• The Story of the Singer Sewing Machine Company Fortune
  • “We have worked with thousands of families over the past two decades. Through that experience, from our research of the financial and legal literature, and from interviews and interactions with professional colleagues in several disciplines, we have come to this conclusion: Ninety percent of all traditional inheritance plans will fail. In part, this conclusion is based on numerous studies that show in families where new wealth has been created by the first generation, six out of ten of those families’ fortunes will be gone by the end of the second generation. By the end of the third generation, nine out of the ten families will be broke.” Beating the Midas Curse, by Perry L. Cochell and Rodney C. Zeeb, Page 7
  • “We have learned that when families place their valuables ahead of their values, they will end up with neither. We believe that the most important inheritance your children will receive from you comes while you are still alive. It is embedded in your everyday life. It is made up of the values you learned from important people in your own life. This is an inheritance you live and model to your family, friends, co-workers, and the community of people and organizations who make up your world. In short, we are dedicated to seeing that more families don’t become part of “the ninety percent”” Beating the Midas Curse, by Perry L. Cochell and Rodney C. Zeeb, Page 8
  • “You can pass both your values and your valuables to your children.” Beating the Midas Curse, by Perry L. Cochell and Rodney C. Zeeb, Page 9
  • “Around the room, the advisors to affluent families exchange knowing glances. They’ve seen the eighteen year old get a million dollars cash, no strings attached, under the terms of granddad’s will. Followed immediately by the hot car, the cocaine, the parties, and finally rehab, jail, or even suicide. They’ve seen marriages break up, friendships devastated, and family members alienated from each other. They’ve watched the companies that grandparents and parents sweated and sacrificed for decades to build go under, as heirs eager to squeeze more cash from the estate broke them up, sold them at bargain prices, or lost them through mismanagement.” Beating the Midas Curse, by Perry L. Cochell and Rodney C. Zeeb, Page 26
  • “The collapse of wealth over several generations is not news to your financial or legal advisors. It wasn’t news two thousand years ago when a Chinese scholar penned the adage: “fubuguo san dai,” or “Wealth never survives three generations.” Or in the thirteenth century England, where the proverb, “Clogs to clogs in three generations,” had morphed by the 1600s to “Rags to riches to rags.” In nineteenth century America, where fortunes were made and lost with astounding speed amidst the gold fields, oil wells, copper mines, and railroad booms, people said “From shirtsleeves to shirtsleeves in three generations.” Beating the Midas Curse, by Perry L. Cochell and Rodney C. Zeeb, Page 26-27
  • “Adam Smith summed it up over two hundred years ago in this landmark book The Wealth of Nations, “Riches, in spite of the most violent regulations of law to prevent their dissipation, very seldom remain long in the same family.” Beating the Midas Curse, by Perry L. Cochell and Rodney C. Zeeb, Page 27
  • “According to Paul Schervish of Boston College, at least forty-one trillion dollars will pass from one generation to the next by the year 2044.” Beating the Midas Curse, by Perry L. Cochell and Rodney C. Zeeb, Page 35
  • “Andrew Carnegie’s religious faith led him to the conclusion that such wealth should be put to use for the betterment of humanity; he subsequently gave most of his money to public libraries and other charities. He had no illusions about the effect of unearned money on children. In a letter to a friend, Carnegie said: ‘The parent who leaves his son enormous wealth generally deadens the talents and energies of the son and tempts him to lead a less useful and less worthy life than he otherwise would’” Beating the Midas Curse, by Perry L. Cochell and Rodney C. Zeeb, Page 39
  • “My life was never destined to be happy. Inherited wealth is a big handicap to happiness. It is as certain death to ambition as cocaine is to morality” (said by William K. Vanderbilt, beneficiary of millions). Beating the Midas Curse, by Perry L. Cochell and Rodney C. Zeeb, Page 39
  • “How long does the average recipient of an inheritance wait before they buy a new car? Just nineteen days.” New Car Dealer Association.Beating the Midas Curse, by Perry L. Cochell and Rodney C. Zeeb, Page 43
  • “The one recurring problem among people who have inherited money out of the blue is that most of them end up struggling to come to grips with the effects of ‘sudden wealth’. That’s because who we were the day before the inheritance was received, or lottery winnings paid out, is who we are the day after. We have the same strengths, the same flaws, the same habits. Character is not improved by the sudden receipt of money. It is revealed by it.” Beating the Midas Curse, by Perry L. Cochell and Rodney C. Zeeb, Page 44 -45
  • “Of course, lots of inheritance problems could be nipped in the bud if the inheritors simply understood that most estates consist of real estate and securities, not cash.” Beating the Midas Curse, by Perry L. Cochell and Rodney C. Zeeb, Page 45
  • “For hundreds of years, estate planning has focused on these financial inheritances almost exclusively. But there is another kind of inheritance that we receive and give, an inheritance that is far more powerful, and ultimately more meaningful, than money. That is an emotional inheritance: one we receive over a lifetime from other family members, friends, teachers, religious leaders, coaches and other significant people in our lives.” Beating the Midas Curse, by Perry L. Cochell and Rodney C. Zeeb, Page 45
  • “Of course, since we know that most traditional estate plans begin to crumble almost as quickly as they shower assets on the heirs, one might be tempted to call money the time bomb inheritance.” Beating the Midas Curse, by Perry L. Cochell and Rodney C. Zeeb, Page 45
