An exclusive focus on financial wealth alone is a prescription for going from shirtsleeves to shirtsleeves in three generations. Most often it is the human breakdowns – not the technical ones – that result in the erosion of wealth over time. Focusing on “value” as a multidimensional issue that includes finances, but also puts finance in a much more nuanced and thoughtful context, allows the family – and the individuals in it – to thrive. Based on the existing research, it appears that one useful way to define family capital is to consider that there are three types of capital in addition to financial capital. They are: Human Capital, Cultural Capital, and Social Capital. Clients who are able to conceptually and emotionally grasp this notion of well tend to view family “wealth” as the dynamic interplay between these four types of capital. Helping a family take this perspective allows them to ensure that they are focused on the big picture. It also allows the family to be highly intentional in its approach as it creates sustainable ways of preserving and growing their capacities as a family.
Questions:
- Do you have a sense of what human, cultural and social capital are?
- What kinds of qualities would you attribute to human, social and cultural capital respectively?