Four ways to preserve family wealth now and for future generations- True Family Wealth
The largest transfer of family wealth in Canadian history is starting to take place.
Over the next decade, it is estimated that $750 billion will be passed on to the boomers.
CIBC calls it the “largest intergenerational wealth transfer in Canadian history.”
What will happen to that family wealth?
Too often it will be mismanaged and depleted. A family unprepared just creates a mess because its true potential to create and sustain wealth is not well understood in today’s society. Despite technology to keep us plugged in and interacting with each other, our culture has become divisive and isolating. There is a tendency to “go it alone”. So, the money is divided up and each recipient spends the capital the way they see fit.
There is a better way. There is strength in numbers. And if you think about it, if you were to pool your inherited money, you can do more with it. And if you are willing to consider this concept, there are a few ways you can help preserve family money and at the same time help everyone in your family live a life of fulfillment, contentment, and joy.
1)Don’t confuse enabling with love.
Families that help their children develop their own personal power, their own strengths, and capabilities, and allow their children to take risks, set goals and work one step at a time to achieve them, in turn, create individuals and a family of high esteem. In providing our children a rope or a ladder to ‘climb out of the well’ for themselves, rather than building an elevator for an easy ride up, they develop their personal power to achieve.
It is in the adventure of self-discovery that a young person builds self-confidence and the opportunity to develop their abilities, talents, and knowledge.
If children have the confidence within themselves and their own personal power and strengths, they are more likely to live a successful life, appreciate financial opportunities, and therefore conserve the money inherited from the previous generation.
2.) Nurture the leader within for True Family Wealth.
It is imperative to the family well-being, and the identity of everyone in it to develop their own unique talents and interests and nourish them. We cannot lead others if you cannot lead ourselves. Without leadership, there will be no stretching into the next phase of the family’s evolution. Personal leadership and emotional maturity are necessary if wealth is to be managed well and preserved.
The basic tenants of leadership can become instilled within a family that believes:
• They are worthy and have much to offer.
• They are also worthy of receiving abundant gifts in return.
• Achievement comes from the pursuit of a worthy goal and taking a step daily towards that goal.
• It is important to work at a career that uses their unique talents, interests, and abilities to the fullest.
And remember, emotional maturity means to do the right thing, not always the easy thing.
3) Nourish their dream (even if it isn’t yours) to create something new and bigger.
Individuals within the family each need to develop their own person vision—that is a life dream. Which in turn helps establish a purpose in life. When each family members discovers their own personal mission, they are well on their way to developing as persons of excellent contribution and ever –strengthening self-worth. This requires parents (who will naturally have their own expectations and dreams for the kids) to get out of the way, and allow their young adults to be who they were meant to be. And most often, the unique talents expressed by each member of the group can still be aligned with the family, so that working together, and supporting each other, they can create something new and bigger than the individuals themselves could ever have created. And the family money, when managed as a pool, can be an important resource to support this creative process.
4) Family wealth means talking about money, yes even at the dinner table.
Conversations about finances and family should not be held separately, as they each affect the other profoundly. Money is NOT solely the responsibility of the “breadwinner” while everyone else gets to live in ignorance of matters financial. Money makes the world go around so we must all be responsible and gain financial acumen, whether we “enjoy” it or not.
A wealth steward learns all they can about money management and investing. Start at an early age with budgeting and learning the difference between needs and wants. Earning money teaches the value of a dollar. Taking courses and working with your advisors to understand the terminology, methods, risks, and opportunities are important.
But delegate, don’t abdicate. This allows you to discern good advice from bad and work with your advisor team intelligently and collaboratively, to preserve and grow wealth for current and future generations
If you are not a wealth steward, you are a wealth consumer.
About Chris Clarke
Chris Clarke is the author of True Family Wealth Love, Money and an Inspired Life. Her personal passion is to help families rethink what money means. Her book, Is the culmination of her years working with families in which she offers tried and true practical strategies to help transcend the issues surrounding money and relationships – while developing financial acumen and an “attitude of gratitude” within the next generation of wealth stewards. https://www.truefamilywealth.ca/