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This generational mindset should not be seen as the preserve of the wealthy or super rich in our societies but for those who will like to impact on their future generations from now. A majority of African owned enterprise or companies are family owned and first generation. Studies have shown that 70% of family wealth is lost by the end of the second generation and 90% by the end of the third. It is my hope that we can start from now to stem this tide to avoid this vicious circle to continue to our children and not be part of these statistics. We need to understand, and work to overcome, the disconnect that occurs between generations regarding the transfer of wealth.
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TRANSFORMATIONAL GROWTH
“Never look down to test the ground
before taking your next step; only he
who keeps is eye fixed on the far
horizon will find the right road”
- Dag Hammarskjold
“Today is when everything that’s
going to happen from now on
begins.”
- Harvey Firestone Jr.
In The Next
Episode
There are some key
aspects of this topic that
have not been explored.
Therefore Episode 02
will look at;
Inter—generational
governance system
Roles & responsibil-
ities of each family
member as owner
of the family enter-
prise.
Roles & Responsi-
bilities of Uncles &
Aunties ‘Transformation literally means going beyond your form.’ Wayne Dyer’
A Master Plan for Generational Wealth Creation
A few years ago, I started wrestling with this phenomenon and
naturally I started looking at my environment (Africa) and to
say the least, the results where shocking. It became clear to me that
without the right thinking and more importantly action, Africa will
never attain ‘its potential’.
Following my investigation, I decided to approach an American who is
in line to inherit billions of generational wealth handed down to his
father by his grand parents. This gentleman who was a close ac-
quaintance at the time took his time to explain some of the tenets of
this principle.
My questions multiplied by a considerable number because a majority
of the things we spoke about, I could tell that even people like my-
self who would consider ourselves exposed to the world would be
found wanting in this generational mindset. I will share some of the
key drivers of this principle which is entrenched in the psyche of peo-
ple in more advanced societies. This write—up cannot even begin to
scratch the surface of this subject but I hope it will spark a con-
sciousness amongst African people and others around the world who
need this awakening.
Just as a footnote, a majority of African owned enterprise or compa-
nies are family owned and first generation. Studies have shown that
70% of family wealth is lost by the end of the second generation and
90% by the end of the third. It is my hope that we can start from
now to stem this tide to avoid this vicious circle to continue to our
children and not be part of these statistics. We need to understand,
and work to overcome, the disconnect that occurs between genera-
tions regarding the transfer of wealth.
EPISODE 01 February 2016
By Mbi Mbapeh - My Reflections on Africa’s Transformational Growth
Reflection Points
- Inheritance
T here is a trait which runs through many African families. Inadvert-
ently an African will inherit debt and other societal problems. In
the event that they inherit something different, it will be riches and not
wealth. People always make the mistake to think that these two are the
same but they are significantly different. The main difference between
being rich and being wealthy is knowledge. Wealthy people know how
to make money while rich people only have money. Rich people are
motivated by money but wealthy people are motivated by their dreams,
purpose and passion. Most rich people make a lot of money with their
paychecks but the moment they stop working, they also stop making
money.
Being wealthy is defined as that status of an individual’s existing finan-
cial resources that supports his or her way of living for a longer dura-
tion, even if he or she does not physically work to generate a recurring
income. (www.millionaireacts.com.)
In thinking about generational wealth creation, every generation should
think about the fact that, what they do today will impact on the fourth
generation after them. World renowned Personal Growth writer Perry
Stone say families today should see generational wealth creation as the
act of planting a tree. The first generation plants the seed, the second
waters the tree, the third grows the tree while the fourth protects the
tree. Bearing in mind that each generation is thinking of four genera-
tions after them.
Leading From Where you are ! MANSA MUSA
An obscure king who ruled West
Africa in the 14th century has
been named the richest person in
history in a new inflation-adjusted
list of the world's 25 wealthi-
est people of all time.
Spanning 1,000 years and with a
combined fortune of $4.317tril-
lion, only three of the list's 25 are
alive today; none of them are
women and 14 of them are Ameri-
can. The legacies of 24 individuals
on the list lives on and is evident
for all to see.
As an African my question is what
is the legacy of Mansa Musa from
Mali, what is his legacy?
Mansa Musa I: This video game representation of the king shows what he may have looked like .
Personal transformation can and does have global effects. As we go, so goes the world, for the world is us. The revolution that will save the world is ultimately a personal one. ‘Marianne Williamson’
In this episode, I would recom-
mend the following book by Perry
Stone;
Breaking The Jewish Code
It carries 12 Secrets that will
transform your Life, Family,
Health and Finances
Please share your thoughts with
us after going through our recom-
mended readings or share your
readings with us.
Generational Wealth Drivers!
The dominant thought is that
if I live lots of money to the
next generation they will be
fine. That is true but does not
always work out as you
would think. What is actually
more important is what you
deposit in the next genera-
tion not in their bank ac-
count.
The following information
should be communicated to
your family to ensure they
are armed for the beyond you
experience;
Your Net-worth state-
ment. You do not neces-
sarily have to be a mil-
lionaire to have a net-
worth statement.
Have a will and testimo-
nial drafted,
Create a family Trust
Have an irrevocable life
insurance trust
Overall goals and inten-
tions for inheritance
Estate Planning
Your road map needs to be
personalized through integra-
tion of your family values,
family history, and ultimate
goals for future generations
‘Generational Wealth Creation
is not the accumulation of
cash and material resources
but planning with the next
generations in mind’—Mbi
Mbapeh
Life is a moving, breathing thing. We have to be willing to constantly evolve - ‘Nia Peeples’
Your Masterplan
T here are a multitude of angles around which this subject can be ap-
proached. For the purpose of this write—up, I will focus on the three areas
which should form the basis of your masterplan. Credits of some of this material
goes to Ilze Alberts and James E. Hughes Jr. for great insights on these matters.
