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How to Talk to Your Family About Money

AngelaRoberts

Written by Angela Roberts

Jun 10, 2021

As a parent, I know how crazy things can get at home. Between team sports, individual sports, various recitals, homework, chores, and a million other things, it’s hard to find time to sit down with family and just talk. But let me ask you: When was the last time you spoke with your family about finances and money?

In an article published on May 3, 2021, CNBC reported that wealthy families “could face combined tax rates of as much as 61% on inherited wealth,” according to a recent analysis of President Biden’s tax plan. Another article published by CNBC on May 27, 2021, pointed out that the proposed plan could, if you make enough money, result in your heirs “[digging] through decades worth of documents to figure out what they owe Uncle Sam.”

Generational wealth isn’t always an easy topic to discuss with your family. Trust me—I have seven children of varying ages, each with a unique level of understanding and experience when it comes to money. But it’s an important discussion to have. If we don’t discuss things or plan ahead, the results can be catastrophic—both in terms of the legacy we want to leave behind and in our family members’ relationships with one another, and just as important, in their own families. In 2018, The Harris Poll conducted a survey of adults who were married or in a serious relationship. Respondents said that money caused the most stress on their relationships, and adults age 18-54 were almost twice as likely to cite money as their top stressor compared to adults age 55 and over.

With that in mind, I’d like to take this week’s Gold News & Views to discuss one of the hardest things a parent can do: speak with our children about what happens when we’re gone.

 

As a parent, I believe that it’s my responsibility to help guide my children toward a better future.

Naturally, every parent wants a better life for their children. But unfortunately, working hard and saving well may not be enough to guarantee this. According to a February 21, 2018, article by MarketWatch, a 20-year study was conducted by The Williams Group, a firm that works with families struggling with wealth transfer. This study looked at why 70% of affluent families eventually lose their assets and see family relationships disintegrate. The study found three important factors that affect whether family assets are retained:

  • Whether families have “meaningful, productive, and honest conversations about the impact of money”
  • Whether heirs “…understood basic personal finance or knew their role in the estate plan”
  • Whether families have “a shared understanding of the purpose of wealth”

 

Protecting your children’s future sometimes means having hard conversations.

Looking at these factors, it becomes clear that speaking to your children or grandchildren about wealth in general, as well as its purpose in their lives, is essential. And more than just talking at them, it’s important that we talk with our children, ensuring that they understand. It’s not an easy task; according to a 2014 article by The New York Times, there are entire symposiums—like the Tiger21 investment group’s “Successful Multigenerational Families”—dedicated to helping wealthy Americans with this exact issue.

But I believe that through patience and love, we can help our children understand the importance of preserving their legacy—no matter the size or amount—and teach them some of the fundamentals that will help them achieve this goal.

For example, if you plan on leaving a golden legacy behind in the form of physical gold or a precious metals IRA, you may need to speak to your children about the benefits of owning gold, as well as your own motivations for owning it in the first place. This may encourage your heirs to do the same and use that gold to diversify their own portfolios. After all, gold’s true power lies in long-term profit potential. And who knows? Perhaps the precious metals you buy today could become a golden legacy that lasts for generations.

 

Make sure your children understand the power of precious metals and the importance of a balanced portfolio.

Another important point to discuss is that not all wealth is equal. While your family may be tempted to take your hard-earned savings and immediately turn it into cash, that may do them more harm than good in the long run. The dollar continues to fall, and paper money simply doesn’t compare to gold when it comes to retaining its buying power over time. Diversification is key to maintaining (and hopefully growing) the legacy you leave behind.

I know that it doesn’t always feel like the right time to have these hard conversations. But there’s no telling what the future may hold or how these new proposed tax rules may affect your ability to pass your wealth on to your children. So do yourself a favor and set some time aside to talk to your children about money—what it’s for, how to manage it, and how to make the most of the legacy you plan to leave behind.

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