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Family Fortunes
Selected as one of Motley Fool’s “5 Great Books You Should Read” Advice on managing your wealth from bestselling author Bill Bonner From trusted New York Times bestselling author Bill Bonner comes a radical new way to look at family money and a practical, actionable guide to getting and maintaining multigenerational wealth. Family Fortunes: How to Build Family Wealth and Hold on to It for 100 Years is packed with useful information, interwoven with Bonner's stories about his own family's wealth philosophy and practices. A comprehensive guide that shows how families can successfully preserve their estates by ignoring most of what people think they know about "the rich" and, instead, training and motivating all family members to work together toward a very uncommon goal. This book is a must-read for all individual investors―even those who do not plan to leave money to their children―because it challenges many of the most ubiquitous principles and rules of investing. You might expect a book on family wealth to be extremely conservative in its outlook. Instead, the Bonners announce what is practically a revolutionary manifesto. They explain: You will come away with a very different idea as to what family wealth is all about. It is not stodgy. Not boring. Not moss-backed and reactionary. On the contrary, it is the most dynamic, forward-looking capital in the world. The essential guide to passing wealth from one generation to the next, Family Fortunes is filled with concrete, practical advice you can put to use right away.
352 pages, Hardcover
First published June 21, 2012
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February 6, 2013
Could be the worst pseudo-finance book ever written. Right-wing authors come off as selfish--complete disregard for any public good. Many of the historical references were out of context, or just plain inaccurate.
September 2, 2017
This book was so much fun I read it in three days. I liked the voice it was written in. I liked the author. Kind, humble, intelligent, and even witty at times.
The only flaw of this book is its time frame. When the Bonners wrote this book, they had been thinking about how to create a strong family for only four years. Even in that small amount of time, they reached almost identical conclusions to what I have reached. But they may have started too late. After a family disperses... it is almost impossible to get them back together. The Bonners write in their book that families who want to stay families should homeschool their kids (a conclusion I also reached). But the Bonner kids are grown. They did the public school thing and now the six kids have six different careers going on in six different cities. I am rooting for them, of course, but I hope people think about what they want their family to be when they get married, not when their kids are grown and gone.
The only conclusion I reached the Bonners didn't address is health. Animals are walking, talking plots of dirt. That's all we are. Soil. The soil must be tended to first, as the highest priority if the family is to stay strong physically. Everything starts with the physical.
I hope the Bonners write a follow up to this book after they have been trying to create their strong family for another ten years. I hope they tell more stories of personal experience. That's the other flaw in this book. More personal experience! They give their advice humbly, but still too much advice and too little of "this is what we did." *Though this book has a helluva lot more "this is what we did" than any other book you will read on money!
Quotes:
"The secret is simply this: The rich take the long view... If there is one thing that marks families with money over the long term it is this: delayed gratification."
"This book is not about getting something. It is about giving up something. It is for the planter. For the roofer. For the builder. For the saver. It is for the person who wishes to make the sacrifice - even if it is a relatively agreeable sacrifice - so that others may benefit from it, perhaps others whom he will never meet."
"There are a lot of families. And there are a lot of rich people. But there aren't many rich families, at least, not for long. And there's a good reason. Keeping money and the family together over longer than a generation is tough. Statistically, it's unlikely. Practically, it's hard work. Most people don't even want to try. Because it's too hard. Or because they don't think it's a good idea."
"Real family money - Old Money - is rare; it's way out on the edge of the bell curve. And it involves sacrifice, not self-indulgence. It involves giving up, not getting. It involves more work, not more leisure."
"More important than the money, the family has to be kept strong and healthy. A strong family can make money. A weak family can't even hold onto money that someone else made."
"The old have not merely abandoned the young to their own fate; they have stabbed them in the back. It's bad enough that they use up all their own money. But they don't stop there. They spend other people's money, too. And then they spend money that hasn't even been earned yet." [referring to Social Security and Medicaid]
"Your family members should do the same, working alongside one another in order to spread not merely knowledge, but something more important: culture."
"What makes these campaigns especially interesting to us is that they targeted families. Totalitarian states, of which France's Committee of Public Safety was an early trial run, insist on the full cooperation and absolute obedience of their subject peoples. They cannot bear any competition from alternate or independent sources of fidelity. Neither religious groups nor ethnic groups, nor families are allowed to compete for power, influence or allegiance with the central political power... The state is often the enemy of families."
-Note that all power wants to destroy family loyalty. Many churches too. You are loyal to your religion first, then your family. If you family leaves your church, you disown them, etc.
"Old Money families create their own culture."
"The nuclear family model is inadequate for multigenerational wealth building."
"It takes an extraordinary effort to produce extraordinary wealth. Ordinary people do ordinary things; they end up with ordinary money."
"You're better off educating the children at home ... Turn them over to the government, and you'll have government-formed children. Your human capital is likely to lose value... Public schools teach the government's narrative, not a family's narrative."
"Make no mistake, your children are under a constant barrage of ideas that dull their senses and pull them down toward the mean. That's what modern society and government do. Public schools, television, social media, mainstream news, sports, pop culture - nothing wrong with them. Most things are, by definition, ordinary. Your children are likely to be ordinary, too. In many cases, it's the best we can hope for! but if you want to have an extraordinary family, you have to do something extraordinary."
"Seventy precent of family wealth transfers fail."
"Old Money family needs to stay as 'outsiders.' It has to remain apart - to some extent - from the culture of the masses, or even the rich."
"In our family, we try to avoid politics altogether. We believe in remaining outsiders. We think it is dangerous to be on the inside. You risk becoming insiders, looking for handouts and wealth redistribution rather than wealth creation."
The ideal family business is a family farm :)
But then he says the ideal family family business is the business you are already in. I agree with that, but it is short term thinking. Yes, the current worker in that business will earn more in that business, but if it is not a good long-term business for a family ... it's short term thinking.
Bonner's family vision has the guy working 12 hours a day outside the home and the woman staying at home. Again to me this is short term thinking. The ideal family business enables the family to be together. Take your family business and make it a place your children can grow up. This is the part he is missing. I don't think dispersed families actually work. The dad working away from his family is the first dispersement.
"But earnings are a consequence of accumulated effort OVER TIME. So the guy who puts in 4 more hours per day accumulates much more experience .... After five years, he's been on the job 5,000 hours longer than his colleague. That's the equivalent of 2.5 years more.... Time spent at the end is much more powerful than time at the beginning. You can see this by looking at the charts of compound interest. Starting from a low base, the first series of compound interest produces little difference. But at the end, the results are spectacular."
"In Paris, the best apartments never even show up in the realtors' windows. Instead, every one has a dozen admirers waiting for the owner to die. Buyers are usually friends and family with a special "in."" *I have found that this is true in every industry! That's why a great career (generally) takes more than one generation to make.
Bonner tells his reader to invest in the developing world and not in the developed world.
Bonner thinks all charity is risky as you may be causing harm. He says if you must do charity, take responsibility for it. Pick the poor child whose education you want to fund, and fund it. Develop a relationship with them. Pick the homeless man you want to support, and watch what your money does for him. Take responsibility for the consequences of your charity.
"When it comes to protecting and preserving a fortune, the United States is not a good place to be."
"Ninety percent of family-owned businesses do not last past three generations of ownership."
"Not preparing for the estate tax is the most basic family wealth blunder you can make. It destroys thousands of otherwise prosperous family businesses."
Family businesses are far more valuable than money for investing.
As Bonner describes how hard it is to hold onto money once made, I am blown away. Keeping money that has been made is a full time job. Better to keep the family business than to sell it and me a money manager for the rest of your life.
One of the best parts of this book was about the Henokiens. Google it. Families that have kept their family business for more than 200 years. THOSE are the families I want to study!
And lastly, a story he told:
"We've got trouble," they announced. "Morale is very low. What can we do?"
"Easy," he replied without thinking about it. "Ask for a show of hands on all employees whose morale is low. Fire those that raise their hands. We don't want employees with low morale."
