Insights Blog
When Silence Costs a Fortune
Jun 19, 2023 // Adam Bruderly
100%…70%…90%
You might be wondering what the percentages 70% and 90% signify. These figures represent the formidable challenge that affluent families encounter in safeguarding their wealth across succeeding generations. Research has shown that approximately 70% of wealth is lost by the second generation, and a staggering 90% vanishes by the third generation. There are several reasons behind these trends, but the foundation, or lack thereof, is built upon…COMMUNICATION.
For starters, insufficient financial education, and lack of financial literacy among heirs may lead to a loss of wealth. Without a firm grasp of wealth management principles, the next generation may never develop the skills to grow and protect a family’s legacy and assets. Additionally, issues driven by family dynamics and communication can lead to wealth attrition. Family conflicts, disagreements, and lack of a shared vision can often lead to higher taxes, costly estate fees, and substantial legal bills.
In the words of George Bernard Shaw, “ The single biggest problem in communication is the illusion that it has taken place.”
Fueling the Pursuit of a Life Well Lived
From my experience working with wealth management clients, I’ve noticed a common thread among those who find real fulfillment in their financial success. They view money not as the end goal but as a vehicle—a means to pursue what matters most. It’s the foundation that lets them start a foundation, create lasting memories with loved ones, or explore new interests without constraints.
What is Wealth?
According to Investopedia “wealth is measured by taking the value of all the assets of worth owned by a person. This is determined by taking the total market value of all physical and intangible assets owned, then subtracting all debts. Essentially, wealth is the accumulation of scarce resources.”
How Many Summers?
After my first son was born, I began to think about what the next phase of our lives looked like. We went from two busy professionals who could hop on a plane for a weekend trip, grab dinner, or chase endless weekend adventures to first time parents. We were 2,000 miles away from family trying to plan the one or two trips a year that we could see them which led me to ask this question, how many summers do we have left?