Achieving enormous wealth by working tirelessly is an incredible thing; being determination personified, one can become a role model for children.
Achieving enormous wealth by working tirelessly is an incredible thing; being determination personified, one can become a role model for children. By sitting on a huge pile of wealth, many live with one fear — whether the future generations would fail to inherit their work ethics along with the hard-earned wealth. This is where the importance of a sophisticated family office comes in.
Family office basically caters to rich families to make decisions in their financial and non-financial needs. If you look at history, most of the family wealth has evaporated down the generations. One generation works hard to create family wealth, which, due to financial incompetence, is squandered away by the next generation, leaving little for the third generation. In reality, most of the inherited wealth is frittered away in vanities and bad deals, leading to bitter infighting and an eventual loss of fortune.
One reason for loss of wealth is that people who made it fail to consolidate and communicate the details of their scattered assets or do not pass along clear instructions on handling physical shares or real estate property documents. Affluent parents must be aware of the potential dark side of financial success and teach children about wealth and management. It is high time families shape their attitude toward wealth.
In the current scenario, the need for a family office for high net worth individuals is a must with an increasing trend of people investing most of their wealth in equities. Family offices have a say in matters related to managing wealth, taking decisions on funding a new business, and liquidating the existing one. Just making money with hard work is not enough; one should make adequate efforts to preserve this wealth for future generations as well. (The author is Executive Director of Moat MultiFamily Office)