Any business that begins to care about employee morale is lame. Because it becomes self-absorbed, like a teenager. It begins to care about itself, its problems, its happiness. It will spend hours worrying about the wrong things. It will direct mangers' attention to problems that shouldn't exist. It will transform itself into an egocentric, self-serving institution... One study we saw said that a group of as few as 100 people could spend ALL its time trying to sort out its own interior problems."
UPDATE: I have now read a dozen or so more books on this subject and have changed my rating of this book from four stars to five. Despite its imperfections, this is by far the best book on this subject.
The only flaw of this book is its time frame. When the Bonners wrote this book, they had been thinking about how to create a strong family for only four years. Even in that small amount of time, they reached almost identical conclusions to what I have reached. But they may have started too late. After a family disperses... it is almost impossible to get them back together. The Bonners write in their book that families who want to stay families should homeschool their kids (a conclusion I also reached). But the Bonner kids are grown. They did the public school thing and now the six kids have six different careers going on in six different cities. I am rooting for them, of course, but I hope people think about what they want their family to be when they get married, not when their kids are grown and gone.
The only conclusion I reached the Bonners didn't address is health. Animals are walking, talking plots of dirt. That's all we are. Soil. The soil must be tended to first, as the highest priority if the family is to stay strong physically. Everything starts with the physical.
I hope the Bonners write a follow up to this book after they have been trying to create their strong family for another ten years. I hope they tell more stories of personal experience. That's the other flaw in this book. More personal experience! They give their advice humbly, but still too much advice and too little of "this is what we did." *Though this book has a helluva lot more "this is what we did" than any other book you will read on money!
Quotes:
"The secret is simply this: The rich take the long view... If there is one thing that marks families with money over the long term it is this: delayed gratification."
"This book is not about getting something. It is about giving up something. It is for the planter. For the roofer. For the builder. For the saver. It is for the person who wishes to make the sacrifice - even if it is a relatively agreeable sacrifice - so that others may benefit from it, perhaps others whom he will never meet."
"There are a lot of families. And there are a lot of rich people. But there aren't many rich families, at least, not for long. And there's a good reason. Keeping money and the family together over longer than a generation is tough. Statistically, it's unlikely. Practically, it's hard work. Most people don't even want to try. Because it's too hard. Or because they don't think it's a good idea."
"Real family money - Old Money - is rare; it's way out on the edge of the bell curve. And it involves sacrifice, not self-indulgence. It involves giving up, not getting. It involves more work, not more leisure."
"More important than the money, the family has to be kept strong and healthy. A strong family can make money. A weak family can't even hold onto money that someone else made."
"The old have not merely abandoned the young to their own fate; they have stabbed them in the back. It's bad enough that they use up all their own money. But they don't stop there. They spend other people's money, too. And then they spend money that hasn't even been earned yet." [referring to Social Security and Medicaid]
"Your family members should do the same, working alongside one another in order to spread not merely knowledge, but something more important: culture."
"What makes these campaigns especially interesting to us is that they targeted families. Totalitarian states, of which France's Committee of Public Safety was an early trial run, insist on the full cooperation and absolute obedience of their subject peoples. They cannot bear any competition from alternate or independent sources of fidelity. Neither religious groups nor ethnic groups, nor families are allowed to compete for power, influence or allegiance with the central political power... The state is often the enemy of families."
-Note that all power wants to destroy family loyalty. Many churches too. You are loyal to your religion first, then your family. If you family leaves your church, you disown them, etc.
"Old Money families create their own culture."
"The nuclear family model is inadequate for multigenerational wealth building."
"It takes an extraordinary effort to produce extraordinary wealth. Ordinary people do ordinary things; they end up with ordinary money."
"You're better off educating the children at home ... Turn them over to the government, and you'll have government-formed children. Your human capital is likely to lose value... Public schools teach the government's narrative, not a family's narrative."
"Make no mistake, your children are under a constant barrage of ideas that dull their senses and pull them down toward the mean. That's what modern society and government do. Public schools, television, social media, mainstream news, sports, pop culture - nothing wrong with them. Most things are, by definition, ordinary. Your children are likely to be ordinary, too. In many cases, it's the best we can hope for! but if you want to have an extraordinary family, you have to do something extraordinary."
"Seventy precent of family wealth transfers fail."
"Old Money family needs to stay as 'outsiders.' It has to remain apart - to some extent - from the culture of the masses, or even the rich."
"In our family, we try to avoid politics altogether. We believe in remaining outsiders. We think it is dangerous to be on the inside. You risk becoming insiders, looking for handouts and wealth redistribution rather than wealth creation."
The ideal family business is a family farm :)
But then he says the ideal family family business is the business you are already in. I agree with that, but it is short term thinking. Yes, the current worker in that business will earn more in that business, but if it is not a good long-term business for a family ... it's short term thinking.
Bonner's family vision has the guy working 12 hours a day outside the home and the woman staying at home. Again to me this is short term thinking. The ideal family business enables the family to be together. Take your family business and make it a place your children can grow up. This is the part he is missing. I don't think dispersed families actually work. The dad working away from his family is the first dispersement.
"But earnings are a consequence of accumulated effort OVER TIME. So the guy who puts in 4 more hours per day accumulates much more experience .... After five years, he's been on the job 5,000 hours longer than his colleague. That's the equivalent of 2.5 years more.... Time spent at the end is much more powerful than time at the beginning. You can see this by looking at the charts of compound interest. Starting from a low base, the first series of compound interest produces little difference. But at the end, the results are spectacular."
"In Paris, the best apartments never even show up in the realtors' windows. Instead, every one has a dozen admirers waiting for the owner to die. Buyers are usually friends and family with a special "in."" *I have found that this is true in every industry! That's why a great career (generally) takes more than one generation to make.
Bonner tells his reader to invest in the developing world and not in the developed world.
Bonner thinks all charity is risky as you may be causing harm. He says if you must do charity, take responsibility for it. Pick the poor child whose education you want to fund, and fund it. Develop a relationship with them. Pick the homeless man you want to support, and watch what your money does for him. Take responsibility for the consequences of your charity.
"When it comes to protecting and preserving a fortune, the United States is not a good place to be."
"Ninety percent of family-owned businesses do not last past three generations of ownership."
"Not preparing for the estate tax is the most basic family wealth blunder you can make. It destroys thousands of otherwise prosperous family businesses."
Family businesses are far more valuable than money for investing.
As Bonner describes how hard it is to hold onto money once made, I am blown away. Keeping money that has been made is a full time job. Better to keep the family business than to sell it and me a money manager for the rest of your life.
One of the best parts of this book was about the Henokiens. Google it. Families that have kept their family business for more than 200 years. THOSE are the families I want to study!
And lastly, a story he told:
"We've got trouble," they announced. "Morale is very low. What can we do?"
"Easy," he replied without thinking about it. "Ask for a show of hands on all employees whose morale is low. Fire those that raise their hands. We don't want employees with low morale."
Any business that begins to care about employee morale is lame. Because it becomes self-absorbed, like a teenager. It begins to care about itself, its problems, its happiness. It will spend hours worrying about the wrong things. It will direct mangers' attention to problems that shouldn't exist. It will transform itself into an egocentric, self-serving institution... One study we saw said that a group of as few as 100 people could spend ALL its time trying to sort out its own interior problems."
UPDATE: I have now read a dozen or so more books on this subject and have changed my rating of this book from four stars to five. Despite its imperfections, this is by far the best book on this subject.
