Learn Where Life and Money Intersect for Money Mastery

I received a call from a gentleman who was referred to me. He was concerned about what his kids would do with his money, once they inherited it.

He told me he spent fifteen years building a company that he sold to another company for a generous profit. He said this new cash and stock infusion was significant to him. It represented an achievement he had worked hard to gain. He knew that the money was enough for he and his wife to live on and enough for his kids to benefit from but that’s not what he wanted the money to do. “I don’t want the money to provide so much security that life becomes a series of reality tv like experiences for my two teen age kids, caught up in the moment without any particular drive or interest. They’re already putting pressure on us about increasing their allowances and buying them new cars. It’s gotten tough on my wife and I to deal with this without feeling resentful.”

As our conversation continued, he revealed that money was never given to him as a child. He had to work for it. His wife also never had a lot growing up although she was given her parents’ car when she was 16 with the knowledge that she would have to turn it over to her brother when she was nineteen and he was sixteen. They couldn’t understand or appreciate their children’s covert and overt demands for money.

After a couple of meetings to understand their concerns and objectives, we decided to put together a 3-part financial program for the family. The first section was the “Financial Conversation.” This gave the kids an opportunity to express what money meant to them, their experience with money and what challenges they had with money. Their parents could only ask questions if they needed clarification on what was being discussed, not questions to judge or criticize. Then the parents had a chance to talk about what money meant to them, their experience with money and challenges they have faced with money.

Doing this in an environment where each participant felt like they could say what they wanted without fear of reprisal or judgment was crucial.  Each member came away from that meeting with a greater understanding of what money meant to themselves and to each other. This created a bond between them which we are now using in an exercise which involves an experience around money that the kids are doing as a team. They will report on their outcomes at the next meeting.

It is important for life and money to intersect so they can support each other rather than conflict with each other. It is critically important to do so in families where money matters so money and life can each be talked about with understanding and purpose rather than with judgment and directives.

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Is Silence Always Golden?

Think back for a moment, back 2 generations and bring your grandparents to mind.  Can you name all 4 of them? If you can, I have another question for you: can you name their hobbies and interests …for all 4 of them? And if you can, I have one more question for you:  do you know what they stood for, or, said differently, what they believed in? Interesting? You are an exception if you know what even two of your grandparents believed in.

Now, join me as I take you one generation further back. How many of you can name your great grandparents…all 8 of them? In a room of 100 people, when I ask this question, I am amazed at how few can name all their great grandparents.

With the first set of questions, usually about 95% of the room can name their grandparents, about 65% can name their hobbies or interests, and less than 20% can name what all four pf their grandparents stood for.  Going back one generation further it is rare when more than 3% can name their great grandparents.  This is tragic because research has shown how beneficial it is for a child’s well-being to understand their family’s storied history.

In the 1990s, Dr. Duke, a psychologist at Emory University, along with a colleague, Dr. Robyn Fivush, tested a hypothesis. This initial thought was developed by a psychologist who found, while working with children that “The ones who know a lot about their families tend to do better when they face challenges.”  Dr. Duke and Dr. Fivush developed a measure to test this hypothesis.  From responses, they concluded that the more people knew about their family’s history, the stronger their sense of control over their lives, their higher their self-esteem and the successfully their believed their families functioned.”

Is silence always golden? No! How are you sharing your family story?

For more information, read here: https://www.nytimes.com/2013/03/17/fashion/the-family-stories-that-bind-us-this-life.html

2 Critical Issues Facing Family Businesses

For families with businesses, there are two big problems that surface as the family grows and ensuing generations get involved or migrate away from the family business.

Conversations about the business that may have started in the living room at home, moved to the kitchen, then a conference room then to a board room, often become a struggle as families grow and as individual agendas develop. Working well together, across generations, can become tense when visions are not aligned, and responsible stewardship is not defined. Competing and contrasting priorities due to generational differences, ownership positions, and desires for the business as contrasted with desires for the family harmony, surface.

It is not natural to manage such complexity. Like a garden who needs proper care and maintenance to stay healthy, relevant, and vibrant, a family is best served by developing a disciplined and purposed component to their family and family business dealings and becoming responsible stewards of what they are growing and eventually, passing down.

Determining an initial purpose to both the family and family business initially separate the two entities so they can clearly define themselves independently. Agreeing on and articulating the value, vision and mission of each entity across generations is key to being responsible stewards. Adapting and becoming comfortable with change is the responsibility of each generation.

Questions to consider asking at home:

  • Who do we want our family to be, as a family?
  • What do we want our family to represent in the community?
  • What is important to us as a family: what do we believe in? What do we stand for?

Creating purpose, mission, vision and family teams to develop the family’s success goes a long way to sustaining intergenerational trust and sustainability.

Questions to consider asking about the business:

  • What is the purpose and mission of the business?
  • Is the business meant to develop as a business or build family wealth?
  • What do we need to do to support our working together?
  • How do we communicate business information so it does not take over or interfere with the family environment?

