Navigating Abundance Foundations: The Pursuit of Total Family Wealth

Welcome back to our foundational series for navigating abundance. My name is Chris Tanke. I’m very glad that you’re listening today. Navigating abundance is all about advancing the pursuit of total family wealth. Our mission is to encourage affluent families to both recognize and then realize their total family wealth potential.

Now this is the second podcast of a three podcast series and it’s best to be viewed sequentially so you might want to just stop this right now and go back to episode number one, which lays some more initial foundational issues that will help you a lot understanding this podcast. So let me encourage you to do that. All right, by way of review, your total family wealth is really found in three separate categories. You can divide it that way. Your ledger wealth, which is your financial capital, your logistic wealth, which is your functional capital and your legacy wealth, which is your family capital.

We would suggest, we would actually go to bat for, that you need to do well in all three categories if you want to truly succeed in your navigating of abundance. They’re all important. You can’t just choose two out of three. So what I would like to do at this point is just drill down a little deeper so you can have a better appreciation for what I’m saying. We’re going to start with ledger wealth because we’re all very familiar with that. As a matter of fact, if I was to say, are you wealthy?

You would open up your ledger wealth portfolio and say, I don’t know, you tell me, right? So that’s the that’s the the matrix for what we consider to be wealth. So we’ll start with that. Ledger wealth is your financial capital. Obviously, I don’t have to go through too much of this is your investments, your real estate, your business, significant collections, all the things you have. One thing that I would want to mention here, and you can see this if you’re viewing this on the chart, is significant life insurance a Lot of families of means have used life insurance large life insurance policies as an estate planning tool and we would suggest that that is actually an asset so I don’t know if I’ve got a hundred million dollars a state and I’ve got three kids. I don’t want to give them more than Four million each I might get three four million dollar well life insurance policies those will go to the kids.

And if I do this well, that’s outside of a state taxation. It’s not subject to a state tax. Neither is it subject to income tax. So I’ll give all the rest of my stuff away to charities. And if it’s, it’s my philosophy that I don’t want my kids to get more than $4 million because I want them to like, you know, grow their own experiences and have their own successes or whatever it is. That’s a good way to do it. Anyway, that’s a whole other podcast on estate planning life insurance, [and I] think it’d be a lot of fun to do it and we will. But for now, I think it belongs in that category of your ledger wealth. Now logistical wealth, this is your functional capital. Essentially, these are, I guess your professionals I would focus on, your group of professionals. Your ledger wealth, we focus on possessions.

Here, we’re focusing on your professionals and, you know, I’m saying right out front, going to bat for the fact that you need to give all the effort here, all the expense, all the time, all the thinking, all the meetings, all that you’ve done in the logistic wealth category, a lot of credence, a lot of credit. It is valuable to you. It is your logistical wealth. As a matter of fact, you’re going to find that your ledger wealth and your legacy wealth aren’t going to function as well unless you’ve really done a good job here. So let’s talk about some of these bullets here of your functional capital. The advisor team you put together, attorneys, CPAs, investment advisors, insurance brokers, business consultants, and some of you might even have a family concierge.

These are people that you rely upon to interact with each other, to share concepts, to work on complicated projects and cases together and They’re super valuable keep encouraging them replace them as you need to whatever it takes you need an a class advisory team and Some of you that have that you say amen brother. I don’t know I do without them That’s part of your logistical wealth financial plans also are part of your logistical wealth. So if you have retirement plans personal plans, estate plans, dynastic plans for generations. Some of you have spent a lot of money and a lot of time creating those. They’re valuable to you. And there’s something that need to be managed in an ongoing fashion. That’s good. You get it. Business succession plans, right? If you have a business, there’s a lot of things you have to consider, right? Your enterprise valuation, buy-sell agreements, partnership arrangements, stock options, gifting.

