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Wealth: Grow It and Protect It, Updated and Revised

Book Description

Discover the best ways to build, protect, and sustain family and business wealth across generations! Wealth is the world's most valuable guide to wealth management for individuals, families, business owners, and the "upwardly affluent." In the six years since Stuart Lucas first wrote this book, however, the financial world has changed dramatically. Throughout the financial crisis and beyond, Lucas has led the University of Chicago's Private Wealth Management program, teaching more than 500 members of the world's wealthiest families. Now, he brings together extraordinary insights and constructs informed by this experience. Wealth, Updated and Revised Edition retains its core advice, which has been tested and proven by the worst financial crisis since the Great Depression. However, Lucas has updated his exclusive Strategic Wealth Management Framework to help even more individuals, families, and entrepreneurs aspiring to wealth or seeking to protect it. Lucas highlights key value drivers - family purpose, the economic engine, and leakage management - that mark the difference between family enterprises that succeed for generations and those that fail. He offers updated, sage advice on making financial decisions, evaluating "expert" advice, running a family business office, tax/estate planning, philanthropy, wealth preservation, and more. Since developing a family's human capital is the best antidote to Wall Street excess, this edition adds even more robust and actionable guidance for building a culture of Entrepreneurial Stewardship: one that enables and encourages all family members to flourish, and improves the odds that families can sustain wealth. This book is for all successful business owners and anyone who possesses (or aspires to own) substantial financial assets, whether earned or inherited. It will also be of keen interest to investment advisors, business consultants, business brokers, wealth industry practitioners, lawyers, accountants, tax advisors, and others who counsel the wealthy (and upwardly affluent) about wealth management.

