The Science of Wealth: Embracing Complexity, Humanness, and Dynamism
What if we've been viewing wealth through too narrow a lens all along?
We often discuss wealth preservation using familiar strategies — governance, next-gen training, portfolio management. But are we missing something bigger? What if wealth isn't just about managing assets; what if it is deeply intertwined with human nature — a complex tapestry of relationships, motivations, cultural values, and societal dynamics? Like human nature, wealth is multi-dimensional, constantly evolving, and profoundly influenced by both our internal aspirations and the external world.
So, if wealth is as complex and dynamic as human nature, why do we persist in managing it with one-dimensional tools — or at best, two or three-dimensional ones — rarely embracing the full spectrum of its complexity?
The Proverbial 'Three-Generation Curse': Myth or Reality?
Centuries of wisdom meet modern insights.
Across cultures and continents, societies have captured the essence of the “three-generation curse” through poignant proverbs:
These sayings reflect a universal observation: wealth amassed by one generation often dissipates by the third. Why is this belief so widespread? These aren't mere folk tales; they're the culmination of multi-generational wisdom — centuries of observing how wealth ebbs and flows in tandem with human behavior and societal changes.
However, in recent discussions with Francois Botha and Bassel Hamwi around Mr. Botha's Forbes Networks Media article on the topic we've delved into modern studies challenging this age-old belief. While studies like the 2003 research by Roy Williams and Vic Preisser of The Williams Group highlight the prevalence of the "curse," emerging viewpoints suggest that with intentional strategies and a deeper understanding of wealth's complexities, families can break this cycle.
While these modern perspectives offer hope, they also raise an important question: Are we oversimplifying a multi-dimensional human system by seeking straightforward solutions?
Are We Oversimplifying a Multi-Dimensional Human System?
The danger of relying on isolated strategies.
To challenge entrenched wisdom, we need equally robust research and frameworks that reflect the complexities of wealth today. Unfortunately, many recent studies on the wealth "curse" — from the Harvard Business School's cited in the Forbes article above to Mr. Grubman's, Family Firm Institute (FFI) Fellow — although providing a number of valuable insights, fail to capture the full picture. By focusing on isolated strategies and 'silver bullet' solutions, are we missing the forest for the trees? Wealth, much like human nature, cannot be fully understood through a singular lens; it requires a holistic approach that considers all its facets.
The Dynamic Nature of Modern Wealth
From traditional assets to the intricate layers of human capital.
Today, wealth is a dynamic, multi-dimensional challenge. Modern families possess diverse forms of capital that extend beyond finances, mirroring the complexities of human nature:
The Nine Dimensions of Wealth:
The landscape of wealth has expanded — are our business development strategies in private banks, wealth management firms and family offices keeping pace with these multiple dimensions that reflect the depth of human nature?
Lessons from Global Events: A Wake-Up Call
Real-world crises exposing unseen vulnerabilities in our human systems.
Consider the Russian-Ukrainian conflict that erupted in 2022. Working closely with high-net-worth individuals (HNWIs), I witnessed families who invested heavily in top-class, intelligent wealth structures and the wealth structuring advisory services supporting them. They didn't build their fortunes on assumptions of stability; they prepared for volatility, understanding that unpredictability is part of human history.
Yet, despite the billions invested, there was one thing they hadn't fully prepared for — the unpredictable nature of human actions on the global stage.
The crisis unveiled vulnerabilities that couldn't be anticipated. It exposed the limitations of even the most well-constructed financial plans when faced with the complexities of geopolitical tensions rooted in human ambitions and conflicts. This experience ignited a deeper search for meaning. It led to a profound understanding of how wealth is managed —and, more importantly, protected — amid unprecedented global challenges stemming from the intricacies of human nature.
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Navigating Unprecedented External Forces Influenced by Human Dynamics
Are we truly prepared for the 21st-century's multi-dimensional challenges driven by human behavior?
In today’s world, external forces shaped by human actions can rapidly alter the wealth landscape. It's essential to recognize the breadth of these forces and how they are deeply influenced by our collective behaviors and decisions:
The Five External Forces Shaping Wealth:
Are our current wealth-related approaches robust enough to withstand these external forces driven by human nature? Managing wealth now requires understanding not only the internal dimensions but also how these external forces interact with and impact each type of capital.
We Can't Navigate a Multi-Dimensional Human World with Limited Tools
Embracing a new paradigm in wealth management that mirrors the complexity of human nature.
We've been trying to navigate a world of intricate terrains and ever-changing landscapes with outdated, one-dimensional maps — even occasionally venturing into two or three dimensions— but it's not enough. If wealth is a living system reflective of human nature's complexity, our tools and strategies must evolve to match its multidimensional nature. It's time we viewed wealth as a living system — complex, multi-layered, and interacting with the world in unpredictable ways.
Should we start treating wealth as a science — one that encompasses all its dimensions and external forces? This model will undoubtedly evolve as our world grows more complex, but we have to start somewhere.
An Invitation to Think Bigger About Our Shared Human Experience
Collective insight for a collective challenge rooted in our humanity.
It is unlikely that any single person or institution can cover all aspects of this conversation. That’s why we need to think bigger. Wealth impacts more than individual families — it shapes communities, economies, and societal stability, all interwoven with the fabric of human nature.
How do we move beyond traditional strategies and view wealth as a complex, multi-dimensional system requiring deep understanding of human behavior and societal dynamics? How do we honor the wisdom of the past while preparing for a future filled with new, unseen challenges arising from the ever-evolving human condition?
Building Legacies That Stand the Test of Time—and Human Nature
A call to action for a deeper, systemic approach that aligns with our intrinsic human values.
Let's engage in this crucial conversation. Share your experiences, insights, or questions. Together, we can navigate the complexities of wealth in our ever-changing world.
I invite you to share your thoughts:
Let's rethink wealth together, embracing it as an intricate, living, and dynamic system intertwined with human nature. By adopting a structured, scientific approach, we can crystallize the tools needed to depolarize wealth, transforming it into a catalyst for peace, progress, and greater equality for many generations to come.
#WealthScience #SystemicWealth #FutureOfWealth #WealthStrategy #NextGenWealth #Legacy
Taylan Turan Nic Dreckmann Vincent Lecomte Neeraj Grover Mark Haefele Kristin Lemkau Andy Sieg Rosa Sangiorgio Marc Briol Eric Jacobsen Naava Mashiah Safa Bouzidi-Leterme RAJESH KHANNA Scott Weber Felix Wenger Sunir Chandaria, ICD.D Andrew Sukhin, CFP? Christopher M. Schroeder Florian Kemmerich Lena Patel Muhannad Abulhasan Nathalie Kazzi Lara Yumi Tsuji Bezerra Katie Roof Mo Lidsky
Managing Director | Private Wealth Advisor | International Wealth Advisor AGS Wealth Management Group of Raymond James
1 个月Ryna, It looks like our thinking and views are even closer than I thought. You have a great ability to put complex matters in simple words. Very impressive.