We hear a lot about wealth; it’s the devotion to wealth that keeps our banks and money managers.…wealthy; wealth management, growing wealth, protecting wealth. Prosperity on the other hand is an overlooked concept.
Very few business owners want wealth for the sake of wealth. Most, when they have time to think about it, are more interested in what wealth can do for them, their families and often their communities. That is where the understanding of prosperity comes in. Prosperity includes wealth, as in financial security, but in broader terms prosperity will include such intangibles as good health and the opportunity to pursue a happy and a fulfilling life. It is in this broader context that we get individualized notions of what clients visualize and what is important to them.
Discussing the components of prosperity helps identify why a family would turn to philanthropy, why they would place importance on higher education or why they would choose to keep or sell the business. Lifestyle questions are prosperity questions, they are key when you are talking to a business family (or any family) considering the future and what will happen to the wealth they have accumulated.
I think families and particularly the senior generation have, at the top of their minds thoughts about lifestyle for themselves and legacies for their children and grandchildren. Talking to them about saving in tax sheltered savings plans are discussions in the moment; there is some interest if we show that tax can be saved or deferred. If, however, we start talking about legacies, grandchildren’s education, family role in the community or what they would like to do when they step back from the business, a more vibrant discussion ensues and one that will stay with them for months and years to come. It is gratifying to hear clients say “thank you for getting us to start this discussion, it has helped us clarify what we have “felt” but not expressed”.
With the “felt” discussion on the table, plans can be made and actions understood by everyone connected to the family and the business. This discussion is typically inclusive and rewarding and allows owners to match strategic plans with family goals and business managers to align business plans with those strategic plans.
Prosperity is so much more than just wealth; when that is understood progress in planning will be made.
Peter Brown CPA, C.A., CFP, CLU