To avoid what seems to be known around the world as ‘Shirt Sleeve to Shirt
Sleeve’, (Family Wealth is transferred and depleted by the third generation) an
intentional ‘Bond of Affinity’ has to be created in the family to drive the common
good agenda. These are; Legacy, Heritage and Wealth. At all levels, every step
taken to drive this agenda has to be ‘Intentional’ from one generation to the
next. Enhancing and transferring to the next generation. Note that you have to;
- Impart Before You Depart - (Perry Stone)
T he main reason why we raise our children and grand children in any gener-
ation is to impart character so that they can be able to carry the mantle
with truth and righteousness and hand it over to the next generation in a much
bigger and better state than they received it. In ancient biblical times, when
Abraham was very advanced in age, he imparted blessings to his son Isaac,
Isaac did the same with Jacob and then Esau and Jacob were no different. In
some other cases, the father or mentor would walk the journey with the mentee
and as they depart, there is a transfer. This was true for Moses and Joshua
same scenario for Elijah and Elisha. Make sure that whatever you do, ‘Impart
before you Depart’.
This impartation could be tactile or even the softer things like the motivation
and positive acclamations that you induce to the next generation by your words
and actions. Remember at all instances, it has to be intentional.
The Family Bank Account!
To build a positive balance in this
bank account, every member of
the structure with a bond of affin-
ity, would freely without duress,
adhere to the principles set out
and do everything in their power
that the common good is
achieved for the ‘greater good’
I) PHILOSOPHY
(A) The Revenue side of the Family Balance Sheet
(B) Enhance each family mem-ber’s goals
(C) High risk/Low interest lender
(D) Expectation that loans will be repaid
(E) Adopt the Rothschild model
II) ORGANIZATION
(A) Not formally chartered so no possible regulation
(B) Board of Directors
1) Only family members
2) Over 21-Advisory vot ing
3) Over 16-Attend meet ing
4) Mater familias as Chair man/Casting Vote
III) OFFICERS
(A) Chairman
(B) Secretary
(C) Board member other than Chairman and Secretary des-ignated facilitator at each meeting
IV) MEETINGS
(A) General- all family meetings will include “Family Bank” issues as an agenda item
(B) Specially called by Chairman whenever a loan application made if not coincident with a general meeting
(C) Meeting may be held tele-phonically, by e-mail or in person
V) ADVISORY BOARD
(A) Non family members
1) Mentors
2) Special loan applications requiring special issue expertise
VI) FUNDING
Optional with mater familias, but initially on a project-by-project basis
James E. Hughes Jr. Esq.
Your Masterplan Continued!
- Legacy -
F rom a legacy perspective, an extremely powerful legacy wealth has to be
created overtime. When you depart leave such a name in your community
that your children will be proud to carry that name. A financial and spiritual leg-
acy are equally important. On the softer side leave lots of pictures. Control your
legacy beyond the grave
- Heritage-
A heritage is something that is not material such as traditions handed down
from one generation to the next. These are intangible but are very power-
ful. When we examine the family balance sheet below it will be captured for
better understanding.
- Wealth -
W ealth is a measure of the value of all of the assets of worth owned by a
person, community, company or country. Wealth is found by taking the
total market value of all the physical and intangible assets of the entity and
then subtracting all debts. Investopedia
The sum total of these tangible and intangible assets, make up the wealth of a
generation to be handed down to the next generation. Whatever you consider
as the first generation from where you are today as an entity, be it a family,
company or community, note that 1st generations will use and treat ideas in the
same way as accounting mechanisms. The actual Family balance sheet looks
beyond these structures.
Life is a moving, breathing thing. We have to be willing to constantly evolve - ‘Nia Peeples’ Read more at http://www.brainyquote.com/quotes/keywords/transformation.html#6dwhT0xigqmSxzaR.99
Contact Us
Give us a call for
more information
about our services
and products
EndlessLife Invest-
ment (Pty) Ltd.
No. 3 Linksfeild
Road, Dunvegan,
Edenvale, Johannes-
burg 1906 RSA
+(27) 11 454-1393
in-
fo@endlesslifeinvestment.
com
Visit us on the web
at www.endlesslifeinvestmen
Your Family Balance Sheet
An adaptation from James E. Hughes, Jr
I t should be noted that the common denominator here is the family or indi-
viduals / entity tied by Bonds of Affinity and interested in the greater good
“The Next Generation’. The greatest liability here is us!
Assets Liabilities
The family represented by the
individual members of the fam-
ily of affinity
The family's human capital
The family's intellectual capital
The family's financial capital
The family's social capital
The family’s spiritual capital
Long-term Family Risks The Prov-erb, "Shirt sleeves to shirt sleeves in three generations"
Failure of family governance
Failure to understand that success requires a 100-year plan
Failure to comprehend and manage all forms of family capital ….human …intellectual …financial
Intermediate Internal Family Risks
Death
Divorce
Malthus’ Law-the geometric increase of family members in each genera-tion
Creditors
Poor beneficiary/trustee relations
Investment programs of fewer than 50 years
Intermediate External Family Risks
Inflation
Inadequate trustee management
Estate and other forms of transfer and wealth taxes
Disasters
Changes of political system
Lack of personal security
Short-term Family Risks
Income taxes
Market fluctuation
No mission statement
Lack of financial education
Family Shareholder Equity
Are individual family members suc-cessfully pursuing happiness?
Are the family’s human and intellec-tual capital increasing as measured against the family’s liabilities?
Is the family as a whole dynamically preserving itself?
Is the family's governance system producing more good decisions than bad taking a 7th generational view?
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