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How Do You Measure Family Wealth?

How Do You Measure Family Wealth?

by Bill High

Family wealth.

Those are big words. When we think about wealth, we usually think in terms of the financial. Financial wealth is measured quantitatively, or by the numbers. How many zeros do we have? What’s on the asset side, and what’s on the liability side—subtract the liabilities from the assets and you come up with net worth. Or perhaps a different way of saying it: net wealth.

But family wealth is far more than quantitative, or by the numbers. To the contrary, family wealth is far more qualitative. What is qualitative wealth? It’s things like the strength of relationships, the strength of communication—the capital we store in our hearts and our minds.

In this equation, family assets look like

  • relational health,
  • relational equity,
  • family memories,
  • family communication,
  • productive family conflict,
  • and family identity.

Liabilities look like

  • unresolved conflict,
  • family secrets,
  • addictive behaviors,
  • isolating behaviors,
  • and selfishness.

When we look at family assets and liabilities in this way, we can better determine true family net wealth.

 

 

Photo by Caleb Jones on Unsplash

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Published February 14, 2022

Topics: Family Legacy

FamilyFamily CommunicationFamily LegacyFamily Wealth

Comments 1

  1. Hi, Bill. I’ve been trying to figure out how to ACCOUNT for–how to record and value–non-financial wealth. I’ve made a long, detailed list of different kinds of assets and liabilities one may possess beyond Financial/Economic assets. My list includes Personal, Social/Relational, Spiritual, Emotional, Intellectual (which includes Historical and Cultural [Music, Literature, Visual and Performing Artistic (drama, song, dance)] knowledge and application), Experiential, Corporeal/Anatomical, Chronological/Temporal, Natural Material, Structural/Technological, Governmental, and Legal assets and liabilities. And I realize that all such assets and liabilities can be held by individuals, by nuclear and/or multi-generational families, and larger formal and informal social groupings (breakfast or drinking buddies, Bible studies, churches, businesses, volunteer organizations, NGOs, mission agencies, communities, cultures, societies, peoples, nation-states, etc.).

    But having made my lists–and continuing to develop and refine them–I’m not sure what to do with what I’ve put together. It FEELS nice to begin “counting my blessings.” But then what? How do I help my extended family recognize and value what I have begun to identify . . . so that they, too, value what they possess (or COULD possess, if they were willing to develop and maintain the assets and reduce the liabilities)?

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