5 Ways Families Lose Wealth From Generation to Generation

After a lifetime of hard work and earning, it all comes down to the legacy you are leaving behind. The real question is, how many generations will your wealth survive? 

Build something that outlives you! 

Passing family wealth from generation to generation is a harder task than many of us expect, but it can be done. At Snow Financial Group, we pay particular attention to the smallest details necessary to help preserve a family’s legacy. If your wealth is managed correctly, it should continue to increase overtime and not deteriorate over time!

The Problem

As many as 90% of wealthy families lose their wealth within three generations, largely due to poor interpersonal dynamics. The most common ways we fail to pass wealth from one generation to another begin with: a lack of meaningful communication, trust, or lack of shared vision. 

At Snow Financial Group we believe that it’s not all about money or transferring the wealth once it’s accumulated. It’s about hard work, good habits, and core values over a long period. You must be disciplined!

5 Ways we lose Wealth From Generation To Generation

1. Lack of Meaningful Communication it’s easy to get swept up in money talk. Engaging in structured, productive dialogue about the components of a lasting family legacy, however, requires more planning and preparation than most people expect. At Snow Financial Group, we encourage conversations about the intangible values of the family legacy. 

2. Lack of Shared Vision

Unless you establish a shared vision for your wealth, it’s likely each family member will spend the money according to his or her plan; yet, that kind of aimless spending could lead to the deterioration of family legacy and wealth over time. At Snow Financial Group, we help each family member understand the purpose of his or her wealth, so you can arrive at these decisions as a family — and protect them together.

 3. Disregard for Intangible Wealth Assets

Most families fail to focus on the intangible assets — such as philanthropy, higher education, community involvement, a perspective of gratitude, and impactful life experiences — because you can’t easily measure the contribution of these assets with numbers. At Snow Financial Group, these intangible assets are at the center of our family legacy planning. When the conversation becomes too focused on wealth, we bring everyone back to the meaning behind the money.

4. Erosion of Trust

When there’s wealth to be shared, there’s often trust to be lost. Communication and transparency are crucial in creating the kind of trust that binds a family together — rather than the secrecy that tears a family apart. While that doesn’t mean you need to disclose everything immediately, these conversations help family members feel like they can trust your plan for the future, so they are much more likely to honor it.

 5. Attitude of Entitlement Over Gratitude  

When you’ve spent a lifetime generously providing for your family, that level of comfort can also come hand-in-hand with a decrease in productivity and motivation in the next generation. If you pass on your work ethic alongside your wealth, however, you are much more likely to ensure the survival of that wealth.

Start Protecting Your Family Legacy: If you’re struggling with communication, trust, and the transfer of values, the Snow Financial Group team can help you start a new dialogue and establish a framework that protects these powerful conversations for generations to come. Contact us Today! Snowgroupllc.com (985) 792-5232 

The Three Levels of Making Money

Did you know that the average millionaire has seven different sources of income? If you are working over 40 hours a week with no additional sources of revenue and want to see seven figures in your financial statements, your financial goals may be far out of reach.

When it comes to making money, there are three different levels of producing wealth – trading your valuable time for money is only level one. Although this is the most common and basic way to generate income, it is also evidently the most inefficient. 

Level One

As previously stated, the first level of creating income is the exchange of time for money. This level includes your typical nine to five job whether it be financial consulting, a marketing coordinator, or even a fast-food worker.  

There is only a finite amount of time in a day which means that if your time is the only thing making you money, there is only a finite amount of income that can be made. Level one provides a stable means of income but because of its restrictions of time, it exposes its inefficiency.

Level Two

The second level of making money is where you begin to generate income from what you’ve earned at level one. At this level, your money begins to earn you additional revenue through the investment of assets, securities, or real estate. 

Through the collection of dividends, rent payments, or buying and selling securities, the income you have already earned is able to grow and produce extra earnings. With level two, there is no restriction of time and supplemental income can be earned while you are sleeping! At this level, you are now working towards your financial goals much more efficiently since you are generating revenue from multiple sources.

Level Three

The third and final level of making money is a continuation and expansion of level two. This level requires having several different sources of income or revenue streams, with the option of having people work for you.

At level three, income can be generated from a variety of places – the time that you exchange for money, your investments, and now your potential businesses such as house cleaning services, lawn care, or investing in franchises that allow you to have people working for you. Having several sources of income such as these is a major key to building wealth and achieving your financial goals.

Where do we come in?

If you find yourself stuck in level one, simply trading your time for money, but have financial goals that you want to talk to a financial professional about, we’re here to help! We want to help you create additional sources of revenue and take you to the next level. With the help of a financial planner, you can climb out of level one and work your way towards achieving your financial goals.

Top 10 Questions About the Life and Career of a Financial Planner

Admittedly, becoming a financial planner is probably not at the top of everyone’s professional bucket list.

After all, it takes some kind of affinity for numbers, a penchant for problem solving and surprising to most, effective people-management and communication skills.

Luckily, I possessed both the skills and the interest in everything necessary from an early age—and to this day, I love what I do. That said, for some “financial planning” is a rather abstract concept. What am I planning? Business financials or personal? Do I invest directly for clients or simply guide you in the right direction? And my personal favorite: “What EXACTLY do you do?”

