Holiday Season Advice: Teach Your Children

by Jeff C. Johnson

Some of the best money wisdom I've learned over the last nearly 40 years came from my clients who were parents and grandparents:

If you can't earn it and you can't accumulate it, then you won’t be able to keep it if you are lucky enough to inherit it.

By observation, I've learned this to be true a pretty good percentage of the time. People that are fortunate enough to be members of an affluent family sometimes rely on the successes of the family and don’t take the management of their money seriously enough.

There are exceptions, but if your heirs can't accumulate a little money on their own, they might not be able to hold on to gifts and inheritances.

I reflected on this wisdom over this holiday season. This time of year is often when parents and grandparents transfer wealth to their children and grandchildren as Christmas presents. And others may make gifts at the start of the year to begin strategic wealth transfer programs.

Perhaps the most important legacy that we can pass on to our families is not investments, real estate, farmland, a business, or other assets. Maybe the most important thing that we can pass on to our heirs is the understanding of how to earn, save, and manage assets that they are fortunate enough to become in possession of.

In my upcoming new book, A Decade to Make Millions, I write about this very topic. But the fact is, time spent teaching our children about how to earn money, the value of wealth, and how to live within their means is an extremely important lesson. And oftentimes, it’s never addressed because it can be uncomfortable to talk about money with family members.

Those of us on the back nine of life can remember Graham Nash’s 1970 song “Teach Your Children.” One line of the lyrics is, “Teach your children what you believe in.”

The song wasn't necessarily about money, but teaching our children and grandchildren about the value of money and how to manage it might be the best Christmas present and legacy that we can give them.

This article is for general information and educational purposes only and is not intended to serve as specific financial, accounting, or tax advice. The opinions expressed are the author’s own and may not accurately reflect those of Buckingham Strategic Wealth. R-22-3092