What percentage of all family firms fail before reaching the second generation?
A) 10% B) 30% C) 50% D) 70% E) 90%
According to the Family Firm Institute of Brookline, MA, “Nearly 70 percent of all family firms fail before reaching the second generation, and 88 percent fail before the third generation; only a little more than 3 percent of all family enterprises survive to the fourth generation and beyond.”
As an advisor to the affluent, I began to examine whether the work I was doing—creating intellectual mechanisms for the rich to pass their wealth to their offspring without associated responsibilities—was 100 percent beneficial. Was I protecting the wealth of hard-working people from the ravages of inflation, the IRS, and other enemies of wealth preservation? Or was I, in effect, contributing to the delinquency of the generation of very wealthy heirs and trust-fund beneficiaries who would follow them? Was I helping my clients to be the best possible stewards of their wealth? Was I contributing to society or harming it?
I began to devote more and more time to studying some of the world’s wealthiest families. I wanted to know why some families were successful in preserving wealth for generations, and why most family fortunes never made it to the fourth generation. I was convinced that the reasons were not based on any financial secrets. I became obsessed with the idea of sustaining a family’s wealth through four generations. If we could create a plan that would help a family sustain their most important assets through the fourth generation, wouldn’t that increase the likelihood that these assets would survive far beyond that? Thus, the quest for a new way of doing business began.
We created The Quadrant Living Wealth Optimization System with the objective to not only optimize a family’s financial assets, but to also maximize the health, happiness and well-being of each family member. This process is focused on growing, protecting, and perpetuating your True Wealth. http://www.empoweredwealth.com/