To help you get a better understanding of my life, passion and role as a financial planner, I took pen to paper—or fingers to keys— and answered the top 10 questions I get asked about my line of work. 

Let’s get started…

Q1: Why did you become a financial planner?

A: I don’t think it was any one particular event that catapulted my career into financial planning. As I already mentioned, I had always been intrigued by numbers and investments to the point that during my years at Ole Miss, I participated in the Wall Street South Investment Club. This program allowed us to create mock portfolios that competed against one another. While it was fun, it wasn’t until AFTER graduating that I began to realize just how unprepared most people were for a successful financial future.

I knew I wanted to help guide others in the right direction. From there I received hands-on training trading securities and managing investment portfolios. The rest as they would say, is history.

Q2: What is the most important message you want to convey to your clients?

A: Above all, TRUST—and not just with your money. I want every client I have to trust that I will listen to you, your needs, your concerns and guide you in a way that prepares you for financial stability and freedom.

Am I allowed a second message? I am? Great, then it would be this: Don’t wait! The sooner you begin working with a professional financial planner, the sooner your financial goals can become a reality. Starting at a young age is KEY!

Q3: What is your greatest challenge when working with clients?

A: Honestly, it’s just about getting clients to see the value in financial planning FOR THEIR SUCCESS. Unfortunately, many people chalk financial planning up to stocks, bonds and mutual funds when in fact, there is a much larger strategy at work. Depending on your individual and family wants and needs, there are both short and long-term goals that must be determined, set, worked towards and achieved.

Educating clients on how the financial planning process works takes time and patience but once they can see the value, we can begin working towards a brighter financial future together.

Q4: Are you a financial planner, manager or advisor?

A: I am all of those things in one, depending on the phase you are in, in life or planning.

• First, as a planner, my goal is to determine the overall short and long-term needs of my clients.

• As an advisor my responsibility is to advise my clients towards what is in their best interest to accomplish the plan we have set in place together.

• And finally, as a manager, I continuously watch and adjust the strategy and communicate with my clients as their needs ebb and flow with life events.

Q5: How do you charge for your services?

A: I am a fee-based advisor. I practice full transparency with all of my clients. My fees also include the planning, managing and advising for entire portfolios so my clients can rest assured that they—and their money—are in the hands of a competent professional.

Q6: What is the biggest mistake people make when it comes to planning?

A: Plain and simple: trying to plan and manage their own finances without a professional.

Hiring a financial planner doesn’t mean investing your life savings in stocks and bonds. We also work together to create a strategy for SAVING and GROWING all client’s current nest eggs.

All of the ways we can work together are:

• Asset Allocation

• Asset Management

• Business Consulting

• Retirement Planning

• College Planning

• 401K

• Freedom Accounts

• Tax Planning

Q7: What is the first aspect of financial planning to address with clients?

A: Without hesitation, the first step is also the most important: the initial client interview. During this time together, we:

1. Review their current financial situation.

2. Define their goals.

3. Create an overall plan to meet both short and long-term goals

And most importantly, find out HOW I CAN HELP THEM

Q8: Can a financial planner help a new or existing business?

A: Absolutely! Every business that wants to see growth and success should have a sound financial plan. Every day we help businesses—just starting or established—to create budgets and projections that help them to achieve financial stability and growth.

Q9: What type of life event may prompt someone to hire a financial planner?

A: I would like to say that most people don’t wait until a major life event to jump into financial planning but that would be a lie. Unfortunately, it’s often those that have suffered a loss, and are now dealing with an estate or facing their own mortality, who opt to speak with a financial planner.

Other life events that result in hiring a financial planner are:

• Inheritance

• Sale of business

• Job loss or change

• Birth of a child

The optimal time to hire a financial planner is as soon as you reach adulthood.

Q10: What is your overall goal with being a financial planner?

A: At the end of the day, I simply want to provide financial clarity to individuals and businesses for their continued growth and success. I want each and every one of my clients to achieve financial security and freedom by creating a balance between saving and smart investments. The long-term goal is for my clients to have the confidence and ability to retire with ease.

That’s what I want for you, too. If you’ve been considering investments, retirement planning, college planning or would like to talk about working your way towards a more secure financial future, please don’t hesitate to reach out to us. Following my passions for all of these years has been easy when ultimately it comes down to helping others enjoy the life they want, with the money they’ve worked hard for.

I think we can both agree that you deserve that, too.

Disclaimer: 

In a fee-based account clients pay a quarterly fee, based on the level of assets in the account, for the services of a financial advisor as part of an advisory relationship. In deciding to pay a fee rather than commissions, clients should understand that the fee may be higher than a commission alternative during periods of lower trading. Advisory fees are in addition to the internal expenses charged by mutual funds and other investment company securities. To the extent that clients intend to hold these securities, the internal expenses should be included when evaluating the costs of a fee-based account. Clients should periodically re-evaluate whether the use of an asset-based fee continues to be appropriate in servicing their needs. A list of additional considerations, as well as the fee schedule, is available in the firm's Form ADV Part II as well as the client agreement.

Opinions expressed are those of the author and not necessarily those of Raymond James, and are subject to change without notice. Past performance is not a guarantee of future performance. Investing involves risk and investors may incur a profit or loss.