Thread by @aebridgeman

@MikeBoyd shared the playbook on @RealVision to preserve and grow generational, family wealth.

And it was awesome! Mike has been superbly building this guide with The Business of Family podcast.

Here are my notes from the conversation: (long thread)

realvision.com/shows/the-inte…

100+ year old companies are very rare.

Most family wealth is lost by the 4th generation as the family outgrows the wealth and fails to build structures to keep that wealth alive.

Only 30% of intergenerational wealth survives the 1st gen to the 2nd gen.

12% to the 3rd.

3% the 4th.

"Shirt sleeves to shirt sleeves in 4 generations."

Today, 80% of wealth is "new money." Many families today don't know how to steward wealth.

To make matters worse, most family wealth destruction comes from relationship breakdowns within the family, NOT financial difficulties.

So, how can a family sustain and grow their wealth?

- Long term focus
- Low ego
- Focus on high impact
- Think about the next generation.

Be a steward of "their" wealth (coming generations), not "my" or "our" wealth.

The family wealth that survives is incredibly intentional with their children and families.

What are we doing with our wealth?
What does it mean to us?

They have structures, governance, policies, meetings, reflections. Perhaps most importantly, they have a vision and values...

Vision and Values are reflected in the Family Constitution.

The Constitution documents policies, procedures, rules, and understandings on how wealth is administered and given. It also gives instruction how dealing with internal family conflicts.

"Policy before needs."

They are "stewards" of their wealth, and view it as something that exists for more than just themselves.

This wealth is for my family today and my future family.

We must leave it in better condition than how we found it.

Generational Storytelling.

Storytelling through families and elders is incredibly impactful. Children who understand and know their elders' stories are more resilient and less likely to have mental health concerns, among other health/wellbeing challenges.

"Bigger than us."

Family Archive.

Someone in the family has the role of "family historian." They intentionally document family and business life to preserve for future generations. Parents will write letters to their children, as an example.

How are family wealth portfolios constructed?

Most wealth is still in primary wealth creation vehicle, the 2-4 core businesses of the family. The rest goes to (among others):

Public equities, RE, PE, VC, alternatives, gold, crypto, private debt, art, syndicates, and more.

In summary, for your wealth to survive:

- Long term focus.
- Document family history, share the stories.
- Intentionally build an enterprise for the wealth that is separate from the family.
- Adopt the stewardship mindset. It's "their" wealth, not "ours."

For more, check out @MikeBoyd's excellent podcast, The Business of Family, and subscribe to his newsletter.

He's building a wealth of information I know many families will find valuable.

businessoffamily.net