Wealth can be a double-edged sword. Whilst it can bring many privileges it can also close off many opportunities, which may have profound effects on the welfare and prosperity of future generations in your family.
Active Knowledge Question:
Have you developed, communicated and stuck to a clear plan on distributing wealth to the next generation?
Children who have grown up in families that have been financially well-off may have many privileges granted to them, in the form of education, travel, holidays, clothing, cars and all the latest gadgets.
If this wealth has been built during their lifetime through the family business’s activity, which has involved their parents, they will also have been exposed to the sacrifices, effort and risks their parents undertook to make the business successful.
However, this can often have a negative impact with the children not wanting to undertake the stresses of businesses that their parents experienced, whilst still wishing to enjoy the benefits of the wealth that it generated.
The outcome can be a dependency on family wealth, without a willingness to accept the independence that was required to generate that wealth. And all the efforts and risks that go with independence.
As your children grow up, I believe one of the greatest gifts you can give them is independence. This being an ability to earn a living for themselves and their family, to deal with the many challenges that life throws at them and to create a life of fulfilment for themselves.
To achieve this outcome, I believe, it is important that they are supported and benefit from the family wealth, but that they also take responsibility for their lives. For example, educate them, buy them a car and a house and then say, “That is all. Now go make a living for yourself.”
Do not create lives of dependency but build lives of independence. Make it crystal clear what access to wealth the children will have, when they will have it and stick to it. Your children can then build their lives without wondering what may come their way.
An entirely new level of performance.
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All the best in the success of your business,