It’s Sunday, which means...It’s time for the recap. I’m tying everything together and sharing the most important takeaway from this week’s theme: 

Why Do Family Fortunes Disappear?

In case you missed any episodes, here’s what we covered in each episode this week: 

• Shirtsleeves To Shirtsleeves In 3 Generations...Why? 
• Understanding The Natural Dilution Of Wealth
• The Key Difference In Lasting Wealth: Stewardship vs. Ownership
• Are You Doing More Harm Than Good With Their Inheritance?
• Why Estate Planning Is So Important If You’re A Multi-Millionaire

Here’s the bottom line: I know this may be tough to hear, but if your inheritance is gone by the 3rd generation, much of that is probably your fault. It takes a lot of work to pass along values like hard work, stewardship, money-savvy skills, patience, and delayed gratification to future generations who have become accustomed to living easy, affluent lives because of family wealth. The key to success with assets lasting past the 3rd generation largely comes down to communication, values, and a stewardship mindset. If you’re not confident that your heirs will be able to handle their inherited wealth, the best solution is a well thought out estate plan.

Tomorrow, come on back, because we’re starting a brand new theme: Get Ready For Tax Hikes! How To Plan Now. I’ll talk about some of the current proposals and tax law changes that are likely to be enacted into law as part of the Build Back Better Act, the $3.5 trillion spending bill that will require tax hikes to pay for.

I’ll talk about which changes will likely impact you and how you can take action now to take advantage of the current tax laws before these changes go into effect. 

Thank you so much for listening this week! Please leave a review on Amazon, Apple Podcasts or wherever you listen to podcasts. I really appreciate your feedback, and reviews also help new people discover the show.  

My name is Ashley Micciche and I hope you have a blessed Sunday.

----------

>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the One Minute Retirement Tip podcast is: Why Do Family Fortunes Disappear?

Today, I’m continuing the estate planning considerations for millionaires. If the overwhelming probability is that your wealth will be gone within 3 generations, how should that influence your estate planning decisions? 

I think this is one of the most important questions that a 1st generation millionaire can ask themselves? Out of misguided sense of fairness, self-made millionaires most often transfer wealth freely and equally to their children. Children who often have very different values and views about money compared to their parents, and children who are also ill-equipped to handle the funds. 

As a result, they don’t act like stewards and don’t take the responsibility of growing and protecting the money seriously. And very frequently, inherited wealth does more harm than good, compromising initiative, character, and judgement...making heirs miserable, all while they’re pissing away your hard-earned money. 

So what’s the solution? It’s simple: Be Intentional.

Minimizing taxes is usually the biggest motivator for estate planning, but one of the most important benefits of estate planning is that it helps you be intentional with how assets are passed on to the next generation. 

Most estate planning looks something like this - even for the wealthy. Whatever is leftover after I die goes to my kids. I have a will or a trust that spells out how the money is passed along - but it’s straightforward. It’s split evenly among all children. 

The children will have a large and instant windfall with little to no communication from mom and dad about the expectations about how that money is to be handled. Children, even though they are usually in their 50s or older by this time are often unprepared. They have no idea how much there is, and certainly no idea how to handle this new wealth. So a good portion is spent up front. A new house, a new car, a vacation for the entire family. Living the good life. Often the money is not saved, invested or even earmarked for their own retirement. And what the first generation multi-millionaire family spent decades building from scratch is spent in the second generation and squandered by the 3rd generation. 

Much of this can be prevented through communication early and often about your intentions with your wealth and your expectations about how wealth is to be handled. Responsible children who view themselves as stewards are capable of using that inherited wealth for worthwhile and meaningful purposes. 

You can use estate planning as an effective tool to keep family wealth intact, and ensure that the assets and family legacy is preserved for generations. There are plenty of strategies to do this, so I recommend that you take the time to talk to a good estate attorney and think through what's really important to you regarding inherited wealth for your children and future generations.

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the One Minute Retirement Tip. 

----------

>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the One Minute Retirement Tip podcast is: Why Do Family Fortunes Disappear?

If you are a 1st generation, self-made millionaire, how does it make you feel knowing that all of the wealth that you worked hard to earn, save, and grow will be gone after your grandkids? Though you may think your family is different, the probability that it will happen is overwhelming...90% of wealth in the United States is gone by the 3rd generation.

