Families tend to lose their wealth within three generations. Typically, this is not due to a failure to make the right investment decisions, or a failure to create the optimal trust structures – it is a failure to teach values, be emotionally honest, and most critically, an absence of meaningful challenge or friction.
Description
We are reluctant to talk about money inside our families because there is a negative conditioning in our society around power and wealth. This can work in many subtle, unseen ways within us, and it can manifest as shame and imposter syndrome. And it also manifests as an inflated ego and an unrealistic sense of superiority that is untethered to any reality beyond net worth. These unfortunate qualities, and a lack of proactive conversation about the values around wealth, are predictive of suboptimal outcomes when it comes to wealth transfer and ongoing multigenerational prosperity.
Establishing core values within a family requires an open, honest dialogue with emotional vulnerability. Wealth is an amplifier of who we are. All it does is turn up the volume. Money just adds zeroes to the frequency already within you. Wealth transfer gets all of the attention and yet it is the unseen, unquantifiable aspects of our relationship to money that makes all of the difference.
Key Take-Aways
- Wealth managers need the tools to facilitate these conversations within family systems, and the foundation of that training is understanding the role of an explicit value system.
- One of the unintended consequences of wealth is that it creates lives of comfort and ease without experiences of friction. Learn about the parts of our brain, and our willpower, that grow in response to friction and discomfort.
- When the seat of the willpower is strong and honed, this becomes the will to contribute, grow, learn, and engage- all of the behaviors that amplify wealth in a positive way.
- Learn to lead inquiries with sincerity and true curiosity, and understand the importance of understanding the veils of shame and the veils of superiority.