  • “Emotional inheritances are quite different. They are composed of the values that you experienced and absorbed from your parents, grandparents, and other important people in your life. These people of influence may have taught you these values explicitly, or perhaps you picked them up simply through living around them and interacting with them. It is tis emotional inheritance (added to and enriched by your own life experience and living example) that you will pass on to your family and other people you know, whether or not you leave anything amounting to a financial inheritance. This emotional legacy is no less than the sum total of your life experience as evidenced by the values by which you lived. Values such as work, faith, philanthropy, and honesty. You received an emotional inheritance from your parents or grandparents while they lived. Your own children and grandchildren are receiving theirs from you right now.” Beating the Midas Curse, by Perry L. Cochell and Rodney C. Zeeb, Page 46
  • “In 2005, the Allianz Life Insurance Company surveyed baby boomers and their parents on a wide range of family and finance related issues. ‘Many people wrongly assume that the most important issue among families is money and wealth transfer- it’s not,’ said Ken Dychtwald, the survey designer. ‘Non-financial items that parents leave behind- like ethics, morals, faith, and religion- are ten times more important to both boomers and their parents than the financial aspects of inheritance. In fact, seventy-seven percent of those surveyed (age forty plus) said the most important inheritance they could receive or pass on would be values and lessons about life.” Beating the Midas Curse, by Perry L. Cochell and Rodney C. Zeeb, Page 76-77
  • “Earlier we cited a statistic from the Boston College of Social Welfare, which estimated that over the next four decades some forty-one trillion dollars will be transferred from one generation to the next. Paul Schervish, one of the authors of the study, estimates that as much as six trillion dollars of that transfer might be devoted to philanthropic purposes. Schervish also says there has been a fundamental shift in the motivation for giving. ‘The rich used to give money only when they were scolded into it,’ he says. ‘Now they are increasingly giving out of a sense of doing something they want to do, that meets the needs of others, that they can do better than commercial interests, government or existing philanthropy. They can express gratitude for their wealth, and their identification with others less fortunate, and that makes them happy.’” Beating the Midas Curse, by Perry L. Cochell and Rodney C. Zeeb, Page 148 -149
  • “As investor Warren Buffet said, “The perfect inheritance is enough money so that they would feel they could do anything, but not so much that they could do nothing.” Beating the Midas Curse, by Perry L. Cochell and Rodney C. Zeeb, Page 171
  • “Research and our combined experience show that most people share the same four primary goals: 1. They want to protect their family from ever being destitute. 2. They want to provide their family with opportunities that will help them mature into healthy, productive adults. 3. They do not want to promote a non-working lifestyle. 4. They want to minimize conflict within the family.” Beating the Midas Curse, by Perry L. Cochell and Rodney C. Zeeb, Page 171-172
  • “Traditional planning asks ‘Who gets the money that’s left over after taxes, legal fees and administrative costs are paid?’ The Heritage Process asks, ‘How can we develop a plan that will pass on the family’s true wealth, its traditions, values, morals and virtues, using the material wealth of the family as a tool to secure those values for generations to come?’” Beating the Midas Curse, by Perry L. Cochell and Rodney C. Zeeb, Page 172
  • “Traditional planning counts the assets, and divides and distributes the ‘spoils’ according to the language of the Will. Heritage planning guides people to discover what they have, and about what they care, to understand how their legacy will affect inheritors, to defined the legacy they want to leave and to determine how they can leave a meaningful legacy and implement their vision statement.” Beating the Midas Curse, by Perry L. Cochell and Rodney C. Zeeb, Page 172
  • “People who create traditional estate plans focus on how much money each inheritor should receive. Those who craft their plans on a foundation of values reflect on what money has meant to them, and what meaning they want to have for their children.” Beating the Midas Curse, by Perry L. Cochell and Rodney C. Zeeb, Page 172
  • “We have found that while advisers are focused on eliminating estate taxes and directing more and more money to the heirs, wealth holders are more concerned about what will happen to the heirs when the money’s in hand.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent? By Scott Fithian and Todd Fithian.  Page 18
  • “Baby Boomer Yearnings:  1.   Values, not Valuables: uncomfortable discussing inheritance out of context; wish to discuss family traditions &history, sharing stories, values, hopes.  2.  Legacy Gap: talking about inheritance but not in a meaningful or productive way.3.  Ideal Legacy Advisor: The top qualities both generations look for in a legacy advisor: honesty, trustworthiness, compassion, a good listener, and strong communicator.”-  2,267 boomers and their elders surveyed, Allianz, 2005, with Ken Dychtwald
  • “Most inheritance plans ultimately fail because the inheritors are not prepared for the responsibilities that come with their emotional and financial inheritances….To thrive, the family must learn howto work together, and how to equip succeeding generations todeal with the responsibilities and opportunities of inherited wealth.”— Rod Zeeb, p. I, from his piece on Family Governance
  • “Staggering amounts of financial wealth have been produced in America since World War II, and especially in the last two decades. The result is vast personal opportunity, huge inheritances, stunning philanthropy, and a crisis of meaning. The wealthy are, in many cases, searching for a dimension beyond wealth. Increasingly, they are asking themselves penetrating questions about the purpose of financial wealth. How much is enough? How do I make sure my financial wealth creates independence rather than dependency? Can I use my wealth to make a difference to society?”  Wealth in Families Third Edition (Charles W. Collier) Page 6