How are going to handle this if two of the four children want to be involved with the business? Key employees leadership development essentially the the business succession is important to you Because it’s it’s generating revenue not only for you, but also once you’re done and maybe even your kids or whatever the case might be valuable real valuable wills and trusts basically You could have all sorts of different types special needs trust charitable Rainer trusts, irrevocable, living, generation skipping, spent this trust, dynamic trusts or dynastic trucks, a lot of different trust. You need them. And you probably have some of you five or six different versions of them. It’s good. And then finally here, family office model. Some of you know exactly what that means. Basically, if you don’t, a family office is an enterprise. It’s essentially functional capital of a group of people that you bring together to take care of some things for you because you can’t afford to do it on your own. You don’t have the time. Some families of significant enterprise have 20, 30, 40 people in their family office and their job is to do a whole wealth of things across all three of these areas to make it work because it’s just too much for a couple or a family to accomplish on their own. We can talk about that. There’s single family offices, multiple family offices, virtual family offices, DIY family offices, a lot of versions of this.

Again, we’ll be podcasting on some of that in the future. But the point is, you look at all of these things, that’s your logistical wealth. Your advisory team brings in compounded wisdom. That’s why you have it. Your financial plans bring in clearer vision. Your business succession plans bring enduring enterprises. Your wills and trust benefit you by way of legal formalization. And your family office, you know how that benefits you? Really, a lot of ways, but the greatest way? Freedom. Because it would just be all encompassing if you were responsible for everything of an abundant family that you’d have to manage. This is impossible. So a family office is there to give you personal freedom really more than anything I would say. All right let’s look at legacy Walt. That’s our final category here. And as I said before I think this is the number one category. This is the most important thing. If you had to pick one out of the three, [which] I wouldn’t advise that, I do all three, but if you absolutely had to this is where you want to be spending your time for sure I think I might have said in the previous video I don’t know forgive me if I did a hundred years from now this is the only thing that’s gonna matter let’s let’s proceed with this legacy wealth is your family capital family relationships what does that involve well we would say that involves developing commitment to the family and a spirit of community to the family. Not all families have that. Work on your communication skills, your conflict resolution skills, right? The goal, if you could do those four things, commitment, community, communication, and conflict resolution, the goal of love is far more probable to be realized. Family relationships, we want to produce love or encourage love.

Family ethos is your family spirit, your family history, appreciation for your roots or your story, your core values, traditions, real important if you can develop them or continue them. And a lot of you have all of these things and you know exactly what I’m saying and why it’s so important. The goal of the family ethos that you want to develop under your legacy well is pride. Pride for your kids, your grandchildren.

Where they came from. That’s real important going forward to carry them into the generations when they receive the wealth, when there’s the transfer. Family wellness is another one, and the goal here is fulfillment. So we look at physical, mental, spiritual health. What can we do to encourage that? Vocation, calling, education. You know, we’re going to find that the kids are not all like us. My kids aren’t.

And so we need to figure out what their passion is, where their gifts are, where they lie. Not everybody is an entrepreneur, let’s say, for an example. And so we need to support that and to create a path to help them have a fulfilled life. That’s the goal of family wellness is fulfillment of all members. Family practice. Well, this is how we get along together. This is how we make decisions together. So we’re talking about family meetings.

Family governance. Our trusts sometimes outline how this is done family Treasury, perhaps Somebody needs some resources to begin a business. How do we decide if they should get that now? You could say well, it’s my stuff. I’m gen 1 I made it I created it and you could you could do all this The problem is though at some point you’re gonna hand this off to gen 2 or gen 3 and it’s far better to like groom folks, the family together, for these next generations than just say, well, they’ll figure it out later. The time to start letting go, the time to start listening to other opinions, the time to start making mutual decisions is now. And I think you can even do it with adolescence on certain things as well. But that’s part of grooming. Your legacy wealth is family practice. And finally, family philanthropy, the goal here is generosity.

So you want to produce joyful giving, personal engagement, maybe through mission trips or soup kitchen serving in line or whatever the case might be. You want to get the generations following you to really understand how blessed they are and their great stewardship of responsibility to other people.

You can do this through donor advised funds. There’s a lot of really fun things you can do that way as well, which we’ll talk about, I’m sure, going forward and or maybe a family foundation if you want to go that formal. But my point is this, and I really believe this out of out of everything that we talked about that’s important and to ledger wealth, logistic wealth, legacy wealth. I think one of the greatest things that you should work toward achieving is to put a generous heart into your children and your grandchildren, to have them be grateful for what they have, from that will cascade all sorts of right opinions and are right values. It’s going to be much easier to do that. I really think it’s probably one of the greatest things you should be looking at to supercharge and encourage. So essentially, as I said, all three are very important. You need all three. You should work on all three.

