HOW TO BUILD WEALTH THAT LASTS MORE THAN 7 GENERATIONS
Do you know that much of the wealth made by the first
generation of rich people hardly goes into the third generation in families? If
you doubt this, see this study by an expert that, out of 483
billionaires examined, 321, representing about 66.5 percent were first
generation. Only 20 percent were second generation, and less than 10 percent
were third generation.
About
2.7 percent or 13 families made it to the fourth generation, 1.4 percent or seven
made it to the fifth generation and less than one percent or two made it to the
sixth generation.
In
another research carried out by the Williams Group wealth
consultancy, 70 percent of wealthy families lose their wealth by the second
generation, and a stunning 90 percent by the third.
Why the high wealth attrition rate? Why do most
of the families, as high as 90 percent, lose their wealth by the 3rd
generation? A number of factors are responsible for this, and they include:
ill-preparation and reluctance of the younger generation to accept
responsibility for wealth stewardship; drugs; not understudying the wealthy
parents, financial wastefulness through parties, gambles; over-pampering of
children by rich parents, and so on.
How then
can we build wealth that will not only last but will also keep growing for
several generations? These are the sure-fire secrets.
(1)
Build a family culture of financial discipline early in life:
Often, the first generation - parents - learn financial discipline through
difficulties, hardship and deprivations. They’re focused, work quite hard, are
prudent with money, and begin to build wealth through savings and investment.
They
must teach this to the children. Parents must make their children understand
the meaning of money, the sacrifices they must make, and the conditions that must
be met in building wealth.
(2)
Lead your family in the fear of God:
We had earlier seen that one of the major factors that make future generations
lose the wealth their predecessors had built up is indulgence in excesses,
drugs, and wastefulness. When they fear God, they’ll receive the wisdom to
manage and grow resources. With God, wisdom and wealth go together.
God
told Solomon, “wisdom and knowledge
are granted to you; and I will give you riches
and wealth and honor, such as none of the kings have had who were before
you, nor shall any after you have the like" (2 Chronicles 1:12).
God’s
programme and agenda for families is for the children or descendants to be
improvements financially and otherwise upon their parents. Abraham was great (Genesis 18:18), Isaac was very great or greater (Genesis 26:12-14), and Jacob or Israel and his children waxed exceeding mighty or were greatest (Exodus 1:7). We
must grow more wealth than our parents and must also get our children to
understand that they must grow more wealth than us.
(3)
Teach your children financial education:
Wealth education is the ability to convert cash or labour
into assets that provide cash flow. Its components include business skills, money
skills and investment skills.
Financial education or financial literacy will
take us and the younger generations from a place of working for money to a
place we engage our money to work for us. Without financial education, the younger
generations can’t grow their inheritance into greater wealth.
(4)
Children should take their financially
successful parents as mentors also: Apart from being parents, we should
also serve as mentors to our children and younger generations. Mentoring is serving as an adviser, guide, teacher, and
source of inspiration to a less-experienced and perhaps younger person or
persons.
As parents, our children may see us as love
givers and care providers for their survival; as mentors they’ll see us as experienced advisers, trainers, and suppliers
of support for their career, business, and financial success.
(5) Build
up the entrepreneurship spirit in the family: Wealthy parents lay a solid
foundation of building wealth through clear goals, professional
or career focus, and determined pursuits in entrepreneurship.
Let’s
get the family story alive by letting the younger
generations understand the discipline, work, energy, and commitment that went
into the wealth they came to see, and how they should build upon that
foundation. Let’s get them to read constantly, acquire new skill sets that the
21st century business environment demands, as well as bring them on
board our businesses to gain practical experience in sustaining and multiplying
wealth.
Want more FREEBIES like this?
I know you do!
Click here to join the Wealth Inspiration Network (w.i.n) and get ready to become the BEST you. I will see you at the topmost top!
0 comments