Stocks fell heavily in the US on Friday, led by a sharp decline in ‘hot’ NASDAQ stocks. There’s a whiff of panic in the air, even though stocks are still near their all-time highs. Maybe it’s the furore around high-frequency trading…or the fact that US Federal Reserve Governor Richard Fisher gave a pretty hawkish speech at a Hong Kong conference on Friday.
But we’re not going to discuss markets today. There’s something far more important to talk about. Last week, NAB boss Cameron Cline resigned at the tender age of 46. His reason? To spend more time with his family. His kids are just 12 and 8, and in running the Bank of New Zealand and then the NAB (since 2009) he hasn’t seen much of them.
Let’s hope he hasn’t left it too late. Kids don’t understand careers, money or ambition. They might grow up in a big house, an exclusive neighbourhood and go to a top school, but they’d swap all that in a heartbeat for more time with dad (or mum).
In the age of the two income household, we sacrifice time with our kids to provide them with stuff they don’t really care about. All kids really want is for you spend time with them…kicking a ball, talking, reading books, playing boring games…just doing stuff.
The bottom line is that if you don’t spend the time with them in the early years, you won’t have an enduring relationship with them in adolescence or into adulthood. Like anything in life, it’s time put in that determines the long term reward. So we hope Cameron Cline hasn’t left it too late.
The tough thing about having kids when you’re also trying to build a career is that both things demand a lot of your time. If you neglect your career for your kids, then you compromise the ability to do things later in life, or leave them a financial legacy. If you compromise your kids for your career, then much of your hard work will be in vain.
Like anything, it’s all about achieving balance.
Then, if you’ve managed to pull this miraculous feat off, you find yourself at the back end of life with excess assets wondering the best way to hand things on to your kids — without blowing relationships up.
This is a crucial aspect of wealth management. Yet not that many people think about it. It’s all about the getting…but there is little thought put into the giving or the passing on. That’s because it’s long term…the benefits of implementing a systematic approach to family wealth accrue over generations, and are not an easy sell for the financial mainstream.
Which is why we launched Gowdie Family Wealth last year. Vern Gowdie, the editor of the publication, is passionate about the topic. So much so that he wrote a book for his daughters on life’s lessons from a mainly financial aspect. (Below you can read an excerpt from Vern’s book on ‘false prophets’ in the financial industry).
Passing wealth on from one generation to the next is not as simple as just leaving a will, or engaging in basic ‘estate planning’. If you want to do it right, it takes time and effort. If you’re interested in this stuff, keep your eye out later this week for a special report from Vern. It will answer many questions you have about family wealth and ensuring that your hard work and legacy endure for generations to come.
for The Daily Reckoning Australia