There is a story that has circulated over time about families of wealth. Different versions of the same story exist around the world. My favorite is the Scottish version: “The father buys, the son builds, the grandchild sells, and his son begs.” To me, it captures the same idea of other versions but creates the best word picture.
Back in 2017, there was an article published in the “New York Post” titled “Most Rich Families Will Lose It All,” where they quoted the Williams Group statistic that 90 percent of family wealth doesn’t make it past three generations.
When you read those kinds of stories and hear the statistics, it’s easy to say, “Maybe this is a new phenomenon. We need to be aware of it, but does it really apply to me?” I don’t know how it will affect your family or your wealth, but the story and the statistics are not new at all.
King Solomon was one of, if not the wealthiest man who ever lived. Not only was he extremely wealthy, God visited him one night and said, “Ask, and I will give it to you.” Solomon could have asked for anything! He did not ask for more wealth, he asked for wisdom.
In King Solomon we have the wealthiest and the wisest man who ever lived. He leaves an incredible lesson for us in how he experienced money in his lifetime, what he did from an inheritance standpoint, and how that inheritance passed to additional generations.
King Solomon was actually the second‑generation of wealth in his family. From generation to generation you can see how the wealth changed hands in light of the Scottish proverb listed above.
First Generation: Solomon’s father David was the youngest in his Jewish family and spent his time taking care of the sheep. The last born in a Jewish family was typically not entitled to much inheritance compared to those who were born earlier. But God raised him up to be king over Israel. As king, David accumulated massive wealth.
Second Generation: Solomon, as David’s chosen second generation, inherits the kingdom from David. Just as the Scottish phrase says, “The son builds,” King Solomon built on his father’s wealth. He was so well known for his wealth and wisdom that people came to see him from around the world to seek his insights.
Third Generation: When King Solomon passed away, the inheritance and the kingdom were split between two of his children, Rehoboam and Jeroboam, not because this was Solomon’s choice, but because of the disagreements and infighting. This illustrates the phrase “the grandchild sells”.
Fourth Generation and beyond: Not many generations later, the Jewish people were carried off through Babylonian exile. The “sons” of David and Solomon were left to “beg.”
What if it were possible to avoid these same issues in our own inheritance plans? Consider the possibility that Solomon left us with a plan to make that happen. Solomon is the author of two incredible books of wisdom in the Bible, Proverbs and Ecclesiastes. He may not have lived his own words, but he left the path that we can follow.
- Wisdom, like an inheritance, is a good thing and benefits those who see the sun. Wisdom is a shelter as money is a shelter, but the advantage of knowledge is this: wisdom preserves those who have it. – Ecclesiastes 7:11-12
Creating a plan to pass our wisdom on to our family is the most important thing we can do. Most families start by thinking about how to pass on the money. What if we start by developing a plan to pass on the wisdom first, before creating a plan to pass on the money? We might make different financial choices with that perspective. I’ve heard the Ecclesiastes verse restated this way, “If all you leave is wisdom, you may never have to leave money. However, if you only leave money, the wealth may be fleeting.”
- Be diligent to know the state of your flocks and attend to your herds for riches are not forever, nor does a crown endure for all generations. – Proverbs 27:23 – 24
Much of the work that is done around estate planning is attempting to create the ability for money to last for multiple generations. There is no thought about what affect this might have on the family. The most successful families I have observed, focus beyond the financial and limit the term of their own wealth planning to three or four generations.
- A good man leaves an inheritance to his children’s children. – Proverbs 13:22
There is an incredible amount of wisdom inside these words. I’ve found they help to set the framework around how to think about financial inheritance plans. This type of planning concerns three generations. I see this as a beautiful example, because it enforces the idea that wealth is not about money. Wealth is about relationships.
It is likely that we will build meaningful relationships with our children and our grandchildren. Through those relationships we can set the foundation of wisdom and leave our financial wealth. What about the fourth generation? I’ll leave that planning up to my children. If I’ve taught them well, they should be well prepared to succeed.
King Solomon may not have been successful with his own legacy, but he left us an incredible amount of wisdom to consider as we make our own plans. How can you create a successful inheritance? How can you create a legacy that’s built to last? We can help you consider how to answer these questions. Paradiem exists to help business owners and families overcome the statistics and write a new story. What will your story be?
Contact us at (985) 727-0770 or [email protected] to set up a meeting.