Tag Archive for: generational impact

Generational Impact, Pt. 2

The conference call line opened up, and one by one, members of the family identified themselves. The CEO of this well-known business enterprise, now in its 3rd generation of family leadership, informed the participants that their approval was needed, and their questions expected. The topic of discussion centered around what would become one of the biggest acquisitions in the history of corporate take-overs. This call was scheduled to get buy-in from every family member in the execution of the multi-billion-dollar deal. Each one of them would need to contribute to the purchase price The eloquently phrased first question to the CEO about long-term debt came from a 13-year-old G4 member of this family. His healthy inheritance would contribute hundreds of millions towards the purchase price.

Sounds like a scene from a high stake’s drama, doesn’t it? But this call actually happened not too long ago, and the deal exponentially grew this already enormous company, ensuring that this family would breeze past the typical generational curse that tanks many family enterprises before the great-grandchildren (G4) can step into leadership. But how did a 13-year-old know enough and have enough confidence to ask such a pertinent question?

On the journey to go beyond success towards significance, making time to educate younger family members on financial literacy and wealth principles is as much a part of building a successful enterprise as picking a CEO or choosing when to expand the business. Below are four principles that successful multi-generational families embrace.

It’s easy to look at the balance sheet and assume you’re wealthy. In this simplistic view, children of wealthy families fail to understand the important distinction between assets and liabilities. Younger generations can easily focus on the income-producing assets that drive up family valuations, but they need to also understand the impact of liabilities, and the important role that reducing high-interest debt plays in providing a clear picture of wealth. The prominence of digital tools and systems can get in the way of this understanding.

Kids growing up today have a much different relationship with money than in years past. They are more focused on mobile banking, investment apps, and an almost zero-cash lifestyle which requires little need to focus on the details or on understanding the full picture. Helping children of a family enterprise to be well-versed in concepts like debt, savings, investments, and budgets can result in the preservation of the families’ achievements. Most importantly, through a focus on key habits that lead to wealth, we teach children that it takes time, effort, and discipline to grow the bottom line.

Multi-generational families embrace an openness to discussing wealth. They don’t hesitate to talk about their business and the various components that have led to their success. They also don’t shy away from exposing their children to the challenges and the inner workings of how the family built their worth. They invite their kids to sit in on business calls, encourage them to ask questions during shareholder updates, and celebrate ideas that might lead to product or process innovations.

Forward-thinking families teach their children the importance of building long-term financial stability through deliberate actions. They make sure their kids consider the various costs of running the business and invite them to take on personal responsibility through contributions to the family legacy. To cement these lessons, children of successful wealthy families are exposed at an early age to how investments work, and how to read financial documents, including the monthly balance sheets. They learn what to look for in the markets, the differences between liquid savings, stocks, mutual funds, real estate, and property, and how to understand a myriad of other wealth-building vehicles. They are exposed to business processes and decision-making approaches.

The underlying lesson that is reinforced throughout childhood is the idea that wealth-building requires knowledge, commitment, and good judgment. This often means postponing personal needs and controlling reactive urges.

Helping those that are less fortunate or supporting causes for which you are passionate about is another key principle taught to children of families seeking significance on their wealth journey. Of course, from a wealth management perspective, they learn that charitable contributions are helpful when it comes to tax time since they help reduce taxable income. However, today’s younger generations tend to get more excited when they are reminded that supporting causes with a personal connection can lead to great satisfaction while positively impacting the world around them.

Exposing kids to the charitable endeavors the family supports, and modeling for them early on how to join in with their own time and money, will make sure that they recognize that wealth is about so much more than just a lot of money in the bank.

Most people automatically associate wealth with money. The bigger their bank account, the wealthier they think they are. What sets accomplished multi-generational families apart is an understanding that wealth is about the freedom to maximize your time, talents, relationships, and faith. Making sure that children and grandchildren appreciate the full capacity of a well-lived life allows them to experience true wealth that contributes towards a long-lasting legacy.

Multi-generational families center themselves on living the fully engaged life that wealth enables, including making significant contributions to their communities. Children of generative families learn early on that success is the result of consistent action.

At Mosaic Family Wealth, we work with families that are looking to go beyond success towards significance. Our family office team can offer investment oversight, financial reporting, guidance on securing a long-term financial future, as well as providing insights on how to weigh important family decisions. We can also support your efforts at educating younger generations about responsible wealth management, business competence, and stepping into a role that extends the families’ generational impact.


Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing in this content is intended to be, and you should not consider anything in this content to be, investment, accounting, tax, or legal advice. If you would like investment, accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs.

Mosaic Family Wealth, LLC is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Mosaic Family Wealth, LLC and its representatives are properly licensed or exempt from licensure.