Is There Wisdom in Losing Wealth?

Is There Wisdom in Losing Wealth?

I read the story of the prodigal son this week. Considering the context of this chapter in Luke’s gospel, the focus is on the things that are lost: the sheep, the coin and the son. The other consideration around loss that is seldom spoken about is the loss of wealth.

What a challenging decision it must have been for the father when the son asks for his inheritance. I expect the father may have known or would have at least suspected how the son was likely to handle the amount he agreed to transfer to his account. Parents usually have some idea about the path a child may choose to walk, especially when they ask for money. Did he know that the son was, in many respects, already lost since he was discontent and felt receiving these funds would answer this discontentment? I have never considered before that maybe the father knew that the only way for his son to truly “be found” and “come to his senses” was to give him his inheritance.

At the time of writing this blog, the verse of the day in the Bible app is this:

Do not love this world nor the things it offers you, for when you love the world, you do not have the love of the Father in you. 

1 John 2:15
https://www.bible.com/verse-of-the-day/1JN.2.15-16/6032?version=116

I have never connected these verses with the prodigal son before, but there is an alignment. There is a competition in each of us for our hearts. What the prodigal saw in front of him was pleasure and possessions; without realizing it he being pulled from the love of the father. Jesus revealed the greatest competitor for our hearts.

No one can serve two masters, for either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve God and money.

Jesus – Matthew 6:24 ESV: English Standard Version 2016

In some sense, maybe the father was actually choosing to invest in his son’s future by giving the inheritance. The story reveals that the wealth given to the son would be completely consumed, so in that sense the return on investment (ROI) was not that great. However, the son hits rock bottom and decides to return to the father. It seems the father was willing to take a loss on the financial side in order for his son to come back to who and where he was supposed to be. The money was lost but the son was found and the rejoicing begins. The lost sheep, the lost coin and the lost son were recovered, but likely the lost wealth was not found. It seems the father was ok to sacrifice the wealth to save the son.

Ron Blue shared a story about parents completing their will and interestingly, their son had a lifestyle they did not approve of. They were thinking because of this they might “cut him out of their will.” Ron asked an important question: “What is the likelihood of your son returning to the Lord if he receives nothing when you pass on?” They had to admit that the chances were nil. Then Ron asked, “Well then, what’s the likelihood of your son returning to the Lord if he IS included in your will?” The fact is, his heart would be more open to the Lord if he was included in their will. I believe that is the heart expressed by the father of the prodigal.

It seems clear to me that one of the overlooked messages that can be taken from prodigal son is this: It’s more important to pass on wisdom to your children than it is to pass on wealth. We need to practice the wisdom principle.

“If you pass wisdom to your children, you probably can pass wealth to them. If they have enough wisdom, then they may not need your wealth.”

Ron Blue, Splitting Heirs, page 70

When discussing the transfer of wealth to children, Ron recommends asking yourself three questions:

  • What’s the worst thing that can happen if I transfer wealth to ___________?
  • How serious is it?
  • How likely is it to occur?

Preparing the next steward to receive any wealth we transfer is a significant part of a parents responsibility.

Is it possible that the prodigal gained enough wisdom to be a better steward in the future? Are you intentionally passing on wisdom to your children? Sometimes more is “caught” than “taught” and our children pick up our wisdom unintentionally.

Estate Planning vs Legacy Planning

Estate Planning vs Legacy Planning

I have been very intrigued by the content in this month’s Kingdom Advisor’s study group centring around legacy and the importance of having an impact beyond my lifetime. Everyone was challenged with the difference between estate planning and legacy planning. In particular, legacy planning not only represents a change in terminology, but it changes the lens through which we see things. Specifically, estate planning has a one-generational focus (transferring wealth to your heirs) while legacy planning looks to impact 5-7 generations (transferring values to multiple generations). That requires a bigger vision and a broader perspective than advisors or clients typically focus on.

Financial professionals are uniquely positioned to invest in the lives of clients. I know as an advisor my discussions focused more on Estate/Wealth Planning rather than Legacy Planning, so this study stretched me to expand my thinking.

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My parents are presently visiting with us and this past weekend our son and grandson visited, so we had four generations in our home. My Dad shared stories with us about how his faith and relationship with God were developed as a young minister and also the impact his own father had upon that faith. Most of these stories I had heard before but my son and daughter-in-law listened intently while baby Ernest slept through it all. I thought how important this time was and wondered if generations yet unborn would benefit from hearing the same stories. To see how God was active in the lives of my parents and grandparents helps to inspire my faith so I am sure it can impact others.

4generationsThink about the business of family for a moment – isn’t it truly about legacy planning?

I will teach you hidden lessons from our past–stories we have heard and known, stories our ancestors handed down to us. We will not hide these truths from our children; we will tell the next generation about the glorious deeds of the LORD, about his power and his mighty wonders. For he issued his laws to Jacob; he gave his instructions to Israel. He commanded our ancestors to teach them to their children, so the next generation might know them–even the children not yet born–and they in turn will teach their own children. Psalm 78:2-6

These verses instruct families specifically to focus on legacy planning which is clearly beyond one generation. I encouraged my Dad to write these things down so the events of his life could be passed on to the children not yet born. That way, his life reaches beyond his years lived on this earth. Many people may feel estate planning is just for those who have wealth, but legacy planning is for everyone.

Ron Blue provides some excellent advice in his book “Splitting Heirs,” when he describes the “Wisdom Principle” which is to “transfer wisdom before wealth. Wealth never creates wisdom. Wisdom may create wealth.” If you think about it “wealth” is the focus of estate planning, while “wisdom” is the focus of legacy planning.

We need to think deeper about the time we are each given. We all have 24 hours per day, and 168 hours per week. On the topic of stewardship Ken Boa says,

“What differentiates people isn’t the amount of time available to them, but the manner in which they exercise their gifts and talents within the available time. We can waste time; we can spend time; or we can invest our time wisely. That’s what stewardship is about: faithfully developing and using our gifts, talents and resources within the amount of time God has allotted to us.”

We have time in an equal measure, but we must be intentional about how we spend it or invest it. The fact is that we often just spend our time when we should be investing it.  Talents are not in equal measure to everyone. We are unique and each has different gifts. Our focus tends to be more about using these gifts to grow wealth and much less  about the growth of our heirs.

Thinking beyond our life can be very challenging because it stretches us outside of our normal pattern of thought. Maybe our perspective needs an adjustment so we consider more the impact we can have upon “the children not yet born.” That takes intentionality and a shift of focus. Our efforts must move toward transferring our values and wisdom  as a guide to govern future generations and less effort on accumulating and transferring wealth. It seems if we get the legacy planning right, the estate planning will be so much easier.

The accumulation and eventual transfer of wealth is a major part of financial planning. If we fail to give proper attention to the legacy planning, we have truly missed the reason that we were entrusted with the wealth in the first place.

Are we spending our time creating something that will only benefit one generation? Can we be more intentional in our investment of time and leave a legacy that extends 5-7 generations?