In this edition of our Wealth Office Newsletter, we conclude our series on the Wealthy Matriarch examining Women and Multigenerational Wealth. We thank you for reading through the series with us.
Earlier in the series we discussed: Women and Purpose; Women and Values; Women and Money; Subtle Power of Women.
What is Generational wealth?
To attain multigenerational wealth, the entrepreneurial mindset must be nurtured, there must be foresight to build a portfolio of businesses and championing stewardship of wealth. Attaining the above forms the bedrock and foundational basis for the Wealthy Matriarch seeking to build multigenerational wealth.
Nurturing Entrepreneurial and Innovative Mindset
An entrepreneurial mindset involves recognising opportunities, taking calculated risks, and being adaptable to changing circumstances. This mindset is important for creating and sustaining multigenerational wealth for both wealth creators and inheritors.
As a Wealthy Matriarch, it is important to cultivate and set up processes and opportunities that breed, nurture, and challenge the entrepreneurial mindset within children, grandchildren, and family members. In cultivating an entrepreneurial mindset, the following are important:
- Identify Opportunities: Constantly seeking new opportunities and markets for the business generating the wealth to thrive and evolve across changing business, social, economic, and environmental dynamics.
- Innovation: Embracing new technologies and business practices is key. Consider setting up a Family Bank with dedicated funding allocated to Seed/Angel investment for entrepreneurial family members to get them started. Such ventures that are backed by the Family’s investment can thereafter be on-boarded into the portfolio of assets that make up the wealth of the family.
- Adaptability: You must be able to change with the times and remain flexible in response to economic changes. This might mean shifting investment strategies during economic downtimes or exploring new sectors during periods of growth.
Purpose and Values of Wealth
Purpose and values cannot be underestimated when it involves building a lasting legacy. They are the foundation of a lasting legacy. They provide direction and meaning to wealth, ensuring it serves the greater good.
Women serve as the custodians of their family’s moral compass, guiding the next generation with principles of integrity, compassion and responsibility, purpose and values. To increase and sustain multigenerational wealth as a woman, the following are essential:
- Define a Clear Mission: Articulate your vision and goals for your wealth. Articulating a clear purpose for wealth brings meaning and provides direction. It ensures that the wealth is not without influence and impact. Write your mission statement down clearly so it can serve as a guide.
- Engage the Family: Share the purpose with family members and welcome their ideas as inputs. Include family members in discussions to build consensus and shared commitment. Regular family meetings can facilitate open communication and collective decision-making. You can read more about this here.
- Align Investments with Values: Ensure investments reflect you and your family’s ethical and social values.
Diversification: From one single (legacy) business to portfolios of businesses
Business and investment diversification is a critical aspect of generational wealth planning. Diversification is investing in multiple assets and businesses as a means of reducing risk.
Diversification is easier where the Wealthy Matriarch’s social goodwill, business strength, and government relations are leveraged on. This facilitates conversations and initiatives such as whether a sale of an existing arm, part or the whole legacy business is a viable option and taking advantage of liquidity events from such divestment to build, nurture or Invest in other businesses, that amongst others, preserves family wealth and incorporates young (rising) generation family members, their ideas, passion and innovations into establishing multigenerational wealth and legacies.
Championing Stewardship of Wealth
Great power they say comes with great responsibility. This is not only true of great power but also significant wealth. With significant wealth comes an even greater responsibility of effective stewardship and management that ensures its preservation through generations.
Stewardship is about managing wealth responsibly for the benefit of future generations, it entails living out the purpose of your wealth. As a steward, the Wealthy Matriarch is someone fully invested in something bigger than herself. She embodies transcendence and commits investments viz her time, talent and treasure to the purpose and vision of her wealth.
Activities and conversations on stewardship may revolve around:
In the Family:
- Address mental health and capacity issues that can impact decision-making, autonomy, and succession planning.
- Ensure family members understand the asset protection and succession structure to minimize disputes.
- Consider “checks and balances” in structures involving third parties for long-term safety and oversight.
- Account for personal circumstances to develop suitable asset protection and succession plans.
Family Welfare:
- Equip the younger generation as effective stakeholders beyond just family business roles.
- Meet expectations through strategic wealth transfer plans tied to milestones or life events.
- Develop open communication and timing of messaging around expectations.
- Nurture family “elders” to guide transitions and share experience.
Beyond the Family:
- Support the welfare of employees, personal staff, and others who contribute to the family’s success.
- Align family businesses with stewardship principles of long-term value creation, sustainable practices, and stakeholder considerations.
- Explore sustainable and impact investing strategies that create measurable positive outcomes.
- Adopt responsible stewardship in philanthropy through research, collaboration, and aligning investments with the mission.
- Understand changing attitudes towards wealth and tax obligations in a transparent digital age.
- Advocate for fair, predictable, and straightforward tax systems that foster conditions for stewardship.
- Engage in dialogue between wealth owners, governments, and society to address misunderstandings and find collaborative solutions.
Conclusion
In building or sustaining multigenerational wealth, the rising generation must be intentionally included and this can be done by having a family council or forum that includes members from different generations to ensure that wealth is managed collectively and responsibly, fostering a sense of duty and accountability.
Also, remember that by integrating an entrepreneurial mindset with a strong sense of purpose and values, and by prioritizing knowledge and professional advice, you can ensure the protection and preservation of your wealth for generations to come. The stewardship of wealth is not just about financial assets but about nurturing a legacy that reflects your family’s values, purpose, and aspirations. All of which are vital to wealthy matriarchs committed to creating and sustaining multigenerational wealth.
At Fiduciary Services Limited, our purpose is to help you identify the potential impacts that threatens the continuity of your wealth, legacy & family harmony.
We apply our expertise as private client professionals to guarantee the preservation & sustainability of your wealth and affairs for generations to come.
You can check out our wealth preservation services here and estate planning services here.
As part of our Private Client services, we have experienced Trust and Estate Planning Advisors ready to assist you in developing an estate plan that protects, preserves, and sustains you and your family’s wealth for generations.
Get in touch with one of our professionals today by sending an email to contact@fiduciaryservicesltd.com
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