Family Wealth – 3 Things To Pass On Besides Money
Family Wealth – 3 Things To Pass On Besides Money
As I get older, it seems that my interests and priorities continue to change. I’m a Generation X’er which is defined as someone born between 1965 – 1979.
In the U.S. we are 80+ million strong!
So when I recently read about how over the next 25 years, baby boomers will be transferring over $60 trillion dollars to our group, it made me reflect on what we should teach our kids in case they get their hands on some of it.
But first, here’s a brief history lesson for you….
Vanderbilt vs Rockefeller
In the 19th century, Cornelius Vanderbilt was the richest man in America with MORE money than the US Treasury.
Pretty strong there Cornelius!
At the time, he donated enough money to start a major university that still bears his name today, Vanderbilt University.
Unfortunately, within a few generations after his death in 1877, Vanderbilt’s fortune was completely depleted by heirs that knew how to spend his money but did little to maintain and grow the family wealth.Join the Passive Investors Circle
John D. Rockefeller
Let’s compare Vanderbilt to another well-known person of wealth during the same era, John D. Rockefeller.
Rockefeller was founder of Standard Oil and America’s first billionaire.
Seven generations and 80 years after his death, Rockefeller’s family continues to oversee (and enjoy) one of the world’s largest fortunes.
Why is that?
How can two extremely wealthy men from the same era have two completely different outcomes?
Let’s explore a few….
3 Steps To Passing On Family Wealth
#1 Family Values
Six generations removed from John D. Rockefeller, younger David Rockefeller remembers receiving an allowance at the age of 10 from his father.
His father taught him the importance of giving at an early age. Specifically his father instructed him to take a portion and give it to the church or charity.
“A generous person will prosper; whoever refreshes others will be refreshed.” – Proverbs 11:25
David’s father explained to him that this is what his great, great grandfather did with his first paycheck.
Giving and philanthropy is a value that has persisted in the Rockefeller family for many generations.
Unfortunately, not all family values are created equal. Sometimes a family value big enough to keep the family together is a value BIGGER than the family itself.
It’s something powerful and significant enough that succeeding generations can point to with pride and say, “That’s what we’re all about.”
What about you? What values are you teaching your kids that they’d believe are worth fighting for? NO amount of success in your practice/work will make up for being a FAILURE at home.
#2 Family Leadership
How many people do you know that are GREAT at work (i.e. the area’s best orthopedic surgeon) but can’t stay married to save his life?
Too often we see this play out where someone is fantastic in their career but struggles with home life.
No amount of success at your career will make up for a FAILURE at home.
Success in the marketplace involves a level of leadership. The best coaches and business owners I know are fantastic leaders – they’re able to influence others to see things the way they see them which leads to action.
Question: How much thought, effort and planning are you giving to the leadership of your family?
I’m NOT talking about your leadership of position but the leadership of influence.
Influential leaders get others to follow them because they make the destination look attractive.
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One of the MOST influential leaders of all time is Walt Disney. Have you thought about how they keep the most heavily visited theme park litter-free?
Walt had a vision to create a safe, clean, family-oriented destination that was different from the then dirty theme parks.
It’s no wonder that when visiting, you’ll notice ALL employees (CEO to janitor) picking up any trash littering the park.
#3 Family Communication
How are you attempting to transfer family values to members of your family?
Unfortunately, too few of us (like the Vanderbilts) fail to do our part. Our leadership initiates values but also don’t forget about constant communication.
If you haven’t already done so, consider starting family-focused conversations.
Related article: How To Teach Kids About Money
One of the keys to building inter-generational wealth is to develop trust and accountability among family members.
Proverbs 13:22 – “A good man leaves an inheritance to his children’s children, and the wealth of the sinner is stored up for the righteous.”
Your kids, grand kids and other heirs need to understand the importance of family wealth planning. They also should be aware of how to prepare themselves to take on responsibility to ensure the plan’s success.
Here Rachel Cruze (Dave Ramsey’s daughter), shares how her dad passes on the family wealth values:
She explains that ever since she can remember, her parents hold a meeting once a year to discuss who gets what inheritance along with other family issues talked about.
This way, everything her parents wish to happen clearly gets communicated on a yearly basis. Not when it’s too late!
You’ll notice that the three steps discussed today could apply to either billionaires or the lower class of the population. It doesn’t matter.
Unfortunately, too few families practice anything like them to pass on the true wealth of the family – which, if you haven’t figured it out yet, has very little to do with money.Join the Passive Investors Circle
I like the new website design, though I thought there’d be more “teeth” in it! Thanks again for all your help.
I have not inherited my fathers estate yet because my mother is still living, but I will say that more financially important than leaving me money was the knowledge on how to make AND retain my own, only then would I be deserving of being the steward of his first generational wealth which I intend to perpetuate in the same way, with the goal of bringing it up one level in amount and family training.
I intend on writing a personal biography not for publication about him to be passed down through the family as well as an autobiography of my live to include our victories and losses and timeless wisdom from our experiences.
Leaving money without training on how to make and retain it can make one rich, but not wealthy because those that are wealthy can make if again if it were to be lost. Therefore, money without training/wisdom is a curse, not a blessing.
Brett, you’re SPOT on. This is the reason that so many young college athletes that sign multi-million dollar contracts end up bankrupt and most lottery winners too.
“To much is given, much is required.”
What’s the point in giving or passing down $$ to someone that we haven’t taught how to properly handle?
It’s NO DIFFERENT than giving my boys a rifle BEFORE they are trained how to handle it while hunting. They’d injure BOTH themselves AND others.
I want to read your autobiography once it’s completed. I’ve read some of your stuff on Dentaltown and you are TOO smart of a real estate investor to NOT teach others.
Thanks for the reminder. I’m adding this to my Fawcett’s Favorites Monday. What good is getting money without getting the knowledge to use it well.
Dr. Cory S. Fawcett
Financial Success MD