What does it mean to be wealthy? Americans have a broad range of views. Perhaps that's because many families don't talk about wealth.
A new study from Fidelity Investments finds a low level of comfort about discussing family finances, with a majority of Americans saying their parents never discussed money with them and wishing they had. The study also identified a positive shift among parents today who say it is important to talk to children about the subject.
“Financial planning is often a deeply personal experience, so it’s no surprise people have historically been uncomfortable talking about it,” Rich Compson, head of wealth solutions at Fidelity Investments, said in a statement. “However, it’s important to start talking about family finances early to ensure the next generation is prepared, especially as life becomes more complicated.”
Compson said he and his colleagues often see families putting these critical discussions until a crisis occurs, which results in increasingly difficult conversations and decisions.
Fidelity’s research examined how Americans are faring on building their wealth. The findings are based to a sample of 1,200 general-population adult respondents in the U.S. and 700 high-net-worth individuals with $1 million or more in savings and investable assets, not including real estate or retirement funds. A third-party market research firm conducted interviews in August.
The survey results showed that one reason many Americans may consider money to be a taboo subject is that most people accumulate wealth on their own. Eighty percent of respondents said they had self-made wealth, with only 5% saying they inherited it.
Fidelity said this could help explain why many people, especially older Americans, are often reluctant to engage their family in financial planning. In fact, one third of baby boomers in the survey did not see the need for a financial plan — the most of any generation.
See the gallery for key findings from the study.
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