WHAT IS THE PURPOSE

OF MONEY

by Marc Silverman

A Generational Values Question for Families in Business

 

At a recent Family Council Meeting the question arose as to what to do with the family fortune.  The question raised quite a commotion.  The first generation (three brothers each in their 70’s) quickly and somewhat aggressively stated that the family did not have anything nearly resembling a fortune and that talk of this nature would lead the family to ruin.  They strongly stated that what the children and grandchildren needed was to learn were the values of hard work, saving for emergency and humility.  

The next generation of six children and their spouses were not impressed by their parents’ remarks.  Some of them quickly responded “Work sixty hours a week like you did?  This is not a life.  Where were you  (my parents) when I was growing up?  How many times did I hope to have my father witnessing some success in school or in sports!  Further, for our whole lifetime – the great bulk of the financial resources have been reinvested in the business.  When do we get to enjoy the fruits of this labor?”

 

The patriarchs of this substantial business grew increasingly worried.  They had spent a lifetime (their spouses thought two lifetimes) building an enterprise that had not only brought stability and stature to their family but had aided their community and country.  Now in their seventies as they got ready to pass the leadership of the family and the business to the next generation, they did not like what they heard.  Of course each child was different, one was harder working, one had married an American and seemed fairly unhappy, another was a loner – all certainly enjoyed a higher life style than the patriarch and his wife had ever imagined.  

 

The next generation seemed not at ease in the patriarch’s eyes.  And the third generation – this was a whole other story.  This generation was brought up with expensive homes, camps, travel and attendants.  It wasn’t just arrogance, it was a sense of entitlement that this generation seemed to bring with them.  They expected the finest and were aggressive in their demands.  For them wealth was taken for granted, their usual concerns were on personal enjoyment and expensive things.

 

Following the Family Council Meeting, the three patriarchs met.  They were concerned about the Family Council Meeting.  What are the family’s values about money?  What will happen to the family’s wealth when we are gone?  Will our family follow so many in going from rags to riches back to rags in three generations?  What are the right values about money? And, what can we do to increase the probability not only of financial success but of helping each child and grandchild to follow in the best values of the family?

 

They called a Family Meeting of all generations.  They shared openly their fears and hopes for the family.  They said “We know the time of our leadership is almost over, we don’t wish to control you but we don’t believe you have solved one of the key questions of Family Business Leadership.  We don’t think you understand the purpose of money.”  In our discussions we decided to ask you the following questions:

  • Is money important? Why?

  • How does money affect your character positively?

  • How does money affect your character negatively?

  • If our family increases our financial wealth – does that help society?

  • If our family increases our financial wealth – does that help each of you individually?

  • If our family increases our financial wealth – does that help our family?

  • What is the level of trust that you have with one another in working and owning assets together

  • Are your values about money and business in alignment with each other?

 

At the end of the Family Meeting the patriarchs said – “We believe we know the right values for our generation.  Perhaps we do not know the right ones for you – this is what you have to determine.  And it should be done now.  Otherwise the money you create may only serve your selfish needs rather than your higher values.  

 

We would like to think that we taught you to value money not as an end but rather as a means to improving your character, your knowledge to making the world a better place and for the enjoyment of our family.  

 

Our final question to you is:

  • What are your plans to preserve and build the family’s wealth and how will you structure it to impact your children and theirs positively?

 

Although we don’t have enough space to share all of what was said – here are a few excerpts:

  • Money is important because it pays for our beautiful home and toys (a 10 year old).

  • Money is important because I’m getting a college education – and the profits from the business are paying for it.

  • We’ve rarely enjoyed our wealth.  We are seen as wealthy by the community.  But most of our capital is reinvested in the business.  Now we have quite a substantial business.  But are we wealthy?  I’m not sure.  Certainly we have many assets and on paper we look good.  But we are so driven to succeed, to make more money.  The pressure is great and at times the rewards feel barely worth it.  I want more quality time with my children.  I want to us to use our wealth wisely – to help our country, our community and to support education.

  • Another spoke:  What is the purpose of money?  If it’s just to grow – it could become like a cancer – which would kill us.  Is it to just enjoy – say by taking a trip?  Perhaps we need a Foundation – one that champions our highest values.

  • And Another: Perhaps money has no purpose.  After all it is just a means to an end?  What is the end?  That’s the great question of our values.  Each generation took a moment to begin looking at their values.

  • The First Generation said:  Our values are building character through hard-work, business success and community development.

  • The Second Generation said:  Our values are family first, business second.  We must find a way to balance our business needs with personal and family development.

  • The Third Generation said:  We love toys but know that life is not about owning a bigger boat.  So, we want to make lots of money, we want to play with lots of money and Grandpa – we do want you to be proud of us.

 

What will make us proud?  Perhaps this is one of the key questions?  What makes each of us proud of ourselves and each other in this family?  Are we acting in ways that are in alignment with our highest values?  Is our business promoting this?  As a family are we finding ways to enrich and support each person’s unique strengths and contributions?  

 

If smart, I believe families find ways to utilise their financial resources that support these noble goals.  Money like love, and other forms of currency can be used positive or negatively.  It can be used to control, coerce or manipulate or it can be used to enrich not only the person but also the community and nation.

 

The elders concluded by saying “Let’s find a way to continue to build our wealth – financial and non-financial. Let’s consider a Foundation.  All of us here have different needs.  But, as humans, we can only see part of the picture. That’s part of why we need each other.   Perhaps our real wealth is our ability to have discussions like these.”  

 

“Can we maintain our family’s beauty and unity?  How can we as a family support our highest ideals in each other? This is what we most wish.  At the last meeting we promised you a surprise.  The surprise is this:  We are committed to turning over all our assets – this year if you as a group can come up with a plan that maximizes your individual and collective hopes and dreams.  We are looking forward to your proposal. 

 

And with that, the elders said “Good Night”.

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