004: a millennial's hot take on succession planning
stewarding wealth through investment, philanthropy, entrepreneurship, and family governance
Dear nextgen brothers and sisters,
Your family needs more than just an heir. They need someone who will build upon the family’s legacy while pursuing his/her own dreams.
May I suggest four ways to achieve this1:
Investment
Philanthropy
Entrepreneurship
Family Governance
Investment
We as nextgens are often our families’ best hope to compound multi-generational wealth by becoming sophisticated consumers of financial products and services.
Most families who remain intimately involved with day to day operations have no time to figure out how to best deploy the healthy cashflows their business spits out.
Some families, having successfully exited their business, are now starting to explore how to invest like the best.
They attract banks, asset managers, and service providers, who call out to them like sirens on the shore.
How can we as nextgens help our families effectively manage our liquid financial assets?
Philanthropy
We as nextgens are often our families’ best hope to immortalize our families’ legacies by becoming sophisticated givers.
Our founding family leaders thrived in turbulent times and defied the odds to catapult us into prosperity. They are top 0.01% in earning money.
Are they also top 0.01% in giving away money?
Our families fear not the return of poverty, but the prospect of being tainted with infamy or fading into obscurity.
How can we as nextgens help our families respond to the needs of our communities, our societies, and our world?
Entrepreneurship
We as nextgens are often our families’ best hope to anticipate the future by building new businesses.
Perhaps it is hard to understand why our families still need us when we are actively choosing not to return.
Yes, we may have a chip on our shoulder, wanting to prove we are worthy without the help of our families.
Yes, we may sometimes find it tough to deal with shade society throws at us.
Yes, we may wish to dodge emotional damage that our families inevitably inflicts on us (and vice versa).
But more often than not, we have discovered we are compelled to create something out of nothing.
That entrepreneurial spirit is key to greater resonance and eventual embrace of our nextgen identity.
When should we as nextgens apply our entrepreneurial spirit not just to our own endeavours, but also our families’?
Family Governance
We as nextgens are often our families’ best hope to explore best practices in multi-generational wealth management by equipping ourselves with family governance knowhow.
Every family thinks there’s a more dysfunctional family out there.
“Unlike those basket cases, there isn’t really a burning need for our family to put things in writing.”
“Why tie us down to a particular way of doing things, when trust level is high now?”
It would spare us nextgens a lot of headache if our kids were born into a clear set of rules of engagement.
Who can we as nextgens bring in to shed light on the need to improve governance practices of our families?
How About You?
For the past five years, I’ve stuck to investment.
This year, I’m trying to add entrepreneurship to my succession planning toolbox (starting with this newsletter!).
How are you staying true to your dreams while contributing to your family’s legacy?
See you next week!
inspired by HK4Families & CUHK Business School