When Paolo Fresia came into possession of tens of millions of pounds after his mother passed away, it was both "a gift and a burden."
Initially, he pretended as if it weren't occurring. However, when he turned 22, he states, "My aim became to escape and act like it didn't even exist."
“Unfortunately for some other of my relatives who received money,” – hundreds of millions from the family vermouth company fortune were split between them – the windfall “ended up corrupting their lifestyle and also their mental health, so it wasn’t good for them, and that money was wasted.”
It turned out that the young and extremely rich "may not be the most suitable individuals to manage it."
This is why 36-year-old Fresia, residing in London, has become part of Patriotic Millionaires UK – an organization pushing for higher progressive taxes on wealthy individuals.
With millennials set to inherit huge fortunes –and today’s millionaires distributing their wealth less than ever – young adults are looking for new opportunities to spend their money.
'You prefer not to appear rich to your acquaintances.'
Discovering that you're going to receive an unexpected inheritance doesn't turn into the idealized Hallmark scene that some people anticipate, according to Fresia.
In addition to coping with the trauma associated with deaths that have occurred because of this, young people frequently "do not wish to reveal their wealth to their peers."
And so he ignored his fortune, working for Medecins Sans Frontieres and in sustainability, before realising some of the company’s investments didn’t align with his beliefs. Things came to a head when Fresia reached his mid-20s.
“I really said, ‘Okay, I can’t run away from it any more. I’ve got to do something about it’.”
Fresia began looking into ways his money might make a difference. He had been working for a family firm in Hong Kong when he began enquiring about where his money might be put to good use.
He was pointed in the direction of networks like Patriotic Millionaires, which guide people who would otherwise have no idea how to spend their large sums.
"Life got much simpler as there are fantastic consultants you can hire for guidance. However, ultimately, the responsibility falls on your shoulders," he notes.
If you fail to engage in the introspective task of genuinely recognizing your privileges, comprehending your duty to reallocate resources and authority, and thus often admitting that you might not be the most suitable individual for making such investment or charitable choices, then naturally, the entire endeavor won’t succeed.
Antonia Mitchell, director of Aurelia Philanthropy, says that around 40pc of her clients are aged under 40, typically seeking her help to spend away family money, rather than their own.
Some $90 trillion (£70 trillion) will be transferred to American millennials, with 94pc of the wealthiest fifth of households in the UK set to leave a bequest, according to figures from the Resolution Foundation.
Yet, unlike their parents, younger generations are most keen to spend on what Mitchell calls “destitution issues”, such as refugees, gender or race matters, those affecting the LGBTQ+ community, “and medical research in which, interestingly, they include mental health – which is in stark contrast to their parents who tend to avoid it”, Mitchell adds.
“A lot of these issues tend to be tricky to navigate between their generation and the older generation who have radically different views,” she explains. “There’s no doubt that the increase in discussion around issues like gender politics have shaped why they see it through that lens.”
Fresia says that among his age group and below, some wealthy people “do feel really guilty, especially when the history of their wealth is in industries that are a little bit more controversial, like weapons or oil and gas – and it’s understandable, of course.
But it's about shifting focus towards taking concrete actions and stating, 'This is how the money was generated. What is your explicit reparations strategy to address all the adverse effects caused by earning that money, followed by reallocating those funds?' That's the approach I adopt.
'It’s the same inheritance problems everybody deals with – just amplified'
In a manner characteristic of millennials, conversations about distributing substantial amounts frequently occur during specialized retreats. At these events, participants wearing "Tax the Rich" T-shirts attend workshops aimed at addressing their “wealth shadows”—the tangible representation of the suffering caused by their prosperity.
Internet platforms and social media are significant factors as well. Numerous groups have emerged specifically in the U.S., such as Donor Revolt and Resource Generation, all aimed at assisting younger individuals in accessing inherited wealth.
The methods people choose can be somewhat unorthodox.
Last year, Marlene Engelhorn, a 32-year-old from Vienna, announced that she would be distributing the £21.5m she had received from her grandmother’s pharmaceutical empire to 50 recipients, who would be selected based on the suggestions from the 10,000 letters she posted out to fellow Austrians, which asked who they thought would be most deserving.
Mitchell says that “giving is easy, giving well is hard, and as they start realising that giving well is difficult, that’s when they call me”. Her client with the smallest fortune is giving away £60,000 – the largest, £1.5m.
“I do see a lot of tension,” she adds of the family dynamics that ensue – either because parents see their child’s giving intentions as the rejection of a gift, relatives disagree over where money should go (“I was dealing with somebody who was actually really disappointed in their child… they cared about homelessness, but the father was uninterested”), or there are arguments over what they’re entitled to in the first place.
“I always say it’s the same challenges everybody else faces, but on steroids.”
Mitchell has a client who came from the fringes of poverty, "achieved great success, and his kids have attended private schools... So how does he instill in them the principles that were key to his own achievements?" she asks.
Managing financial and social duties can pose challenges for wealthy children: "Philanthropy revolves around your moral compass."
The age-old dilemma for numerous affluent families remains how, or maybe what, to communicate with their children about this matter.
Mitchell has previously worked with clients whose parent was an entrepreneur who initially wasn’t aware of the family’s substantial wealth. This information later became public knowledge through various media outlets, causing significant stress and trauma for these individuals. They were particularly concerned because they had come across numerous stories about wealthy people engaging in misconduct, and they wanted to avoid being associated with such negative behaviors.
With some of the youngest inheritors now having children of their own, these quandaries are becoming more acute.
The question is “really on my mind these days, actually”, Fresia says of his four and six-year-old. “I really hope that they will be angry at me when they’re teenagers for not having given enough money away, as opposed to not having given enough money to them. But I’ll see if I succeed in making them angry in that direction.”
He admits, however, that, “I’m not a super frugal saint.”
His children go to private school, the family goes on nice holidays, and while he is a “huge admirer” of people like Engelhorn, he says he is “not as brave as them”. His risk tolerance has fallen since his brood expanded (currently 80pc of his wealth is invested in good causes).
He believes that both his own generation and the subsequent one will have a significantly different encounter with accumulating inherited wealth.
"As many of the occurrences in past generations revolved around the mindset of amassing and safeguarding wealth, young people were kept unaware of their expected inheritance and the purpose behind those funds," he clarifies.
He states, 'We will make it abundantly clear to our young kids that this wealth, particularly since it was inherited, is not intended for leading an excessively lavish lifestyle.'
Instead, Fresia aims for his children to understand that money should be seen as "a means to become a responsible manager of it and share it with others."
Apart from the financial aspect, "I believe the greatest gift I can offer is clarity, because I lacked that myself. Really, I did."
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