Estimated reading time: 5-6 minutes
In Courtney Pullen’s book, “Intentional Family Wealth: How Families Build Legacies of Stewardship and Financial Health,” he offers readers a candid look at how they can be successful with money for generations to come.
He writes that while it “is certainly true that wealth can promote a sense of entitlement, dissatisfaction, and dysfunction. It is also true that wealth can promote responsibility, stewardship, and satisfaction.”
While there are a variety of ways to create a legacy of financial health, from building shared family values to promoting open communication and focusing on future generations, it begs the question: how will you know you did you succeed?
Here are five markers of success for affluent families creating an intentional family legacy.
1. Family members live their lives as responsible and resilient adults.
You will know you have succeeded when your children are no longer dependent on you for support. It doesn’t mean you don’t provide them with anything anymore, as financial gifts and inheritance vary by situation, but it does mean they don’t need it or depend on it to get by. to go out.
This can be difficult for affluent families, as children often grow up knowing that money is not an obstacle in their affluent family. Left unchecked, this can turn into a sense of entitlement around money. Avoid this dependency by communicating openly with future generations about what this money will and will not bring them. Also discuss the importance of work and sustenance, and gather around what it means in your family.
2. You know who you are and what’s important to you, and you use money to support those passions.
Money is simply a tool you can use to live the life you want. By building a healthy relationship around money, your family can use that money to support their passions and spend time doing the things you love.
Alternatively, if you’re unsure of what’s important to you and haven’t discussed a common vision with your family, no amount of money will get you where you want to go. Therefore, it is essential to discuss with your family what is important to you and what you would like to do with your money.
3. Your family loves wealth and appreciates the benefits it brings to your life.
Another sign of success is when your family takes advantage and enjoys the benefits that wealth can bring. For some, this may mean choosing to pursue lower-paying but more meaningful work, taking an extended period of time to volunteer, or providing tuition for future generations.
Each family’s money goals and dreams will be unique, but the critical marker is that money and spending align with your family’s goals. Above all, it is about gratitude for your position.
Pullen writes, “It’s living with a sense of gratitude for these benefits: not having to struggle to pay the bills, being able to travel easily and enjoy other experiences, not worrying about the financial future, having the opportunity to have luxuries if you wish, knowing that you can afford any medical care you might need, and being able to pursue whatever career paths and interests that interest you.”
4. Family members are neither ashamed of having wealth nor proud of it.
It’s a delicate balance, and successful families know that having wealth doesn’t make them any better or worse than families that don’t. It’s understanding that “your net worth is not your personal worth,” Pullen writes.
A great way for families to navigate this delicate balance is to communicate that while money is important and should be managed wisely, it’s not the end. Again, money is just a tool, not a measuring device to determine our worth.
5. Current and future generations accept responsibility for managing wealth with conscious care rather than using it destructively or carelessly.
Finally, successful families who build a legacy of intentional wealth pass on more than money: they pass on shared values. Stewardship is a core value, meaning the understanding that they are managing money for themselves and for generations to come.
The best way to instill this in future generations is to model and communicate openly. Show future generations what prudent management looks like. Let them join you when you meet investment advisors who help you manage your wealth. Explain how you evaluate different opportunities and why you handle money the way you do. And finally, show them what you value with money. Why is money important to you and how do you choose to spend it? By having these discussions with future generations, you can instill a sense of common purpose and financial stewardship around family wealth.
TrueNorth Wealth is here to help.
If you would like to work with a CFP® fiduciary professional to help you define your family financial plan, with an investment portfolio customized to meet your financial goals, then TrueNorth Wealth is here to help.
TrueNorth Wealth is a fee-based (commission-free) wealth management firm in Utah and Idaho, with offices in Salt Lake City, Logan, St. George and Boise. At TrueNorth Wealth, we strive to help our clients build and secure their wealth. We do this with an academically sound money management philosophy and by seizing every opportunity to deploy smart tax strategies. We match each client with a dedicated CFP® professional or financial advisor backed by a very smart team.
For our team at TrueNorth, it’s about more than money. It’s about serving families across Utah and helping them achieve freedom and flexibility in their lives. To learn more or schedule a free consultation, visit our website at TrueNorth Wealth or call (801) 316-1875.