As it turns out, a growing body of research shows that families can remain successful across generations and that there are key qualities that these families share. The families that sustain wealth for multiple generations seem to share a number of common perspectives, core competencies, and best practices. Paramount among these is the deep recognition that wealth must be replenished to be sustained. Family wealth can be seen as a complex web of assets moving into and out of the family. If the outflow exceeds the inflow for a long enough period, the family will lose its wealth. This problem is exacerbated by the fact that families grow and usually do so more quickly than the wealth generation can sustain. Because of this, these families tend to see the critical aspects of their wealth as more than mere financial capital. While not minimizing the importance of a strong financial base, they recognize that the true wealth of their family lies in those things that will sustain and replenish the financial assets of the family and help to ensure family stability. The question becomes, what are the components of this form of wealth?
Questions:
- What belongs on the family wealth balance sheet besides financial capital?
- What characteristics allow the families you work with to be successful across generations?