Broker Check

Leaving a Legacy

January 03, 2023

We begin a new year with a clean slate.  The S&P 500 had its worst performance since 2008, the great recession.  It was down over 19.4%.  That is unnerving to some, to others, it’s to be expected.  It depends on what your objectives are.  Also, whether you have a long-term perspective, short-term perspective, or gambler mentality.  Add to that the idea that an Individual who has money to invest falls under one of three categories.  The individual either wants to grow their money, save their money or reduce their risks.  Personally, I think that is a short-term aim rather than a long-term investment strategy.  I’ll explain more in detail why I say that later in this letter.

I am currently reading Ray Dalio’s book, “Principles”. 

There is a lot of valuable information and thought-provoking content.  The kind of stuff that makes you go, ah!  One point, or better said, equation for your consideration is:

 “Radical truth + radical transparency = meaningful life”

 I believe it is safe to say that all of us want a meaningful life.  We want what we have done, continue to do, to the end, to make a difference.   For us and for our family.


I recently read the quarterly letter by Rothschild & Co. on Leaving a Legacy.

They are the primary partner who I rely on to manage the investments on behalf of my clients.  This past year has been an excellent example of their grasp of the markets, their actions and the results.  In this edition they discussed the important issues surrounding legacies and succession.  What is required when one considers these topics is “radical truth” and “radical transparency."

I chose to create a brief synopsis of the most important parts of the letter for your consideration and use in creating your own legacy.

Our desire to leave a legacy is strong, and it’s often driven by our protective instincts for our loved ones.  We all take comfort in the idea that we’ll be remembered after we’re gone, and it’s important to know that our loved ones will be adequately provided for.  Research shows that our desire to leave a lasting mark on the world increases as we get older.  (Note, I for one, am guilty of this!).  This is especially true for those who have had successful careers or established businesses.  After all hard work and sacrifices made, it’s good to know our efforts won’t be forgotten, or the fruits of our labor squandered.   Establishing a legacy is that it ultimately reassures us that our life mattered.

When you feel the impulse of creating a legacy plan for you and your family, you most likely have reached that point where you look beyond your personal goals and become more interested in educating, guiding and inspiring the younger generations. In this case, your family.

Why is establishing a legacy plan important?  Only three per cent of family businesses still exist into the fourth generation and beyond, and 90% of wealth families have lost their fortunes by the third generation.  The Japanese have a simple saying, “the third generation ruins the house.”

There are three broad types of legacy that are the cornerstones of most succession planning in planning an inheritance system.  The three are: biological, material and values.  They are self-explanatory.  Biological is when you pass on your genes to your children; material is the transfer of wealth, land and possessions; and values are the social, cultural and personal beliefs that you hand down.

The two issues that are of most importance to most families are the transfer of wealth and secondly the values that you wish to hand down to your children, grandchildren, and into succeeding generations of the family.  You have no effect over the genetic part, but on the other two, you have a great opportunity.  Some sort of financial education should be provided as soon as your children and grandchildren are ready.  The challenge is, leaving the issue until it is too late.  (Note: I already am in the process of learning how I can assist my grandson in these two areas, working together with my daughter and son-in-law.).

Let’s turn our focus now to how to transfer that wealth discussed above and discuss how your legacy can be preserved.  Another “radical truth” is that building a legacy is one thing, preserving it is another.  What has been discovered from the many families who’ve mastered the transition of wealth across multiple generations is that they did so by having access to a good team of advisers who weren’t afraid to provide frank, sometimes difficult, answers to the big questions.  (Note:  Again, beating the drum…. This involves radical truth and transparency in order to accomplish this successfully.). Two key themes arise from those who have mastered the transition: transparency and unity. 

Let’s consider the Rothschild family and their founder Nathan Mayer Rothschild. 

He realized that their biggest strength lay in the solidarity as a family.  What was the most important consideration for Nathan?  The end goal was preservation.  Why preservation?

“It takes a great deal of boldness and a great deal of caution to make a great fortune; and when you have got it, it requires ten times as much with to keep it.” - Nathan Mayer Rothschild

So how does Rothschild & Co. help my clients and I in managing their investments with the objective of growing their wealth prudently, focusing on wealth preservation principles and not incurring irrecoverable losses?

The answer is by being strategically patient, favoring long-term approaches, steady returns, rather than high-risk gambits, which in turn ensure stability.  Implementing that “long-term” thinking by using well-researched, consistent and risk appropriate strategies.  Rothschild & Co. understands that the prevailing market volatility can be uncomfortable.  However, their focus is on the long term.  They are looking to preserve and grow a client’s wealth, not only for this generation but for many more to come.

What about the recent market decline?  How does Rothschild & Co. view it?  Their view has always been that large market movements give rise to considerable opportunities, enabling them to invest in new companies at a more attractive price or add further to holdings in which they continue to have confidence.  From an investment perspective, various economic and geopolitical headwinds created volatility across markets last year.  But despite an uncertain backdrop, Rothschild & Co. remains confident that their portfolios are well positioned as we head into 2023.

What my partnership with Rothschild & Co. offer you is sound investment strategies, honest, pragmatic feedback, and connections to the right people and professionals to help you shape your future and your legacy. 

Please contact me if you wish to discuss further how this can be accomplished for you and your family.

Happy New Year!