February 16, 2020
I was deeply unimpressed with this book. It reads like it was written by a ranting boomer who has managed to figure out how to write a blog, which it pretty much is. I looked at Bonner's blog and could not get through a single article without a gag or eye roll. There were a few parts that I enjoyed which made me keep reading, but mostly out of sheer desperation to make the read worthwhile. Those parts included his advice on growing a business (i.e. "the fastest way to make money is to make money slowly. You can try to make it fast forever and never get anywhere. But try to make it slowly... and you'll probably end up with at least something eventually."). Sound advice, but that grammar though... :(
The author has very strong opinions and assumes a tone that feels extremely disparaging and preachy to younger generations or anyone who disagrees with him. I would consider myself novice investor, but I know the basics well enough to tell when his data is inaccurate. His examples unflaggingly assume worst-case scenarios and when the most disastrous case is your baseline it's easy to make Bonner's examples seem credible. He seems to believe that the only way to make money is by starting a business, working 12 hour days, making your wife stay home (oh yeah he's sexist too), and retaining long-term control of said business by forcing all your children to work in the family business. I would skip this book entirely and find another one that better written and less doomsday.
The author has very strong opinions and assumes a tone that feels extremely disparaging and preachy to younger generations or anyone who disagrees with him. I would consider myself novice investor, but I know the basics well enough to tell when his data is inaccurate. His examples unflaggingly assume worst-case scenarios and when the most disastrous case is your baseline it's easy to make Bonner's examples seem credible. He seems to believe that the only way to make money is by starting a business, working 12 hour days, making your wife stay home (oh yeah he's sexist too), and retaining long-term control of said business by forcing all your children to work in the family business. I would skip this book entirely and find another one that better written and less doomsday.
April 21, 2014
This book is an important work if you want to consider leaving a financial and familial legacy for the generations of your family to come after you. This book is not good if you want a non-patriarchal, non-homophobic, non-prejudiced view of how to maintain a familial legacy. I was not interested in being offended however, so I focused on the lessons that the book offered and I was impressed.
The idea that you have "family money" is foreign to most people's way of thinking (including my own before I picked up this book). Money that lasts beyond you, your children, and your grandchildren, is a concept that always seems destined for other people. The book is important, because it gets your mindset set to the fact that having "family money" is not what happens to other people, but is something that people make happen. Saving and protecting your money and assets, both from the outside world and from your potentially ignorant offspring/relatives, is the crux of this book. That message may seem crass, but it is also incredibly relevant. Protecting against what could happen and what will definitely happen is a smart move to make.
I am personally ambitious and I want the best for my children and offspring for generations. Thinking about money beyond what I personally want and instead what my grandchildren's grandchildren could do with that money is a completely different way of thought. I would recommend "Family Fortunes" as a great book to get your mind in the right path of establishing a legacy and protecting it continually.
The idea that you have "family money" is foreign to most people's way of thinking (including my own before I picked up this book). Money that lasts beyond you, your children, and your grandchildren, is a concept that always seems destined for other people. The book is important, because it gets your mindset set to the fact that having "family money" is not what happens to other people, but is something that people make happen. Saving and protecting your money and assets, both from the outside world and from your potentially ignorant offspring/relatives, is the crux of this book. That message may seem crass, but it is also incredibly relevant. Protecting against what could happen and what will definitely happen is a smart move to make.
I am personally ambitious and I want the best for my children and offspring for generations. Thinking about money beyond what I personally want and instead what my grandchildren's grandchildren could do with that money is a completely different way of thought. I would recommend "Family Fortunes" as a great book to get your mind in the right path of establishing a legacy and protecting it continually.
January 29, 2016
This book was impactful to me in that there are several actions I've taken and will take as a result of what I read in it. It also contained several viewpoints that are contrarian, which I love to encounter in my reading. Examples of such viewpoints, which are expanded upon in the book - i.e. why nepotism is good and philanthropy is misdirected.
I'm also going to paste some of the notes I took in the book below in case they are helpful for other readers:
* General themes on family culture:
*
* Important to establish a family culture, a family identity, shared family values.
* Family property/ies are helpful - facilitates common memories/ties
* Important to focus equally on developing human capital as it is financial capital
* Have a family council, family policies, shared family passions (sports team, college, etc) that are passed through children
* Bring children on business trips and into the business at a young age
* Family Office Specifics:
*
* Ownership of Family Business is a Must
*
* Innovations are mutations - most die. Instead, incrementally improve. Rip off and duplicate. You want improvement, not innovation. Don't be a pioneer, be at the tipping point. Launch your boat in a rising tide with wind at your back. You want to be in a space that's proven but not fully implemented.
* A real business is a collaboration, there are no lone wolves.
* Any business that cares about employee morale is lame - too inward focused. Be focused outward and fire anyone on your team who isn't
* Hard Structures:
*
* 5 hard structures you must have in place:
*
* 1. Owner of the family wealth - usually a trust
*
* Dynasty Trust - avoid high estate taxes and mismanagement by future generations. Transfer wealth before you die for tax benefit
* 2. An investment/bank account where you can trust the currency
* 3. A will
* 4. An estate plan
* 5. Tax strategy that makes sense and connects these pieces with your family's financial goals
* Soft Structures:
*
* Soft structures most important in family offices. Communication lines, councils, conflict resolution process, etc
* Patriarch and matriarch must agree on family vision and plan for assets over next 100 years
* Endowment model:
*
* Soft: Institutionalize your family council, mission statement, and constitution, family bank, investment committee, education and mentorship program, family philanthropic arm. Have a family meeting and establish the above. Organize family activities that strengthen bonds, enable group decision making and consensus building.
* Family bank - manage loans throughout family, an insurance fund, fund education, new business ventures, investments, etc
* Have a "Black Swan" plan - ex. a farm/stronghold with resources
* Designate one family member to establish non-US base:
*
* 1 member of the family must not be a US citizen. This family member, preferably a young person, should have few appreciated assets at the time of expatriation - exit taxes will be minimized. The family member outside US must then set up non-US hard structures - (bank accts, trust, corporation, new will, salaries) these become the "holder/controller" of the family's non-US assets. Get free and clear of US taxes, especially important when wealth is being transfered to next generation.
* Politics, bureaucracy, etc all hurt wealth - stay away from it. An international base lets you choose which structures to use.
* Family Council Meeting Agenda:
*
* Acknowledgment of recent family accomplishments, events and activities - 15m
* Roll Call and review of family profiles - 30m
* Introduction of Family Office and review of the family balance sheet - 1h (then break)
* Review of the family office budgets, including allowances/children, maintenance of family properties, travel to family events/holidays, other items - 1h
* Official formation of the investment committee - 30m (then break)
* Review of family governance (how family office decisions are made) - 30m
* Closing remarks/summary of takeaways/announcement of next meeting - 15m
* Contrarian Viewpoints:
*
* Warren Buffett's attitude on higher taxes is wrong
* Nepotism is good; Philanthropy is misdirected - you could go to a poor country and volunteer your time. But if the cost of a day laborer there is $10/day, you are better off working in the US and sending your earnings there for bread. But such aid money is misdirected, feeds into poor and/or corrupt uses. You already fund this through taxes.
* Dual incomes are not good for creating wealth and family fortunes - you should have one partner focused on wealth creation, the other focused on human capital creation (running the family, instilling family values/culture)
* More important to give practical knowledge (hands-on) vs. sending kids to business school
* Spousal selections are "policy decisions" - they should be chosen to fit the family culture
* Kennedy and Busch families were poor examples of family offices.
* US is an aged empire - it is headed for bankruptcy and perhaps worse. This could be a bad time to have all your eggs in the US basket.
* Other/Misc. Points:
*
* Wealth is correlated to being good at delayed gratification (i.e. wealthy countries had to plan/ration resources - i.e Sweden, Norway, Switzerland vs. Congo, West Virginia, etc; also used example of kids who could delay eating sweets as being more successful in school and career)
* HENRYs: High Earners Not Rich Yet (pays high taxes, has high cost of lifestyle, stuck in hamster wheel)
* FU money is liberating. Enough to get away from politics, other decision makers. You can be free in an unfree world.
* Think of your time as compounding - compounds like interest. With families, your time gets to compound beyond your own generation (ex. It takes olive trees 35 years to produce its first decent harvest, but then it does so for centuries)
* Serious investors rarely follow the news and never act on it
* In the long run, it's beta (asset allocation) that makes $, not alpha. 2 Beta views:
*
* Short the developed world; go long on the emerging countries
* Bet on the losers - paper money down as credit corrects; gold to go up long term
* US expanded through 17th-20th centuries - it is not "virgin territory" anymore; we have to compete in a different way. US's competitive advantage has eroded and the whole world is demanding resources. Trends that favored the US and US debt are coming to an end.
