Among the very wealthy, a common question is usually along the lines of, “How do I give my money to my children without harming them?” While no one ever complained about having too much money, the truth is, at a certain point, extra money can have adverse effects on your children and their development.

Sometimes Less Is More

To a certain extent, life is about struggling and figuring it out. Too much money takes away the opportunity to struggle, grow and learn. Without the growth and strength that comes with struggle, we often start to look at our money as a source of security that inevitably will leave us feeling vulnerable because we lack the self-confidence that we can take care of ourselves and our family. When we struggle and overcome adversity, we build our resilience and persistence. We become more empathetic because our struggles allow us to relate to others as they endure and overcome their own struggles.

How do you help your child reach their full potential and use your money to enhance their quality of life? The way out of this challenge is for your child to live a period largely on his or her own earnings—to go out and find a job that supports them and that ideally gives them a sense of meaning and purpose. Once your child has figured out how to navigate the world on their own as an independent adult, then you can help make their life a little easier. For example, give them some money to renovate their kitchen, to take a great vacation, to go back to school, or to help fund your grandchild’s college fund. You can even consider giving them an annual cash gift of $25,000 to $50,000; enough to make their life easier, but not enough to support them comfortably.

Prepare Your Children for Their Future

Once your children have figured out how to support themselves and their family, it’s important to help them put their success and wealth in context of the world around them. Consider these two ideas to get you started:

  1. Recognize the factors that went into building your financial wealth. Senior members of the family should talk to the younger generations about the role luck and good fortune played in the family’s accumulation of wealth in addition to the requisite hard work, struggle and willingness to take risk. When we believe we are solely responsible for our success, we diminish our sense of gratitude for the sacrifices of our ancestors, the love and care of our parents, the vibrant strengths of the American experience, and our genetic gifts and talents. We diminish our empathy and connection for others because we believe that anyone can accumulate vast sums of money if they just work hard enough.
  2. Get out of your wealth bubble. For children of extraordinary wealth, it’s vital that the family helps them engage with people who have far less than they do. Our perception of wealth is relative. On an objective basis, we might be in the top 1% yet feel poor if our social network is filled with people who have more money than we do. The only way for your children to emotionally realize how much they have is to be around folks who have far less—folks who are struggling to cover their basic needs.

Think About Your Living Legacy

Once you realize you have more than enough for you and your children—and you can’t take the money with you—it’s only a hop, skip and a jump to start considering how you might use your money to help others. How can you combine your passions, talents, and sense of purpose to make a difference in the world around you? If that question is too daunting, just think about what makes your heart hurt. Who would you like to help? How would you like to leave the world just a little bit better?

Part of that is to also support your children as they strive to make a difference. Engage in a family discussion about what really matters in life and what each family member finds most upsetting in our society. Talk about how they might use their time, talents, and expertise to make a meaningful difference for a cause that ignites their passion and, if possible, offer your financial support or connect them to influencers in your community. If they are interested, see if you can work together to make an even bigger impact. The key here is to let the adult child take the lead in pursuing their passion and for the parent to support them as a role model, mentor, and source of capital.

A life well lived is built on a foundation of self-sufficiency and self-confidence. It is filled with close, supportive relationships. It is a productive life, one that combines an individual’s passion and talents in an endeavor that is both meaningful and productive. Money is a tool, nothing more and nothing less. When used indiscriminately, it often leads to heartache and challenges. When used thoughtfully, it can lead to confidence, joy and meaning.

You Don’t Have to Make Hard Decisions Alone

Your Wealth Enhancement Group financial advisor can help create a cash flow model that shows you how much money you need to support your current lifestyle and how much more you can spend without putting you or your family in harm’s way.

Work with a Behavioral Wealth Specialist (BWS) to explore how your emotions and childhood money messages may be holding you back from spending money on things and experiences you can easily afford. Your BWS can help you move from feeling nervous to feeling centered and confident so you can enjoy the wealth you have created. After all, it is your money.

May the wealth you worked so hard to create enhance the quality of your life and those you love.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

David Geller

David Geller

Director, Behavioral Wealth Management

CFP® David joined Wealth Enhancement Group through the partnership with JOYN Advisors, where he acted as CEO and Co-Founder. He is the creator of the Behavioral Wealth Management™ model. A model that focuses on aligning wealth management with the integration of human emotions while taking into consideration an individual’s talents, wisdom, network and relationships. David has been featured in a number of prominent outlets including The New York Times, The Wall Street Journal and The...Read More