Hawthorn: Reflections

A periodic blog on topics that help prepare wealth for families and families for wealth.

March 2021

The Five Most Effective Strategies for Preparing the Next Generation of Inheritors, According to Them.

While preparation of inheritors is as critical as it has ever been, it is nonetheless time to rethink what it means to prepare the next generation for the responsibilities —and opportunities— of wealth.

By: Joline Godfrey, CEO, The Unexpected Table, Author of "Raising Financially Fit Kids"

Covid 19; the renaissance of the social justice movement, climate change, demographic shifts, and warp speed disruptions in technology, agriculture, biotech, and international relations, have turned the very idea of ‘preparing the next generation of inheritors” into an old idea from yesteryear. The inheritors we aim to ‘prepare’ are, these days, often bemused, annoyed, offended—or at the very least puzzled-- by their elders’ aspirations. Kids who’ve grown up communicating by digital device; feeling the impact of the planet’s climate shift; intimately aware of the gaps between rich and poor; demonstrating after the Parkland massacre; and making change in bitcoin--with the potential of sending their own kids to school on Mars or at least the Moon, are, not surprisingly, resistant to the good intentions we may have for how or what to prepare them for when it comes to the future.

While preparation of inheritors is as critical as it has ever been, it is nonetheless time to rethink what it means to prepare the next generation for the responsibilities—and opportunities-- of wealth.

What are the supports and resources they need to live resilient, adaptive, sustainable lives over the next 50, 75, 100+ years? Let’s remember there are more than a few Silicon Valley titans looking for the “God Pill” to assure extreme longevity; and even without that kind of magical miracle, people under 21 have access to food, nutrients, information, and treatments which may in fact extend their lives significantly, leaving them open to almost unimaginable transformations in the nature of the world—as well as vulnerable to the consequences of longer lives.

With this radically different context in mind, we’ve gathered the input of young inheritors who’ve offered up their own ideas for what will be helpful, organized as four strategies that are a composite of their views and concerns.

1. Help them prepare themselves.

One irony of this generation is that many were raised by helicopter parents who did everything for them--while providing  opportunities few generations have enjoyed. Whether it was a summer at coding camp, a hike through Spain, or an internship on a marine biology project, these kids have seen more, traveled more, experienced more than most of us.

It’s not that they’re not competent to be responsible inheritors, it’s that they’ve not needed to be. Surrounded by family office staff and an assortment of coaches and experts, many of life’s annoyances were smoothed over for them. We all have stories of kids who, when their car breaks down, call Uber to pick them up and mom to get the car towed. And as finance turned into a matter of delegating financial management to algorithms and managing a budget became as simple as charging goods and services to a credit card someone else paid, the NEED to develop financial skills began to fade away. This left many inheritors with diminished economic self-defense skills and fewer opportunities to acquire the very competencies we want them to exercise. As one 16-year-old put it, “my mother keeps a spread sheet for everything; she TELLS me what I spend, but I don’t actually understand it myself.”

This unintended consequence of being a loving parent or grandparent is not irreparable—but changing habits to let--indeed require—young inheritors to gain new skills will take courage and fortitude. Giving them responsibilities that matter (leadership opportunities and bottom-line knowledge); holding them accountable and allowing them to fail—and try again; resisting the temptation to make them happy instead of masterful—these are the tasks that help young beneficiaries develop resilience and new competencies. Encouraging them to do hard things is how we prepare them to do hard things.

2. Listen and co-create.

There are few things more debilitating than the words, “I told you so.” Being right about someone’s idea, life path, or passions, doesn’t make us wise; it just makes us judgmental and mean. The next generation needs collaborators who will join with them as mentors and co-conspirators.

The rise of the phrase, “OK, Boomer,” (was that just a couple of years ago?) may have felt unjustified. But it was pushback for the dismissal next gens experienced from adults who, many feel, have left them with the mess of extreme environmental change; institutional injustice and racism; economic disparity and more.

Readying families for the future will take the collective genius of the entire family—across generation and cultures. Including those inheritors--in plans, brainstorms and planning for the future is one way to get access to their knowledge—while giving them exposure to the wisdom of their elders.

“Getting my parents to be transparent about our financial priorities is impossible,“ one college student told us. “I know they think I’m going to judge--and that I’m too inexperienced to understand their decisions. But I am not stupid; their defensiveness is a problem. I don’t know how to get into the conversation about family philanthropy, social impact, or investing in a meaningful way!”

