for moms specifically. If that is something that you are interested in, if you are working on trying to raise money smart kids, if it's something that keeps you up at night, please shoot me an email, katherine@sunnybranchwealth.com or send me a DM on Instagram.

I'm starting a list of people who might be interested, so let me know. I'll catch you on the next episode of Heir Necessities, and if you need to find me in the meantime, all that information is down below in the show notes.