Why Legacy Means More Than Wealth

For many families who have built successful enterprises, the primary focus is often on financial wealth—growing it, preserving it, and passing it on to the next generation. However, as time goes on, the realization emerges that wealth alone is not enough to secure a lasting legacy. True legacy transcends balance sheets and bank accounts; it is about instilling values, fostering relationships, and creating a meaningful impact that endures across generations.

In “Family Fortune” by Mike Schmitt, the concept of legacy beyond wealth is central. He emphasizes that while financial security is essential, the families who truly thrive for generations are those who focus on something deeper—a lasting legacy rooted in purpose, family unity, and shared values. This newsletter explores how you can shift your focus from mere wealth preservation to building a legacy that endures and enriches the lives of future generations.

Why Legacy Matters More Than Wealth

In today’s world, it’s easy to equate success with material wealth. But families who have been through the process of growing and maintaining a business know that money alone doesn’t guarantee happiness or harmony. In fact, as the statistics in “Family Fortune” show, 90% of family wealth is lost by the third generation. The reason? Lack of planning, poor communication, and a focus solely on financial success, rather than instilling values that transcend the assets themselves.

Creating a legacy beyond wealth is about answering larger, more meaningful questions: How will your family be remembered? What impact will you have on your community and the world? What values and principles will you pass on to your children, grandchildren, and beyond?

A legacy beyond wealth is a compass, guiding family members not just in financial decisions but in how they live their lives and relate to one another.

Defining Your Family’s Core Values

At the heart of a lasting legacy is a set of shared family values. These values act as the foundation for everything from business decisions to family interactions. As Schmitt advises, families should take the time to clearly define what matters most to them. These values should reflect both the history and aspirations of the family.

Ask yourself:

• What principles guided the family in building its wealth?
• How does your family define success beyond monetary terms?
• What do you want your descendants to prioritize in their lives—both personal and professional?

Families that have successfully passed on their legacy often engage in exercises like creating a family constitution or a set of guiding principles. This document can outline the family’s beliefs on work ethic, philanthropy, relationships, and even personal responsibility. The goal is to create a framework that empowers future generations to make decisions that reflect the family’s ethos, ensuring that the wealth serves the family’s purpose—not the other way around.

Strengthening Family Relationships and Unity

The greatest wealth a family possesses isn’t its financial assets—it’s the relationships between its members. In family enterprises, conflicts can often arise over business decisions, inheritance, or diverging personal interests. Left unchecked, these conflicts can tear families apart and undermine any attempt to preserve wealth or legacy.

“Family Fortune” emphasizes the importance of family unity as a critical aspect of legacy. Strong family relationships create a supportive environment where wealth becomes a tool for shared prosperity rather than a source of division.

To strengthen family ties, consider the following:

• Regular Family Meetings: Holding consistent, structured family meetings provides a forum for open communication about business, finances, and personal issues. These meetings ensure that everyone’s voice is heard and help prevent misunderstandings or unspoken grievances from festering.
• Encouraging Family Participation: Not every family member may be directly involved in the family business, but it’s essential to make everyone feel included in the legacy. Whether it’s through governance roles, philanthropy, or simply educating them on financial matters, each member should feel like they have a stake in the family’s future.
• Investing in Relationships: Spending time together outside of business discussions—family retreats, shared hobbies, or even vacations—strengthens bonds and reinforces the sense that the family is a team, united by more than just financial interests.

Making a Positive Impact: Philanthropy and Social Responsibility

A legacy beyond wealth also involves giving back. Families with significant wealth have the unique opportunity to use their resources to make a positive impact on their communities and the world. Whether through philanthropy, environmental stewardship, or socially responsible business practices, your family can leave a legacy that benefits others as well as your descendants.

Philanthropy provides a powerful way to involve younger generations in the family’s mission. Many families set up charitable foundations or trusts, allowing the next generation to participate in decision-making about donations and causes. This involvement teaches financial responsibility, the value of giving, and the importance of being good stewards of both wealth and the family name.

Additionally, businesses that integrate social responsibility into their core operations not only contribute to the greater good but also help strengthen the family’s reputation, both within the business community and beyond.

Educating and Empowering the Next Generation

One of the most effective ways to ensure your legacy lasts is to invest in the education and empowerment of the next generation. Financial literacy is critical, but so is teaching them leadership skills, critical thinking, and the importance of living by the family’s values.

Consider providing formal education on wealth management, estate planning, and business operations. But beyond financial education, also focus on personal development—teach them the importance of humility, empathy, and the responsibility that comes with wealth.

Encouraging younger family members to gain experience outside the family business can also be invaluable. When they return, they bring new skills, fresh perspectives, and a renewed appreciation for the family legacy. This not only strengthens the business but also prepares them to lead with wisdom and confidence.

Passing Down the Legacy: The Power of Storytelling

Finally, one of the most powerful ways to preserve a legacy beyond wealth is through storytelling. The stories of how the family built its business, overcame challenges, and upheld its values are an essential part of the family’s history. These stories help future generations feel connected to the past and give context to the wealth they inherit.

As Schmitt notes in “Family Fortune”, creating an oral or written history of the family can become a cherished tradition. This practice gives younger members a sense of pride and responsibility, inspiring them to continue the family’s legacy of hard work, innovation, and generosity.

Conclusion: Legacy as a Lifelong Commitment

Building a legacy beyond wealth is not a one-time event—it’s a lifelong commitment. It requires active engagement, thoughtful planning, and a focus on the values, relationships, and responsibilities that define your family’s purpose. When wealth is treated as a tool for achieving these higher goals, it becomes a source of strength and unity rather than division.

Ultimately, the true measure of a family’s success is not the size of its fortune but the strength of its legacy—the values, love, and purpose that are passed down to future generations.

If you would like to read our recent book you can access it here: https://a.co/d/3ElVkOn