3. Start young; or start now.

Economic understanding is a developmental life task, a set of life skills that evolve and grow over time. You would not expect a 16-year-old to perform at the symphony if they’d not learned to read music as a young child and had not spent years of afternoons practicing. You would not send a kid to play against Rafael Nadal had they not had years of practice and coaches to help them master keystrokes and physical prowess. The accumulation of economic skills for a young beneficiary is the same—and the 10,000 hours Malcolm Gladwell told us was required to master a skill hardly scratches the surface when it comes to preparing inheritors.[1] This is what the developmental skill map for financial fluency looks like:

Ages 5-8

Social/Emotional Development

  • Curious, easily short attention span
  • High-energy, active, learns experientially
  • Needs rest periods with alternating active/quiet time
  • Concept of fairness important

Appropriate Money Skills

  • Can count coins and bills
  • Understand value and purpose of money (spend, save, impact)
  • Differentiate between wants & needs
  • Have developing sense of ethics

Actions for Growth

  • Sort & count bills and change
  • Arrange group philanthropic activity (buy a new ball for a homeless shelter, etc.)
  • Organize a bartering day (bring a toy to trade)

Ages 9-12

Social/Emotional Development

  • Growing fast, body changing, self-conscious
  • Begin self-expression and independence
  • Developing social conscience
  • Early awareness of hobbies & careers
  • Strong identity with peers

Appropriate Money Skills

  • Can make change
  • Shows initiative and entrepreneurial spirit
  • Aware of cost of things
  • Aware of earned money
  • Can balance checkbook, keep up with savings account

Actions for Growth

  • Collaborate on buying stock in a company they have connection with…
  • Visit the bank to open checking & savings account.
  • Encourage discussion of saving for college, trips, etc.
  • Use failures as learning experiences

Ages 13-15

Social/Emotional Development

  • Focus primarily on the present, have a vague sense of the future
  • Egocentric, self-conscious, and anxious about personal behavior
  • Begins to think independently
  • Conforms to peer group norms and behaviors
  • Highly experimental phase, try different roles

Appropriate Money Skills

  • Commit to saving goals
  • Begin to earn money, initiate small ventures
  • Develop basic understanding of investment
  • Connect money and future
  • Understand philanthropy
  • Understand interest and dividends

Actions for Growth

  • Create group project that requires fundraising for future event/purchase
  • Establish savings goal/strategy
  • Run mock investments
  • Establish mentoring relationships

Ages 16-18

Social/Emotional Development

  • Have increased capacity for logical thought and planning
  • Preoccupied with acceptance by peer group
  • Experimenting with independence
  • Confront serious decisions about life
  • Less likely to take big risks related to academic and career achievement.

Appropriate Money Skills

  • Actively save, spend, invest
  • Connect goals and saving
  • Develop discipline
  • Experience responsibility for others and self
  • Able to talk about money and plan future
  • Developing capacity for economic self-sufficiency

Actions for Growth

  • Encourage personal life/money plans
  • Introduce broad career options
  • Encourage investment clubs
  • Encourage entrepreneurial activity, experiments
  • Help set up a giving circle
  • Start ‘annual plan’ tradition

©Joline Godfrey 2019 all rights reserved.

But what if you haven’t started on a map like this? Like learning a new language, the task is harder as we age. But that just calls for greater focus and more practice, not an abandonment of effort.

Lifelong learning is a responsibility of the whole family—not just young inheritors. Learn with your beneficiaries, beside them and as role models. Engage because it is a great way to share life; not because it is an odious task to be endured.

Among the most avid learners we see are those kids who were eager to start a lemonade stand as a 10-year-old…but whose seeming lack of interest later was more a case of failed focus among the grown-ups than lost interest for the kids.

4. Experience, not sermons.

Too often we seek that ‘expert’ who will spend an afternoon explaining economics, beneficiary responsibilities and money management skills to kids. As though that’s remotely possible.  Can the explanations and the afternoon lessons. Ask the 16-year-old to buy the car. Give the family vacation budget to the 12-year-old. Tell your college student you’ll help fund a new theater for the college if they’ll sit on the finance committee and learn how to manage the finances of the building project. Get inventive about what it means to help young inheritors get intimate with what they are inheriting.

Kids learn to swim by swimming, not listening to you tell them how to swim. They learn how to climb mountains by climbing mountains and master the art of baking bread by baking bread. Preparing young inheritors calls for preparation with an eye to the year 2200—which some of them will live to see. It is a process that  starts young, is experiential, intentional—and inventive. At the Institute for Family Success we are creating new approaches to developing young inheritors and we’d love to hear from you—with your stories of success—and stories of your needs.

More to come,


About Joline

Joline Godfrey is CEO, The Unexpected Table, and author of "Raising Financially Fit Kids". She is part of the Hawthorn Institute for Family Success℠, which is dedicated to preparing families for their wealth. In this capacity, Joline develops and delivers a series of products and services for nurturing financially mindful children and thriving families.

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  1. Gladwell, Malcolm (2008). Outliers. Little, Brown and Company. ISBN 978-0-316-01792-3

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