How to Raise Great Kids and Create Generational Family Wealth, with Keith Whitaker
How do you raise confident, successful, happy children who use their uniqueness to contribute the most in the world? What kind of family leadership do you need, so that you build strong families? And what is the secret to generational family wealth, really?
Parenting is one of the most complex tasks we will ever face. It can feel like a mountain of skills our kids need to gain—everything from arithmetic to writing essays to public speaking to driving to finding their passion, choosing a college, a career, and a mate, to making and managing money, and eventually raising their own family.
Families with money have compounded challenges. That’s because, often, the rising generation is overlooked, falling into the shadow of silence.
We’re talking with Keith Whitaker, an educator who consults with leaders and rising generation members of enterprising families. The last time we had him on the show we discussed his book Complete Family Wealth.
Today we’re exploring the question: how do I parent well and teach my children to become wise stewards of wealth, so that money doesn’t corrupt them?
So, if you want to help your children to make good decisions as they decide on a college major, choose a career path, find a partner, parent their own children, use and make money, and ultimately serve as the bridge to connect families across generations, you need to hear this one thing. Tune in now!
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Table of contents
Generational Family Wealth: Qualitative Wealth
There’s quantitative wealth, and then there’s qualitative. The former is money—what most people think of as wealth. However, when looking at a unit, in the context of generational family wealth, it’s critical to examine qualitative wealth. In other words, we must consider “human capital” as a part of the family’s wealth.
Human capital is comprised of personal strengths, passions, and skills that every human possesses. Knowing and fostering human capital as a part of the family wealth system is crucial. This is what helps our children to become well-rounded, capable, and confident people. People who can thrive and carry on the family legacy, for true generational family wealth.
So how do parents help their children grow their human capital?
[5:28] “Even though the context is family, the focus is on individuals, and that goes back to another principle we have. Our own thinking about family wealth is that really great families or healthy families are made up of great or healthy individuals. So sometimes, especially in the context of large financial wealth, people have a tendency to focus on the family. Having a hundred-year family plan, having a hundred-year constitution, talking about family values–-all of those things are important, but they really pale in comparison to the importance of helping each individual in that family grow and be as healthy as strong, as confident in him or herself as can be.”
Without fostering individual confidence and capability, you can have all of the documents and mission statements in the world, and they will simply be words. You must raise children who feel heard, and can develop their own unique abilities in a way that serves the family’s greater purpose.
Keith suggests you ask yourself what good parenting is? This question is important regardless of wealth because every family involves parenting. Only then can you layer on the aspects of parenting with wealth involved.
The foundation of this conversation is good parenting, and what that looks like to you. Then you can introduce special considerations that come with significant wealth. These components combined allow you to raise children who are confident and capable. And, they can also understand the context of generational family wealth.
The Three Stages of Life
Once you’ve considered your parenting style, you must adapt to your children’s needs. Keith breaks down the stages of life into three major categories—each having different needs. First, you have your young children, from infancy to about eleven years old. Then, you have children from twelve to twenty, in the prime of their school-years. Finally, you have people twenty-one and older.
The first stage, parents are the major influence. Children in this stage use their parents as their primary example for behavior. At the middle stage, children begin to develop more tightly knit friendships, and their circle widens. People at this stage are firmly in their schooling years, and they have more mentors in their lives. Then, you have children who are 21 and up—they’re leaving school and entering the workforce. This is the time where children become adults, and start shaping their own lives, and building families. It’s the epic journey stage.
Throughout these stages, parents must navigate verbal communication–what you tell kids to do—and non-verbal communication, which is what you teach through example. For younger children, those behavioral, non-verbal communications are the MOST important. Young children watch you closely, and they pick up habits and behaviors from you at this stage.
Communicating with Your Children
This is an important time to ask yourself: do your actions line up with the things that you say and are trying to teach to your children?
For the middle group, verbal communications are more important. However, you also have less of your children’s time and attention, so you must be more strategic. Spend more time, at this stage, being intentional with what you say to your children.
Above all, it’s important that your actions and words truly align with the values you say are important to you. For example, if acts of service are your greatest value, acting in alignment with that is crucial. It’s how you teach your children what it means to be of service to others. The words you speak will also have a profound impact.
So while it’s great to outline your values in words, as a point of reference, it’s even more important to live and speak in accordance with those values. Especially in your darkest hours. This is what your children will learn from you, after all.
