It has been my observation that the financial services industry has done a poor job of truly helping people with wealth transfer. The public, and many professional advisors have limited thinking about how wealth is created and transferred upon death. The existing mindset around estate planning normally leads up to the death of one generation and then distributes the assets to the second generation, who is then free to use the assets in any way they choose.

In James Hughes’ book, Family Wealth, Hughes describes a recurring pattern of families creating wealth in one generation, transferring it to the next generation who then consumes the wealth leaving nothing for the third and future generations. He calls it Rags to Rags in three generations.

The idea that someone creates wealth over a lifetime and, at their death, passes it to their kids without a plan for how the money is to be used is proof that more education is needed.

The problem, in my opinion, is the mindset that assumes everyone in the family knows what to do or a belief that things will be learned through osmosis. Under this mindset, there is no emphasis on educating family members about money, their beliefs, their values, or even the giver’s wishes after they pass. Therefore, there is very little guidance given for what the receiving generation should do with the money coming their way.

I often hear the same comment from people who are grieving over the loss of their mother or father, “I am trying to figure everything out”.

What a powerful comment: “I am trying to figure everything out.” If you dissect this statement and consider what is being communicated with these words you quickly realize that “everything” encompasses a lot of things. You also realize that the word “trying” means that there was little if any guidance is given from one generation to the next about what needs to be done.

To understand why there is such a disconnect between generations and how to help connect the dots, you must first understand the root of the problem. It is my belief that there are two primary reasons families fail to connect generationally:

  1. Many people tend to believe that “everything” simply equates to financial related matters, but when it comes to “trying to figure everything out”, “everything” is much more far-reaching than simply money and possessions. It literally includes “everything”. What is “everything”? Everything includes anything relating to Family, Faith, Fitness, Finance, Philanthropy, Education, and more.
  2. For many families, there are up to four living generations: grandparents, parents, children, and their children’s children. While some of these families have traditions that include vacations, special occasions, church attendance, and even closely held secret family recipes, very few have a shared family plan that reaches into future generations.

Imagine for a moment that the patriarch of your family gathered all generations together to outline a family legacy plan which included a meaningful discussion about what your family stands for, what values you share, what wealth strategies are in place, what to expect as one generation dies and a new one is born.

What if this were to happen? What if each family member and each generation had a responsibility to perpetuate the family plan? How powerful would this be for future generations?

Instead of each generation starting over and struggling with “I am trying to figure everything out,” you have an opportunity to equip your family for generations. You just need to think differently about what it means to lead a family and form a new mindset of what generational planning means.

All of this could very well be a result of not knowing that there is a way to plan generationally.


One of the most challenging aspects of money management for the average person is the accountability of how it is used. Busy lifestyles and poor habits leave little time for us to properly manage our hard-earned money. It often becomes a cycle of addressing problems as they arise, and otherwise sinking into an out of sight, out of mind mindset.

For some, the idea of managing money is that it is an unnecessary task, as long as there is money in the bank. The truth of the matter is you can get away with not having a spending plan for your money—simply do not allow your spending to exceed your income. It really is that simple. However, the point of financial planning is to do more than simply get by. It is about getting to the next level financially, and in order to accomplish this task, you absolutely have to start by completing a cash flow awareness exercise. It truly is not possible without it.

You have to know two things in order to make progress with anything you are doing: you have to know where you are, and you have to know where you are going. The reality for most people is that money seems to come into our lives, but quickly leaves month after month and year after year, and people have little understanding of where the money goes and how it is spent. It does not have to be that way, and you do not need an accounting degree or a sick fascination with numbers and spreadsheets to track your cash flow.

The purpose of cash flow awareness is not to make ends meet, but rather to properly organize your money, which allows you to create wealth, and avoid debt. It is a fairly straightforward process, which need not take a lot of time if you follow a few basic steps:

1. Realize the difference between a budget and a cash flow awareness exercise. A budget tells you what you cannot afford and focuses on trimming spending. A cash flow awareness exercise highlights what you want to spend money on.

2. When you think of your cash flow, break down your annual expenses into five groupings:

  • Debt payments
  • Tax payments
  • Regular monthly expenses
  • Irregular expenses throughout the year
  • Storage of money you do not need

3. Then list in chronological order the big-ticket items you plan to spend money on in chunks over the next 5-10 years. Don’t think about how you will pay for these big-ticket items, just list what they are.

Once you have completed the exercise, you will see that your planned spending ties directly into the goals. A cash flow awareness exercise is a key component for creating a true sense of where you are and is the nucleus of your financial plan.

When I work with a new client, the primary goal I have is to help her define with crystal clarity the purpose of the money she has, and how she plans to use it. Defining your intention for the money you have, or will accumulate, allows you to begin to assemble your financial plan in a strategic, chronological manner.

The purpose of this process is to help you visualize and define what you want to accomplish, and when you will need your money. It is a chronological road map for your finances and will serve as a compass when making a financial decision.

Imagine having a financial plan in place that chronologically maps out all of the cash needs that you have for the rest of your life with a cash flow strategy in place ensuring that you have money available when you need it.

This is our goal for each and every client.

Everything is about cash flow.  It’s the most important aspect of a financial plan ensuring you have money available when you need it.