Host: Dave Specht, National Development Manager for Family Dynamics, Wells Fargo Private Bank
Guest: Gary Shunk, Family Dynamics Consultant, Wells Fargo Bank
Wealth creators have typically become successful because they set ambitious goals and have a resilience that allows them to push through hard times until they achieve success. These same wealth creators often long to create a better life for their children than they had. Every parent wants their child to be happy and productive, so how can families pass their wealth to the next generation, while at the same time perpetuating their values?
I’m Dave Specht, the Family Dynamics National Development Manager for Wells Fargo Private Bank, and I’m your host for “Your Financial Journey,” a podcast series that explores questions families of wealth commonly face.
Today, I’m joined by Gary Shunk, Family Dynamics Consultant with Wells Fargo Private Bank.
Gary, many of our clients have accumulated great wealth and hope to pass it to their children and grandchildren. There’s a saying that conveys the difficulty of doing so in many cultures, “Shirtsleeves to Shirtsleeves in 3 generations.” What does this saying actually mean and how can it be avoided?
Well Dave, that saying is quite common around the world. In Asia the saying is, “rice paddies to rice paddies in 3 generations.” In the Scandinavian countries it’s, “clogs to clogs in 3 generations.” What this means is that the first generation creates the wealth, the second generation enjoys it and the third typically squanders it and the family has to start the cycle over again.
That’s interesting that the phenomena seems to happen across different cultures all over the world. Is there anything that can keep a family from experiencing this cycle of ultimately losing their wealth?
There are many theories, Dave, as to what might keep this process from happening in your family. One theory I believe to be true is that each generation must possess these three traits: gratitude, goals and grit.
Gary, tell me more about those and why they matter.
Well, let’s start with gratitude. When individuals are grateful and they recognize that their good fortune has come from the efforts of not only themselves, but others, it keeps them from feeling entitled. Gratitude and entitlement can’t coexist, so this is crucial.
Second, goals are important because it is the pursuit of an ambitious objective that can give a sense of focus even when surrounded by great wealth. The goal also serves as a measuring stick for progress, which is crucial for any individual and their feelings of self-worth. Lastly, grit is the resilience to keep moving forward even if you don’t succeed right away. When your next generation has grit, they will have a chance to compete in an ever-changing global economy.
I like that, Gary. So the three traits of raising a successful next generation are gratitude, goals, and grit. I’ll have to work on those with my own family. To learn more, contact your financial professional at Wells Fargo Private Bank.
Thank you, listeners, for joining this podcast.