One Is Usually Better, But Not Always

This week we’ll be looking at an idea I’ve touched on in the past, but in a new light, thanks to an interesting exchange I had at a conference I recently attended.

When I crafted the title to this blog, I was convinced that I’d be able to link to a previous post that I’d written specifically on the “Responding Versus Reacting” concept I so often mention when speaking with people, but alas, that blog exists only in my imagination.

I will, however, still be revisiting the idea, because the conversation noted above forced me into a few different reflections: on the subject itself, how universally true I thought it was, and on how I share my thoughts on it.

So far this has been rather vague, I realize, so thanks for indulging my meandering style of setting up these weekly missives.

The Perfect Set-Up for Sharing a Favourite Idea

Allow me to set the context for you. 

It’s the evening before the first day of the conference, so I headed down to the hotel bar to see who else flew in early.

After chatting with some long-time friends and acquaintances at a table, I’m heading back up to my room to get some sleep when I happened to recognize a face from last year at the bar.

Next thing you know I’m offered a drink and I’m suddenly chatting with a small group of mostly strangers here for the same gathering.

One of the men begins relating a story about tension between a father and son, and we start talking about ways the son can learn to avoid similar situations with his own, teenage son.

Next thing I know I’m sharing one of many Zig Ziglar stories I have in my repertoire. 

(Curious readers are invited to type “Ziglar” in the search feature of my website).

Responding Versus Reacting

So I begin sharing the key differences between responding to a situation and reacting to it.

The simplest way to remember it, is to consider a medical situation and how we speak about the interventions that happen at the hospital.

“They gave him medication and he is responding” is always positive, whereas, “He had a reaction to the medicine” is negative.

When we take a step back and compose ourselves and respond to something that happens or what someone says, we have a better chance of things going well, versus immediately reacting without thought, which often escalates a situation.

When taken aback, I sometimes deliberately pause and even say, “I want to take a moment to think about this so I can respond, rather than simply reacting”.

I Thought It Was Clear, Until….

I felt like I’d made my point well and the conversation veered into a few different directions.

But imagine my dismay, when a while later one of the guys was relaying another story, where this time the problem was that someone had become way too complacent with a situation, and the protagonist was not responsive enough.

And as he concluded, he pointed to me and said, “Like you said, he should have reacted!”

Wait, what? 

I felt stumped and was thankful that the number of beverages consumed by all made this fade away as the subject once again got changed.

But I now had some reflecting to do, as my concept had been turned on its head.

Time to Revisit This

I think it was on the plane back home a few days later that it hit me that I needed to circle back and reconsider what happened and how I talk about this important subject.

Did I not explain myself well enough, was there a problem with my metaphor, or is it something else?

I believe I did explain it well enough, but there are limits to every metaphor, this one included.

It is still a good idea, in most cases, to pause and take a moment to provide a considered response to something, rather than simply quickly giving your gut reaction.

And, there are also times when pausing for way too long can be sub-optimal.

Flexibility Is an Asset

We need to recognize the limits of rigidity and the benefits of flexibility in many areas.

How long we take to reflect before we respond is probably one of those areas, but I will continue to err on the side of pausing.

All Happy Families Are the Same…

Most weeknights after having dinner and watching the news, my wife and I watch Jeopardy together.

A couple of months back while doing this, there was a clue that referred to a famous quote from Tolstoy’s Anna Karenina.

Because my wife was unfamiliar with it, I asked my friend Mr. Google to get me the exact line, which is actually the opening sentence of that classic book from the 1870’s.

It reads, “Happy families are all alike; every unhappy family is unhappy in its own way.”

Unfortunately, this highlights the fact that there are lots of ways for families to be unhappy.

99% Unhappy, 1% Happy?

The very next day we were driving somewhere together and for whatever reason, it came up again, and we talked about it.

She noted that there are way more unhappy families, suggesting the figure of 99%.

I chose not to argue with her, and we both agreed that I had the workings of a blog post about this, so here we are.

The title of this post is meant to highlight the fact that most families want to be perceived as “One Big Happy Family”, but that under the surface, very few of them actually are.

As someone who works with families on the important subjects relating to their future wealth transitions, helping move a family from “unhappy” to “happier” is part of what I’m usually going for.

Who Gets to Judge this Matter?

A constant challenge to this work is that the family is not one unit, it is a system of many interdependent human beings, who each have their own views, opinions, feelings, and behaviours.

Many of the professionals who handle the more technical aspects of this work can get away with thinking about the family as a unit, but those who work on the relationship angle between the family members are constantly confronted with individual differences in each person.

There are usually some people who think of their family as a happy one, where other members of that same family would disagree.

Who gets to decide if their family is happy? 

What if I think we’re happy but I’m the only one who thinks that?

Ideally, we can find a way for families to talk about this to find ways to make each person a bit happier, which should thereby make the family happier as a result.

Could it be that simple?

