One of the statistics that we often cite is that 97% of family wealth is lost by the 4th generation. This statistic has its genesis in a study conducted many years ago by the Family Firm Institute. Another organization The Williams Group has conducted a 20 year study that cites 70% as the percentage of family wealth that is dissipated over three generations.
One of the reasons we founded the Certior Group on the principles of Empowered Wealth was to address some of the issues cited in this article. As the title suggests, the article focuses on leaving an inheritance. It references research done by Boston College that indicates that “participants with children worried less about making more money and impacting the world through philanthropy than ‘to be a good parent’.”
As a parent with young children, this phrase resonates with me. The paradox and challenge for me – as I’ve observed it is for many – is that “leaving an inheritance” is a somewhat distant, abstract idea. The task that we’re contemplating is to clearly, realistically visualize the future and begin to set the conditions now that will give our children and future generations of our family the greatest likelihood of succeeding and thriving. This is no different than the responsibilities and opportunities our ancestors faced. What’s different about today is that technological, demographic, economic, social, and political forces are accelerating change in more volatile, uncertain, complex, and ambiguous ways than ever before.
I commend the Williams Group for identifying “meaningful, productive and honest conversations about the impact of money and the purpose of the wealth”; heirs “relationship to wealth”; and “having a shared understanding of the purpose of the wealth” as guidelines for how to be “good parents” when it comes to inheritances. However, here’s where the principles of Empowered Wealth have informed our work; there’s more to being a “good parent”.
We are very committed to empowering leaders in families who, in turn, will empower family members (and others) to live in Gratitude and to build their futures around what they value most.