  • ““ Part of the reason for believing that my wealth should be given back to society,” says Bill Gates, in Forbes magazine article, “and not, in any substantial percentage, be passed on to my children, is that I don’t think it would be good for them. They really need to get out and work and contribute to society. I think that’s an important element of a fulfilling life.”” Wealth in Families Third Edition (Charles W. Collier) Page 25
  • “In discussing his views on the uses of a financial inheritance, the late Robert G. Stone, Jr., chairman emeritus of the Kirby Corporation in New York and former Senior Fellow of Harvard College, said it well: “I believe in giving your children enough money so they can follow whatever pursuit they want in life. If they want to be teachers or artists, I hope they will be the best they can be in those fields. Having money gives them freedom of choice with security, no matter what direction they decide to take.”” Wealth in Families Third Edition (Charles W. Collier) Page 26
  • “The decision on how much to give or leave your children is a deeply personal one, and there are many variables, including individual preferences and specific family situations. Having said that, and admitting there are no rules of thumb, I’ll make some observations using hard numbers. In my experience, with families where the publicly traded financial wealth is in the range of $15 million to $30 million, the opening number is typically $1 million to $2 million per child. In most cases, the amount provides a measure of flexibility, but it may not dramatically change the child’s lifestyle. Also, I see many people deciding that $3 million to $5 million is an appropriate financial inheritance. For families with approximately $100 million and above, many believe that $10 million to $15 million per child is sufficient. Finally, for families with a new worth greater than $500 million, the inheritance often ranges from $25 million to $50 million or more.”  Wealth in Families Third Edition (Charles W. Collier) Page 27
  • “Entrepreneurs enjoy the hunt,” adds Fay, “and they want to instill that sense of struggle and achievement in their children. They’ll set up a safety net for them so they can be teachers or musicians-to expand their range of fulfilling life opportunities. They’ll tell their own story about how excited they are in creating something in the hope that their children will challenge themselves.” Wealth in Families Third Edition (Charles W. Collier) Page 28
  • ““True economic freedom is the ability to wake up in the morning and be able to decide what you will do for the day,” Hughes concludes. “Thus, an appropriate inheritance may be that amount of financial wealth that will allow you to live in this way. Any amount of money beyond that is discretionary because it is not what you need to be free.”” Wealth in Families Third Edition (Charles W. Collier) Page 28
  • ““It makes more sense to give money to your children during your lifetime than at your death,” said Dick Watson. “Leaving money to your children at your death is not nearly as tax-effective. Also, the money often arrives too late to have a positive impact on your children’s lives.”” Wealth in Families Third Edition (Charles W. Collier) Page 29
  • “So when would it be best for your heirs to receive their inheritance? People tend to choose one of two approaches. First, define the inheritance and give it to them sooner rather than later Talk with them, provide age-appropriate financial education, and help them understand and work with the money. Financial education and discussion of wealth responsibility are critical to this approach. Openness and access early on, coupled with education, also enhance their ability to choose careers not solely based on economics of the profession.” Wealth in Families Third Edition (Charles W. Collier) Page 29
  • “In every culture that I’ve encountered-in China, Latin America, and Europe, for example-I run into the same proverb. In China, rice paddy to rice paddy; in Ireland, clogs to clogs.  It appears that financial wealth is destined to disappear in three or four generations. The proverb means that the first generation makes the money, the second generation preserves it, the third generation spends it, and the fourth generation must re-create it. I prefer the rice paddy idiom; for example, imagine a poor couple in China wearing torn clothing. They pull rice every day and make a financial fortune. They don’t leave their home or change their way of life. The second generation moves to the city, joins the opera board, and becomes significant members of society. The third generation, having no experience of work, spends the money, and the fourth generation goes back to working in the rice paddy.” Wealth in Families Third Edition (Charles W. Collier) Page 35-36
  • “I feel strongly that parents should not give their children a significant financial inheritance during their career building years, say, ages 22 to 35. I don’t mean that you shouldn’t help them out financially with their needs around health, education, reasonable housing, philanthropy, entrepreneurial activity, and financial education. But in terms of when they are going to receive a large inheritance, it shouldn’t be during those important career-building years. I don’t think they should get it until they’re around 40. They need to make it on their own if they’re going to achieve any kind of competence. Money can derail the work they need to do during those critical years.” Wealth in Families Third Edition (Charles W. Collier) Page 47
  • “How long does the average recipient of an inheritance wait before they buy a new car?  Just nineteen days.” New Car Dealer Association. Beating the Midas Curse, by Perry L. Cochell and Rodney C. Zeeb, Page 43
  • “Grade school, ages 6 to 12
    • Discuss caring for possessions.
