When we started this blog, we made a point to leave a wise financial legacy that will benefit our family centuries from now.
How do we go about doing that?
Developing a system of values and traditions that will help our family stay together and preserve wealth.
Adam Smith back in 1776 in the Wealth of Nations wrote the following:
“Riches, in spite of most violent regulations of love to prevent their dissipation, very seldom remain in the same family. “
– Adam Smith
Stated differently, wealthy families lose their wealth in three to four generations. How is that for a wake up call and illustrating how quickly wealth can evaporate.
My wife and I had come to an agreement that the money we are currently saving and investing are no longer ours. We are primarily responsible to creating sustainable growth and educating our children on how to prevent blowing their inheritance.
We are putting an emphasis on these fundamentals:
- Educate in a collaborative manner, what it takes to have success in wealth accumulation
- Communicate openly and find a way to connect with our children on their level. Let them know what they are responsible for
- Preserve and pass the financial wisdom to the next generation
- The money they are inheriting is not theirs, they are entitled to it as long as they follow William Bergen 4% rule, all the time every time
- Use wealth to fund future growth – managing wealth
This is not to say that my family and I can not enjoy the fruits of our investment but we have to be cognizant of our principles to preserving wealth.
“Wealth is the ability to fully experience life.”
– Henry David Thoreau
While there is no secret formula to guarantee success, our hope is that the fundamental framework above, along with education, can be applied successfully within our family. Ultimately, benefiting our family centuries from now.
I will go a step further to emphasize, aside from preparing the youth to be responsible stewards of family legacy and values. Education is, and has been, and will remain the key factor to success.
It’s time to get cracking!
