The Dimmer Switch vs. the On/Off
This week I’m going to touch on a very big topic that I haven’t written nearly enough about. It’s also a subject that lots of families face, whether they have a business or not.
The idea came to me a couple of weeks ago while listening to the weekly teleconference of the Purposeful Planning Institute.
As I had stated in Huge Liquidity Events – Great News, Right?, there was going to be at least one other blog that came from that call.
The great nugget for this blog actually came from the Q & A at the end of the call. (Many Thanks to Matt Wesley of Merrill Lynch)
Having the “Money” Talk
One of the call participants asked a question about helping their client families have the big talk about wealth.
You know how this goes. Wealthy parents talk to their advisors, the advisors strongly suggest that the parents begin to share information about their wealth with the kids, and the parents usually balk.
They understand that they should have the talk, but that doesn’t mean that they know how to do it.
The Dimmer Switch Analogy
The man who asked the question was looking for ways to help his clients begin the important stage of sharing information about the family’s wealth with their children.
The answer that came back was brilliant, and it is one that I plan on using. Parents often think about this “talk” as an all-or-nothing proposition. They shouldn’t!
It’s not a binary situation, where you go from complete “secrecy” to “full disclosure”.
It’s NOT a regular light switch, where the family was in the dark, and you flip the switch up and now everyone sees everything.
Time for your Pupils to Adjust
If you’ve ever gone to the movies during the day and you walk out into the daylight, you know that it takes time for your eyes to adjust.
In the same way, you really don’t want to “blind” your children with everything in one shot.
There is no need to quench their thirst for information with a firehose.
I like the dimmer switch analogy for a couple of reasons.
Shine a Little Light
I think the idea of “shining a little light” is the perfect antidote to the idea of “keeping them in the dark”.
And everyone knows what a dimmer switch is, and what it does. It allows you to control the amount of light.
So where should you begin?
Why Are We Here?
So let’s say you’ve decided that you can’t wait any longer and you need to talk about your wealth with the next generation of your family. Great. It’s not rocket science.
A frank and open way to get started is to tell them that you love them and that you care about them, now, and for the rest of their lives.
You could also share that you understand that if things go as they usually do, they will very likely outlive their parents, and that’s a good thing.
So, given that, there’s a lot of “stuff” that you have accumulated over the years and you need to begin to figure out what’s going to happen with it all after your gone.
One Step At a Time
The stage is now set. You have made them aware that you will be having some important discussions going forward.
And you control the dimmer switch, on both “how much” and “how fast” you’ll shed the light.
You don’t have to do it all today. Or even this week. Or this month. But preferably once you start, you do continue again sometime this year.
They may ask questions. That’s a good thing. You need to respond to all of their questions, but that doesn’t mean that you have to tell them everything they want to know.
Take your time. Turn that dimmer switch very slowly. But do turn it. And don’t turn it back the other way, although I’m not even sure if you can turn this metaphorical dimmer switch back towards darkness.
Dialogue > Monologue
You may have pictured yourself giving your family a speech about this subject. I strongly urge you NOT to look at it this way, or to act this way.
The “go slow” approach works well because you can adjust as you go. A dialogue, where you take the time to listen to their questions and concerns, is what you should be going for here.