But the greatest of these is legacy wealth. And I think coming to legacy wealth, the final moments of your life, your very last thought is not going to be, golly gee, wish I would have made a couple extra million dollars to give away. That’s not going to be anywhere on your mind. What’s going to be on your mind is legacy wealth issues. All right, being true to form now, we’re going to leave the informational part of this podcast, which is your total family wealth categories. And we’re now going to talk about inspirational ideas. Now I’m going to warn you, some of you are going to look at this and listen to this and say, this is so basic. I already know this. Yes, I understand. I understand you already know this. Frankly, I know this too. Do you want to know why I’m doing this? I’m doing this because I’m pretty sure that just like me, even though you know, that you should be following these philosophies of life, you don’t always do it well. It’s just human nature. So what I’m doing is I’m trying to be a champion for three principles which every morning when you get out of bed and put your feet on the ground, you should be thinking something like this in all three of these areas. Now that might be a little wooden and unexpected, but basically what I’m saying is these have to govern your life.

And you have to remind yourself all the time. So here they are ready. This is what I need to remember. Navigating abundance is a team sport. Principle number one. Don’t forget that. It’s a team sport. Secondly, navigating abundance is all about keeping your eye on the prize. You have to have your priorities in place. And third, navigating abundance can appreciate Tempus Fugit- time flies.

I know some of you are going to turn it off right now and say, got it, thanks, got it, but you don’t have it because you’re a human being. So let me come back to this, this is the former preacher coming out on me now, and encourage you to follow this because knowing it’s not enough, remember, it’s not just information that creates change, it’s information wedded with inspiration. Information plus inspiration. So let’s see if you can go on this touchy-feely journey with me if some of you think that way. Here you go, navigating abundance is a team sport. Here’s the bottom line. I hope you can recognize, I hope you have enough humility to say, wow, this is a lot of stuff. I can’t do this. The job is too big. Now, some of you built enterprises where you started out, you know, in your garage by yourself and it worked out.

And then all of a sudden you had to hire more people because you couldn’t handle it. And then from there, from there, from there, from there. So you’ve known intuitively, you’ve learned that some jobs are just too big to do on your own.

That’s the point. Navigating abundance is far too important of a life quest to try to make it a DIY project. It’s just too important. The logistical wealth we talked about. I mean, that’s the professionals you have to bring around you. I mean, that’s an admission that, I need help to do that. And my point would be, though, that that’s also probably two of your legacy wealth. The skill set that made your fortune might not be transferable to communication or transferable to conflict resolution, right, or transferable to creating traditions or whatever the case might be. You might need to read something, but you also might read, sit down with somebody and say, hey, can you help us out here? Can you coach us? For sure. What a great, great use of time and resources. We need other people.

A really cool book came out a few years ago by Harding and Sullivan and the title is so descriptive of what the book’s about that once you read the title you really don’t have to buy the book. And the title is Who Not How. Who Not How. So if you want to get something done and you don’t know how to do it, it’s sometimes fun to learn new skills and whatnot, but oftentimes it’s a tremendous waste of time. You don’t even know how to do something.

You need to find the who that can do it better, that can do it more consistently, that has a lot of experience, that knows all sorts of questions even to ask that you would never begin to ask as you’re trying to solve your own problem. Hire somebody, find somebody, bring somebody on the team. It’s not about how, it’s about who. All right, so I’ll tell you right now, I’ve got the book, I like the book, it’s a little book, it’s really good, I read it all the time. To refresh myself, here we go again. There’s nothing in that book beyond those three words. That says it all. I have to change my thinking to not do as much stuff but find people that can do it because it’s going to work out better in the long run, etc. So what’s the purpose of the rest of the book? Inspiration, stories, anecdotes, illustrations, statistics to support the information. It’s really who, not how. I think you need to apply that your own pursuit of your total family wealth. It is a team sport. You need to get the right who’s on your team. And I would suggest to you, you need to be honest enough, humble enough to say, boy, you know, I might need that in my legacy wealth too, for sure. Not uncommon at all. Okay. Let’s move on to keep your eye on the price.

I’m going to start with the quote from the famous theologian Bob Marley, the reggae guy who said, some people are so poor that all they have is money. Ya-mon. That’s it. Some people are so poor that all they have is money. I sincerely hope that’s not you. Right? The total family wealth concept that we’re presenting, right? Again, it’s not new to us.

