Adam Taggart: How I'm bringing financial literacy to next-gen family office members

Adam Taggart is the CEO, host and founder of Wealthion, a financial channel on YouTube with over 5 million monthly views. Taggart has worked in business and finance for 30 years and is the author of Prosper! How To Prepare For The Future & Create A World Worth Inheriting.

What led you to start the Wealthion YouTube channel?

I started it two years ago because our education system fails at teaching financial literacy. I was never given a class on how to take out a mortgage, how to create a home budget, estate planning — all the essentials of life. It’s expected that people will figure this out, and a lot of folks don't.

How surprising have you found your status as an influencer?

The average consumers are falling out of love with mainstream media like CNBC because a number of these channels are influenced by advertisers. A lot of important topics just don't get the depth that they deserve. And it seems like no matter what the commentary or the daily news is, it’s always a great time to buy stocks, and that's largely because there's a lot of ETF advertisers for the channel. So consumers are self-educating and seeking other forms of information that they believe provide more authentic, fact-filled, less biased and more in-depth discussions of the key topics they care about.

How financially literate do you think next-gen family office members are?

It varies. There are a few important ways to pass along good financial literacy to your children or improving their odds of becoming good stewards of wealth.

Teach the basics: finance, valuations, due diligence and portfolio management. When the children are relatively young, bring them into some of the discussion about how the family manages its money. It might be an annual meeting where the family is gathering with its team of advisers and reviewing large portfolio decisions. These kids are a fly on the wall, but they're seeing the issues that come up. Gradually, involve them with a nonvoting voice where they're able to develop and express their opinions. Later, make them voters in certain discussions, maybe begin with philanthropy.

The responsibility to manage family wealth has to be earned; it can’t be passed along at an arbitrary age. Skills are best developed by pursuing jobs where children can gain experience making hard decisions and recover from failure, which is how most people learn. You have to push kids out of the nest before bringing them back into the fold.

How have you seen next-gen family office members differentiate their views about wealth management from older generations?

Comfort with digital assets is probably the biggest differentiator, their openness to cryptocurrencies and seeing them as part of a credible part of a portfolio allocation. A number of younger-gen offices who bought early rode some massive gains and are still believers, even given the recent correction. Many of them know where the value lies, and they see an opportunity to buy high-quality crypto assets at good value now.

Younger family offices are also more comfortable viewing real estate as a speculative asset. Older generations would do big real estate investments for a minimum 10 years, maximum forever. The younger generation looks at it as an investment for a certain period with an exit plan.

How do younger generations view their legacies compared to their parents and grandparents?

Younger-generation family office leaders are more likely to have a social mission behind investments rather than seeking the highest ROI. There’s a greater awareness that they can use their money to do good but also as means to a mission and purpose.