The primary variable that families can control in affecting their investment returns is their spending rate. Yet, too often discussions about the real-life, brass tacks implications of wealth are either never held (most common) or are perceived/received as ‘spend shaming,’ rather than helping families members think strategically about their wealth and engage with how it can be a positive force in their own lives and communities.

In family wealth / family office circles, I have noticed a distinct phenomena – an almost universal tendency to not talk about the money. There are tremendous resources that are well crafted and thoughtfully produced that cover every possible nuance of family wealth – philanthropy, engaging the rising generation, management of the family office, unique estate planning structures, etc, etc. While all those topics are of vital importance – there is “one elephant in the room” that is rarely addressed, the fact that these considerations only exist because one has become exceptionally wealthy. 

But very few want to talk about what it means to be wealthy. 

This makes sense to some degree. Generally, we have all been raised in cultures where it is considered inappropriate to discuss financial matters in public.  Such matters are rightfully very private. Discussing such matters opens the family to potential scorn or even worse, the predators who would seek to prey off the family. There is also the general perception that ‘new money’ is crass from their conspicuous consumption and desire to more publicly flaunt their new found social status. In fact, it may be regarded as a sign of maturation that the family begins to adopt traditional ‘old money’ values such as discretion and modesty about the depth of ones financial resources.

If wealth is ever discussed, what generally is covered are the downsides of wealth. No conversation about the next generation is ever completed with out the word “entitlement” being raised.  And tragic stories abound of family members whose financial resources take a poor first decision and fan its flames into the very real challenges of addiction. Both are very real concerns and are not to be treated lightly. With such tremendous negative ‘downside’ risk, the implied message though is often that it is better to not discuss the wealth at the risk of emerging generations veering into the gutter. 

But what if, this very tendency to not discuss what it means to be wealthy, actually enhances the risk of a negative outcome rather than prevents it? How are family members to understand what it means to be wealthy if they cannot hear from others who have wrestled with those questions and reached satisfactory conclusions? How are they to be inspired to use their means to live lives of purpose and impact if they do not know the possible? 

Certainly discretion is warranted for those where such a conversation would do them harm. But for the rest, learning the gentle art of talking about wealth is of paramount.  For a family to remain healthy over the long-term, the financial resources alone cannot be the glue that keeps the family together. It is never just about the money for families that thrive for multiple generations. 

But let’s acknowledge the fact, that the financial resources are what are creating the opportunities for the family in the first place. The wealth is an ever present factor – the question is what do we do with it? 

If we ignore it and pretend it does not exist, we give it greater power to produce negative outcomes, because we imbue it with mystery and a sense of ‘off-limit-ness.’ Instead, with mutual learning and thoughtful consideration, the family can learn that wealth in itself does not bring about a meaningful life. Family members begin to articulate their goals and priorities for their wealth, and see it as a tool to be learned and deployed thoughtfully. Interestingly, with such a mindset and an engagement with one’s life, concerns around entitlement and profligacy begin to disappear.