Some investors don't tell their children their net worth, concerned how it will affect them, while others think it is beneficial that children know in order to understand family financial decisions.
The question may come from a child, to a mother or father, in the form of “How much money do you have?”
Unbeknownst to the child, it is a question about net worth, and investors have varying views about answering that question.
Spectrem’s Millionaire Corner surveyed more than 1,000 affluent investors, asking them if and when they told their children about their net worth. The answers range from a very young age to never, and the reasons for the decisions were wide-ranging as well.
The overall answer to the question “Do you tell your kids about your net worth?” is “no.” Almost two-thirds (62 percent) of affluent investors said they did not tell their children about their net worth, ever.
The investors were segmented by several different factors, and one of the factors was the level of net worth, with those with less net worth being less likely to tell their children. While only 55 percent of invertors with a net worth over $5 million refused to tell their children their net worth, 66 percent of those with a net worth between $100,000 and $500,000 said “I’m not telling”.
The net worth values were Not Including Primary Residence.
Business owners were most demonstrably against the idea of telling their kids about net worth. Seventh-five percent of business owners said they did not tell their kids about their financial situation.
Investors are apparently protective of their financial bottom line. Exactly one-third of the investors said their personal net worth is “none of their business’ when asked why they did not tell their children about their net worth. Fifteen percent said the children were not interested, but 14 percent said they were concerned how the information would affect their children. That was especially true of the investors with a net worth over $5 million; 33 percent said they were concerned about how the information would affect their children’s lives.
Nine percent of investors said they did not want their children sharing the information with others, and 8 percent said their children were not responsible enough to handle the information properly.
Of the 38 percent of investors who did tell their children about their net worth, 61 percent said they did so in case something drastic happened to the investor. Fifty-six percent said they wanted their children to understand the implications of various financial decisions made in the household, including those related to college and other large expenses.
Forty-five percent said they wanted to teach their children financial matter such as saving for the future, and 42 percent said they wanted their children to have an appreciation of the cost of things, a choice made more by those with less wealth than those with greater wealth.
Age of the children is also a clear factor in the decision to tell them about the family’s met worth. More than 50 percent said they gave their children the information about the family’s net worth when they were 21 or older.
Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.
In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.
McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.
McDill is the father of four children, and an active fan of soccer, Jimmy Buffett and all things Disney.