In a previous post we discussed the first reason family wealth rarely outlives the third generation. That was about the emotional association the younger generation has with the founding family member and with the business itself.
In this post, we’ll discuss a second reason.
First-Generation Wealth Creators (or Lack Thereof)
- I worked like hell to set this up for you.
- You didn’t have it as hard as I did.
- All you have to do is not ruin a good thing.
- I don’t want you to go through the struggles i went through.
All of these statements have some good intention behind them, though numbers two and three are particularly condescending. But they all communicate one message: I was a pioneer who had to build something, and now I not only don’t expect you to build anything, but it was my intention to make sure you never feel the need to build anything.
Oops.
The truth is,
- Working out of desperation is never an ideal way to live.
- Everyone’s life is hard in a unique way.
- A business is perfectly capable of ruining itself by refusing to adapt. And finally,
- Everyone’s going to go through different struggles.
A better outlook is to train your children to be first-generation wealth creators.
- I ran so that I could teach you to run.
- You’ll have hard times too, but you’ll be more ready for those times because you won’t have to face them alone.
- If we make a mistake, we learn from it and move on. Success is about testing, iterating, and scaling up as appropriate.
- I want you to learn from failure, disappointment, and setbacks as effectively as possible.
There’s no reason why your children cannot benefit from your experience and momentum. However, every person in your family must learn to see themselves as a first-generation wealth creator, regardless of their profession or where life takes them. This makes them captains of their own destiny, and thank God for that, because nobody wants to live a life that isn’t their own.
And as much as we want to pass on our business, the future is not always under our control. Far better to have children with a pioneer spirit and work ethic, regardless of future events.
An Unfair Advantage
One unfair advantage you have now is the ability to hire a bookkeeper. A decent bookkeeper is effective at monitoring costs, helping you make effective business decisions, and keeping you ready for tax season. It’s easier to learn the truth about the business from someone who has organized the information in a more understandable way, and you’ll save over 80 hours a year compared to doing it yourself. Schedule a call with me to discuss the future of your business’s bookkeeping today.