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. 

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