I’ve been spending this week talking about the many reasons why that is, and why it takes so much work and intentionality to pass along values that will create a mindset of stewards in your children and grandchildren, so today I want to explore the question: “If you know that it will likely be gone in 3 generations, how do you want to pass on wealth to your children and grandchildren? To what extent do you want to do that and are you 100% sure that they will be better off as a result? 

Many parents split their assets evenly among their children, and the more proactive try to do so in a way that minimizes taxes, but that’s the extent of it 99% of the time, even with multi-millionaires. 

If you are not 100% confident that your children would be better off for receiving their inheritance and will act like stewards, ensuring that the assets aren’t squandered by your grandchildren, you may want to ask yourself if there is something more meaningful and lasting that can be done with your wealth to improve the lives of more people, or if your estate plan is in need of some changes. 

I don’t have the answers to this. But I do know that I don’t want my children to be on easy-street and not know the value of hard work and delayed gratification, so it will be ever-evolving how I address my estate plan and how I pass along wealth (assuming there is something there to pass along), and I will always remain open to strong restrictions on access to wealth and possibly no inheritance at all if I think it will do more harm than good to one or all of my children.

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the One Minute Retirement Tip. 

----------

>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the One Minute Retirement Tip podcast is: Why Do Family Fortunes Disappear?

Earlier this week, I talked about how the most important money values that predict financial success are not transferred well to subsequent generations. 

Today, I’m digging a little deeper into the values that it takes to successfully pass along wealth to the next generation, and in my experience and research, it all comes down to whether or not future generations view themselves as stewards or owners.

Almost all of the families today around the world who have had enduring wealth for hundreds of years have maintained their wealth because of a mindset of stewardship. 

This concept is so important that we even find a few examples of this in the bible. The role of the steward is most clearly illustrated in the parable of the talents, where Jesus tells a story about a wealthy man who entrusts assets to 3 stewards while he is away. According to the parable: 

To one he gave five talents;* to another, two; to a third, one—to each according to his ability. Then he went away. Immediately the one who received five talents went and traded with them, and made another five. Likewise, the one who received two made another two. But the man who received one went off and dug a hole in the ground and buried his master’s money.

When the wealthy man came back and found out what each of the 3 stewards had done, he praised the first two, and gave them even more responsibilities. To the 3rd who buried his talent he said: “ ‘You wicked, lazy servant!...Should you not then have put my money in the bank so that I could have got it back with interest on my return? Now then! Take the talent from him and give it to the one with ten. 

Like all of Jesus’ parables, this parable has a lot of different lessons that can be drawn from it. But one lesson relevant to today’s topic is that the first 2 stewards acted like stewards. A steward is someone who “manages or looks after (another's property).”

The 3rd steward who buried the talent did not act like a steward. He was too concerned with losing and too fearful of what would happen if he lost his one talent, that he acted out of self-preservation and buried it. 

And that right there is the key difference between many families who are able to preserve wealth for generations and ones who don’t. Future generations who view themselves as stewards of the family business or the family property or family wealth will act very differently toward inherited wealth. 

They’ll operate with a mindset that’s very different from “this is mine now”. A steward operates with the mindset that I need to look after this and manage this well. I need to grow and protect this legacy so it can continue after me. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the One Minute Retirement Tip. 

---------

>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the One Minute Retirement Tip podcast is: Why Do Family Fortunes Disappear?

Today, I’m talking about the natural dilution of wealth. This was actually something I didn’t think about much, assuming that wealth was lost in future generations, mostly due to what I discussed yesterday - bad investment decisions, overspending, taxes, and generally money values that are inconsistent with keeping and growing wealth. 

But it’s important to understand how the natural dilution of wealth and how wealth is passed down equally in the United States plays a big role in the loss of family fortunes. 

Let’s look at a really simple example. Let’s say you’re married and you amass a wealth of $12 million dollars by the time you pass. Interestingly enough, the average multi-millionaire household is likely to have 3 or more children. I’m going to assume in this example that you have 3 children, and they each have 3 children. I am also assuming there is no growth on the wealth and no taxes. 

By the time your wealth is split among your 3 children, the $12 million estate is down to $4 million. Assuming no growth and no taxes, once that money is passed to all 9 of your grandkids, the $4 million is diluted further to $1.3 million each. 

Contrast this to the way wealth is passed down in Europe or through family trusts and foundations, where fortunes endure for hundreds of years. There is usually a single steward or trustee to the family fortune, and future generations aren’t handed a check for millions to do what they please with their new windfall. 

