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Why It Matters

Raising families in the context of significant wealth brings unique challenges. As different as families are around the world they all face the universal challenge of transitioning wealth from generation to generation.  History shows us that families have less than a 10 percent chance of transitioning wealth successfully across three generations.

Consider the laws of physics: energy is created in a rapid expansion; it then stabilizes, and ultimately dissipates.   With wealth, this same cycle is so universally linked with the passing of three human generations that we find every culture, religion, region and society has embodied this concept in their wisdom as reflected by the proverb – shirtsleeves to shirtsleeves in three generations.

But this outcome is not inevitable.  Helping families raise their awareness of this cycle and engage in the practices that break it is what I do.

First – It’s not all about the money!

An enormous economic empire has grown up around managing the financial capital of a family.  But financial wealth is a very narrow measure of a family’s true value.  Family Wealth elder, Jay Hughes teaches us to adopt a more holistic view of a family’s balance sheet.  We must step back and consider the deeper assets of a family: the human capital, comprised of the family members themselves and their values and their works.

To sustain wealth over generations, families need to invest as much time and energy in managing, nourishing and mentoring the human capital of the family as they do in managing the financial wealth.

This work takes many forms and can be implemented in many ways, but it is about helping families:

  • Ensure the flourishing of each individual – nurturing dreams and mentoring skills in each generation

  • Develop the financial accountability of each family member

  • Recognize and honor the family legacy

  • Become effective at communicating and collaborating – so that the joint decision making is more effective and rewarding, and

  •  Become exceptional stewards of their wealth, in all its forms!

Is your family ready to break the cycle?

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