How to build family wealth that lasts

• True financial wealth involves acting as a steward, ensuring resources are managed and invested to benefit future generations.
• Open communication about money with children, prioritising financial education, and involving family members in decisions are all crucial steps towards fostering financial stewardship. 
• Shared values and purpose influence a family's approach to wealth, relationships, and ultimately, the meaning they assign to money.

Family wealth is more than just money in the bank. Traditionally, it’s the amount of assets a family holds. But for a good steward, it’s about more than just having money. Here’s a key definition: “sustaining and watching over resources to invest and support a comfortable lifestyle, and the ability to manage and sustain investments productively”. The word “sustaining” is crucial. Stewardship means ensuring our financial resources aren’t just there today (generation four) but will continue to benefit future generations (generation eight).

This focus on sustainability has practical implications for families. It shapes how we talk about money with our children, influencing their spending habits and expectations. It emphasises the importance of financial education – not just learning about money, but actively involving the family in learning how to manage wealth. 

In my own family, this principle played out in a unique way. Since our family business was sold before I was even born, we no longer had a tangible entity to focus on. Instead, our focus shifted to stocks, investments, and overall investment strategy. This meant financial education became paramount.

We spent a significant amount of time in my youth learning about investment strategies, starting small and gradually increasing the complexity as our knowledge grew. Over 15 years, our cousin-led investment group became quite successful.

While a cousin-run investment group might not be the ideal solution for every family, the core concept is what matters. We, as a family, came together to discuss our needs in terms of financial stewardship. We found a creative solution that worked for us.

This concept can be applied in various ways. Perhaps your family prioritises education about the family business, entrepreneurship, banking, real estate, or something else entirely. The key takeaway is that fostering stewardship of financial wealth involves setting clear expectations, defining the necessary education, and helping each family member understand their role as a steward of the family’s financial well-being.

Intangible assets

The second dimension of wealth is human or intellectual wealth. This refers to intangible assets that allow us to flourish as individuals. In the context of stewardship, it’s about nurturing skills, capabilities, character traits, leadership abilities, and financial literacy. This includes understanding personal wealth management, budgeting, and becoming financially independent.

How does this translate to families? Age-appropriate conversations about wealth are crucial, no matter how challenging they may seem. Numerous resources are available to help you talk to children about money management from a young age. Simple strategies include showing them the cost of items and calculating taxes, or taking them to the bank to understand saving.

Human wealth also encompasses fostering self-esteem and a strong sense of identity. Families with abundant financial resources often have unique opportunities to do this. For example, my grandmother’s wartime education opportunity exemplifies this. Additionally, fostering skills that contribute to maturity and independence plays a vital role.

In my own family, we encountered a unique situation. Not everyone has an equal aptitude for numbers and finance. This highlights the importance of tailoring strategies to individual strengths. A cousin of mine, while not particularly finance-savvy, possesses exceptional artistic talent. We wanted to involve her and enhance her leadership and personal finance management skills. So, we entrusted her with leading our family history project. Through this project, she developed valuable skills in project management, communication, and leadership as she interviewed family members. This experience not only empowered her as an individual but will ultimately benefit the entire family.

Our story is just one example. There are countless ways to cultivate human wealth within your family.

Shared family values

The third dimension of wealth is spiritual wealth or purpose. It’s not about religion, but rather about shared family values, spirit, and mission. It’s about finding a common ground that respects individual identities while fostering a sense of collective purpose. This translates to a shared approach towards wealth, relationships within the family, and ultimately, the meaning behind your money.

This dimension manifests in families in various ways. It could be a formal family mission or vision statement that guides your decisions. Perhaps it involves open discussions about the deeper meaning of wealth and life overall, or sharing family history and values.

As I mentioned before, family history is very important to us. Sharing stories is a cornerstone of our family experience. Additionally, we have a family mission statement that holds immense significance. We begin every formal family meeting by reviewing the mission statement and conclude by revisiting our core values. This serves as a constant reminder that managing our financial assets is intrinsically linked to a higher purpose – our shared vision as a family.

This is an excerpt from the first module of Campden Education’s course on becoming responsible stewards of family wealth. 

Bryn Mars Monahan is a fourth-generation family office board member and a consultant at Relative Solutions LLC. Bryn focuses on the intersection of enterprise and family, providing structure for governance, leadership, communication, and education.