When Silence Costs a Fortune
You might be wondering what the percentages 70% and 90% signify. These figures represent the formidable challenge that affluent families encounter in safeguarding their wealth across succeeding generations. Research has shown that approximately 70% of wealth is lost by the second generation, and a staggering 90% vanishes by the third generation. There are several reasons behind these trends, but the foundation, or lack thereof, is built upon…COMMUNICATION.
For starters, insufficient financial education, and lack of financial literacy among heirs may lead to a loss of wealth. Without a firm grasp of wealth management principles, the next generation may never develop the skills to grow and protect a family’s legacy and assets. Additionally, issues driven by family dynamics and communication can lead to wealth attrition. Family conflicts, disagreements, and lack of a shared vision can often lead to higher taxes, costly estate fees, and substantial legal bills.
In the words of George Bernard Shaw, “ The single biggest problem in communication is the illusion that it has taken place.”