* Not planning for estate taxes has killed many family offices/fortunes
I'm also going to paste some of the notes I took in the book below in case they are helpful for other readers:
* General themes on family culture:
*
* Important to establish a family culture, a family identity, shared family values.
* Family property/ies are helpful - facilitates common memories/ties
* Important to focus equally on developing human capital as it is financial capital
* Have a family council, family policies, shared family passions (sports team, college, etc) that are passed through children
* Bring children on business trips and into the business at a young age
* Family Office Specifics:
*
* Ownership of Family Business is a Must
*
* Innovations are mutations - most die. Instead, incrementally improve. Rip off and duplicate. You want improvement, not innovation. Don't be a pioneer, be at the tipping point. Launch your boat in a rising tide with wind at your back. You want to be in a space that's proven but not fully implemented.
* A real business is a collaboration, there are no lone wolves.
* Any business that cares about employee morale is lame - too inward focused. Be focused outward and fire anyone on your team who isn't
* Hard Structures:
*
* 5 hard structures you must have in place:
*
* 1. Owner of the family wealth - usually a trust
*
* Dynasty Trust - avoid high estate taxes and mismanagement by future generations. Transfer wealth before you die for tax benefit
* 2. An investment/bank account where you can trust the currency
* 3. A will
* 4. An estate plan
* 5. Tax strategy that makes sense and connects these pieces with your family's financial goals
* Soft Structures:
*
* Soft structures most important in family offices. Communication lines, councils, conflict resolution process, etc
* Patriarch and matriarch must agree on family vision and plan for assets over next 100 years
* Endowment model:
*
* Soft: Institutionalize your family council, mission statement, and constitution, family bank, investment committee, education and mentorship program, family philanthropic arm. Have a family meeting and establish the above. Organize family activities that strengthen bonds, enable group decision making and consensus building.
* Family bank - manage loans throughout family, an insurance fund, fund education, new business ventures, investments, etc
* Have a "Black Swan" plan - ex. a farm/stronghold with resources
* Designate one family member to establish non-US base:
*
* 1 member of the family must not be a US citizen. This family member, preferably a young person, should have few appreciated assets at the time of expatriation - exit taxes will be minimized. The family member outside US must then set up non-US hard structures - (bank accts, trust, corporation, new will, salaries) these become the "holder/controller" of the family's non-US assets. Get free and clear of US taxes, especially important when wealth is being transfered to next generation.
* Politics, bureaucracy, etc all hurt wealth - stay away from it. An international base lets you choose which structures to use.
* Family Council Meeting Agenda:
*
* Acknowledgment of recent family accomplishments, events and activities - 15m
* Roll Call and review of family profiles - 30m
* Introduction of Family Office and review of the family balance sheet - 1h (then break)
* Review of the family office budgets, including allowances/children, maintenance of family properties, travel to family events/holidays, other items - 1h
* Official formation of the investment committee - 30m (then break)
* Review of family governance (how family office decisions are made) - 30m
* Closing remarks/summary of takeaways/announcement of next meeting - 15m
* Contrarian Viewpoints:
*
* Warren Buffett's attitude on higher taxes is wrong
* Nepotism is good; Philanthropy is misdirected - you could go to a poor country and volunteer your time. But if the cost of a day laborer there is $10/day, you are better off working in the US and sending your earnings there for bread. But such aid money is misdirected, feeds into poor and/or corrupt uses. You already fund this through taxes.
* Dual incomes are not good for creating wealth and family fortunes - you should have one partner focused on wealth creation, the other focused on human capital creation (running the family, instilling family values/culture)
* More important to give practical knowledge (hands-on) vs. sending kids to business school
* Spousal selections are "policy decisions" - they should be chosen to fit the family culture
* Kennedy and Busch families were poor examples of family offices.
* US is an aged empire - it is headed for bankruptcy and perhaps worse. This could be a bad time to have all your eggs in the US basket.
* Other/Misc. Points:
*
* Wealth is correlated to being good at delayed gratification (i.e. wealthy countries had to plan/ration resources - i.e Sweden, Norway, Switzerland vs. Congo, West Virginia, etc; also used example of kids who could delay eating sweets as being more successful in school and career)
* HENRYs: High Earners Not Rich Yet (pays high taxes, has high cost of lifestyle, stuck in hamster wheel)
* FU money is liberating. Enough to get away from politics, other decision makers. You can be free in an unfree world.
* Think of your time as compounding - compounds like interest. With families, your time gets to compound beyond your own generation (ex. It takes olive trees 35 years to produce its first decent harvest, but then it does so for centuries)
* Serious investors rarely follow the news and never act on it
* In the long run, it's beta (asset allocation) that makes $, not alpha. 2 Beta views:
*
* Short the developed world; go long on the emerging countries
* Bet on the losers - paper money down as credit corrects; gold to go up long term
* US expanded through 17th-20th centuries - it is not "virgin territory" anymore; we have to compete in a different way. US's competitive advantage has eroded and the whole world is demanding resources. Trends that favored the US and US debt are coming to an end.
* Not planning for estate taxes has killed many family offices/fortunes
September 30, 2021
This is easily the worst personal finance book I've ever read. Before attempting to recount some of the many problems let's just lead with the fatal flaw that makes it useless for everyone:
The authors have zero experience with building family wealth and holding onto it for 100 years. They do not have experience advising families who have done so. They did not interview families who have done so. Bill Bonner is a somewhat crackpot, alarmist, financial-doomsday author whose predictions have continually failed to come to pass. In this book are his (and his son's) ruminations on what they think maybe, probably it takes to build family wealth and hold onto it for 100 years.
The second fatal flaw is there is nothing hard backing anything they write. They often take a very Trump approach of saying "everyone knows" and "people say" without any citations or references or...anything.
Every study ever done? Wow, they must have spent a lot of time reading all those studies!
In some cases when they do this it's not even that I disagree strongly with them. But this is simply sloppy, bad writing that shouldn't be encouraged. If you're going to appeal to scientific authority for your claims by referencing "studies", you need to back it up with references. Otherwise, just be brave and say it is your personal opinion.
Of course, at other times they don't even bother with "proof". That would require doing actual work before writing a book.
Finally, the book itself is just all over the place and not especially cohesive. There's a weirdly long disgression into the "history" of retirement, though I'm not sure what that has to do with holding onto family wealth for 100 years. And tons of conservative talking points about government/family/etc that also have nothing to do with building family wealth or holding on to it for 100 years.
Or
Not to mention histrionic stuff like:
Yes, America's young people are definitely the world's poorest. Not, like the billions in Africa or Asia who live on $2/day.
Strewn throughout the book are numerous asides where the authors clearly have no idea what they're talking about. One wonders why they even bothered. A particularly painful example is their discussion about Haiti and why it is poor despite having good climate and soil. They seem to be completely unaware of the Haitian Revolution of 1791-1804, the only successful slave revolt in world history, that resulted in France blockading the island with warships and demanding reparations that took until 1947 to finally pay off and bankrupted the country for a century. Maybe that has something with why Haiti is poor and not their theory about good weather makes people lazy?
A similar example occurs during the aforementioned long interlude about the "history" of retirement:
Yes, retirement is a Soviet attempt to undermine real America.
This book is garbage. For a much better book on the same subject of dynastic wealth -- from someone with actual experience in the area -- check out Complete Family Wealth
The authors have zero experience with building family wealth and holding onto it for 100 years. They do not have experience advising families who have done so. They did not interview families who have done so. Bill Bonner is a somewhat crackpot, alarmist, financial-doomsday author whose predictions have continually failed to come to pass. In this book are his (and his son's) ruminations on what they think maybe, probably it takes to build family wealth and hold onto it for 100 years.
