I want to teach my kids the value of wealth but they don’t know the value of $1k versus $100k

It’s no surprise that rich people don’t actually comprehend the value of money. But when some finally decide to do something useful with their money, they sometimes have a hard time figuring out what to do and how to teach their children to treat their wealth responsibly. What’s the best way to teach kids the value of wealth?

One person was wondering how he could teach his children not only how to handle money responsibly, but how to use that money to give back to people who need it. He took his concerns to the r/fatFIRE community, a group of people focused on retiring with “a fat stash”, and was looking for help. This is what they said.

The Question

How rich people see money.

Please remember that the information here, and in the original thread, are opinions. You should always speak to a financial expert or a lawyer before making any big financial decision.

The author of the post says that he has two children, ages 11 and 14, who he wants to educate about the value of money and how to give back to the community. He was looking into options for donor-advised funds and was wondering what other members of the community had done, and if they had used DAFs and in what way. He was thinking of putting between $1,000 and $10,000 into the fund for each kid for them to donate to causes that interest them.

He was hoping that this would teach them about the different kinds of interest earnings and develop their sense of managing money and charity. The problem, he says, is that his kids don’t really understand the value of money, how hard it is to earn vast amounts of wealth, and how lucky and privileged they are to have so much money themselves.

The Community Response

A rich kid with too much money.

A few of the people who responded pointed out that using a DAF, while it might be good for giving to charity, isn’t the best tool for teaching children the value of money. Kids might be able to do the math when it comes to money, but truly understanding what it means, how lucky they are to have it, and the true power of money, is an emotional connection that rich people just physically cannot comprehend without having to live in poverty themselves.

Rich kids will always spend money like it grows on trees because, to them, it does. As a result, many commenters related their own failures when trying to teach their children the value of money. On the other hand, none had much advice on the use of a DAF for giving to charity, and it seemed like it was mostly a personal choice on how the author wanted to facilitate his children giving to causes they cared about. The most important thing, of course, was making it as engaging, educational, and as easy as possible.

Some commenters made the process more business-like, including proposals and plans, while others made it more fun and hands-on. Either way, the fund from which the money comes really didn’t matter that much. As long as the money is going to those who need it, that’s the important thing!