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  • Tag: Children and Money

    Are your adult children financially astute?

    Adult children of wealthy families are not prepared to handle wealth. That is one of the most common concerns among Newport Private Wealth’s hundreds of wealthy clients. Wealthy baby boomers are moving into their golden years, planning for the succession of assets and realizing their adult children don’t have the necessary skills to effectively manage wealth.

    A U.S. Trust study last year confirmed that very few high net worth individuals believe their children would be mature enough to handle wealth before the age of 25 and more than a quarter think they won’t be ready before the age of 40. (1)

    Why is this so? Financial planning, risk vs. return, asset allocation, budgeting and tax minimization aren’t concepts that are taught in our schools and universities. Discussing the family’s wealth isn’t something most families raise at the dinner table. Yet, ironically, parents want to ensure their children, as heirs, (1) don’t squander inherited wealth; and (2) don’t lose sight of family values because of it. [read more >>]

    Passing wealth on now, later, ever?

    Today’s Globe & Mail High Net Worth section featured Newport Private Wealth in a piece by journalist Paul Brent entitled Don’t let your money spoil the kids.

    It deals with the issues, desires, opportunities and complications of wealthy baby boomers assisting their offspring financially — a subject that’s near and dear to our hearts and on which several of our colleagues have blogged. You can also read David Lloyd’s post on Catalyst Funding and Kevin Dean’s Engaging the Next Generation.

    For high net worth families concerned about preparing the next generation for responsible wealth management, remember that we offer an educational program for young adults, NextWave. Contact Caitlin Lloyd or Kevin Dean to learn more.

    Engaging the next generation

    At the end of November we held our launch event for NextWave, Newport Private Wealth’s initiative for young adults to help them become better equipped at managing wealth.

    We had a tremendous turnout with over 40 young adults in attendance for an evening of networking and a brief introduction to the concept of NextWave, as well as introductory topics that will lead into our future events. Feedback from attendees was enthusiastic: “These are exactly the kinds of questions I have but I don’t know who to talk to” and “I was so happy that I actually understood what you were talking about because I feel totally underprepared when it comes to financials”.

    The feedback confirmed our belief that there is a strong desire to learn. Young adults want to take more responsibility, but with little in hard financial assets early in their careers they feel like they don’t have access to qualified individuals to discuss their concerns. [read more >>]

    Values based wealth management

    Earlier this month, we hosted another in our series of Inside the Tent events for clients and friends. This time the topic was personal: Net worth. Self worth. What values will you pass on?

    How do we make sure our money doesn’t mess up our family?

    How much financial support should we give our kids?

    How do we create a sense of generosity and not entitlement?

    [read more >>]

    The top 10 things our children should know about money

    savings money piggy5 The top 10 things our children should know about moneyMany of my clients have adult children graduating from university and starting a new career. For many it’s the first time they have had to manage finances and plan for the longer term. Now is the time to establish good habits and attitudes that will last a lifetime. Here is my list of the top 10 things I advise young adults to do if they want to build a healthy and successful relationship with money:

    1. Write down your values and goals. You may draw some blanks at first, but these should be your guiding principles. Then work hard to make them happen.
    2. Earn all you can, save all you can and give what you can.
    3. Avoid credit cards until you have a full time job to pay off balances in full each month.
    4. Pay off student loans, credit cards and any other debt on which the interest is not tax deductible.
    5. Contribute to an RRSP early and often. You can’t beat the value of tax deferred compounding.
    6. If you’ve maxed out RRSPs, contribute to a TFSA and invest what you can. If you save and invest your money, you can’t spend it.
    7. If you need a car, buy a used one. It’s a depreciating asset that won’t help you build wealth.
    8. In everything you buy, buy quality, not brand.
    9. Don’t buy a house or condo until you can really afford it.
    10. Be ambitious and courageous; there is no such thing as failure; it’s just experience.

     

    Does wealth breed selfishness?

    iStock 000014940915Medium squirel 20Apr1 Does wealth breed selfishness?A guest blog by Dr. Julie A. Morton.

    Provocative new research at the University of California, Berkley, suggests that those of means ARE different from their more humble brethren, and NOT in ways that would make one proud.  According to studies conducted by social psychologist Paul Piff and his university colleagues, wealthy individuals are more likely to LIE, to CHEAT and to STEAL then their less fortunate counterparts. They are even more likely to do things as mundane as cutting off other drivers and refusing to wait for pedestrians at crosswalks.

    The research points to a number of reasons, but three stand out: [read more >>]

    Adult Children Returning to the Nest

    Many of our clients are justifiably concerned for the future welfare of their children. Some are torn between letting children find their own way and accepting that it is, and will likely continue to be, tougher for our kids than we had it. Finding a job, affording to buy a home, uncertainty surrounding government services, caring for an aging demographic and responsibility for an enormous debt burden for which they did not incur, are steep hurdles we did not have to overcome.

    One issue facing boomers today is adult children moving back into the family home, indefinitely. So what are some of the issues and practical steps to make sure this family reunion doesn’t turn out to be a like All in the Family (aka Archie Bunker and family)? [read more >>]