Whether successful Old Money does or not, we don’t know. But it seems like a good way to look at it.
The second fatal flaw is there is nothing hard backing anything they write. They often take a very Trump approach of saying "everyone knows" and "people say" without any citations or references or...anything.
Yet government’s performance has been spotty. In fact, every study ever done concludes that the family can be far more helpful to an individual than the state.
Every study ever done? Wow, they must have spent a lot of time reading all those studies!
Raising children properly is a critical family function. It should be the focus of one parent. There are numerous studies that confirm this.
In some cases when they do this it's not even that I disagree strongly with them. But this is simply sloppy, bad writing that shouldn't be encouraged. If you're going to appeal to scientific authority for your claims by referencing "studies", you need to back it up with references. Otherwise, just be brave and say it is your personal opinion.
Of course, at other times they don't even bother with "proof". That would require doing actual work before writing a book.
People made many different arrangements, depending on what was going on at the time. But the institution that most commonly held and allocated wealth was the family. We say that without any real proof. But it seems self-evident.
Finally, the book itself is just all over the place and not especially cohesive. There's a weirdly long disgression into the "history" of retirement, though I'm not sure what that has to do with holding onto family wealth for 100 years. And tons of conservative talking points about government/family/etc that also have nothing to do with building family wealth or holding on to it for 100 years.
Still, in modern developed countries, people are meant to owe greater allegiance to the government than to their own kin.
Or
But now we know something. The political/economic model used by European and American nation-states for the last 150 years is going bust.
Not to mention histrionic stuff like:
Forbes publishes a list of the world’s richest people. But suppose it published a list of the world’s poorest people. Who would it put on this list? Surely, America’s young people would lead the rankings.
Yes, America's young people are definitely the world's poorest. Not, like the billions in Africa or Asia who live on $2/day.
Strewn throughout the book are numerous asides where the authors clearly have no idea what they're talking about. One wonders why they even bothered. A particularly painful example is their discussion about Haiti and why it is poor despite having good climate and soil. They seem to be completely unaware of the Haitian Revolution of 1791-1804, the only successful slave revolt in world history, that resulted in France blockading the island with warships and demanding reparations that took until 1947 to finally pay off and bankrupted the country for a century. Maybe that has something with why Haiti is poor and not their theory about good weather makes people lazy?
A similar example occurs during the aforementioned long interlude about the "history" of retirement:
The idea of retirement was invented by social engineers who were trying to develop economic models for welfare/warfare societies.
This vision of the way things ought to work was the basic template for Bismarck’s social welfare state. Later, it was expanded by the Marxists, who were even more ambitious.
But the vision of “retirement” outlived the Soviet Union.
Yes, retirement is a Soviet attempt to undermine real America.
This book is garbage. For a much better book on the same subject of dynastic wealth -- from someone with actual experience in the area -- check out Complete Family Wealth
November 23, 2018
Truly awful. They speculate on how certain families operate without any inside knowledge (they admit this!). Some of their views are plain dangerous
July 17, 2018
This book is wonderful if only for introducing a way of ultra-long-term thinking. It’s worth reading because it’s unlike most of what you read today: It doesn’t (necessarily) recommend stocks and gives unconventional business and family advice. Some of the advice might be based on underlying views that are debatable, but there is also a non-zero chance that he author is correct. Highly recommended.
January 23, 2015
I am not in the target audience for this book. It's all about how families build and protect wealth through generations. It's a mix of folksy philosophizing about how families should operate, rambling advice about strategies for earning and investing wealth for maximum growth and safety, etc. From what I know of the Bonners and their empire of financial commentary and newsletters, they are contrarians to much of the mainstream perspective about money, investing, politics, and more. They are big into the developing world, are economically libertarian and socially conservative without being Republican. I skimmed a lot of this because it just simply wasn't relevant to me, or is so far out of my reach that it's not worth spending serious time on. Maybe one day when I make my millions. Yeah, that's it.
December 6, 2018
I started this book with a hope of learning more about family business and how they succeed over time, as the title suggests. However, this turns out to be a one-sided and vengeful argument about how you shouldn't trust anyone else to manage your money apert from yourself. The logic and language deployed in the argument were rudimentary as well as polarised. Apart from the introductory chapters the content of the book did not adhere to the title and what supporting examples it used were few and again gave no consideration for alternative interpretations. Also, I can say after reading Titian the biography of John D Rockefeller the author's example of the Rockefeller family is superficial and wrong example to be used at the beginning of the book.
Waste of my time and will look for other books on this topic.
Waste of my time and will look for other books on this topic.
February 20, 2017
This book gives a brief, anecdotal overview of what it takes to keep multi-generational wealth management alive and well. Short on hard data, the authors offer their personal experiences as support for their conclusions.
I did enjoy reading the book. I give it a two-star rating simply because the writing was a bit too scattered for my taste. Furthermore, while the book was heavy on "truths", it was short on facts; a pet peeve of mine. I appreciate the authors laying out their experiences, but wish that they had explored in more detail the experiences of other successful families.
I did enjoy reading the book. I give it a two-star rating simply because the writing was a bit too scattered for my taste. Furthermore, while the book was heavy on "truths", it was short on facts; a pet peeve of mine. I appreciate the authors laying out their experiences, but wish that they had explored in more detail the experiences of other successful families.
April 13, 2018
The authors frequently stated their thoughts and theories as facts, yet rarely offered data to back up themselves up. It reads like the authors have little to no experience about “old money” themselves, yet rely on their own limited experience as the basis of the book rather than draw on the experiences of others who have actually done what this book proposes to be a roadmap for. Writing style is quite elementary. There are some good points here and there that warrant consideration, however. Such as the notion that growing families need to expand and grow business(es) instead of dilute them.
January 20, 2022
A great way to think about ways to protect your wealth. Some of the material I could resonate with while some challenged my beliefs. A good read.
December 14, 2016
What kind of habits and modes of thought separate Old Money families from everyone else? How do you build a family fortune? How do you get a family to work together toward a single purpose as the “core” is continually invaded by new spouses and children? How do you invest your prodigious wealth at high rates of return? How do you hold on to your family fortune for 100 years? Why does 100 years seem like a long time when it’s really only 3-4 generations of people?
Frustratingly (maddeningly?), the answer most often given in this book to questions like these is, “We don’t know, but here’s our guess.”
What I didn’t get from this book, then, were many specific, useful ideas for implementing with my own family enterprise– or family-as-enterprise. What I did get, and what will be the focus of this review, are a lot of questions, principles to ponder, and general strategic problems in need of robust solutions. This is not a how-to manual for putting together the essential structure of long-lived family institutions such as tax and estate planning, family organization and branding, household management.
Most people will not have a family fortune to contend with. It is not something that can be acquired through a known formula, but rather it is the outcome of an entrepreneurial process that is, epistemologically speaking, random. Just as one can not predictably create a family fortune, one can not predictably control the size or scope of the family fortune, within certain bounds. In other words, your family may have the good fortune to stumble upon a business opportunity with a significant market capitalization. That’s the first hurdle, and there’s no formula for getting there. Then, that fortune might turn out to be worth $50M, $100M, or $5B. That’s another hurdle, and there’s no formula. Failing to seize every opportunity you are presented with might limit your total fortune, and being eager and observant for those opportunities might extend the limit. But there is no recipe for turning something that is worth $50M into $5B unless it was the kind of opportunity that can scale that big in the first place.
Some market opportunities are worth a lot to one person who owns them (“he made a fortune!”), but they’re still not worth a lot to the market or economy as a whole (limited scale). This is an important point because of the gilded cage nature of family fortunes– once you have one, you’re kind of stuck with it, but it’s really tempting to think you have a lot more control over it than you do, or that it’s a lot more durable than it might be.
Imagine you’re the guy with the $50M fortune. You’re pretty happy with your luck, assuming everything else is right in your life, but you’re aware of people with $5B fortunes. If you can generate a $50M fortune, why can’t you generate a $5B fortune? Are those people smarter? Better connected? More productive? What’s the difference?