If you’ve watched Downton Abbey you can see how this works. Family wealth, businesses, and properties are entrusted to a single heir. The rest of the family members usually benefit, but they aren’t given the keys to the store. Heirs are more likely to shoulder the responsibility better in keeping the family legacy intact, and so it’s not surprising that you see 5, 6, or 12 generations or more of family wealth enduring under this type of structure. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the One Minute Retirement Tip. 

----------

>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the One Minute Retirement Tip podcast is: Why Do Family Fortunes Disappear?

Today, I’m talking about some of the most common reasons why 90% of wealth is gone after the 3rd generation. The old adage “shirtsleeves to shirtsleeves in 3 generations” is true for the vast majority of wealth. 

It’s why most millionaires alive today are self-made and did not inherit their fortune. You may have some assumptions about why wealth is lost, so let’s explore the often complicated reasons why wealth doesn’t stay in the family for more than a couple generations: 

Unfortunately, most of it comes down to the values and priorities of both the earners of the fortunes and the next generations they pass the money to. 

Lack of communication is perhaps the biggest issue. Most wealthy families do not talk to their kids about money. They do not set expectations or boundaries on how their children should handle money. They rarely think twice about giving their kids the best vacations, the best clothes, etc. Children of wealthy parents almost never have to work for what they have, so their values and experience with money is vastly different from their parents who often had to sacrifice much to build their wealth. If there’s a family business, children are not involved early and they know next to nothing about the values that brought about success with money and in the family business in the first place. Children of self-made millionaires aren’t taught how to invest or how to manage money prudently. For them, money is easy to access and is available to fund whatever, whenever, so children grow up with instant gratification with money and not much appreciation for connecting the dots between work and money. 

Because they’ve lived the easy life in terms of money, they usually don’t develop the skills to be prudent with money, invest wisely, etc. They spend more than they save, they know next to nothing about basic investment principles, personal finance, and how compound interest works. Patience with investing does not come easily to the 2nd generation wealthy individual, and they often make big investment blunders because they don’t know the dangers of debt or they can’t analyze the risk/return tradeoffs. No one has ever told them that a 7% return on your money is worthwhile. 

Of course, I’m making some broad generalizations here. There are exceptions to this, and when you see exceptions to this - when children grow up developing the same values that brought about the creation of wealth, they are more likely to think of themselves as stewards of the family wealth, vs. owners.

There are plenty of other reasons why wealth doesn’t last beyond 3 generations, including the natural dilution of wealth as it transfers to the next generations (which I’ll talk more about tomorrow), but much of it comes down to the fact that the most important money values that predict financial success are not transferred well to subsequent generations. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the One Minute Retirement Tip. 

----------

>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

Welcome to a new week here on the One Minute Retirement Tip Podcast. I’m your host Ashley Micciche, co-owner of True North Retirement Advisors, an independent financial advisory practice managing $325 million in client assets. I’m a Chartered Retirement Planning Counselor, and I started this podcast because I love helping people just like you gain clarity and make a plan for the retirement you envision. 

The theme this week on the One Minute Retirement Tip podcast is: Why Do Family Fortunes Disappear?

Have you heard the quote: “Shirtsleeves to shirtsleeves in 3 generations”? According to research, 90% of family fortunes are gone after the grandkids and the 4th generation has to start all over again. 

So this week on the podcast, we’ll explore how the wealthiest families manage to lose their money most of the time, and the key differences between families like the Rockefellers who are still going strong generations later, compared to the Vanderbilt family, who couldn’t count a millionaire among them by the 1970s, despite both families being among the wealthiest in the history of the United States.  

More specifically, I’ll talk about: 

• The often complicated and nuanced reasons why it’s likely your great-grandchildren won’t be rich, even if you are.
• The natural dilution that happens with wealth as it’s passed down to children and grandchildren
• And the key behavioral difference among families with lasting vs. transitory wealth

Then we’ll explore whether or not it’s even a good thing for children to inherit wealth. Almost all of us transfer money freely to the next generation and try to give children every comfort and opportunity in life. We’ll talk about how that can often backfire, and then lastly, I’ll tie everything together by talking about the important estate planning decisions you’ll need to make if you plan to pass only 7 figures or more to the next generation. 

I hope what I have to share with you this week will help you make smart and thoughtful decisions with your retirement. And while I am careful to not lead you astray, personal finance is not an exact science. There is no one-size-fits-all solution for everyone, so I encourage you to disregard anything I say that may not be helpful for you, and to consult your own financial, tax, and legal advisors regarding your own individual situation. 