Looking Back at a Couple of Past Posts

Thinking about this subject conjured up a couple of posts I’ve written here that touch on this subject.

First, in On Wellness, Performance, and Relationships in Families, we looked at how those three subjects are a convenient way to consider how people are doing.

Are they feeling well? Can they do what they’re trying to get done? Do they get along with all the people they interact with?

I suggest that the more Yes’s you get to those questions, the happier you’ll be.

And if more members of a family can get 3 Yes’s, that family would likely be happier too.

Key Question: Are there ways for the family’s wealth to support and contribute to getting more Yes’s to those questions from more family members?

Should Happiness Be the Goal?

Unfortunately, many people put a bit too much focus on happiness as a goal, which can bring negative results.

Back in 2022, I shared Make Sure Happiness Is a By-Product, Not the Goal.

That post was inspired by a session at an FFI Conference where a person who specializes in addiction treatment and recovery was the one who stated the line I used as my title.

How many parents do we know who did everything to make their children happy, and then realized (and regretted) that their kids did not develop enough resilience and independence to launch into adulthood.

Maximizing Each Family Member’s Human Capital

As is so often the case, when I set out to write on this week’s topic, I didn’t know where it would lead.

Between you and me, that’s what keeps me coming back each week, but please keep that to yourself.

If you want a happy family, those “interdependent human beings” that compose the family should probably be your focus.

If you’re fortunate enough to have accumulated plenty of wealth, why not use a portion of it to try to enhance the “wellness, performance and relationships” of every family member?

Maybe that’ll help you have that One-Big-Happy-Family we all strive for.

The First Part of Is More Appealing than the Second

This week we’ll be looking at an aspect of the world of wealth transitions that I typically don’t put a lot of focus upon.

In some ways though, this is a subject that’s long overdue, and I finally have a good excuse to introduce it here now.

We’ll get into more details below, but I want to start with the words I put in my title this week, about how people in a wealthy family will eventually inherit wealth, but that wealth typically comes in some form of a “structure”, or more likely, “structures”, plural.

I recently heard someone put it that way, but the first person I heard it from years ago is a good friend who was recently my guest on a podcast I hosted, and because that episode just dropped, it’s fresh in my mind.

Stop Frankensteining It

The podcast was Family Enterprise Canada’s Let’s Talk Family Enterprise, episode 68, titled Stop Frankensteining It.

My guest was Cindy Radu, and she was the first one I ever heard say “people in families inherit wealth, AND structures”.

The Frankenstein part is all about how lots of different professionals are typically involved in the creation of said structures, and the result is often some abomination.

The take-away message for this part is that incoherent, overly complex and incompatible structures make it even worse.

I feel like I may be digressing too much so I want to just get back to what inheritors are actually going to inherit.

Suffice it to say that most are happy about the wealth part, and less enamored with the structures that invariably come along with the wealth.

Very Valid Reasons for Structure

There are of course a number of very good reasons why people create such structures, and so it’s important to acknowledge what they are.

The goal is typically one of wealth preservation over generations.

The cynical way to state this may be “I want my grandkids and great-grandkids to benefit from my hard work and good fortune, so I need to make sure my own kids don’t spend it all or allow it to fritter away”.

The most common reason espoused is to save taxes, wherein the government / tax man is the common enemy of the whole family.

It’s very easy for any wealth creator to be seduced by a plan that clearly shows, down to the last dollar and cent, that if you do nothing you’ll pay $XXX to the tax man, but, if you implement this great plan I’ve drawn up for you, that number shrinks or even disappears.

All too often, though, that “tax tail” ends up wagging the whole family dog.

Limiting Access and Maintaining Control

The structures that get put in place also usually limit access to the wealth to specific people at specific times and for specific reasons, all with the goal of maintaining the family wealth for posterity.

This is sometimes couched in reasoning like protection from creditors and former spouses too.

There’s usually some terms in place that allow for certain people to remain in control of the wealth, lest the heirs be allowed to use it at will.

You can imagine that those for whom all this is purportedly being done may look at these structures in a negative light, that somehow leaves them feeling less than perfectly trusted by their forebears.

And that’s why it’s important to take the time to discuss and explain everything to the stakeholders.

Preparing the Heirs for the Wealth

There’s an expression I like that says people spend lots of time preparing the wealth for the heirs (i.e. creating all these structures) and not nearly enough time preparing the heirs for the wealth.

Preparing those who will inherit is better than not preparing them of course, but what is sufficient preparation?

So many people immediately jump to “financial literacy”, and while important, it is rarely enough.

Regular readers know that I encourage regular meetings that include dialogue between generations, so that information can flow upwards as well as downwards.

This allows the family to learn how the wealth can and should be used and stewarded for future generations, and allows the structures to be understood and modified over the years to evolve as the family evolves.

The structures are necessary, as we noted, but they don’t need to become the bogeyman.