Reply to When do you tell kids about family money?

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[quote=Anonymous]My only child, a 20-something, will eventually inherit 8 figures, and knows it.  It seems to make no difference to his career planning or amibitions, as he knows that the timing of any such inheritance is totally uncertain.  He also knows that a large net worth presently can diminish considerably in the future if his parents' long-term care needs so demand, and/or if the markets fail to live up to their historical promise.  He is successfully making his own way in the world, and any inheritance will just be a bonus if and when it arrives on his doorstep.

That said, we have prepared him for adulthood in part by educating him all along about personal finance and investing, so he can sensibly and prudently manage his own financial affairs as well as, incidentally and unspoken, any money he may inherit in the future.  He understands the benefits of risk management, of delayed gratification, of the time value of money, and other key financial concepts.  He manages his own currently far more modest investments, including taxable and tax-free accounts, and his 401(k).  He understands the potential value and risk of owning his employer's stock, and the benefits of buying such stock at a discount through an employee stock ownership program.

Preparing childrent to manage their own money prepares them to manage windfalls too, as long as they are grounded, not impulsive, and not susceptible to advice and requests from outsiders not worthy of their confidence.  Knowing how to identify such outsiders is also part of a responsible parental education.  [/quote]

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