Understanding Your Children
Your children, while able to learn and adopt habits, also have their own God-given nature, or disposition. Recognizing that your child is an independent person with their own nature can help you better connect with and understand them. This is especially true if their nature is much different from yours. All children are different. And knowing your child’s nature can help you instill the right habits for success in your child.
Habits are learned through imitation. Therefore, the things that you do tend to have a larger effect on your children than the things you say. If you want to model good personal grooming, better eating habits, or foster a love of reading—doing those things yourself will go a long way. Your children will pick up some of your habits through imitation, so being aware of what you project is important.
Next to action, speech is the weakest cause of action. We tend to over-focus on speech—in other words, what we tell our children to do or value. This, however, is the weakest compulsion to take action. Of course, words become more important as your child ages. The key is for your actions and words to match; your children will notice.
Nature and habit together inform what your children do, and how they do things. The secret is to understand your children and who they are, and to develop habits in alignment with your own values that your children can pick up.
Examining Your Ideas About Money
In the context of wealth, what you say and do will rub off on your children. In order to impart the wisdom of wealth that you have to your children, it’s crucial to recognize your own story about money. Do the deep internal work of understanding the factors that are driving your words and actions around money so that you can project the right messages and habits to your children.
This means addressing your fears about money, fixing your relationship to money, and being very careful how you talk about it in front of your family. A scarcity mindset can even extend to non-financial topics, so practice abundance in all things.
The Family Business
Many families of means have aspirations for their children to join the family business one day. Keith shares an interesting insight about his approach with his family and those he consults. He shares that it’s important to give children their own time before pulling them into the fold of the family business.
In other words, let them make their own way for a while. If you were hiring outside the family, you’d likely be seeking someone with experience. Give your children the same leeway. First, this ensures that they can develop a sense of self outside of the family business. They’ll learn more about who they are and what they want outside of the family business for the first 3-5 years of their career. Then, if they do choose to join the family business, they can come back into the family fold with confidence and certainty that they’re a good fit for the job.
This is much better all-around for children–it eliminates entitlement and also lets children know that they are still of value if they choose a different path. This also gives your children the space to learn how to make it on their own. This is knowledge that can only help them.
Generational Family Wealth: The Voice of the Rising Generation
When wealth is involved, how do you keep from overshadowing your children? This is what Keith Whitaker addresses in his book, The Voice of the Rising Generation.
It’s important to recognize that significant wealth can have a silencing effect on children. “He who has the gold, rules.” Kids know and learn this principle, and as a parent, it is important to know that the power that comes with your money can be overpowering for your children. Simply knowing and acknowledging this fact can help you better connect with your children, and give them a voice.
Children can also feel overwhelmed by the public image of their families.
This silencing effect of both money and power can make children feel like they don’t deserve their own dreams, or as if they don’t matter.
Your Hopes vs. Their Hopes
Additionally, as natural as it is to have hopes and dreams for your children, it’s important to understand that they are YOUR hopes. You children will likely have different hopes and dreams for their life.
Sometimes the children that seem to be the “drifters” tend to be those who have had their parents’ hopes more strictly imposed on them.
Holding your hopes for your children too closely can keep them from realizing their own dreams, or silence them. Most children who endure this type of parenting style tend to be the most passive and directionless. They lack a strong sense of identity.
Holding yourself back can be hard, but as a parent, it’s important to give your children the room to be themselves. As you build generational family wealth, remember your human capital. At the end of the day, this is most important.
Connect with Keith:
- Wise Counsel Research
About Keith Whitaker
Keith is an educator who consults with leaders and rising generation members of enterprising families. Family Wealth Report named Keith the 2015 outstanding contributor to wealth management thought-leadership. Keith’s writings and commentary have appeared in The Wall Street Journal, The New York Times, and The Financial Times. He is the co-author of Wealth and the Will of God, The Cycle of the Gift, The Voice of the Rising Generation, Family Trusts, Complete Family Wealth, and Wealth of Wisdom: the Top 50 Questions Wealthy Families Ask. Keith has served as a Managing Director at Wells Fargo Family Wealth, an adjunct professor of management at Vanderbilt University, and an adjunct assistant professor of philosophy at Boston College. Keith holds a Ph.D. in Social Thought from the University of Chicago and a BA and MA in Classics and Philosophy from Boston University.
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