Summary: “Family Wealth” By James E Hughes Jr

Family Wealth
Keeping It in the Family: How Family Members and Their Advisers Preserve Human, Intellectual and Financial Assets for Generations
by James E. Hughes Jr.

• Most families who become wealthy lose their money within three generations.
• The capacity to attain wealth is rare, and is often unappreciated by subsequent generations who may squander the family’s accumulated capital.
•Families who seek to preserve their wealth must understand that their family is a business.
• The family business should have a mission statement that is reaffirmed by each generation.
• Most families are so intent on preserving wealth that they focus too much on the current fiscal year. A family business can afford to take a long-term perspective.
• Most families err by fixating on numerical measurements of their success. Qualitative measurements are equally important.
• Capital is only one resource a family should leverage. Unless it builds human capital and the welfare and intellectual development of family members, the family business is doomed.
• Many families establish a family bank that gives low-interest loans to members.
• Representative governance is the most effective method for families.
• Successful families endure by sharing family history and stories that keep the family bonded.