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Or Refreshing Your Views on What It Is
As yet another year is about to disappear into the past and we look out ahead at a fresh calendar ahead of us, I want to throw out one last idea that came to me a couple of months ago.
Regular readers know that I’m always looking for fresh ways to talk about the challenges that families face as they prepare for an upcoming generational transition of their business or wealth.
I pick up various ideas along the way, assemble them into some kind of memorable combination, and try to share them here on a weekly basis.
Along the way, more and more people have been picking up on my writings, so I continue to oblige you with my missives.
I’m immensely grateful for the positive feedback I get from these blogs, in case there’s any doubt about that.
What Are You Paying Attention To?
A couple of months back, in a context I’ve since forgotten, I heard someone mention that you can tell a lot about what is important to someone by trying to focus on where their attention is placed.
I work in the world of family wealth, and some people focus on the wealth part, while others, like me, prefer to focus on the family part.
More and more advisors to such families are recognizing the need to take a more holistic view and try to integrate both, with varying degrees of success.
But the families themselves are also susceptible to focusing too much on one to the detriment of the other.
The subtitle of my first book (SHIFT your Family Business) way back in 2014 was Stop working in your family business, Start working on your business family.
I hope you can see both contrasts I was making there (family vs business; working in vs working on).
Show Me Your Calendar and Bank Statements
On a related note, I’ve heard on more than one occasion the idea that if you want to know what’s important to someone, you can get a very good idea by looking in just two (or three) places.
“Show me your calendar” gets at the idea that if I can see where you spend your time and what kinds of things you’re doing with it, I will get a very good idea of your priorities.
Likewise, if I were to look at your bank statements and see where your money is going, that would also have lots of useful evidence.
If we add in your credit card statements (that’s #3) I bet I’d have a pretty clear picture of what you enjoy doing and what you hold dear.
Okay, so where’s all this going?
Attention, Time, Money – Your “ATM”
If you’ve been paying really close attention to what I teased in the title above, you’ll have noted that I was walking you through a mnemonic; ATM, for attention, time, money.
If you think I may have created the “Family ATM” idea as a false narrative to draw in readers who might wrongly assume I was going to write about parents who regularly feel the need to dole out cash to their kids, well, you may be onto something.
But of course the two ideas are far from mutually exclusive!
Families who pay attention to the messages that their parenting sends, and who spend their time educating their offspring about the value of money and about the family’s wealth, are less likely to feel like an “automated teller machine”.
Additionally, a family that spends a small part of their money on hiring outside help to deal with this subject are likely to feel even less solicited by “cash calls” from their rising generation.
Peppet’s M/L/F Ratio Revisited
Last year in How Can a Family Office Enrich You, I shared an idea from Scott Peppet that I love.
He talks about the ratio of time that family office people spend on what he calls their three main areas of focus, which he calls the M/L/F ratio.
Those letter stand for Money, Legal, and Family.
He contends that most family offices are around 70/20/10, and I think that’s the same ballpark I’d put them in too.
But he and I both agree that the Family number should be much higher.
The families themselves should also be monitoring their ATM’s.
Are you spending enough time considering all the human capital your family has to offer?
