By Lisa Nam

One of the most dreaded questions our Wealth Management clients get asked by their children is, “Are we rich?” To a child, this seems like a simple question, but for adults, the answer is much more complicated. Children are not seeking a number; they are trying to understand their own identity and place in the world. This question can stem from comparisons with peers or recognizing signs of affluence that create emotional or cognitive dissonance.

When children ask this question, it is an opportunity for engagement and values-based education.

Financial education starts early and needs to be intentional

Financial education is a lifelong process, beginning in childhood. For children in affluent communities, basic financial skills can be elusive due to plentiful resources and met needs. It will be up to parents to create teachable moments. This can include encouraging children to consider opportunity costs, holding them accountable for earning income to finance “wants” or providing opportunities to understand economic privilege. Parents may need to guide children into the responsibilities of wealth with intentional learning plans, which can feel daunting.

One simple exercise can help start this journey. Ask yourself: “What behaviors do I see in my children regarding money and wealth?” or “What do I mean when I tell my children that they will be well taken care of?” These questions can open up opportunities for children to learn from behaviors from you and others. Early wealth education aims to proactively communicate healthy and purposeful money messages, preventing children from forming their wealth identity through external influences.

Gentle disruption can be productive

Families are emotional systems made up of interdependent, yet independent individuals, often leading to communication challenges. Family members may rely on non-verbal cues forcing them to attempt to read the minds of one another. This can result in misunderstandings, false assumptions and misdirected expectations, especially regarding sensitive topics like money and wealth.

The first step to disrupting this invisible script is to commit to building a culture of clarity through open and curious communication. To avoid breakdowns, family members may need to proactively engage with each other and avoid mind reading. Parents should be clear about their intentions, money values and expectations. Additionally, children must be encouraged to ask questions instead of making assumptions. As they age, they need to take responsibility for their financial lives and be prepared for “tough love” instead of a financial infusion.

Nurturing stewards requires more than financial literacy

Introducing a learning roadmap for the family can help build a lifetime of financial skills. Research shows that successfully integrating wealth into one’s identity requires both “external” and “internal” competencies.¹ At J.P. Morgan Wealth Management, we have created the 10x10 Learning Roadmap, a proprietary framework focused on developing core competencies throughout the learning journey.² “External competencies” involve managing finances confidently, while “internal competencies” include emotional and social abilities needed for life’s transitions.

The learning journey can start as early as age 5, beginning with basic financial skills and gradually expanding. As learners progress, they will address questions like, “How does my family’s wealth serve greater purposes?” or “What does it mean to share in my family's prosperity and act as a steward of our wealth?" Success in a learning program is marked by learners developing a healthy view of themselves in relation to their family’s wealth, and assuming responsibilities as thoughtful stewards.

Parents need to empower children by providing these types of roadmaps, educational tools and financial management resources, and by building a relationship with the family’s wealth. This involves helping children know who they are and establishing shared values. It also means having open discussions about the family's unique privilege to create impact in their lives and the community.

Children who participate in stewarding family wealth are better positioned to create their own impact. With the right preparation, they can embrace responsibilities to be generous, create their own wealth and use their talents to add value to the world. This process continues as children age, become parents and develop governance and family enterprise skills to pass along their financial knowledge to the next generation.

We can help

Many families struggle to begin the learning journey, or start difficult conversations. Facilitation by your trusted J.P. Morgan advisor can be the "gentle disruption” needed to overcome family dynamics.

A third-party facilitator can foster a constructive environment where family members take the process seriously, engage in meaningful self-reflection, and are open to sharing and receiving feedback. This reduces reliance on mind reading, and clarifies shared values that support the continued growth of the family wealth over generations.