When I was a teenager, I desperately wanted a pair of Jordache jeans (please, no wisecracks about what this may or may not indicate about my age). But my family was on a tight budget, and it didn’t include designer jeans for the youngest kid in the house. So, I made a deal with my dad: I would clear out the blackberry thicket that covered a large part of the property on which our house stood. It was typically full of castoffs from my father’s carpentry work anyway, and I considered it an eyesore. My dad agreed to pay me a dollar an hour, and my parents said that as long as I put at least half the money I made into savings, I could use what was left to buy my jeans.
As I relate in my book, Wealthy by Design, I stuck to the task, and about seventy hours of work and a few blisters later, I went down the store and proudly purchased my first pair of Jordache jeans—brand new, not hand-me-downs from an older sister. I wore those jeans like a badge of honor.
At that time in my young life, Jordache jeans represented the height of luxury and “cool.” All the popular girls in my class wore them, and my idea of wealth probably included being able to buy as many pair of Jordache jeans in as many styles and colors as there were. My hardworking, blue-collar parents, on the other hand, likely had a different definition: being wealthy meant not having to worry about where next month’s groceries, mortgage payment, and gas money were coming from. Many of us, as we go through life, can probably locate our shifting views of wealth somewhere along this continuum.
Since America is one of the world’s wealthiest nations, it may not surprise you to learn that in Charles Schwab’s 2021 Modern Wealth Survey, respondents indicated that a net worth of $1.9 million qualified a person as “wealthy.” However, it’s interesting to note that this figure was down from the $2.6 million figure identified in the previous year’s survey. It is also worth noting that as members of a new generation begin to establish themselves and enter the ranks of the wealthy, their definitions of what it means to be “rich” may vary widely from those of their GenX and Baby Boomer parents and grandparents.
In our work with family stewards at Empyrion Wealth Management, one of the most important services we provide, in addition to coaching on finance, estate planning, and investing, is facilitating cross-generational conversations about what it means to have wealth, and especially about what it means to use wealth wisely. Baby Boomers, for example, are often astounded to learn that purchasing and paying off a home are simply not priorities for their Millennial grandkids. For Boomers, the “mortgage-burning party” is typically a long-held dream: the day when the bank no longer has any claim on the family home. The model for many of those who are now in or entering retirement was to work hard for 30–40 years—preferably for the same employer but certainly in the same career—and then to retire with a pension, a paid-for home, and a nice balance in savings.
But for Millennials, many of whom will hold as many different jobs during their first 15 years of working as the average Boomer has had in an entire career, frequent changes in both employers and residential locations may necessitate a different set of priorities for what constitutes financial security. Not only that, but Millennials are more likely to shift careers completely. One study found that 47% of Millennials have completely changed careers since joining the workforce. And they aren’t switching solely for more money, either; many report making changes to achieve better work-life balance, to move to or stay in a desired location, or simply to embrace a new challenge.
This means that, especially for family stewards, it is vital to understand how different generations define wealth and the responsibilities that go with it. A balance in a trust fund may mean very different things to the generation that established the family financial legacy than it does to the second or third generations. And any legacy planning that doesn’t take those differences into consideration—including careful, purposeful communication—probably contains a fatal flaw.
At Empyrion Wealth Management, we work with family stewards and others to create strategies for not only financial growth but also for succession planning and sustainable governance. To learn more, click here to read our whitepaper, “Family Stewards.”
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