Nearly $60 trillion in US wealth will change hands over the next 55 years – the greatest wealth transfer in history. Yet many families simply aren’t prepared for this transition. They don’t talk frankly enough about money and don’t have a strategy in place to help guide younger generations.
It is estimated that 70 percent of wealthy families lose their wealth by the second generation, and a stunning 90 percent by the third.
“If the answer to maintaining wealth were easy,” says Linda Davis Taylor, CEO and chairman of the nation’s oldest investment advisory firm Clifford Swan Investment Counsel, “the old ‘shirtsleeves to shirtsleeves in three generations’ problem would have disappeared long ago.”
Davis Taylor’s new book The Business of Family: How to Stay Rich for Generations (Palgrave Macmillan June 30, 2015) teaches families how to avoid this fate by writing their own family business plan and using techniques borrowed from the corporate world.
Davis Taylor, a participant in a fourth-generation family business, and a frequent speaker on wealth transition, family governance and philanthropy, illustrates the application of business strategies through engaging real-life stories and situations.
She reminds us that like a company, a family must constantly nurture and protect its most precious asset – its people – with support, training and a commitment to a purpose. Like a company, a family will deal with unexpected challenges but will weather these bumps in the road better by working together toward long-term goals and celebrating milestones along the way.
Davis Taylor has seen firsthand how important it is for a family to be connected by a common purpose. Whether it’s collaborating on a family calendar, family finances or a family’s philanthropic endeavors, including everyone in the discussion is vital to preserving wealth and building a family legacy.
“Money can unite or divide a family. The money doesn’t decide. Family members do,” Davis Taylor says.
This book is a blueprint for families looking to engage their members, communicate more effectively and rally everyone around a plan that sustains wealth and shared values for future generations.