Family Matters -February 2018
Welcome to the ‘Family Matters’ newsletter. Every month you'll discover deep insights, thought-provoking discussion points, and commentary on family, business, and what really matters to us.
Greed Or Envy?
Greed and Envy are two of the 'seven deadly sins' and are relevant to material wealth. Economists adopt the fundamental principle that people seek wealth maximisation (a form of greed), but is this really the case?
Because we live in communities and families, it can be argued that the more significant driver of behaviour is envy, because we invariably compare and benchmark ourselves to those around us.
For the economists among you, the analysis is in the link below, but more broadly interesting is the implications for family wealth.
If envy is a greater driver of behaviour than greed, then the principles of equity and fairness become all the more important when transitioning wealth within a family. Within families, envy can be a far more destructive attribute. Any gift (in the broadest sense, so including a role that is 'given' to a family member) should be considered in the context of how other family members may react and respond.
Consider This: Are members of your family more driven by greed or envy? While neither are good attributes, what can you do to mitigate their risks?
Original article: http://falkenblog.blogspot.com.au/2010/03/why-envy-dominates-greed.html (very dry)
#wealthtransfer #conflict #intergenerationalwars #familywealth
At What Age Should Someone Inherit?
Increasing life expectancies have meant that for the first time in history, four generations are alive at the same time. This has important implications for the timing of the transition of family wealth.
There is an 'inheritance boom' coming when the Millennial generation inherit the wealth of the Baby Boomer generation, but this is expected to peak in 2035 when the average Millennial has already passed the age of 60!
Some wealth originators shudder at the idea of passing over the reins while they are still alive, having seen other children squander their family's wealth. While there is always a risk that the next generation will blow it, the previous generation can reasonably argue that they don't want to be around if/when that happens.
But is it reasonable to make the next generation wait that long? Granted, they will likely have many years to enjoy the wealth (and the control of the wealth), but holding back can create resentment and can be considered condescending and patronising.
Consider This: At what age do you think your children should inherit significant family assets? To what extent is that driven by your own experience? Whatever the age, what are you doing to prepare them for that eventuality?
Original article: https://www.moneywise.co.uk/news/2018-01-02/millennials-set-inheritance-boom-when-they-turn-61
#generationalwars #wealthtransfer #conflict #familywealth #inheritance