The goal of “The Business of Family: How to Stay Rich for Generations ” is to bring the much-needed conversation about money to the dinner table. Why? Our families need it.
As author Linda Davis Taylor shares in her book, more and more families are gaining assets that will be passed down to other family members one day. The problem is those hard-earned assets are often gone within the third generation.
What is “The Business of Family” About?
“The Business of Family” is not about how to make money as a family or where to put your money for a higher rate of return. Instead. but it is about keeping your hard-earned money (and other assets) within your family, generation after generation. You won’t find a lot of advice on where to put your money for a higher rate of return or how to create wealth. Instead, author Linda Davis Taylor focuses on investment in two things, values and education. These two things, in Taylor’s opinion, are the key components missing from a family wealth transition or inheritance plan.
Taylor bemoans, in several places in the book, about how business owners put time into creating a succession plan and training for their businesses, but fail to do this for their families. As a result, even if the individual business owner handles money well, all of that effort could be destroyed by the efforts of family members. (Just check your local gossip column, history book, or tabloid.)
To solve that problem, Taylor suggests that families invest in themselves, like a business owner invests in their business. Like a business, families should consider their values and formalize them into a workable plan (family constitution), which serves as the family’s strategy for increasing and passing down their wealth. This plan, updated on a regular basis through family councils, should include education in financial IQ (money management and finance), as well as financial EQ (values, mentoring, and behaviors, etc.).
The result, if followed through, is a family that is well-informed about money in general, about their family’s money specifically, and has a written plan that guides everyone on board.
About the Author
Linda Davis Taylor  is a former college advisor and CEO of Clifford Swan Investment Counsel, a fourth generation family business. She advises and speaks about issues regarding wealth planning and families.
What Was Best About “The Business of Family”
The best part about “The Business of Family” is the straightforward solution for a sticky family problem, money. Taylor’s answer invites readers to approach the issue in a collaborative but structured way designed to be passed down. In other words, instead of just passing down the money, families should also pass down the philosophy behind the money too. This is a rather forward-thinking approach, even in times where money seems to be moving faster than ever.
What Could Have Been Done Differently
“The Business of Family” leaves out one big issue that could derail the whole project, family obstacles. Families often encounter large obstacles, heightened when you have large amounts of money. The book does touch on this a little, but more attention to problem-solving strategies would be helpful.
Why Read “The Business of Family”
“The Business of Family” gives compelling support to the idea that families should have the “money conversation” on a regular basis, particularly when it comes to succession. It isn’t enough to just do the paperwork for succession. It’s also important to transmit the values and goals of succession to the person who will control the assets after it is passed down.
Although heavily geared toward families with large accounts, the book offers advice that should form part of every family’s money conversation. Regardless of what assets we pass down, if we don’t invest in the people who will manage those assets, then our assets can become liabilities faster than we think.