That’s it for today. Come on back tomorrow...

Thanks for listening! My name is Ashley Micciche...and this is the One Minute Retirement Tip. 

----------

>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

It’s Sunday, which means...It’s time for the recap. I’m tying everything together and sharing the most important takeaway from this week’s theme: 

How To Recession-Proof Your Retirement

In case you missed any episodes, here’s what we covered in each episode this week: 

• Why You Never Want To Retire During A Recession - and what to do if this happens to you!
• Gaining Perspective By Understanding Market Cycles
• Why Cash Reserves Are The Key To Recession-Proofing Your Retirement
• How To Protect Your Investments In A Recession
• Having More Control Over Your Finances In A Recession

Here’s the bottom line: Retiring in the midst of a recession, or if a big one hits in the first few years of retirement can be devastating. But that doesn’t mean you need to be a sitting retired duck. You can take steps now to prepare by rebalancing and keeping enough cash on hand, as well as thinking through any changes you would be willing to make if a recession hits you from behind in retirement. 

Tomorrow, come on back, because we’re starting a brand new theme and exploring an interesting question: Why Do Family Fortunes Disappear? I’ll talk about why most family wealth legacies don’t last past the 3rd generation and the myriad of reasons why wealth tends not to last. Whether or not you think it’s important to leave money to your children and generations beyond, I think you’ll find next week’s podcast episodes interesting and useful in being strategic about how you pass down assets and wealth to the next generation. 

Thank you so much for listening this week! Please leave a review on Amazon, Apple Podcasts or wherever you listen to podcasts. I really appreciate your feedback, and reviews also help new people discover the show.  

My name is Ashley Micciche and I hope you have a blessed Sunday.

----------

>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the One Minute Retirement Tip podcast is: How To Recession-Proof Your Retirement.

Today, I’m talking about how to have more control over your finances in a recession. Two of the biggest impact actions you can take in advance of a recession is to keep plenty of cash on hand and rebalance your portfolio. With the stock market and the economy charging ahead, now is the time to insulate yourself and prepare for the next recession.

If you wait until the recession hits, it’s too late. The stock market is usually the first domino to fall in a recession and it’s impossible to predict. 

If you missed earlier episodes this week, I went into the strategies on keeping cash and rebalancing, so go back and have a listen to those if you missed any. 

Moving on to today’s topic…let’s say a recession hits today. What do you do now? Flexibility is key! Can you afford to stop your portfolio withdrawals? Could you work part-time? If you had to, could you change your lifestyle by putting off travel and shopping more economically for groceries? You may not even need to do any of these things, but if you had to, where can you cut the fat first? 

Thinking through this and making a plan will help you mentally prepare for the next recession. When you’re prepared for the storms, you can keep a level head, and not panic and make rash decisions with your investment portfolio because you’re freaked out and you don’t know what to do. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the One Minute Retirement Tip. 

----------

>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the One Minute Retirement Tip podcast is: How To Recession-Proof Your Retirement.

Today, I’m talking about how to protect your investments in a recession by rebalancing BEFORE the recession starts! A lot of people get into trouble because they are close to retirement, yet they haven’t rebalanced their portfolio in years. Some people approaching retirement have 80, 90, or even 100% of their portfolio still in stocks. 

Taking the time to rebalance is critical right now with the stock market near it’s all time high. We’re coming off of 3 strong years in performance in stocks. Yes, the stock market could continue to go up from here, but now is the time to rebalance your portfolio to ensure you have the right mix of stocks and bonds for your age and proximity to retirement. 

When your portfolio is invested appropriately for your age and proximity to retirement, you’ll be able to sidestep the worst of a bear market drop during the next recession. The S&P 500 typically drops about 33% in a recession. But if only 50% or 60% of your portfolio is in the stock market, and well diversified, you may only experience a 10 or 15% drop, which is a lot safer for your retirement and a lot easier to recover from. 

If you want to know the mix of stocks that we recommend for our clients by age, you can email me and I will send you our age-based asset allocation cheat sheet. It’s a guide to what your stock and bond mix should be for your age, and it’s the foundation that we when building portfolios for all of our clients. 

Just shoot me an email - [email protected]. That’s [email protected] and I’ll send you your free age-based asset allocation cheat sheet, to help you determine the right mix of stocks and bonds for your portfolio. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the One Minute Retirement Tip.  

----------

>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance