Wealthy leaders share financial advice they gave their kids: Invest early, learn from failure — and think carefully about inheritance
Entrepreneur Eric Malka had to completely shift his mindset when he sold his company and became an investor. Since then he's learned many lessons he's now passing to his kids.
When The Art of Shaving — which Malka and his wife Myriam Zaoui founded in 1996 — was bought by Procter & Gamble for a reported $60 million in 2009, Malka realized he needed to educate himself.
«When an entrepreneur like me is lucky enough to have a liquidity event, then we're faced … with managing assets without proper training,» he told CNBC by video call. Investors must focus on being patient and on long-term returns, whereas company founders often look at a short-term plan, «almost an opposite» mindset, Malka said.
He took courses on wealth management, read books on investing and now has a diversified portfolio of stocks, bonds, private equity and real estate, with about 10% allocated to riskier investments. In 2014 he founded private equity fund Strategic Brand Investments.
When it came to educating his children — sons aged 14 and 16 — about money, Malka's attitude has been to help them learn from the ground up.
«One of the challenges I faced with my teenagers early on, is their belief that it's very easy to make money by investing through social media and through what they hear from friends,» he said. His older son thought he could generate a 20% monthly return, which Malka described as «very concerning.» So, Malka let him invest a small portion of his savings, hoping it would provide an opportunity to learn — and his son lost 40% of that investment after trading currency futures.
«I hate to set up my child for failure, but sometimes, you know, the lessons learned when you lose are more valuable than the ones when you succeed,» Malka said.
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