Remember David, the kid who killed Goliath, the giant? He started as a shepherd boy and went on to rule a kingdom worth multiple billions in today’s dollars. His son, Solomon, became the wealthiest man of his time (worth approximately two trillion in today’s dollars).
But did you know Solomon’s son lost the vast majority of those trillions?
Unfortunately, that’s not uncommon: Statistically, nine out of ten families lose their wealth by the third generation. Why?
Most wealth transfers fail for three reasons:
Families who successfully overcome these three obstacles have a greater chance of thriving across generations.
Solomon’s son lost the wealth but Solomon became arguably one of the richest men in history. How did David set up his son for success?
David had an extremely successful career, winning many military campaigns and becoming the dominant political figure of his time. Later in life, he shifted his attention from his personal career to his son, who would eventually become the sole inheritor. He spent time preparing both the wealth for his son and his son for the wealth.
Here are a few ways David and Solomon overcame the above three obstacles to wealth transfer:
David understood the impact that a father’s blessing had on a child, and he verbally blessed Solomon both privately and publicly. He also exhibited trust in his son by bringing him into conversations about the wealth he would inherit. He explained to Solomon, not only what he would inherit, but the purpose behind the wealth as well. David “walked the talk”-- he modeled a life of integrity and faith, and he exhorted his son to do the same.
David recognized Solomon was young and inexperienced and would need wise counsel. David surrounded Solomon with trusted advisors who would help him steward the kingdom’s resources wisely. He also helped his son understand the political landscape so that he could firmly establish control of the kingdom.
David taught Solomon the purpose of the wealth beyond personal pleasure. As a result, Solomon understood the inherited wealth was his to steward, not just consume.
The training seems to have paid off. When Solomon became king, he sought wisdom above wealth, and both Solomon and the kingdom he ruled flourished greatly.
Whether you agree with the steps David took to prepare Solomon or not, I challenge you to consider the three obstacles to wealth transfer above. Which category do you think is most important for your family to overcome?
Sources:
[1] https://www.thewilliamsgroup.org/page.cfm?id=467