I was reading a thread on the Sonlight Curriculum forums yesterday about the demise of the middle class. I will confess, I was dismayed to read about how little some of the participants on that forum are getting by on each year. But then I did a little research this morning using a tool my wife brought to my attention earlier this week: The Global Rich List.

As the people who put that site together explained in a recent blog post,

[T]he Global Rich List, launched in 2003, continues to surprise people with their unexpected financial ranking in the world – which makes them feel instantly better about their income, and in turn puts them in a much happier place to think about giving some of it to a good cause.

Where do you stand? I think you’ll be surprised!

And for those of us who are thinking about legacy–either legacy planning or, simply, passing on a legacy–I think it can be helpful to be surprised, to have our thinking expanded.

So, I’m curious: Does the websites result surprise you? Change your perception either of yourself or of the world? How do you think it may change your behavior?

I mentioned that profits have to do with increased wealth; and increased wealth is not the same as cash. If we fail to understand those differences, we can run into some serious trouble.

I thought I would illustrate what I am talking about. Read the rest of this entry »

What are profits?

I don’t think most of us really understand the concept very well. In fact, I’ll include myself in the number who struggle to understand what profits are.

To illustrate: When you hear that a company made, say, $8 billion last year, what image comes to your mind? –For me, I tend to think: “Oh, wow! They have $8 billion in cash in a bank somewhere–$8 billion that they did not have the year before.” “Profits” mean “cash.”

That’s what many people think. But that’s not right.

I’m sure there are more technically correct definitions of the word profits, but here’s a the best working definition I’ve been able to come up with: Profits are any increase in assets for which a business does not have increased liabilities (or debts) other than to the owners. Put another way, profits are an increase in wealth–and (most important to understand–and something I still tend to forget!) wealth comes in many forms other than money!

I say this because, for the longest time, I thought of profits in the same way I thought of a paycheck: profits are the same thing as a paycheck. You take them, bring them to the bank, and buy stuff with them.

But that’s not the case. Read the rest of this entry »

Yesterday I posted a proposed draft copy of an IPS (Investment Policy Statement) our legacy planners gave me. I said I didn’t feel comfortable signing the document without further input . . . from our investment advisor himself and, perhaps, one or two other similar advisors.

Today I thought I would share some of the things I wrote to our investment advisor about the document. So here’s the cover letter I sent him: Read the rest of this entry »

How rich are you? You might find the answer enlightening.

Go to GlobalRichList.com and find out exactly where you rate among all the people in the world! Pretty shocking, actually. . . . Read the rest of this entry »

While at the Mission India conference a couple of weeks ago, a smaller group of about 30 men met to discuss legacy planning. At one point, one of the participants asked, “How many of you received a substantial inheritance?”

Out of 30 people, one man raised his hand. One.

“Shouldn’t that tell us something?” asked the man who had raised the first question. Read the rest of this entry »

I’ve already read Jay Link’s Family Wealth Counseling.

He’s issued a clarion call to pay attention not only to the financial aspects of an estate plan or legacy plan, but, I would say, he calls our attention even more to the social and spiritual/emotional issues related to one’s . . . lifetime legacy.

I chose those last two words carefully.

I think we aren’t normally challenged to think in terms of our lives when it comes to estate planning. We are led to think in terms of death, dying, and what happens after our lives are over.

Link, by contrast, calls us to Read the rest of this entry »

G____, our legacy planner, asked, “Suppose we were to say a family has successfully passed on its legacy to the next generation if two things, at minimum, are true: 1) the family’s wealth is still there when the first generation has passed away, and, 2) none of the members of the second generation have seen their lives destroyed due to improper use of funds; no family relationships have been ruined as a result of strife over money.

“Of families who use traditional financial and estate planning techniques and go no further, what percentage would you guess are successful, according to this definition, in the second generation? How many wealthy families still have the wealth and are still relationally intact in the second generation?”

“Maybe one or two percent?” I suggested. Read the rest of this entry »