The old adage “Money can’t buy happiness” may be true, but it sure can make life a whole lot easier. But trouble can arise when wealthy grow up expecting that most problems can be solved just by writing a check. Here are seven ways the wealthy can help their children with no money changing hands.
Narcissism can be a virtue. While taken to an extreme, narcissism can be dangerous and self defeating, it is true that the rich teach their kids that they are special and are deserving of all the good that comes to them. The wealthy instill confidence in their offspring.
Surround yourself with other wealthy people. Whether it means taking advantage of your school connections or deliberately seeking out other people that are already financially successful, being around money generally leads to you having more opportunities to earn money. Hang out where wealthy people hang out. Join industry associations, learn to play golf, and drink in hotel bars. If you can’t find any wealthy people near you, read books written by successful, wealthy people. Connections help but it’s their knowledge you’re really after.
Invest in what you love. Passion investing allows you to turn a hobby into a fortune. Whether that means investing in vintage guitars or watches, tinkering with cars, or curating a wine cellar, it can be a fun and potentially lucrative way of diversifying a portfolio. Sharing your passion is truly a virtue.
Don’t expect things to just fall into your lap. Building a fortune takes work. So-called self-made millionaires work much longer hours and tend to make sacrifices that other people don’t make.
Spend less, invest more. Set a budget and limit the amount of money you spend on things like Netflix and other entertainment. Billionaires like Bill Gates (despite being born into a wealthy family) are remarkably frugal.
Live like a monk. If you’ve got an allowance, it might be tempting to spend the money on luxury items or fritter it away on bad habits. But if you want your family’s legacy to last beyond your parent’s fortune, it’s time you start acting more responsibly.
Think big. Most wealthy people earned their money by solving (or at least attempting to solve) big problems. Instead of toiling away in a 9-to-5 job working for someone else, they are entrepreneurs that have started their own businesses and are looking to change the world in some meaningful way. Your business role models should be people like Elon Musk, Jeff Bezos, and Steve Jobs. All of them had a vision and went for it.
Lee Sherman is a contributing writer to MyPerfectFinancialAdvisor, the premier matchmaker between investors and advisors. Lee is an experienced journalist and editor with over 30 years of expertise with a significant history of writing in the personal finance and technology arenas.