How to Benefit from Billionaire Techniques: Generational Differences Matter
Differences in roles, motivation and challenges between family generations can affect the outcome of your family’s wealth transfer success. If you are trying to start or keep a family dynasty, knowing about these differences can help you succeed.
Based on studies and observation of wealthy families they serve, Mark Haynes Daniell and Sara S. Hamilton made note of characteristics of three generations as involved in wealth transfer. In their new book Family Legacy and Leadership Preserving True Family Wealth in Challenging Times, they discuss crossing generational bridges.
The wealth creating generation (First Gen) has the dream and the vision that creates the wealth. This generation is characterized by the need to control, take risks and be an entrepreneur. When it is time to transfer leadership and control to the next generation they may have trouble letting go of the day to day. They may not want to see their own children struggle as they did. They haven’t had time or energy to think about creating a legacy or educating the next generation.
Children of the First Gen (Second Gen) are typically the ones who start the family dynasty and develop a way for the family members to control the wealth creation engine. They want equality, simplicity, independence and want to avoid risk and conflict. They fear failure and are often intimidated by the First Gen. They have trouble living in the shadow of Mom or Dad – sometimes not finding a place for themselves in the enterprise. They have difficulty sharing ownership, control and development of a philanthropic vision with siblings. They often struggle with parenting their affluent offspring (they most likely did not grow up with affluence) and with understanding financial structures that are complex.
Cousins (Third Gen) have the hard task of learning to control the family’s wealth and legacy when there are a lot of stakeholders (sometimes 100 or more). They look for ownership and control, diversity, flexibility, consensus and nourish the family legacy. The difficulties they face include living up to the family legacy, working with cousins over great distances, coming up with a new shared vision for their generation, balancing individual and nuclear family pursuits with legacy responsibilities and finding their own way in their world of wealth.
Family Legacy and Leadership Preserving True Family Wealth in Challenging Times by Marke Haynes Daniell and Sara S. Hamilton, copyright 2010, published by John “Wiley & Sons (Asia) Pte. Ltd