Luck, and leverage, but using leverage without blowing up is really just a residue of luck.
So you’ve got this $50M fortune. What can you do with it? If you have it invested in the business that created it, you enjoy a nice income stream from it each year (maybe that’s worth $2.5M, maybe it’s worth $5M if you’re really lucky) and you reinvest where and when you can. If your business doesn’t scale easily though, you can’t put it back in and make more. You’re stuck at $50M. What if you take the $50M out by selling the business? Now you have $50M in cash with no annual return and an investment problem. Where are you going to put $50M to work such that you can, say, spend $5M per year and still have $50M left over to do it again next year? Know any hot stocks? You didn’t make your fortune in investing the first time around, what makes you think you’re going to make it there the second time around just because you have $50M now? (Note: you are statistically and logically unlikely to achieve this outcome if you so desire it.) Know any good businesses for sale? Oh, that’s right, you just sold one!
That’s the gilded cage. You’re stuck with a $50M fortune. It’s a nice problem to have, but it’s still a problem. And nothing changes at scale besides the difficulty of the problem. It isn’t easier but actually harder to achieve yield at higher increments of invested capital due to the economic phenomenon of diminishing marginal returns (if this were not the case, you could infinitely scale things by always adding more resources to every project; DMR ensures that the more you add over time, the less incremental gain you get to the point that you get no return or a negative return, ie, waste). If you had $5B, you’d have even fewer places to put it and you’d have given up an even rarer business opportunity in selling.
Unless your business value is about to become permanently impaired and you can see the writing on the wall when no one else can — technological change, regulatory change, some kind of disastrous political or economic event — your business will never be as valuable to you on the market as it is under your ownership, assuming you’re a competent operator. I’m not going to explore what you do if you’re incompetent because that’s a special case, although it follows the same general logic and leads to the same general investment problems.
I think what this means is that the primary challenge for a family with a fortune in terms of managing their business is to be sensitive to the innovation required over time to maintain the economic value of the assets, to manage the capital structure of their business intelligently (ie, not too much debt) so they don’t lose control because of the volatility of the business cycle, and to build cash up and keep their eyes peeled for a truly unique investment opportunity, the kind that made the first family fortune possible. That means it’s more important to avoid doing the wrong things than it is to try to be finding the right things to do. It also means it requires great patience. If we’re talking about building multi-generational wealth, patience is implied in the premise, but it’s still worth repeating. Bonner emphasizes this frequently– find ways to let time work for you, not against you. He believes luck, advantages and businesses all tend to grow over time so the idea is to set things up so those advantages will accumulate in your favor.
Smart investing is not the way to build a fortune. Some people will build a fortune building an investment business (ie, a wealth manager), but it will not be the investing itself that makes them rich but the operational leverage they gain through their fee structure. Because Bonner is a skeptic of “investing” as a tool for wealth building, he would land squarely on my side of the skeptic’s divide about the value public capital markets play in economic growth. Why should a person find it necessary or valuable to contribute capital to a company building things in other people’s towns instead of investing in opportunities in their own town, right “down the street”? Profit signals and differing equity returns will attract capital from disparate areas and thereby indicate relative value across an economy, but I am skeptical that this process and the capital markets in general would be as big a part of the economy overall as they are presently if we were in anything more closely approximating free market conditions without crony capitalist interventions.
So, you may get lucky and find yourself with a fortune, small or large, from a family business. If you do, hold on to it, appreciate it, care for it, tend to it responsibly and hope you or one of your descendants has an opportunity to take another swing at an uncertain point in the future. But don’t try to force it, and don’t think there’s anything you can do to greatly enhance your opportunity beyond what it is. And understand that it will never be as valuable to you as a pile of cash as it is invested in your business.
The other big topic in the book is building the institutional framework of a long-lived family that can participate in this family business over the generations and can also be “true” to the family culture and values. Family planning is an idea that attracts me, and I have spent considerable time on my own with the concept of creating a family brand (what the ancients’ termed a coat of arms) to identify the family and its enterprises.
The trouble I have with family planning is the same trouble I have with all planning, particularly that of the central variety– what if the individual members of your family don’t really find value in your plan? Obviously, raising them with certain values and viewpoints creates a better chance for a kind of coalescing around this identity and direction. But is that how I want to raise my children, by telling them what is important? I think they can figure that kind of stuff out on their own, just as I did. Hopefully I can lead by example, and provide a demonstration of the virtue of the family virtue. But I think a potentially frustrating consequence of putting this emphasis on building multi-generational institutions together is you might find out your family just doesn’t see the use in them. That’s kind of worse case, though, and doesn’t necessarily argue against the project in general.
Yet, what if you’re successful at this? Building a business and building wealth is a coordination problem resolved by growing trust. Who can you trust more than members of your own family? Creating a family organization based on shared values and common identity and linking that organization to a business entity could allow for a uniquely successful competitive strategy and management continuity over a significantly longer timeline than the average public or private competitor– in other words, huge competitive advantages over time. Simultaneously, this arrangement could solve one of the common problems of families and their constituent members, that being how each as an individual and the family as a whole can achieve security, success and satisfaction with one’s productive efforts and life. As I’ve argued in the past, I believe the family is the best institution for accomplishing this task and it is certainly far superior to the currently dominant model of public corporations (for-profit and nation-states/institutional gangsterism).
Frustratingly (maddeningly?), the answer most often given in this book to questions like these is, “We don’t know, but here’s our guess.”
What I didn’t get from this book, then, were many specific, useful ideas for implementing with my own family enterprise– or family-as-enterprise. What I did get, and what will be the focus of this review, are a lot of questions, principles to ponder, and general strategic problems in need of robust solutions. This is not a how-to manual for putting together the essential structure of long-lived family institutions such as tax and estate planning, family organization and branding, household management.
Most people will not have a family fortune to contend with. It is not something that can be acquired through a known formula, but rather it is the outcome of an entrepreneurial process that is, epistemologically speaking, random. Just as one can not predictably create a family fortune, one can not predictably control the size or scope of the family fortune, within certain bounds. In other words, your family may have the good fortune to stumble upon a business opportunity with a significant market capitalization. That’s the first hurdle, and there’s no formula for getting there. Then, that fortune might turn out to be worth $50M, $100M, or $5B. That’s another hurdle, and there’s no formula. Failing to seize every opportunity you are presented with might limit your total fortune, and being eager and observant for those opportunities might extend the limit. But there is no recipe for turning something that is worth $50M into $5B unless it was the kind of opportunity that can scale that big in the first place.
Some market opportunities are worth a lot to one person who owns them (“he made a fortune!”), but they’re still not worth a lot to the market or economy as a whole (limited scale). This is an important point because of the gilded cage nature of family fortunes– once you have one, you’re kind of stuck with it, but it’s really tempting to think you have a lot more control over it than you do, or that it’s a lot more durable than it might be.
Imagine you’re the guy with the $50M fortune. You’re pretty happy with your luck, assuming everything else is right in your life, but you’re aware of people with $5B fortunes. If you can generate a $50M fortune, why can’t you generate a $5B fortune? Are those people smarter? Better connected? More productive? What’s the difference?
Luck, and leverage, but using leverage without blowing up is really just a residue of luck.
So you’ve got this $50M fortune. What can you do with it? If you have it invested in the business that created it, you enjoy a nice income stream from it each year (maybe that’s worth $2.5M, maybe it’s worth $5M if you’re really lucky) and you reinvest where and when you can. If your business doesn’t scale easily though, you can’t put it back in and make more. You’re stuck at $50M. What if you take the $50M out by selling the business? Now you have $50M in cash with no annual return and an investment problem. Where are you going to put $50M to work such that you can, say, spend $5M per year and still have $50M left over to do it again next year? Know any hot stocks? You didn’t make your fortune in investing the first time around, what makes you think you’re going to make it there the second time around just because you have $50M now? (Note: you are statistically and logically unlikely to achieve this outcome if you so desire it.) Know any good businesses for sale? Oh, that’s right, you just sold one!
