The Dalai Lama says, “Open your arms to change, but don’t let go of your values”. These feel like words to live by when the world of finance is going through such a period of transformation. Digital banks, blockchain, biometrics, contactless wearables... the list of new developments altering how we interact with money is endless. And it is not just a fintech revolution. Cryptocurrencies, peer-to-peer lending and impact investments are just a few of the preoccupations forward-thinking family offices are navigating in order to make the right decisions about what to do with capital and then how to manage it.
While none of us can predict the future, there’s plenty to be learned from the past. Our latest Family Fortunes report , a joint development by Sanlam and Global Partnership Family Offices, has been a revealing opportunity to unearth pearls of wisdom from individuals at the coal face of managing family wealth.
Compiled from 15 in-depth interviews, and many more informal conversations with very wealthy families, the report explores the complexity of passing on an inheritance today. This ranges from decisions about investment and succession planning, to the many emotive issues around philanthropy, mental health and personal vocation that come with the responsibility of inheriting a family fortune.
A common focus among those we spoke to was education. How young is too young to prepare the next generation for taking on the mantle? Should all those due to inherit be trained in finance? While each family had a unique approach, with their own set of values and priorities, everyone we spoke to has a profound respect for the lessons they’d had passed onto them from the previous generation, or that they had gleaned themselves through hard-won experience.
So here are the top ten pearls of wisdom from our report, for making a Family Fortune go further.
1\. “Try to save half and spend half. That’s what I was always taught: consider a worst-case scenario, prepare for the worst, hope for the best, all the time.”
2\. “It can all go, it can all be taken away. Don’t take it for granted. That’s the difference between entitlement and privilege.”
3\. “The biggest thing that I learnt from my parents is how to be cautious, but not overly so.”
4\. “Keep things simple. It allows me to find true happiness from things not linked to money at all.”
5\. “My grandparents were Victorians and my father fought in the Second World War. They taught me how bad things get and to never take anything for granted. We forget our history at our peril.”
6\. “Be aware of spending money and be a bit thrifty sometimes. My father taught me not to show off and to stay grounded.”
7\. “Philanthropy is not just about giving money away but giving up your own time and efforts.”
8\. “Be entrepreneurial. You have to be constantly looking at how to make money as well as balancing entrepreneurialism with preservation.”
9\. “Don’t spend it all straight away. Invest and look out for the long term, the earlier you start saving, the more you can benefit over a life.”
10\. “You don’t get anywhere without hard work. You have to put effort in to get something out at the end.”
Who wouldn’t give a dollar to look back at the present from 50, or even 20 years from now, and whisper down a few words of advice to our nearest and dearest?
Penny Lovell is Head of Sanlam Private Office. Sanlam UK provides financial planning and investment management services.