It might be new to you, but we’re just trying to present it in a way perhaps you’ve not seen it before. But seriously, your logistic wealth and your ledger wealth is there really to support your legacy wealth. And that’s what it’s all about. Keep your eye on the prize. Boy, is that hard to do sometimes, isn’t it? Again, it’s a brutal question to ask, but what percentage of my time, my money, and my professional arrangements that I’ve developed and associations. What percent of that is spent on managing my ledger wealth and my logistical wealth? 80%. Okay. So that means that 20 % then is spent on hobbies, vacations, acquisitions, and maybe some legacy wealth development, right? You sure that’s wise?

Again, a hundred years from now, what’s going to still be here? Your bloodline. Your legacy. Now, look, I’m not trying to upset you. Some of you are like, you can’t tell me what to I totally get it. I’m not trying to tell you what to I’m just trying to tell you what the reality is. And I think that if you want to be a leader in your family, you’ve got to keep your eye on the prize. And that is difficult to do.

It’s difficult to do because you’re going to be pulled in so many different ways. I get it. I understand. I am too. But you have to fight. You have to fight like mad to make sure your priorities are arranged and clear and refreshed every day. Keep your eye on the prize. In 1989, The Seven Habits of Highly Successful People was published by Stephen Covey. A lot of you have read that book, a lot of you have benefited from that book. Again, it’s another way of saying, if you can do seven things, you’re going to be far more advantaged to accomplish anything that’s important in your life. It was designed for business, but churches quickly started going through it. My church did at that time, and individuals did to organize their own lives as well. Great stuff. The third habit that you cannot afford to miss is simply this.

Put first things first. Fight like heck to put first things first. Do not allow the tyranny of the urgent to overcome that which is really critically important. Keep your eye on the prize. All right, if you’re still with me, if you haven’t turned me off by now because you’re saying, wow, this is just too heavy, let’s talk about Tempest Fugit, right? Time is flying. I’m 66 years old.

I lost my second parent last year and I’m glad he’s with mom. I have great comfort in that, totally believe it. And I’m very much at peace with that. Miss them both, but I truly know they’re in the right place in a better place.

But I got to tell you what’s kind of weird is for all my life, I was either in the dugout or in the batter circle. As a child, I was in the dugout watching my grandparents bat and my parents in the on deck circle. Well, then my grandparents died and my parents went up to bat and I’m in the on deck circle. Now that the second of the two of them are gone, I’m up to bat. And for the rest of my life, I’m falling off pitches to stay in that batter’s box as long as I can. The older I get, and I know you can relate to this, the more I come to realize that the real currency in my life is not dollars and cents anymore. I have plenty of that. The real currency in my life is days, weeks, months, and years. I’m running out of time.

And that’s the most priceless thing I have as a commodity to make a difference. I’m here to make a difference in this world. I’m here to make a difference in my family. This is what navigating abundance is all about. But time is flying. It’s so easy to look at all that we have to do with navigating abundance in light of all the other things that’s going on in our lives and say, yikes, I’m frozen. It’s too much. I’m going to procrastinate.

And I just have to think this through a little bit and I’ve got to tell you, you’ve got to stop. You don’t have to get it perfectly right, but you have to start. And the time to start is now, today, right now. If you want, go to our resources, go to Amazon, there’s a link right there, buy one of the books and start reading. At least you’re starting. You don’t have to solve at all.

But if you can make incremental progress, it’s amazing how momentum will help. I’m just going to pitch for that which you absolutely know is true. My money is unlimited. My time is not. Spend it wisely. Tempest fugit. Little victories are better than no victories. Start today. So there you go. Feel like I should be passing an offering plate or something.

But that’s the sermon for the day. So please remember, remember, whatever you want to succeed in with life, you need information, but you also need inspiration. And that’s what we’re trying to bring to you. There’s one more podcast in this series, number three, it’s shorter, so don’t be afraid, where I share some personal feelings on some of these things. But once you’ve done that, you’ve gone through a boot camp of the foundational episodes of Navigating Abundance.

I hope that you enjoyed. hope that we’re already something that I’m is connecting with you a little bit. And that would be, make me very, very happy. All right, so for now, this is Chris Tanke with Navigating Abundance signing off, reminding you, your family is worth it.