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Goer­ing Cen­ter Newslet­ter
Jan­u­ary 15, 2015
by: Mack­ey McNeill

He is 62, the first gen­er­a­tion. She is 40, the sec­ond gen­er­a­tion. They are ready to make the tran­si­tion from Gen 1 to Gen 2. While the chal­lenges are many, var­ied and com­plex, the finan­cial issues that arise in this trans­fer of wealth pro­vide an under­pin­ning of suc­cess or a foun­da­tion for failure.

The 62 year old has focused all his time, atten­tion and tal­ent on grow­ing one asset, the fam­i­ly busi­ness. There may be some life insur­ance, a bit of an IRA, or mon­ey added to a 401k some­where in the dis­tant past. But the bulk of his assets reside in the fam­i­ly busi­ness, and grow­ing a busi­ness is hard work. By far, most of his efforts have been a heads down, nose to grind­stone focus on his pas­sion, his busi­ness. Things like build­ing a loy­al cus­tomer base, devel­op­ing a high qual­i­ty team, find­ing a unique sales propo­si­tion, achiev­ing oper­a­tional excel­lence and the many oth­er areas demand­ed his con­stant atten­tion. Finan­cial plan­ning was always some­thing he intend­ed to do, but nev­er quite found the time or saw it as a press­ing need. After all, there was a busi­ness to run.

In walks the 40 year old. She is faced with man­ag­ing an asset that has a siz­able unfund­ed lia­bil­i­ty on its bal­ance sheet. The even­tu­al retire­ment of the 62 year old own­er and the mon­ey need­ed to sup­port his future life in retirement.

She is excit­ed. She sees the untapped poten­tial of the com­pa­ny and has a vision for future growth and long-term suc­cess. How­ev­er, in the back of her mind is a nag­ging con­cern… How is she going to meet the expec­ta­tions of the 62 year old?

She knows all busi­ness­es have ups and downs, but she also knows that when the 62 year old retires he will require an income stream. He will require an income stream that may need to last 35 or more years under a vari­ety of eco­nom­ic sit­u­a­tions. How does the busi­ness meet this chal­lenge? What does that real­ly mean to her future? What is real­ly expect­ed of her? Will she ever be able to retire?

If finan­cial plan­ning hasn’t quite made it to the top of the to-do list, it is now, for both generations.

Besides being busy, many busi­ness own­ers avoid plan­ning because they real­ly don’t under­stand how it works and why it ben­e­fits them.

Finan­cial plan­ning, done well, is an inter­ac­tive and engag­ing process. Through­out the process you and the plan­ner co-cre­ate a plan that pro­vides a sol­id vision of what your future could be and a fea­si­ble action plan for the how to make that future a reality.

There are four key steps.

  1. It begins with inten­tion and pur­pose. What is my per­son­al inten­tion? What moti­vates me? What are my pas­sions? How do I define prosperity? 
  2. Next, you define your per­son­al goals. What is impor­tant? What do I want, and how am I going to make it hap­pen? How do I start the jour­ney? What are the steps I need to take and how do I avoid the pot­holes that are guar­an­teed to be on the path to success? 
  3. Once the plan is in place, you’re still not done. You must exe­cute the plan.
  4. Last­ly, there is peri­od­ic mon­i­tor­ing of the plan. Are you on track to achieve your future goals? Do changes need to be made?


Fail­ure to thor­ough­ly embrace any of these steps cre­ates a break in the sys­tem and more like­ly than not, a failed plan. Like any­thing, unless it is done well, it isn’t worth doing.

Noth­ing gives a per­son more con­fi­dence about their finan­cial future than a sol­id plan. With finan­cial con­fi­dence han­dled, she can move onto putting her vision into real­i­ty and he can retire wor­ry free.

Regard­less of where you are on your jour­ney to build­ing your fam­i­ly busi­ness, now is a great time to give your­self and Gen 2 the best present ever, finan­cial con­fi­dence, made pos­si­ble with a well-exe­cut­ed finan­cial plan.