Knowing the purpose of the business, communicating that to the family, developing trust in leadership development are all critical to successfully passing a business legacy and leadership from one generation to the next.

When Trust Wavers…

Family dynamics can be challenging at times. I am reminded of a situation where one family member, a sister, asked her brother why they had stopped talking to each other. Silence was her reply. After asking the same question a few times, and getting silence as the repeated response, she got up from the table and left. That was the last time she engaged in conversation with him for years.

Her family had a history of mistrust. Behind the scenes, there were not so subtle attempts by most family members to influence the remaining parent in directing how and to whom her assets should be dispersed.  Family gatherings were polite and casual as family members placated their elder mother in hopes it would rebalance her estate plan in their favor.  The sister witnessed this behavior and chose not to participate in it, thinking that having a well-mannered relationship with all would prevail in the end.

Years later, after their mother had passed and the will was read, this sister, who had forged an independent life for herself while still reaching out to her siblings, found she had been completely omitted from any estate distribution; no assets, no jewelry, no books, no mention, no nothing. It wasn’t the assets she felt she deserved, it was the omission of her in any way, that hurt her.  She felt like she really did not need to be there.  It was embarrassing to feel that she really wasn’t part of the family. The brother, who responded to her in silence years before was the executor or their mother’s will. As the sister later learned, there had been some underhanded tactics used to try to convince the mother of one sibling’s family’s “wonderful” intentions while undermining the intentions of the other siblings.

Family members, as trust wavered, found ways to undermine ones that had weaker positions in the family while elevating themselves. It destroyed the family harmony. After the mother’s passing, and will was read, lawsuits were filed, letters of betrayal were found, and the family was destroyed.

Is breaking trust and family discord really worth it? IT is a tough question to ask and very important to consider, when cordial harmony mask darker intentions. People will rebuild family units but consider how much stronger a family can become when trust and harmony are nurtured.

It’s Important for Women to be Confident with their Money

I have always enjoyed being a steward of money. Even as a kid, I would count my money; I was excited to open a bank account; I would plan on money expenditures, I thought about money and how to best use it.  As a young adult, I thought about how to ensure I had extra saved money; I enjoyed the world of investing, although, as a woman, back then, there was not a lot of support for women in money matters.

So, I was stunned to recently read an article about women and money that included sobering findings from a Fidelity Investments Money FIT Women Study. Surveying 1,500 women, this survey found that 8 out of 10 women don’t talk to family or friends about money. That is chilling to me. The study also revealed that 50% of those interviewed, mostly Gen X and Yers, said they are nervous talking about making financial decisions! What the what the?!

Even today, where so much is available and expected of us, it seems we don’t include financial literacy as an area to master. As a result, and according to the Fidelity study, women have a confidence gap when it comes to financial literacy.

Is this true for you? Do you feel yourself avoiding money conversations? If so, what can you do to change this behavior and mindset. Here are three tips to begin your positively affect your relationship with your money.

  • Take a moment to answer this question: How do you want money to play an active an enabling role in your life? Answering this question allows you to finally understand what money means to you. Knowing this gives you clarity about how you really view money. It may be that you don’t get money, or, you don’t respect it or, conversely, that you want to get a handle on it but don’t know how.
  • If it is easy for you to accumulate debt and spend more than you have, ask yourself: What is in it for you to continue this habit? Really stop and respond to this with clarity. We tend to do things either because there is a benefit to doing so, because we want to sabotage ourselves, or because we are avoiding dealing with the topic of money.
  • What first step can you commit to make a, one, not all, just one, present unproductive habit move into the shadows of your life rather than being in the driver’s seat to your life? Taking a small step can begin a journey of steps that eventually become a pathway to sustainable and successful habits and behaviors around money.

Need more help? Contact me. Having women be successful in life with their money is important to me! I hope it is to you, too.

The Family Story is Powerful to Children

Several years ago, Emory University commissioned a study. The study was hosted by two prominent Emory psychologists, Robyn Fivush and Marshall Duke, and a former graduate student, Jennifer Bohanek. They wanted to understand the impact of family stories to a family’s dynamics with their adolescent members.

“Family stories” the researchers wrote, “…help children understand who they are in the world.” These unique and important stories help children understand who they are and where they come from, in a different way, but akin to the DNA tests available for us to take today. Neither of these will tell us who we are going to become, but they do shed light into that which brought us here.

The power of the important story is its experiential transmission of connectivity. Before this study, researchers had an inkling that family stories contributed to a child’s well-being and identity but had not measured their ideas. Now there was evidence. The study found that the teenagers in the study expressed “…higher levels of emotional well-being, and also higher levels of identity achievement, even when controlling for general level of family functioning.” Wow!

Although this is the first study of its kind to use a Do You Know Scale of measurement, it certainly is, for some, an eye opener, while for others, confirmation, on the power of important family stories.

