articles

In a world fixated on financial metrics—net worth, investment portfolios, and property values—we've narrowed the concept of wealth to numbers on balance sheets and bank statements. Yet the original root of the word tells a different story. 'Wealth' derives from the Old English 'wela' meaning "happiness and prosperity in abundance" and 'weal,' referring to "welfare and wellbeing." This linguistic origin reveals a profound truth: our ancestors understood wealth as something far more comprehensive than mere monetary accumulation.

The Historical Evolution of Wealth

Before modern capitalism and industrialization transformed economic systems, wealth was measured differently across civilizations. In many indigenous cultures, wealth was calculated by one's contributions to the community, knowledge of traditional practices, and harmony with the natural world. Family lineages were preserved not primarily through financial inheritance but through transmitted wisdom, skills, and stories that ensured the next generation's ability to thrive.

Ancient Greek philosophers like Aristotle spoke of "eudaimonia"—a state of flourishing that encompassed moral virtue, practical wisdom, and social connections—as the true measure of a wealthy life. This holistic approach to prosperity recognized that passing down virtue and wisdom to one's children constituted a more meaningful inheritance than gold or property alone.  This is supported by the families I’ve worked with, when all is said and done, the thing they most want is the kids happy and thriving in their own right

Even Adam Smith, often cited as the father of modern capitalism, stressed in "The Theory of Moral Sentiments" that a society's true wealth lay in the wellbeing of its people—particularly in their capacity for moral sentiment and connection. True intergenerational prosperity depended on developing human capital alongside financial capital.  Something all too often forgotten in  society today and as a result distorts the word ‘legacy’.

Dimensions of Authentic Wealth for Generational Legacy

When we expand our definition beyond financial assets, wealth reveals itself as multidimensional, with each dimension offering unique opportunities for intergenerational transmission.  Here are a few of these:

Relationship Wealth: The Harvard Study of Adult Development found that close relationships protect people from life's discontents and delay mental and physical decline. Intergenerationally wealthy families invest in teaching relationship skills, conflict resolution, and emotional intelligence. They also intentionally maintain extended family connections and community networks that children and grandchildren can access throughout their lives.

Time Wealth: The freedom to choose how you’ll spend your time represents perhaps the most precious form of affluence. Parents who model time sovereignty—having discretion over how we spend our days—show future generations that true wealth includes the capacity to be present for life's meaningful moments rather than perpetually sacrificing today for tomorrow's financial gain.

Health Wealth: The ancient Roman poet Virgil noted, "The greatest wealth is health." A sentiment often associated with Steve Jobs in his later days. Beyond genetic inheritance, we pass down health habits, nutritional knowledge, and approaches to physical and mental wellbeing that can benefit descendants for generations. Families that prioritize health education and modelling healthy behaviours provide their heirs with resources more valuable than any trust fund.

Experiential Wealth: Research by psychologist Thomas Gilovich demonstrates that experiences generate more lasting satisfaction than material possessions. Families that prioritize creating meaningful experiences together—from travel adventures to holiday traditions—build a shared experiential vocabulary that strengthens family identity and resilience across generations.

Wisdom Wealth: Every family possesses a treasury of hard-won insights, lessons learned through success and failure, and practical knowledge about navigating life's challenges. When these lessons remain uncaptured and unshared, we deprive future generations of invaluable intellectual and emotional resources. Wisdom transmission—through stories, documented experiences, and intentional mentoring—constitutes a cornerstone of true intergenerational wealth.  I know from experience, for elders to share these ‘hard’ or failure stories often takes some promoting, however the looks on the young adults faces in the room is incredible as they absorb every word and glean such value from what the person has said.

Identity Wealth: Understanding one's family history, cultural heritage, and the narrative arc of previous generations provides descendants with context and meaning that no financial windfall can deliver. Families that preserve their stories, celebrate their heritage, and maintain connection to their roots provide future generations with an identity anchor in an increasingly rootless world.

Values Wealth: Perhaps the most significant inheritance we leave isn't financial but ethical—the principles and values that guide decision-making and purpose. Families with clearly articulated and demonstrated values create a moral compass that serves descendants far beyond any material advantage.

