I was raised in a minority household in the middle of the last century in New Jersey. My Italian (single) mom was discriminated against her whole life. She never earned as much as the men she worked beside (sometimes less than half) and she had to work longer hours to prove herself as an uncredentialed bookkeeper in the 1960’s and 70’s.

Bankers laughed at her when she wanted a mortgage for a house, even though she had three times the amount of earnest money required at the time. Eventually they allowed a loan if three women would pledge their income to the mortgage. So I was raised by my mom, my grandmother and my aunt.

At the time, Leave It to Beaver and Father Knows Best were the standards for how families should live, and we were way outside the bell curve on that one. We felt like outsiders and that was probably something that fanned the flames of desire for wealth.
If you are part of the young wealth builder’s community, things may be similar for you.

Modelling Wealth

Unfortunately, my mom never met Tony Robbins. Neither have I. But I have been able to study his works in ways not possible when my mom was working 18 hour days. And the most significant thing I found in all his teaching was his roadmap to success.

He said that success was easy. Find someone doing what you wanted to do, and model them. If they can do it, you can too.

After three or four decades of trying, my own attempts at wealth accumulation had been getting off to a disappointingly slow start. I have to say that they would have been greatly accelerated if I had had a committed person in my corner, like Latasha’s clients do.

Nevertheless, about fifteen years ago, I began my fourth career. I am a financial counsel for trusts and retirees and I work on portfolios of stocks and derivatives. Like you, almost all my clients started out with much less than they have now. They are at the stage where they want to provide for their children or grandchildren who are probably around your age.
Their concern was not how to make money, but how to make sure that their kids got some, kept it and passed it down to the next generations.

That’s when Tony’s words came back to me and I began to earnestly study and help families implement some of the techniques that rich people use. So it was logical that when they asked how one could be wealthy, maintain that wealth and pass it down, I had no choice but to look towards a model.

I chose to model the Rothschild Family. During the 19th century, when it was at its height, the Rothschild family is believed by some to have possessed the largest private fortune in the world as well as the largest fortune in modern world history.
The path was not without obstacles.

Completely unreasonable: They have more wealth than many countries and a few continents. Who wants to try that hard?

Impossible to copy: Their expertise, connections and rolodex was completely unreachable by me. I would never acquire this kind of money on my own

Cloaked in secrecy and myth: Whatever you read about them is more than likely untrue.
Inaccessible to study or even ask questions about: Do you know any of them? I don’t either.

Fortunately, I have a fast Internet connection and you probably do also. Whip out your iPad and look them up in Wikipedia If you read between the lines, you can get plenty of information to start you one the road to getting wealthy, staying wealthy and passing it on. I’ll distill it for you here.

Ground Zero.

1) Before you can save, you have to make enough money to survive. That means that you have to get out of poverty and get into the top 55% of American earners. The good news is that if you make over $35,000 you are in the top 1% of wage earners across the globe. The bad news is that you may live in an expensive neighborhood.

2) After you have a surplus, you need to find a way to leave it unmolested over time, no matter what. The power of time is hard to capture, but if you do, you will get the benefits of compound interest. Left alone for 30 years, $10,000 grows to over $200,000 at 8% interest. What if you left it for 50 years? Here’s how: You “gift” $10,000 to your fifteen year old to take care of her needs when she can’t work anymore. Over that half century, it grows to a cool half million dollars. If she’s happy, healthy and doesn’t really need the money until she’s 70, then almost one million.

“Secret Principles” of Family Wealth

Here’s the surprise. There are six or seven principles and around 20 Best Practices common to families that have passed significant intergenerational wealth.
The most important principles don’t have anything to do with money.

Be born to wealth

Oops. Can’t help ourselves there, can we? Every family with a history of intergenerational wealth and protection started with someone. And they were able to pass something on to their kids, who had brought up the grandkids well enough that it was possible for a tradition to go for at least three generations. If you aren’t the child or grandkid of someone with wealth (at least $200,000) then YOU’RE THE ONE! You’re the patriarch or matriarch who is responsible for starting the whole thing. Take a breath and begin.

Family Skill Sets

Wealthy families have a purpose, or skill or business. Know something that will be valuable for your children to know. For the Rothschild’s the skill was FOREX trading. It’s pretty accessible today, but it had its own complications in the days of yore. Certainly the skills that Mayer Amschel Rothschild passed to his kids and grandkids were something that not everyone knew.

A few other skills that have been enshrined in families who grew from nothing are the art of wine making (Chateau LaFite-Rothschild, est 1855), the arcane art of creating the best cymbals ever (Zildjian,est 1623) and even making the best office supplies (Faber Castell, est. 1761, 253 years of yellow pencils).

Keep your family close

When I see family wealth fall apart it is usually at the death of a matriarch or patriarch who raised several kids. If there were two or three kids, they are generally all successful, job holding middle class people. They are often a little older than your parents. In these families, sometimes you get someone who is 50 and never held a job, or is addicted to drugs but those cases are not the norm. What’s common to the failures is that all of them are successful, but none of them get along well with the others.

In order to have true wealth that is going to reach downstream, you are best served by figuring out how to get along with your siblings and even your cousins. If you are a parent, then you will do yourself a big favor by closely watching your children grow and by being an uncompromising guardian of their emotional health and balance. There is no substitute for a mom who knows how to sooth hurt feelings and remind kids to be kind to one another.

Collaborate often, in good faith and with care

“It’s who you know...” is actually just as important as what you know. Make friends with people who can share your vision and who will help you accomplish it. Make your brothers and sisters part of the plan and do what you need to in order to heal or at least function in light of old wounds.

Family also can go beyond blood. My business partner and I have been working together for over 25 years. With networks like LinkedIn, Facebook and the rest, there is no excuse for not being able to keep in touch with people who are important to you and can get behind your goals and vice versa.

Use Creatures of Law to protect yourself.

Meyer Rothschild grew up as a Jew in the middle Ages. He literally had a target on his back in most towns he visited. It was easy for Mayors or Dukes to confiscate his money, lands and properties. He could be summarily kicked out of any town he was living in.
For that reason, Meyer and his clan became adept at using trusts, businesses and banks to protect a great amount of his wealth. The ownership structures the family devised, within the laws of various countries, kept property away from jealous kings and strangers. Indeed, it made it secure from anyone who was not family. Fortunately, in America, it’s a lot easier today, no matter who you are.

For wealth builders in their 20’s the strategy amounts to properly titled bank, saving and brokerage accounts for singles and couples, and a trust just as soon as a child comes along. That’s right… as soon as you have a kid, you should think about trust work and insurance in order to care for and protect them in case of tragedy. Wills and happenstance will just catapult your kid back to the bottom. Your family will lose three to six decades in its progression towards wealth.

 Guy Porter manages the Engineered Risk Advisory, as a fiduciary counsel for retirees, trustees and stewards of family wealth. His forthcoming book, “Principles of WealthCraft: How to Make Ordinary Wealth Extraordinary” is due out in early 2015. The book and website are dedicated to committed achievers who want to take a long term view of themselves and their families in order to become and stay wealthy as good stewards who will leave lasting legacies. A long time student of markets and martial arts, Guy enjoys learning classical piano, mathematical pursuits and watching cute cat videos on the Internet.

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