What is the Purpose of Money? Part I.

20 de August de 2021

A Generational Values Question for Families in Business.

At a recent Family Council Meeting the question arose as to what to do with the family fortune. The question raised quite a commotion. The first generation (three brothers each in their 70’s) quickly and somewhat aggressively stated that the family did not have anything nearly resembling a fortune and that talk of this nature would lead the family to ruin. They strongly stated that what the children and grandchildren needed was to learn were the values of hard work, saving for emergency and humility.

The next generation of six children and their spouses were not impressed by their parents’ remarks. Some of them quickly responded “Work sixty hours a week like you did? This is not a life. Where were you (my parents) when I was growing up? How many times did I hope to have my father witnessing some success in school or in sports! Further, for our whole lifetime – the great bulk of the financial resources have been reinvested in the business. When do we get to enjoy the fruits of this labor?”

The patriarchs of this substantial business grew increasingly worried. They had spent a lifetime (their spouses thought two lifetimes) building an enterprise that had not only brought stability and stature to their family but had aided their community and country. Now in their seventies as they got ready to pass the leadership of the family and the business to the next generation, they did not like what they heard. Of course, each child was different, one was harder working, one had married an American and seemed fairly unhappy, another was a loner – all certainly enjoyed a higher life style than the patriarch and his wife had ever imagined.

The next generation seemed not at ease in the patriarch’s eyes. And the third generation – this was a whole other story. This generation was brought up with expensive homes, camps, travel and attendants. It wasn’t just arrogance, it was a sense of entitlement that this generation seemed to bring with them. They expected the finest and were aggressive in their demands. For them wealth was taken for granted, their usual concerns were on personal enjoyment and expensive things.

Following the Family Council Meeting, the three patriarchs met. They were concerned about the Family Council Meeting. What are the family’s values about money? What will happen to the family’s wealth when we are gone? Will our family follow so many in going from rags to riches back to rags in three generations? What are the right values about money? And, what can we do to increase the probability not only of financial success but of helping each child and grandchild to follow in the best values of the family?

They called a Family Meeting of all generations. They shared openly their fears and hopes for the family. They said “We know the time of our leadership is almost over, we don’t wish to control you but we don’t believe you have solved one of the key questions of Family Business Leadership. We don’t think you understand the purpose of money.” In our discussions we decided to ask you the following questions:

Is money important? Why?
How does money affect your character positively?
How does money affect your character negatively?
If our family increases our financial wealth – does that help society?
If our family increases our financial wealth – does that help each of you individually?
If our family increases our financial wealth – does that help our family?
What is the level of trust that you have with one another in working and owning assets together
Are your values about money and business in alignment with each other?

At the end of the Family Meeting the patriarchs said – “We believe we know the right values for our generation. Perhaps we do not know the right ones for you – this is what you have to determine. And it should be done now. Otherwise the money you create may only serve your selfish needs rather than your higher values.

We would like to think that we taught you to value money not as an end but rather as a means to improving your character, your knowledge to making the world a better place and for the enjoyment of our family. Our final question to you is what are your plans to preserve and build the family’s wealth and how will you structure it to impact your children and theirs positively.

Marc@Sii-Inc.Net

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