The Triad Perspective
     


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The Parent Trap

I was born dirt-poor, raised in a ramshackle house on the edge of civilization. It's now known as New Jersey.
 
OK, I'm exaggerating a bit. I grew up in rather humble, middle-class circumstances. There wasn't a lot of spare change in our household. But the good thing was I learned the value of working hard, saving, and being careful with spending. Until I met my wife. Just kidding, honey!
 
I recently read an article in the New York Times  about discussing family wealth with your children. It can be a complicated subject. The article got me to thinking if I'd taken the best approach with my kids.
 
Many parents we know and work with tend to be reluctant to discuss wealth with their kids. They don't want to crush their child's personal motivations, also known as spoiling the child. Seems reasonable to me. I did the same thing, not really discussing money with our kids out of fear for their future ambitions. In hindsight this seems foolish.
 
I'm a financial adviser. It would seem I should be able to have a discussion that's age-appropriate with my own children. I understand the most important concepts to discuss. It should have been relatively easy for me. Yet I didn't do it.
 
That's about to change. My married son Matt is 29, and my single daughter Alyssa is 26 years old. I think they're ready. Truth is, they've probably been ready for years.
 
According to that NYT article, two-thirds of Americans with $3 million in investable assets haven't discussed wealth with their children, or never will! That's startling. If we can speak with our kids about drugs, alcohol, sex and other sensitive subjects, we should be able to handle speaking about finances.
 
Some parents assume the kids aren't paying attention to signs of wealth. Probably not true. Signs of wealth abound, from the family home, cars, vacations, etc. Kids can use the internet to make some educated guesses. Operating in an information vacuum isn't a good idea.
 
It can be a hard conversation. Where to start? What should we discuss? What are the right incentives? What if I kill my kids' motivations? There are no easy answers. Only the difficult task of getting started. Your kids are ready to handle the discussion at an age-appropriate level.
 
Since I didn't grow up in a wealthy family or with wealthy friends, guess what? We didn't discuss money or wealth. That lack of experience can make it difficult to have the conversation with your own children. But like saving, it's always better to start early. Take it from me.
 
I'd consider finding time soon to have this talk if you haven't yet had it with your children. Start small. Don't reveal everything. Get a sense for their values, motivations, goals, etc. Try to teach them the value of long-term planning.
 
One of my favorite Bill Gates quotes follows: "Most people overestimate what they can do in one year and underestimate what they can do in ten years."
 
Get going.


-John Heldman, CFA


Past performance does not guarantee future results.  Results are presented net of fees and include the reinvestment of all income.  The opinions expressed herein are those of Triad Investment Management, LLC and are subject to change without notice. Consider the investment objectives, risks and expenses before investing. The information in this presentation should not be considered as a recommendation to buy or sell any particular security and should not be considered as investment advice of any kind. You should not assume that any securities discussed in this report are or will be profitable, or that recommendations we make in the future will be profitable or equal the performance of any securities discussed in this presentation. The report is based on data obtained from sources believed to be reliable but is not guaranteed as being accurate and does not purport to be a complete summary of the available data. Recommendations for the past twelve months are available upon request. In addition to clients, partners and employees or their family members may have a position in any securities mentioned herein. Triad Investment Management, LLC is a SEC-registered investment adviser. More information about us is included in our SEC Form ADV Part 2, which is available upon request.  
     

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