FAQ

How Do Wealthy Families Actually Keep Their Money Across Generations?

Understanding multigenerational wealth preservation
 

While every family who loses their wealth loses it because of a unique set of relational or economic circumstances, those families who do keep their wealth across 3+ generations have 3 things in common:

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1. The paperwork is not only complete, but also discussed annually, revised, completely known by everyone in the family. Wills, letters of instruction, company constitutions, family constitutions, etc etc. 

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2. Family values include frugality, and adaptability. Frugality sounds ironic when we are talking about the most successful families in the world. But looking back through history, not one family has kept their wealth across 3+ generations while holding a value of visible waste. Part of this is because of the societal contract - in order to be accepted by society (and not have flaming pitchforks at your front gate once a week), you need to be able to blend in with the rest of society. These days, this even holds true for royalty. The wealthiest royal family in the world, the Thai royal family, for example, has an museum exhibit which includes a mostly-used toothpaste tube to show the King is not wasteful. In a museum it is that important. 

Similarly ironic is the value of adaptability, given that we do know in business the best strategy is often to keep doing whatever it is that you have been doing well. However, the families who have actually kept their wealth have done so by continuing to re-invent themselves while also holding true to their core. As the famous Chairman Lee Kun-hee of the Samsung dynasty  said "change everything except your wife and children". Other examples are the Falck family who pivoted from being the lords of steel to the kings of renewable energy. 

And the icing on the cake is that most families don't even have their values documented. But the ones who succeed do. 

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3. An advisory team to support 6 generations of dynastic wealth. Naturally, all wealthy families, even those who lose their wealth after a couple of generations, have paperwork experts: lawyers, accountants, bankers, wealth managers. But those families who succeed, who keep their wealth, they have teams of specialist family relationship managers, storytellers, coaches, trainers, facilitators, and psychologists. The families who succeed have a whole set of advisors who do not even consider the paperwork. Advisorys like me, trained in the paperwork as well as in psychology, relationships, and intergenerational wealth. 

 

If your family loses it's wealth in a few generations, it is unlikely to be because of economic factors, nor even the paperwork. It will be because of relationship destruction. And where more money is involved, more pressure is put on interpersonal relationships. 

 

 

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Why Do Some Family Businesses Fall Apart While Others Thrive?

Identifying risks in family business succession

 

The family businesses that succeed do so by clearly understanding:

1. The best and brightest must run the family business, not necessarily the closest relatives. For example, the Maersk family business is currently led by the son, but his struggle to arrive at the top position was based on decades of hard work and proving his worth. 

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2. Clear understanding of the 7 potential roles family members will fill in regards to business ownership, control, and the family. 

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3. Independent advisors whose job it is to speak the uncomfortable truth. Advisors like me - I serve a number of family businesses as their independent advisor. 

 

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What Questions Should I Ask a Family Advisor Before Hiring Them?

 

1. What type of families or individuals do you love working with? 

(ps. for me, it's families who love the ocean, and want to pass on their skill and love of ocean things through the generations)

 

2. What's the financial situation of families and individuals you love working with? 

(ps. if your situation isn't complex enough for an expert like me, I will put you in touch with those who are better suited for you)

 

3. Who are your main competitors? 

(ps. there are only a handful of expert advisors who can do what I do ... and zero of them work for large companies)