Rupert Lee-Browne, the chairman and CEO of Caxton, a payments fintech company, founded in 2002, emphasizes the importance of teaching financial literacy to children in wealthy families. He believes that discussions around inheritance should go beyond tax and legal matters and include emotional and psychological aspects. Lee-Browne suggests that heirs need to be equipped with the skills and knowledge to manage their legacies with confidence in the long run.
One tip Lee-Browne offers is separating the familiar from the financial by providing children with an allowance and opportunities to earn money on their own. This helps instill a sense of personal responsibility for their financial well-being. He also recommends setting out a succession plan to prepare children for receiving an inheritance and avoid ambiguity or tension among family members. Communication and explanation of decisions play a key role in this process.
Parents are encouraged to serve as financial role models for their children by demonstrating positive habits like budgeting and investing. Talking openly about family wealth and the source of money can help children understand their financial heritage and empower them to take responsibility. Lee-Browne emphasizes the importance of embracing a positive mindset and taking an active approach when it comes to managing wealth.
It’s essential for children to understand the concept of calculated risks, investment horizons, and the willingness to make mistakes in pursuit of financial goals. By educating children about financial matters and giving them the confidence to make informed decisions, they will be better prepared to manage their inheritance effectively. Lee-Browne believes that open communication, education, and empowerment are key elements in ensuring a smooth transition of wealth to the next generation.
Overall, Lee-Browne’s advice focuses on the importance of teaching children how to manage wealth responsibly and prepare them for the challenges that come with inheritance. By starting early and having open conversations about money, parents can help their children develop the skills and knowledge needed to handle financial matters with confidence. This proactive approach can help prevent potential issues and ensure a successful transfer of wealth from one generation to the next.
