Jan 5th

4 Stages for Developing Good Stewards of Wealth and Family Businesses

The parenting and education we provide our children has a profound impact on their future attitudes towards wealth, money, stewardship, and the family business. We have to consider our approach very carefully, as it must be consistent, thoughtful, and disciplined, not exerting too much or too little control. It is ultimately up to them whether they want to pursue the family business or other ventures. It is our job to encourage their passions and be active participants in their lives, giving them all the tools we can possibly offer to make their own decisions and be prepared for any opportunity. There are different methods for each stage of our children’s lives for teaching family history, family business, money, investments, and estate planning.

In early development, from the time they’re born, till they’re about six years old, what is most important for your children is dedicating time and attention to them regardless of your other demands, creating a warm and loving environment to start laying a strong foundation for their character and values. At this age we lead by example, children see and internalize us working hard and being kind and generous to others. The latter end of this stage is also a good time to introduce your children to actual currency. Through an allowance, they will start learning money management and delayed gratification as they realize they need to save for items they really want, a valuable lesson as technology will be ever more present in their lives and needs to be understood as a tool, not a magic wand. At ages seven to thirteen, your children will begin asking questions about money and business, and when this happens you must take the time to provide them with thoughtful answers to encourage a strong work ethic, curiosity, generosity, and a fully functioning moral compass. If they have allowed their savings to grow, this may be a good time to introduce investing. Let them buy a few stocks of companies they know well and introduce basic ideas of compound growth and market behavior in relation to the larger world. To foster creativity and a go-getter spirit, it’s not a bad idea to let them start a simple business, your classic lemonade stand for example, but it’s important that they are actively involved in all aspects of planning and expenses, not just the revenue side, so they may work out themselves how to overcome challenges and understand logistical relationships. If applicable, this is also a good time to teach them the basics of the family business and introduce them to key figures. They may gravitate toward it, or they may not.

Their high school and college years (14-22) will be challenging, and it is critical that you remain an active participant in their lives, as they will have many life-impacting decisions to make during this time. However, it is also essential you recognize that while choices of academic rigor and effort, college, costs, and career path are not to be taken lightly, ultimately it is their choice. As variables grow and life gets complicated, communication becomes increasingly important to properly handle the questions and expectations of all parties. This is also the age to encourage the pursuit of internships. Real-world experience is a must for future employers and a necessity for personal growth. If you own a family business, let them intern at the bottom and learn how to work their way up, so they can understand the hard work that goes into every level of the company and the value of each component to the business overall. After graduating from college, they’re on their own. You can still give advice and help them find opportunities, but this is where your hard work, love, and lessons pay off. They will be on their own journey, and that may involve a career you envisioned for them or even the family business, or it may not. The important thing is maintaining open, honest communication, and bringing them into the fold on estate planning, so they may preserve, protect, and enhance your family’s assets as they teach their own children about stewardship.

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