Cultivating Intergenerational True Wealth

Often it’s the technical aspects of legacy planning that’s prioritized —like estate structures and tax optimization—while overlooking the crucial human elements required for sustained multigenerational prosperity. Business founders may secure succession plans without transferring their entrepreneurial mindset, while investors establish complex trusts without investing in heirs' character development or financial literacy.

This imbalance helps explain the universal "shirtsleeves to shirtsleeves in three generations" phenomenon, where family wealth typically dissipates by the third generation. Research indicates this decline stems not from inadequate financial planning but from insufficient development of human and social capital across generations—the relationships, skills, and values needed to steward wealth effectively.

Knowing that we all want our hard work to have meant something, it’s important to move beyond considering purely those wealth creation and stewardship aspects. True family prosperity requires intentional cultivation across multiple dimensions and encompasses areas such as the following:

Develop Comprehensive Family Governance: Just as financial assets need management structures, family human capital requires governance systems that articulate shared values, decision-making processes, and expectations. These structures provide frameworks for addressing conflicts, allocating resources, and maintaining family cohesion across generations.

A Family Legacy System: That systematically captures shared family wisdom through recorded interviews and documented meetings, while cultivating a comprehensive family narrative that includes both triumphs and struggles—research shows this approach significantly enhances younger generations' resilience and emotional wellbeing.

Invest in Family Education: Truly prosperous families develop systematic approaches to preparing heirs for the responsibilities of wealth, focusing on emotional intelligence, leadership skills, and purpose development in addition to the areas surrounding financial literacy.

Building Meaningful Traditions: Regular family gatherings, rituals, and traditions that strengthen bonds and create contexts for transmitting values and wisdom. These traditions become particularly important as families expand geographically and generationally.  Imagine a room full of people, 30 – 50 years from now where even the 4th cousins all know each other really well.

Develop Family Philanthropy: Shared giving experiences provide powerful contexts for articulating values, practicing decision-making, and connecting across generations around common purpose. Done well this can create a platform for continued family alignment and cohesion that  stands the test of time.

A New Paradigm for Heritage Planning

When considering the landscape of intergenerational wealth, a comprehensive framework acknowledges five distinct forms of family capital that contribute to lasting prosperity:

Financial Capital: The tangible monetary assets, investments, property, and business interests that provide material security and opportunity.

Human Capital: The individual qualities each family member brings—their knowledge, skills, health, education, and unique talents.

Intellectual Capital: The collective wisdom, lessons learned, problem-solving approaches, and creative capacity developed across generations.

Social Capital: The relationships, networks, reputation, and community connections that open doors and provide crucial support systems.

Spiritual Capital: The shared purpose, values, faith traditions, and meaning-making frameworks that guide significant family decisions and create cohesion.

Done well your trusted professional advisors work together with you in a manner that builds true heritage planning, addresses all five capitals and recognizes that financial resources alone cannot secure genuine family prosperity across generations. This integrated approach acknowledges that the most valuable inheritance we leave our children exists not in our bank accounts but in their hearts, minds, values, and relationships.

The True Family Balance Sheet

Imagine if families created balance sheets that accounted for all their wealth dimensions:

• How rich is our family wisdom repository?
• What is the strength of our family relationship networks?
• How developed is our shared narrative and identity?
• How effectively do we transmit values and purpose?
• What is the state of our collective health and wellbeing?
• How strong are our traditions and regular connection points?

Such accounting would provide a more accurate picture of family prosperity than financial statements alone ever could. More importantly, it would direct attention and resources toward the forms of wealth that research consistently shows contribute most significantly to human flourishing.

Conclusion: Leaving a Legacy That Truly Matters

The wisdom of our linguistic ancestors remains relevant: true wealth encompasses welfare and wellbeing in their fullest sense. By reclaiming this definition in our approach to intergenerational prosperity, we can ensure that what we pass to future generations includes not just financial security but the far more valuable treasures of wisdom, identity, purpose, and connection.

As you consider your own legacy, rather than asking "What will my children inherit?" consider instead  "Who will my children become because of what I've invested in their development?" The answer to that question—far more than any financial sum—will determine whether your family experiences true wealth for generations to come.