What is your family’s story; not the where when or how, but the story of who and the why of the family? Your family story is a thread, a  link to identity and connection. Tell it to your family.

A Look Back and a Peek Forward

As 2018 closes its remaining open doors , I reflect back on those who have made my year the satisfying one it has been. I appreciate your journey to elevating that which matters and to strengthening the world of legacy, life and money matters.

 

Thank you for your support of the work Focus and Sustain promotes.

Thank you for your commitment to significance and purpose.

Thank you for sharing your stories of success and the weighty challenges you faced and dealt with.

 You have given me great insight with the conversations we have had.

 

You have given me an opportunity to think more clearly with the questions you have asked and the stories you have shared of your own journey on creating, building and sustaining  strong legacy families, lives with purpose, and powerful money behaviors.

 

You have been an essential ingredient to making the circle of Strength and Significance mightier than it was when this year began.

 

As I peek into the year ahead,

 

I wish you a Meaningfully Focused 2019

Give Your Family Its Wings

Are you building your wealth only to see it gone by the time your great, great grandchildren are growing up and asking about their roots? Most families do not keep ancestral footprints. You can change that by creating a living and engaging family history, footprint, and legacy.

According to research done by The Williams Group, who researched families of great wealth,  70% of families with  assets and stories, values and meaning, will find their money gone by the end of the 2nd generation. Shocking? For those 70%, probably yes.

The research continued to find that 90% of families are unable to have their wealth pass on beyond the third generation, in other words, beyond their grandchildren.  Why is this?

Families survive and thrive not by money transfers alone, the above statistic evidences that.  Families stay together because of a “why.” This “why” is the glue that voluntarily keeps them unified. This “why” includes the history of who you are, where you came from, what shaped you. It is your family’s living legacy.

Consider this: the etymology of Legacy according to the Online Etymology Dictionary stems from the 14th Century French: “legate-body of persons sent on a mission”, and from the middle Latin “ambassador or envoy.” Give your family its wings by creating its legacy. This will keep them connected for generations well beyond your initial contributions.

3 Tips to Developing Money Stewards at Home

An effective way to view  money at home is to regard money education as a process rather than as a single event instruction. When money education is set up like this, money behaviors can be talked about, tweaked and managed more easily.

Here are 3 tips to get you started in developing money stewardship at home:

1        Begin by asking your family members what money means to them. Once the question has been asked, listen, without interruption to their response. It is critical that you not interrupt so your family members feel listened to. They do not want to feel this was a set up question for judgement and commands. When your children feel heard rather than feeling like they are being judged, they will more likely be candid with you in their response.

2        Put together an agreed to plan of action to develop valuable money habits in these areas: saving, invest, donating, earning, spending, what we at Focus and Sustain call the 5 S.I.D.E.S. of Money©. You will find your children are drawn more to one or two “sides” more than others. Explore these with them. Create limits and challenges for them to explore their interests.

3        Talk about money. Set up money nights where you talk about topics like: budgets for vacations, issues your children are running into, budgets, how to make money choices, etc.  Open  up the dialogue with welcomed feedback, with parameters around accountability, develop measurability to plans. All these will develop stewards to money at home.

Who is Ready for their Inheritance?

If you have young kids, and you are wealthy, are your children wealthy? What about your grandchildren, are they wealthy? When I ask these questions to clients, they inevitable pause. I can almost see the wheels spinning in their heads as they consider the money paradigm  existing in their lives.

 

I often hear how they want their kids and grandkids to understand the value of thrift, to see and appreciate how hard it once was, not take money for granted, and yet also give their children and/or grandchildren opportunities and advantages available to them. But how can your progeny learn about life’s hardships when they have private tutors, unique vacations, and financial ignorance?

 

Money is not often discussed in families with wealth. The Wilmington Trust, in a poll they conducted,  found that sixty seven percent of respondents said they were uncomfortable talking about eventual inheritances and only ten percent provided complete information to their heirs.

 

Concerned that they might thwart motivation, self-worth, and confidence, wealth holders often will askew conversations about money. Hope, intuition, seat of pants guidance are common methodologies, but they are not recipes for success. Trusts and timelines are common tools to allocate money to next generations but neither of these prepare the inheritors from being ready to receive the money. Let me repeat that: neither of these prepare the inheritors from being ready to receive the money. Maybe it’s time to change that paradigm .

 

Prepare your family for their inheritance. Mentor them to become stewards of that which you worked hard and proudly to accumulate.  Ask them what money means to them. Ask them what they would do with money. Give them a small amount of money to see how they handle it. Let them make mistakes while mentoring them towards stewardship.

 

This is such an important topic, rather than avoid or delay talking about money, use the tools that allow you to create an environment of healthy money conversations and stewardship.   Contact me if you want to learn how to talk about money.

 

Money can become just another conversation. But you need to create that environment so when asked: “Who is Ready for their inheritance?” your children and grandchildren can say: “We are. We are stewards to a legacy. And we are ready in our roles and responsibilities to steward our inheritance.”