That’s the gilded cage. You’re stuck with a $50M fortune. It’s a nice problem to have, but it’s still a problem. And nothing changes at scale besides the difficulty of the problem. It isn’t easier but actually harder to achieve yield at higher increments of invested capital due to the economic phenomenon of diminishing marginal returns (if this were not the case, you could infinitely scale things by always adding more resources to every project; DMR ensures that the more you add over time, the less incremental gain you get to the point that you get no return or a negative return, ie, waste). If you had $5B, you’d have even fewer places to put it and you’d have given up an even rarer business opportunity in selling.
Unless your business value is about to become permanently impaired and you can see the writing on the wall when no one else can — technological change, regulatory change, some kind of disastrous political or economic event — your business will never be as valuable to you on the market as it is under your ownership, assuming you’re a competent operator. I’m not going to explore what you do if you’re incompetent because that’s a special case, although it follows the same general logic and leads to the same general investment problems.
I think what this means is that the primary challenge for a family with a fortune in terms of managing their business is to be sensitive to the innovation required over time to maintain the economic value of the assets, to manage the capital structure of their business intelligently (ie, not too much debt) so they don’t lose control because of the volatility of the business cycle, and to build cash up and keep their eyes peeled for a truly unique investment opportunity, the kind that made the first family fortune possible. That means it’s more important to avoid doing the wrong things than it is to try to be finding the right things to do. It also means it requires great patience. If we’re talking about building multi-generational wealth, patience is implied in the premise, but it’s still worth repeating. Bonner emphasizes this frequently– find ways to let time work for you, not against you. He believes luck, advantages and businesses all tend to grow over time so the idea is to set things up so those advantages will accumulate in your favor.
Smart investing is not the way to build a fortune. Some people will build a fortune building an investment business (ie, a wealth manager), but it will not be the investing itself that makes them rich but the operational leverage they gain through their fee structure. Because Bonner is a skeptic of “investing” as a tool for wealth building, he would land squarely on my side of the skeptic’s divide about the value public capital markets play in economic growth. Why should a person find it necessary or valuable to contribute capital to a company building things in other people’s towns instead of investing in opportunities in their own town, right “down the street”? Profit signals and differing equity returns will attract capital from disparate areas and thereby indicate relative value across an economy, but I am skeptical that this process and the capital markets in general would be as big a part of the economy overall as they are presently if we were in anything more closely approximating free market conditions without crony capitalist interventions.
So, you may get lucky and find yourself with a fortune, small or large, from a family business. If you do, hold on to it, appreciate it, care for it, tend to it responsibly and hope you or one of your descendants has an opportunity to take another swing at an uncertain point in the future. But don’t try to force it, and don’t think there’s anything you can do to greatly enhance your opportunity beyond what it is. And understand that it will never be as valuable to you as a pile of cash as it is invested in your business.
The other big topic in the book is building the institutional framework of a long-lived family that can participate in this family business over the generations and can also be “true” to the family culture and values. Family planning is an idea that attracts me, and I have spent considerable time on my own with the concept of creating a family brand (what the ancients’ termed a coat of arms) to identify the family and its enterprises.
The trouble I have with family planning is the same trouble I have with all planning, particularly that of the central variety– what if the individual members of your family don’t really find value in your plan? Obviously, raising them with certain values and viewpoints creates a better chance for a kind of coalescing around this identity and direction. But is that how I want to raise my children, by telling them what is important? I think they can figure that kind of stuff out on their own, just as I did. Hopefully I can lead by example, and provide a demonstration of the virtue of the family virtue. But I think a potentially frustrating consequence of putting this emphasis on building multi-generational institutions together is you might find out your family just doesn’t see the use in them. That’s kind of worse case, though, and doesn’t necessarily argue against the project in general.
Yet, what if you’re successful at this? Building a business and building wealth is a coordination problem resolved by growing trust. Who can you trust more than members of your own family? Creating a family organization based on shared values and common identity and linking that organization to a business entity could allow for a uniquely successful competitive strategy and management continuity over a significantly longer timeline than the average public or private competitor– in other words, huge competitive advantages over time. Simultaneously, this arrangement could solve one of the common problems of families and their constituent members, that being how each as an individual and the family as a whole can achieve security, success and satisfaction with one’s productive efforts and life. As I’ve argued in the past, I believe the family is the best institution for accomplishing this task and it is certainly far superior to the currently dominant model of public corporations (for-profit and nation-states/institutional gangsterism).
October 27, 2023
This book went straight into the recycling bin, rather than inflicting its dreadfulness upon anyone else. It is basically a series of uneducated opinions by the authors (a father and son), without citing much research at all other than a few cherry-picked examples here and there. The numerous problems that I had with this book include:
*It is very sexist and chauvinistic. Husbands are supposed to work twelve hours a day to support the family, while wives are supposed to stay home and raise the kids. "The wife works too, but inside the household, freeing the husband to concentrate on building wealth without undermining the integrity of the family itself." Women are not mentioned at all unless it is about their roles as wives and mothers.
*They state that most charity is a waste of time and money; there is no empathy for fellow human beings who are suffering and may need help.
*It is very anti-government; there is no sense of the "common good" created by funding police, fire fighters, schools, healthcare, parks, roads, the military, etc.
*It is anti-taxation; promoting tax havens, keepings one's money abroad, and all maneuvers possible to avoid paying one's fair share of taxes. It includes suggestions such as having some family members give up their American citizenship, in order to avoid paying US taxes.
*Despite being written in 2011 when people were still recovering from the Global Financial Crisis, this is not mentioned at all until a couple of brief mentions at the end of the book.
*Regarding education, they indicate that "Much of what is taught--depending on the discipline--is not knowledge at all. It is nothing more than intellectually fashionable claptrap that later proves to be completely false."
* They quote someone who describes people in Third World countries as "stuck in their medieval serf mentality."
Don't waste your time on this book!
*It is very sexist and chauvinistic. Husbands are supposed to work twelve hours a day to support the family, while wives are supposed to stay home and raise the kids. "The wife works too, but inside the household, freeing the husband to concentrate on building wealth without undermining the integrity of the family itself." Women are not mentioned at all unless it is about their roles as wives and mothers.
*They state that most charity is a waste of time and money; there is no empathy for fellow human beings who are suffering and may need help.
*It is very anti-government; there is no sense of the "common good" created by funding police, fire fighters, schools, healthcare, parks, roads, the military, etc.
*It is anti-taxation; promoting tax havens, keepings one's money abroad, and all maneuvers possible to avoid paying one's fair share of taxes. It includes suggestions such as having some family members give up their American citizenship, in order to avoid paying US taxes.
*Despite being written in 2011 when people were still recovering from the Global Financial Crisis, this is not mentioned at all until a couple of brief mentions at the end of the book.
*Regarding education, they indicate that "Much of what is taught--depending on the discipline--is not knowledge at all. It is nothing more than intellectually fashionable claptrap that later proves to be completely false."
* They quote someone who describes people in Third World countries as "stuck in their medieval serf mentality."
Don't waste your time on this book!
Read
December 10, 2022Keep your brain active as you read this book. There are nuggets of wisdom and deep truths mixed with personal opinions and misrepresentations.
I liked it. I've been curious about the financial approaches of the very wealthy for ~3 years or so, but until now hadn't spent time learning. This is how one family plans to manage their wealth to turn it into something lasting.
The stories about how family wealth was destroyed were fascinating.
The high level trust, residency, and tax management approaches were interesting. I wish they had been more detailed, but now I have a list of things to look into more deeply.
I liked it. I've been curious about the financial approaches of the very wealthy for ~3 years or so, but until now hadn't spent time learning. This is how one family plans to manage their wealth to turn it into something lasting.
The stories about how family wealth was destroyed were fascinating.
The high level trust, residency, and tax management approaches were interesting. I wish they had been more detailed, but now I have a list of things to look into more deeply.
