I have been reading a great book by James Hughes titled Family Wealth: Keeping it in the Family. The book is about family trusts, but it is really about more than that. It is about reversing the normal way that people look at family assets. One of the core tenets of the book is that the most important assets in a family are the people in the family, not the money. Rather than focusing on developing the money, the most important thing is to develop the people.
Many people, when developing trusts, don’t give the slightest thought to how the money will impact the personal growth and development of the beneficiaries, but only how they can best keep the money going into the future. James Hughes says that this is very backwards, and can actually cause the money to become a burden rather than a blessing, and change a gift of love into an entitlement. Hughes advocates developing a structure of family governance which organizes the whole family as an organization, and the focus of the governance being the betterment of the people in the family, not just increasing the asset value. Hughes looks into the history of a number of families that have been successful in developing a legacy, and shows how their focus on the members of the family, rather than the money, led to the long-term survival of the family’s wealth.
However, while reading the book, I continually get the sense that, while Hughes was writing entirely to people who have money to put into a trust, one could incorporate a number of his suggestions even if you have no money to put in a trust. For starters, Hughes suggests an annual family meeting to discuss family business – i.e. not just chit-chat, but really discussing where people are in their lives, where they are going, how they can better get there, and what the rest of the family can do to help. This is something any family can do, even without a single penny.
Another suggestion Hughes gives is in family philanthropy. Hughes suggests that grandchildren should present philanthropic suggestions to grandparents, so that grandchildren get a sense of what it is like to put together and make such presentations. They can start really young, and you simply adjust the kind of presentation based on the age of the grandchild. The grandparents not only consider the request, but also offer suggestions for improvement to the presenters. When a decision is made, not only is money given, but the whole family participates in whatever philanthropic activity was suggested. As should be evident by now, there is nothing in this that actually requires money. Time is one of the components of this plan, and it can actually be given completely independently of any financial gift. Therefore, grandchildren can present ideas for how the family should spend their time philanthropically to their grandparents, and the whole family can participate in the endeavor once a decision is reached.
It is my contention that if family’s acted more cohesively as Hughes suggests, it can be a model for not just how a family can protect wealth long-term, but also develop wealth from nothing. Like Hughes, I believe that if we develop the people, the money will follow. I also think that even if the money did not follow, developing the people would be a sufficient goal warranting such an exercise. Anyway, I hope you read the book. While it focuses more on money than a MicroSecession view of the world would, I think a lot of the ideas and refocusing on different forms of value available are very consonant with the ideas of MicroSecession.