THE FOUR TYPES OF WEALTH
Research shows that families that have sustained wealth over more than three generations often have a different view and definition of wealth1. These successful families see wealth from four different perspectives, of which money is only one.
THE RISKS OF A ONE-DIMENSIONAL WEALTH PERSPECTIVE
The proverb “shirtsleeves to shirtsleeves in three generations” is pervasive across many cultures. It effectively communicates the concept that the wealth created by one generation is seldom sustained through another two generations. These families often don’t consider the other types of wealth that exist beyond money and their importance to long-term sustainability. Successful multi-generational families treat money as an important tool, but not the only one. They also focus on recognizing and nurturing other types of wealth; self (human capital), relationships (social capital) and values (cultural capital). This development is critical in successfully transferring wealth from generation to generation.
Our goal at TFO Phoenix is to help you develop the four types of wealth that can help your family endure.
Self (Human Capital)
Confident, self-assured, intellectually engaged, intellectual capital, resilient, productive and happy members of your family.
Relationships (Social Capital)
Feeling connected, sharing your dreams, finding partners, engaging in your communities, finding solutions, overcoming challenges and making a difference are much more apt to happen with a strong network of quality relationships.
Values (Cultural Capital)
This may be the most difficult type of wealth to define, build and nurture, but it’s the most rewarding and enduring. It brings family members together to be a family.
Money (Financial Capital)
The most typical, but also the most narrow, definition of wealth is financial capital –the family’s bottom line.