    • Structure an allowance: Most experts suggest a modest amount for being part of the family and doing certain basic household chores.
    • Provide jobs for pay.
    • Encourage long-term savings: Consider matching any money they will save for over a year.
    • Set limits around money, for example, not buying everything they want when you go shopping.
    • Introduce philanthropy: Help them to give and take them on site visits.

    Teen years, ages 13 to 18

    • Insist on summer employment; fund their Roth IRA.
    • Guide them through their budget and a 1040 tax return.
    • Advocate smart consumerism: For example, discuss the messages in advertising and the impact of advertising on their purchases.
    • Discuss the intelligent use of credit cards and checking accounts.
    • Explore investments on the Internet.
    • Engage them in philanthropy: Encourage site visits and include them in evaluating gift decisions.

    College years, ages 18 and over

    • Work with them on a college spending budget.
    • Insist on summer employment and fund their Roth IRA.
    • Set up adviser-facilitated learning about investments.
    • Provide money for them to manage.
    • Explain the roles of trustee and beneficiary, if trusts are used in your family.
    • Engage them in philanthropy; add them to the board of your philanthropic fund.”

    Wealth in Families Third Edition (Charles W. Collier) Page 55-56

  • “Philanthropy can instill a sense of responsibility around wealth in the next generation of your family. “The more money you have personally,” said Bob Stone, “the more responsibility you have to society. Providing an inheritance to our children also gives them certain responsibilities as well, including using their wealth to have a positive impact on society.” Wealth in Families Third Edition (Charles W. Collier) Page 67
  • “Because I believe that the true wealth of your family is not financial, I think that you should first discuss the principles that will guide your decision about how much to give your children. Wealth in Families Third Edition (Charles W. Collier) Page 111
  • “Think carefully about the purpose of the financial inheritance. Engage all of your children in conversations about your financial wealth and their inheritances.” Wealth in Families Third Edition (Charles W. Collier) Page 114
  • “Parents should leave children “enough money so they would feel they could do anything, but not so much that they could do nothing.” Warren Buffet
  • “In discussing his views on the uses of a financial inheritance, the late Robert G. Stone, Jr., chairman emeritus of the Kirby Corporation in New York and former Senior Fellow of Harvard College, said it well: “I believe in giving your children enough money so they can follow whatever pursuit they want in life. If they want to be teachers or artists, I hope they will be the best they can be in those fields. Having money gives them freedom of choice with security, no matter what direction they decide to take.”” Wealth in Families Third Edition (Charles W. Collier) Page 26
  • “In every culture that I’ve encountered-in China, Latin America, and Europe, for example-I run into the same proverb. In China, rice paddy to rice paddy; in Ireland, clogs to clogs.  It appears that financial wealth is destined to disappear in three or four generations. The proverb means that the first generation makes the money, the second generation preserves it, the third generation spends it, and the fourth generation must re-create it. I prefer the rice paddy idiom; for example, imagine a poor couple in China wearing torn clothing. They pull rice every day and make a financial fortune. They don’t leave their home or change their way of life. The second generation moves to the city, joins the opera board, and becomes significant members of society. The third generation, having no experience of work, spends the money, and the fourth generation goes back to working in the rice paddy.” Wealth in Families Third Edition (Charles W. Collier) Page 35-36