Investor Education: Family Governance – Know Your Why

By Dr. Richard Orlando

What is the technology you are using to make the most important family wealth decisions that impact your legacy?

This is the second part in the series on legacy planning. During the first part of the series, I defined what legacy planning is and what it is not and what I shared was that legacy planning isn’t so much about what happens at the end of our lives, but how we choose to live every day of our lives. And I review the five most important family wealth decisions that we have to answer which have the greatest impact on our legacies and those are: how do I ensure a happy and fulfilled life for myself and my family? How do I transfer my wealth to my children and the others I care about? How do I prepare the next generation of my family for the opportunities and responsibilities of wealth?  How do I best give and share my resources with others, and how do I ensure that my family business, whatever it may be, flourishes?

Today we will focus on securing the why behind how you answer these five questions and how you choose to live your legacy every day. The philosopher Friedrich Nietzsche said “he who has a why to live for can bear almost any how”. How we answer our own personal whys is really already found in one of our existing capitals and those capitals we each possess are financial, intellectual, social, human, and spiritual. It is in our spiritual capital that we find the answer to our why and to help us understand our spiritual capital, I created an equation. Which is our spiritual capital = our values + our purpose x our faith. When I say faith, let me be very clear that I am in no way referring to religion. I am talking in that category or in that variable about the spiritual, that which is more transcendent and more intangible. Whether you call it the divine, your God, or whatever other name you might use.

Let me use an example to illustrate the role of spiritual capital. There are many cars and many planes that are beautiful to look at and can provide shelter in a storm. But that is not really their ultimate purpose. Their purpose comes when we ignite the engine with gasoline and they are able to take us on our journeys, where we want to go and sometimes take us to places that are pleasant surprises to us that we didn’t anticipate before we got to the destination.

Similarly, that is what our spiritual capital is to us and our decision making. It is the fuel that ignites our abilities to plan for our legacy and answer those five questions. Let me draw another analogy. Think about the paper map and our GPS technologies. Both serve the same purpose; to get us from point A to point B.

But they are very different in their effectiveness in doing that. A paper map is secure, we can hold it, we are familiar with it. But it is limited because it is one dimensional. It does not tell us how long it will take us to get to a destination, any points of interest along the way, and it sure is troublesome when the map is not up-to-date with the latest roads it may represent. Where our GPS technology is multi-dimensional and is able to add so much more to the process of going from point A to point B and, to stay with the analogy of social capital, it is really tapping into the orbits, literally the satellites in the orbits, to help us with the information we need to navigate our journey here on Earth.

When we do our estate planning or tax planning and our investment or financial planning, it is necessary and vital that we do that effectively. But if we only focus on the technical aspect of our planning, it is like a paper based map. It is limited in what it can do. So we must integrate and ignite our legacy planning and how we answer those five most important questions that impact our legacy with our why and our spiritual capital. That is the only way we will be able to optimize our decisions for ourselves and our family for generations to come.

So what technology are you using to secure your why and navigate these five important decisions? I trust that if you haven’t already, you will take the time to invest into your personal GPS, your spiritual capital. To learn more about this topic and the others in this series, please go to my book called Legacy.

Now go live your legacy.