Multi-Generational Wealth Management: Becoming a Steward of Your Family’s “River of Wealth”

“A good man leaves an inheritance to his children’s children.” – King Solomon, Proverbs 13:22

As a financial advisor, I’ve had the privilege of guiding families through the most important financial decisions of their lives for as many as four generations of family members. I now have four daughters of my own and I realize that Kristen (my wife) and I would do whatever it takes to give them every opportunity to make their lives the best they can possibly be.

I’m sure everyone feels this way as their children start arriving, but working in the financial planning field made it that much more poignant for me. After all, my job is to build and carry out a plan to help people get the financial lives they want. Seeing the wonderful young women my daughters are growing up to be makes me realize my financial planning horizon has extended by another generation. 

It has changed the way we think about money in general.

Wealth Is a River

My favorite personal finance writer, Nick Murray, once wrote: “Rather than looking at money as a finite resource, the chief issue surrounding which is when it will be all used up, we begin thinking of wealth as a river, capable of growing deeper and wider as it flows downstream to the next generation.”

We want to build that “river of wealth”, to help it grow deeper and wider as we tend it, and ultimately, pass it along to our daughters and, eventually, their children as they create a family of their own. Of course, we want to make sure it’s a blessing to them rather than a curse, but we realize that’s part of our responsibility as parents — to teach them how to properly manage and thrive in the life they will have.

In their book, Family Fortunes, Bill and Will Bonner said, “All wealth either is consumed or must be owned and managed by someone. Serious Old Money accepts the responsibility of taking care of its own money and preparing the next generation to do likewise.”

So, managed right, what might this river of family wealth do in my girls’ lives and the lives of their children? Certainly, there will be more education, travel, and business opportunities but, the truth is, we cannot imagine the challenges and opportunities the world will put in their path.

The one thing we can know is, if our family has its own river of wealth to tend and to draw on, they’re far more likely to be able to capture those opportunities and overcome those challenges as they’re faced with them.

Treasure Leads the Heart

Kirsten and I now see our role as overseers of their river of wealth, which we will work to broaden and deepen through the rest of our working years. Of course, we’ll drink from it in later life but our focus is on the next generation(s) and we tend the river with them top of mind. We make decisions based on how it will affect them at least as much as how it will affect us.

As a financial planner, I’ve noticed that the families that make decisions based on what’s best for the next generation make better decisions. The long-term focus, combined with the realization that we’re all just taking care of what we have for someone else in the future, gives us a healthier, more mature perspective in our financial lives.

Jesus told us in Matthew 6:21, “…where your treasure is, there your heart will be also.” Notice it’s not “where your heart is, there your treasure will be.” He’s telling us the treasure leads the heart.

As we consciously shift the focus of our financial life toward the next generations (or other people more broadly), our hearts will follow.

Become a Steward of Your Family’s River of Wealth

A self-centered financial life leads to a self-centered person. A self-centered life is a lonely life. But who doesn’t love spending time with people who love you?

A financial life dedicated to stewarding your resources for the benefit of your family fosters the most important relationships in your life. It also provides a sense of purpose in retirement, a reason to engage with the world and to stay connected with all the people for whom you’re tending this river of wealth.

Which type of life would you want as you get older?

Financial planning and wealth management aren’t just about you and your retirement. They’re not even just about money. Ultimately, if you’ll let it be, financial planning is about improving the lives of the people you love. It’s the process of widening and deepening your family’s river of wealth so it can impact future generations you’ll never meet.

As Warren Buffett said, “Someone’s sitting in the shade today because someone planted a tree a long time ago.”

Let us help you become a true steward of your family’s river of wealth. To get started with your own multi-generational wealth planning, join our Retirement Income Academy course. You can also download a free copy of our eBook, “How to Retire with Confidence and Clarity” to learn how you can set a date for retirement — and stick to it!