March 14, 2021
This book was ok. It has some good high level advice and bigger picture long term perspectives but is lacking in constructive day-to-day advice. It’s also based on very traditional family principles so if you’re offended by the idea of the woman staying at home child rearing and the man going out to work, this book isn’t for you. It provides one way of making money long term and building a multi generational legacy so is useful in some ways.
September 24, 2020
This is an excellent book in managing family income, foster family culture and establishing a family council to eventually help transferring wealth for generations to come. However, I found some of the statements fuzzy and there didn't seem to be credited hard data to support them, which frustrates me.
July 4, 2022
Not so useful as a personal finance book but it provides a host a circumstances and case studies to consider and think about. Building family wealth that last generations is about cultivating a process that works, sticks and can be passed down the generations. This book helps you to get started with thinking about wealth as family wealth as opposed to personal wealth.
July 20, 2018
Really good book. I greatly enjoyed it. Interesting that all of their recommendations: Oil, Gold, and emerging markets have underperformed. Maybe they will perform in the long term. I am going to follow their advise and work on building my family business. Definitely worth reading again.
May 16, 2022
Absolutely incredible book - Highly recommend for any ambitious people looking to build a lasting legacy. This book gives you all the fundamentals to getting a family legacy started and running. It will offer you each topic in decent detail which will allow you to study further on your own.
June 18, 2022
Taking aside the US focus, there are some high level take always prople can take from this book, of which, planning is key.
I'd say, know your story, your local tax thresholds, and go from there...
I'd say, know your story, your local tax thresholds, and go from there...
October 16, 2022
A book for times such as these
Perhaps little of what you read and much of the description of the families in this book apply to you, reading this book can reveal valuable information.
Perhaps little of what you read and much of the description of the families in this book apply to you, reading this book can reveal valuable information.
February 5, 2023
one really great book for family legacy
I have been looking for a book like this to give me a frame of mind for family legacy and wealth. It's informational and eye opening. I would change my behavior and mindset from today to many years in the future.
I have been looking for a book like this to give me a frame of mind for family legacy and wealth. It's informational and eye opening. I would change my behavior and mindset from today to many years in the future.
April 18, 2022
Got worse with each page turn. A book about multi-generation wealth dynasties written by someone who has never experienced it. The apocalyptic ranting at the end was odd.
July 17, 2022
If u wanna build a family fortune like that of kennedys, rotschield, and hilton's u wanna check this out.
This entire review has been hidden because of spoilers.
February 3, 2023
Great book on planning a family legacy
November 3, 2017
Key Take Aways:
-Use family money to help family members earn their own income - not to support their lifestyle.
-Set up a family council to decide how money gets invested and disbursed/loaned
-Think about long term investing, most of the time there is a big change, likely a government policy, that results in some asset class growing or shrinking for 10-20 years. Ex. Gold in the 70s, bonds since the 80s, etc.
-Use family money to help family members earn their own income - not to support their lifestyle.
-Set up a family council to decide how money gets invested and disbursed/loaned
-Think about long term investing, most of the time there is a big change, likely a government policy, that results in some asset class growing or shrinking for 10-20 years. Ex. Gold in the 70s, bonds since the 80s, etc.
July 10, 2020
The US border police are essentially charged with a double mission to keep poor people from getting in the US & to keep rich people from getting out. Illegal immigration is a problem one 1 side illegal ingratiation on the other. Every year millions seek & millions seek out those that seek in are trying to make their fortune those that seek out often do so to protect the fortunes they created already Even today the US is a good place to make a fortune. Though probably not as good as it was & probably as good as the emerging economies.
Family $ has to be run by someone you want to be run by someone that doesn't die, get drunk at parties or run off with a buxom redhead.
The last major famine due to failed crops in Western Europe occurred 18th century after that the famines in the developed world at least have been intentional caused largely by gov. policies aka state on the back.
Average US teenage now spends 1/3rd of his life 8 hours a day on some type of electronic devise. Does it make him smarter? richer? more civilized? more coherent? Not that we have been able to detect.
https://www.youtube.com/watch?v=pfEwM...
Whale saving is not subjected to market pricing.
70% of intergenerational wealth transfers fail, according to research conducted on over 3,250 families who transferred wealth. That is, inherited wealth is dissipated by the heirs at this stunningly high rate. It's an international phenomenon.
The correct translation of the word chateau is actually money pit.
http://theeconomiccollapseblog.com/ar...
https://dailyreckoning.com/the-concep...
A quick look at a map will also reveal another curiosity. Look at places that are rich. Then look at places where people are poor. Take Haiti, for example. It is one of the poorest countries on Earth. It is also one of the easiest places to grow food. Go figure. What to find easy places to grow food? Just look at some of the poorest countries in the world: the Democratic Republic of Congo, Burundi, and Liberia.
Now take a look at Switzerland. It is perhaps the richest country on Earth. It is also one of the hardest places to grow food. Go figure. And look at other relatively rich countries: Sweden, Norway, Denmark, Germany, Britain.
Mobs gathered in front of the Tuileries Palace, protesting the high cost of food. Inflation and bad weather had driven the price of a loaf of bread to almost an entire days' wages by an ordinary laborer. Marie Antoinette, wife of Louis 16th, is said to have asked: "What are they complaining about?" "They have no bread," came the answer. "Well, let them eat cake," was her witty, but ultimately fatal, reply. She lost her head in the Revolution. So did thousands of others.
Family $ has to be run by someone you want to be run by someone that doesn't die, get drunk at parties or run off with a buxom redhead.
The last major famine due to failed crops in Western Europe occurred 18th century after that the famines in the developed world at least have been intentional caused largely by gov. policies aka state on the back.
Average US teenage now spends 1/3rd of his life 8 hours a day on some type of electronic devise. Does it make him smarter? richer? more civilized? more coherent? Not that we have been able to detect.
https://www.youtube.com/watch?v=pfEwM...
Whale saving is not subjected to market pricing.
70% of intergenerational wealth transfers fail, according to research conducted on over 3,250 families who transferred wealth. That is, inherited wealth is dissipated by the heirs at this stunningly high rate. It's an international phenomenon.
The correct translation of the word chateau is actually money pit.
http://theeconomiccollapseblog.com/ar...
https://dailyreckoning.com/the-concep...
A quick look at a map will also reveal another curiosity. Look at places that are rich. Then look at places where people are poor. Take Haiti, for example. It is one of the poorest countries on Earth. It is also one of the easiest places to grow food. Go figure. What to find easy places to grow food? Just look at some of the poorest countries in the world: the Democratic Republic of Congo, Burundi, and Liberia.
Now take a look at Switzerland. It is perhaps the richest country on Earth. It is also one of the hardest places to grow food. Go figure. And look at other relatively rich countries: Sweden, Norway, Denmark, Germany, Britain.
Mobs gathered in front of the Tuileries Palace, protesting the high cost of food. Inflation and bad weather had driven the price of a loaf of bread to almost an entire days' wages by an ordinary laborer. Marie Antoinette, wife of Louis 16th, is said to have asked: "What are they complaining about?" "They have no bread," came the answer. "Well, let them eat cake," was her witty, but ultimately fatal, reply. She lost her head in the Revolution. So did thousands of others.
February 14, 2017
The authors do a good job painting the broad strokes about what it takes to build a family, build a fortune, and transform it into old family money. Its clear that the authors have done a bunch of research at their own expense to better understand the complications here for their own family and are sharing that information with us. While its light on particulars (they want you to get your own legal and financial team), they emphasize heavily the importance of "family" in "family money" and provide some specific examples for the soft structures that could make it work. Through examples and real-life case studies, they point out a lot of what hasn't worked and a few things that they think have worked (including some from a club that only lets families that have been profitably running the same business for over 200 years in). If anything, I'd like a second book which dives more into the details for how to do some of this stuff. For example, what things are disbursements versus loans, and why? Do they do student loans or grants? How do they handle "support for family members doing arts/humanities work" separately, since that seems like they're covering people's lifestyles at that point. Anyway, it'll go on my read-again shelf (for when I have, you know, a family... and money. :))
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