Did you know that 70 percent of millionaire families lose their wealth by the second generation? That generation would be only the grandchildren of the breadwinner. And did you know that 90 percent of families lose their wealth by the third generation, the great-grandchildren? Those are scary statistics for people who have worked hard all their lives, built a business or other significant assets, and had dreams of that wealth providing the means for the people they love to live better lives of their own.
It’s really the “American Dream.” But wow! Who would have guessed the dream could end that way, and frequently does? We’re here to tell you – it doesn’t have to, once you know how to maintain wealth for future generations. This is something we do, day in and day out, helping to alleviate this concern for clients who view leaving an inheritance or a legacy as a priority. Please ask us, but until then, here’s what you need to know:
- Talk to and educate your children about money. Most families don’t talk about money because many believe it’s not appropriate. That’s a big miss in terms of financial education.
- Talk about the will. Everyone will find out who got what anyway, so why be secretive? It’s an opportunity to share your wishes for your legacy and for your family’s longevity.
- Create a vision statement. Businesses have them. Why not families? Your vision statement serves as the grounding force that puts wealth into context. Money becomes more than money. It becomes a tool for something bigger. Create one together and share it.
These strategies are not a guarantee for successfully ensuring your legacy, but we have seen them work for many families. Give them a go, no matter how much money you currently have. Tomorrow is another day. Work hard, be deliberate about educating and communicating. You’ll create not just smarter children, but the legacy you always wanted.