Table of Contents

  1. Title Page
  2. Copyright Page
  3. Praise for the Previous Edition of Wealth
  4. Dedication Page
  5. Contents
  6. Foreword to the Second Edition
  7. Foreword to the First Edition
  8. Acknowledgments
  9. About the Author
  10. Introduction
    1. Good Idea, Bad Start
    2. When Opportunity Comes Face to Face with Hard Work and Preparation
    3. End of an Era
    4. No Strategic Approach to Wealth Management
    5. Alarm Bells
    6. It’s Hard to Grow Assets AND Enjoy the Fruits of Success at the Same Time!
    7. Our Wealth Represented More Than Cash
    8. We Needed to Get a Handle on Our Investment Portfolio
    9. Introducing Strategic Wealth Management
    10. We Are Stewards, Not Owners, of Our Wealth
    11. Taking Control for the First Time
    12. The Power and Purpose of Entrepreneurial Stewardship
    13. Philanthropy Has Emerged as a Shared Interest Among Many Family Members
    14. Closer Family Ties
    15. The Value of Family Lore
    16. How My Dad Taught Me the Value of Money
    17. A Book About Strategic Wealth Management
  11. 1. Protecting and Growing Your Wealth
    1. Transitions
    2. How the Wealth Management Industry Works
    3. Classic Approach to Wealth Management
    4. Strategic Wealth Management of Your Family Enterprise
    5. The Eight Principles
    6. The Family as a Cultural System
    7. Taking Control of the Wealth Management Process
    8. The Nature of the Wealth Strategist’s Role
    9. Conclusion
    10. Chapter 1: Issues to Discuss with Your Family
    11. Endnotes
  12. 2. Eight Principles of Strategic Wealth Management
    1. Principle #1: Take Charge and Do It Early
    2. Principle #2: Align Family and Business Interests Around Wealth-Building Goals and Strategies
    3. Principle #3: Create a Culture of Accountability
    4. Principle #4: Capitalize on Your Family’s Combined Resources
    5. Principle #5: Delegate, Empower, and Respect Independence
    6. Principle #6: Diversify but Focus
    7. Principle #7: Err on the Side of Simplicity When Possible
    8. Principle #8: Develop Future Family Leaders with Strong Wealth Management Skills
    9. How to Use the Eight Principles in the Strategic Wealth Management Framework
    10. Conclusion
    11. Chapter 2: Issues to Discuss with Your Family
    12. Endnotes
  13. 3. Start with Your Family Purpose
    1. Question #1: What Do You Want to Accomplish with Your Wealth?
    2. Question #2: What Is the Role of Family Business in Your Family Enterprise?
    3. Question #3: When It Comes to Investing, Would You Rather “Eat Well” or “Sleep Well”?
    4. Question #4: What Talents Within Your Family Can You Tap Into to Further Expand Your Family’s Productivity and Wealth?
    5. Question #5: Are You Committed to Creating a Culture of Accountability in Your Family and with Your Wealth Advisors?
    6. Question # 6: Are You Bullish or Bearish on the Global Economy, Business, and Investing?
    7. Question #7: To What Extent Are Your Assets Under Threat?
    8. Question #8: How Should My Family Communicate About Its Wealth?
    9. Question #9: Do You Plan to Build Family Leadership to Grow Your Wealth over Multiple Generations?
    10. Question #10: How Important Is It to You to Maximize Tax Efficiency? Will It Change in Future Generations?
    11. Pulling the Ten Questions Together: Translating Your Family Purpose into Financial Goals
    12. Conclusion
    13. Endnotes
  14. 4. Defining Your Financial Objectives
    1. The “Distribution-Driven” Category of Financial Management
    2. The “Growth-Driven” Category of Financial Management
    3. Different Plans—Different End Results
    4. Two Market Forces That Affect Any Wealth Management Approach
    5. Putting Numbers to the Different Approaches
    6. Finding the Right Financial Objective for the Lucas Family
    7. Benefits of a Unified Wealth Management Approach
    8. Adjusting for Tax-Deferred Assets
    9. Growing Wealth While Spending It Is Hard to Do
    10. Pulling It All Together
    11. Where the Rubber Meets the Road—Making Your Financial Objectives Work for Your Family
    12. What Do You Do?
    13. Conclusion
    14. Chapter 4: Issues to Discuss with Your Family
    15. Endnotes
  15. 5. The Enchanted Forest, the Secret Society, and the Capital Kibbutz
    1. Regulation
    2. The Four A’s
    3. The Mutual Funds Industry: Open Architecture Comes to Private Investors
    4. Should I Use a Retail Brokerage?
    5. Trust Bank Services
    6. The Gap in the Individual Investment Process
    7. How Can You Distinguish Among Wealth Advisors?
    8. The Enchanted Forest
    9. The Secret Society
    10. The Capital Kibbutz
    11. A Travelogue: Helping a Friend Get Out of the Enchanted Forest and Into the Secret Society
    12. Mutual Fund Indexing: Why It’s the Investment Path for Most Individuals
    13. A New Perspective on the Wealth Management Industry
    14. Traveling the Investment Landscape
    15. Conclusion
    16. Chapter 5: Issues to Discuss with Your Family
    17. Endnotes
  16. 6. Picking Your Investment Strategy
    1. Three Value-Added Financial Strategies for Managing Wealth
    2. Conclusion
    3. Chapter 6: Issues to Discuss with Your Family
    4. Endnotes
  17. 7. Making Your Most Important Hire
    1. Selecting the Right FA
    2. Core Skills of an FA
    3. Selecting the Right Firm
    4. Conclusion
    5. Chapter 7: Issues to Discuss with Your Family
    6. Endnotes
  18. 8. Taxes Can Be Your Ally!
    1. Where Do You Begin?
    2. Takeaway #1: U.S. Taxing Authorities Are Your Investing Partners
    3. Takeaway #2: Be a Long-Term, Equity-Oriented Investor
    4. Takeaway #3: Improve Investment Results Through Tax Management
    5. Takeaway #4: Don’t Overcommit to Retirement and Deferred-Compensation Plans
    6. Takeaway #5: Don’t Put After-Tax Income into Variable Annuities and Retail Life Insurance Savings Plans
    7. Conclusion
    8. Chapter 8: Issues to Discuss with Your Family
    9. Endnotes
  19. 9. Promoting Entrepreneurial Stewardship
    1. Entrepreneurial Stewardship
    2. Udders and Herds
    3. “Fly First-Class; Your Children Will”
    4. You Have to Take Risks
    5. Think Twice Before Selling
    6. Reorienting Yourself
    7. Growing Up In Privilege
    8. Education and Entrepreneurial Stewardship
    9. Family
    10. Parenting
    11. Family Meetings
    12. Entrepreneurial Stewardship in Families
    13. Nepotism
    14. Fairness
    15. Conclusion
    16. Chapter 9: Issues to Discuss with Your Family
    17. Endnotes
  20. 10. Making Philanthropy Part of Your Strategic Wealth Program
    1. Why People Give
    2. How to Be Philanthropic
    3. Innovations in Effective Philanthropy
    4. Philanthropy and Family
    5. Philanthropy and Children
    6. Family Foundations
    7. Direct Service
    8. Conclusion
    9. Chapter 10: Issues to Discuss with Your Family
    10. Endnotes
  21. 11. Putting It All Together: Multigenerational Planning and Wealth Transfer
    1. The Estate Planning Road Map
    2. Step #1: Anticipate and Communicate About Your Eventual Demise
    3. Step #2: Focus on Defense; Let Your Heirs Worry About Offense
    4. Step #3: Deal with Family Houses and Other “Legacy Assets”
    5. Step #4: Perpetuate the Family’s Economic Engine
    6. Step #5: Prepare Estate Plans to Create Income Streams
    7. Step #6: Accomplish the Must-Dos
    8. Conclusion
    9. Chapter 11: Issues to Discuss with Your Family
  22. Index
  23. Financial Times Press