Tom McCullough - Wealth of Wisdom

1. Chapter 14

1. Chapter 13
2. Chapter 14
3. Chapter 18
4. Chapter 20
5. Chapter 27
6. Chapter 31
7. Chapter 35
8. Chapter 41
9. Chapter 48

Tom McCullough

Keith Whitaker

This edition first published 2018

2019 Tom McCullough and Keith Whitaker

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Tom dedicates this book to Karen, Kate, Ben, and Miranda.

Keith dedicates this book to the many trusted advisors who, over the past two decades, have invited him to share with them the journey of helping enterprising families.

Dirk Jung, Chairman, Pitcairn Company

For parents, there is no greater imperative or joy than creating a better life for your children. For families that have generated considerable wealth through family business or investing, this objective comes with unique opportunities and challenges. Wealth creators have the chance to sustain not just family wealth, but also to pass on the values and education future generations need to find success and satisfaction in their pursuits. Yet wealth is an amplifier of all things. If not properly cultivated, the very resources intended to perpetuate a familys legacy can be its undoing.

As Tom McCullough and Keith Whitaker and their contributing authors so articulately detail in this book, succession planning encompasses far more than simply transitioning assets. It requires constant tending, including clear communication, good governance, effective education, and shared values. Its not about providing the next generation with financial independence, its about providing them with the tools to be truly independent.

I was fortunate enough to grow up in a family that nurtured true independence from an early age. My father learned about hard work as a child by planting, weeding, watering, and harvesting crops in his family garden during the Great Depression. When I was 12, he started instilling that same work ethic in me. My father provided an advance on my allowance for the capital investment in a small garden at our familys summer home in the Catskill Mountains. I set about digging up the hard brown clay and the seemingly endless rocks under the soil. After weeks of preparing for planting, my humble plot had a name Rock Acres.

I can still remember the crop rotation I selected for that first summer corn, eggplant, squash, cucumber, lettuce, and tomatoes. Before long, my garden started yielding strong produce, which I sold to friends and family near my home. Early in the summer, Id get frustrated when I pictured my friends buying popsicles and candy from the market on their way to the pool, while I pulled weeds. But come August, as I began to see a considerable return on the time Id put into Rock Acres, I started to appreciate my summers worth of hard work.

I learned more that summer than I thought possible, and many of the lessons wouldnt be fully apparent to me until decades later when I had children of my own and my perspectives on family changed. My father put me on the path toward a life fueled by the values that drove his success and have sustained our family for generations. Those hardearned values, including work ethic, patience, and business fundamentals have been invaluable in my work helping our family protect and grow its wealth. For more than 40 years, the Pitcairn Company has given me a front row seat to how wealth impacts families, both my own family and others we serve as a multifamily office.

Theres no substitute for a summer of hard work, but this book, Wealth of Wisdom, and its countless lessons and insights comes close. Tom and Keith draw from their distinguished careers to identify the key questions that families are asking. What makes this work truly stand apart is the impressive group of voices Tom and Keith have brought together to share their knowledge. They have curated established best practices and bold new thinking from the leading thinkers and advisors in the family wealth field. The observations and practical advice on family transitions and succession planning are a concise and powerful resource for families.

Tom and Keith are the perfect guides to synthesize all this knowledge into a single work. Their perspectives and approaches elevate this work into something greater a master class in sustaining family wealth, backed by decades of experience and generations of insights.

While reading this book, I found myself highlighting entire passages and flagging pages to revisit with colleagues and family members. It held countless takeaways I am eager to share and put into practice. Many of these insights coalesced around three themes all families can derive value from in an everchanging world.

One of those themes is the changing demographics and their impact on family dynamics. Individuals, particularly affluent individuals, are living longer, thus reshaping expectations around lifestyles and legacy. With this longevity, firstgeneration wealth creators and subsequent generations face new opportunities and obstacles. This reality adds increased pressure for families to foster meaningful conversations about difficult issues all families must grapple with. This book addresses this emerging issue of longevity from a variety of meaningful perspectives and offers a roadmap for those conversations.