Family culture encompasses your family’s history, traditions, values, views, habits, goals, communication methods, and experiences. Your culture can affect whether or not future generations will have access to the wealth you are now building or shepherding.
What are these cultural factors that can make or break your wealth transfer success? Continue reading
Family fortunes: How to Build Family Wealth and Hold on to It for 100 Years
by Bill and Will Bonner copyright 2012, published by John Wiley and Sons Inc, Hoboken, New Jersey
The Bonner family is a young (first generation wealth maker with grown second generation and one third generation baby) who made their money in the publishing business.
The wealth creator (Bill Bonner) and his spouse decided that they would use hard and soft structures to set their hard earned wealth to work for the whole family instead of using it up themselves or passing it along to their children. They define hard structures as wills, trusts, tax strategies and estate plans; and soft structures as family council, family mission and constitution, family bank, investment and philanthropic committees.
Family wealth, they say, is different than personal wealth.
“It’s no one’s asset, yet it belongs to all the family. It does no one’s work, yet it is at the service of the whole bunch. It increases no one’s standard of living, yet it should increase the quality of life for them all.”
Family wealth should be held in a perpetual trust, protected from taxation, family members who would make it disappear, investment fees and other antagonist who would suck it dry.
The Bonners lay out their views on why families are better at helping family members than the governments are; the importance of family – its care, education, experience and human capital – in keeping wealth once obtained; how to make a fortune; how to invest to keep the fortune and the necessity of having a family stronghold to go to in case of societal collapse.
The authors seem to be following the concepts and ideas laid out by James E. Hughes in Family Wealth–Keeping It in the Family: How Family Members and Their Advisers Preserve Human, Intellectual, and Financial Assets for Generations
as well as Mark Haynes Daniell in his books: Strategy for the Wealthy Family: Seven Principles to Assure Riches to Riches Across Generations
and Family Legacy and Leadership: Preserving True Family Wealth in Challenging Times (Wiley Finance).
There are some great examples of families gone wrong as well as some detailed ideas on how to get and hold long term family wealth. It is a very readable book, and the authors don’t hesitate to express opinions contrary to ones popular today. Continue reading
Carnegie, Rockefeller, Astor, Vanderbilt and Rothschild are all names of families with wealth – wealth held across many generations. Just hearing the names causes pictures of polished silver, wood paneling and yachts to form in our minds.
Is your family trying to become a family of wealth? What does that even mean to you, to be a family of wealth? Do you want your future family to have ‘old money’? Is old money better than new money? Is it harder to have? Is it better or worse? Continue reading
When I decided to hold a Grandma’s Money Camp this year, I wanted to have a guide for myself to help me remember the concepts and activities to teach my grandchildren about personal finance. Read about the Money Camp concept here and read about my preparation work here.
At Money CampSince my grandchildren were 6 and 3 at the time I held this years money camp, I concentrated on very basic concepts about money. Believe it or not, there is quite a difference in what a 3 ½ year old understands about money vs. what a 6 ¾ year old has experienced. It was sometimes challenging deciding on which activities to pursue – something that was a review for the 6 year old or something too advanced for the 3 year old.
Millionaires Hesitate To Disclose Wealth
A US Trust Study “Insights On Wealth and Worth” published in April of this year surveyed 450 Americans with 3 million or more in investable assets (not including primary residence).
Among other findings, the group analyzing the results concluded that wealthy parents are ‘hesitant’ to discuss wealth with their children.
However, the numbers they give don’t really support that conclusion in my mind.
The question being responded to was: “To what extent have you disclosed your wealth to your child/children? Possible responses were No Disclosure, Some Disclosure and Full Disclosure.
Did your parents help you out with your kid’s education expenses? Did they supply money for a down payment on your first house? Do you get an annual gift of cash?
It’s Mom’s Fault!
If so, it is possible your parents weakened your ability to produce and accumulate wealth.
