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