America's wealthiest are becoming increasingly concerned about their kids' financial future as millions of Gen Z employees face job losses due to fierce competition and artificial intelligence reshaping the economy.
Many wealthy individuals are not immune to the impact of AI on the job market and have the same concerns as other sections of society- Will their kids be able to get a job and sustain themselves?
Billionaires Concerned About Their Gen Z Kids
Tom Thiegs, managing director of leadership and legacy at Ascent Private Capital Management with U.S. Bank, revealed to Fortune that while billionaires “have the financial resources to support their children, but they sometimes struggle to determine what else is needed for their children to succeed.”
The main problem is not that they won't be able to financially support their kids; for many high-net-worth individuals, the concern is that their offspring will not have the same sense of fulfilment and career outcomes as previous generations. They are also worried that a sense of entitlement and having a large fortune could hamper the kids' desire to work.
“They're not usually worried about the financial security of their children; rather, they worry that the job market will impact their child's sense of purpose, identity, and confidence,” Thiegs revealed.
What's Happening In The Job Market?
The job market in the United States is currently tough for young people in general, with the unemployment rate for recent college graduates reaching 9.7% in September, according to Federal Reserve Data. Last year was the weakest hiring year in the country since 2009, excluding the pandemic-affected year of 2020, as per the US Bureau of Labor Statistics.
Some have blamed AI as a potential reason. Other experts have cited economic uncertainty, rising living and housing costs and established workers clinging to their jobs as the causes, according to CNBC.
Facing mass layoffs and anxiety about artificial intelligence, many young workers are opting for employment that offers more control or faster cash, including blue-collar jobs in manufacturing and nanny and tutor roles. Many are also prioritising work-life balance, learning and personal fulfilment.
What This Means For Parents
The current scenario means that billionaires and high-net-worth individuals have to undertake financial planning in a different manner compared to the past.
Trent Von Ahsen, a certified financial planner and managing partner at Cedar Point Capital Partners, told Fortune that ultra-high net worth families see today's job market risks in terms of whether they are over-supporting their kids. He added that right now, the emphasis is on designing plans that move “toward providing opportunity without removing initiative".
“We see more emphasis on education funding flexibility, mentorship, and phased wealth transfers,” he explained.
As the job market continues to remain uncertain, high-net-worth individuals are now looking to redesign their plans to leave their kids with a better future.
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