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It’s a sad state of affairs when adults look forward to their kids to leaving home so they can be all alone again, and can’t wait for their parents to die so they can inherit whats left of their money. This isn’t what Old Money is and isn’t what “Family Fortunes, How to Build Family Wealth and Hold on to it for 100 Years” is about. It’s a long title, so I’ll just call it “Family Fortunes”, henceforth.
Old Money, ‘generational wealth‘, is instead built on family values, a hard work ethic. Contrary to popular belief, it is the hardest of all money to attain and then harder still hold onto. Old money isn’t like other money. It isn’t bound to a single person, it doesn’t follow the same rules. It isn’t created quickly, nor is it created equally. Instead, it depends on families loving and taking care of one another and a supportive culture needs to
I hunted around for a book as a starting place for myself to begin learning about some of the more difficult. After some time I decided on “Family Fortunes”. Appropriately so, it is written by the Bonner Brothers Bill & Will, who are first-generation Old Money and are seeking to build a dynasty of their own.
“Family Fortunes” serves as a great launch point for your family to build a fortune of their own. It covers the different ways to build and preserve it. It starts with family balance sheet & culture, then delves into business and investing, followed by structures and preservation. I’ve written a comprehensive review of the concepts and takeaways, if a lot of this is resonating with you, I suggest you pick a copy of the book up for yourself.
What I Liked about “Family Fortunes”
I really enjoyed reading this book. It had a great flow and the writers were transparent in their successes and failures. It would be impossible for me to recount everything in the book without rewriting it completely as it was that jam-packed. So I’ve put some of my key takeaways below.
Themes
Throughout the book, there was a strong emphasis on the fact that the members of the family and the culture that surrounds them are the true essence of the wealth, not the money itself. This was affectionately referred to as Human Capital. By playing to your family’s strengths and supporting the weaknesses, you can create a culture that helps foster keeping wealth within the family.
“Old Money” doesn’t have to be a huge sum either. There was one part in particular that stood out where they show even 10,000 can be used as family money. Old money doesn’t have to be 7 or 8 figures, it can be a small amount put towards the greater prosperity of the family as well. If the culture around money is fostered, then a sum like this won’t be squandered and can be utilized to bring greater value to the family long term. Toil in low-end work to accumulate $300,000. That can then be used for higher education, then the money from the work that education produced can build even more than that.
Side Note: I have since discovered there are 3 core methods to build family money. The Great Accumulator, The Collective, and The Family Business.
Focus
The Bonner brothers are sons of “The Elder Bonner”. The Elder Bonner launched a publishing business after leaving his job. His sons are now running this business alongside him with offices across the world, a veritable miniature empire. The business serves as a focal point for their family. They all get paid out from it for their personal expenses, and the balance is what generates their family financal capital. The wealth pool is invested in to family assets and used to further the families collective objectives.
Family Bank & Collective Goals
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Family Fortunes: How to Build Family Wealth and Hold onto it for 100 Years.
One instance of the family money helping members out if one of the 3rd generation sons is trying to become a professional singer in LA. The family money helps fund his lifestyle in a small way, he still must work to supplement it. This lets him have more time to chase connections, build social capital, polish his skill set and build other assets such as a youtube channel and albums. If this doesn’t work out, the son is always welcome back into the family business.
The Family bank can also be a means of lending money to other family members to start businesses, chase higher education or to purchase homes. If it makes sense to do this and keep interest payments low and internal for the family, the family benefits. The family bank benefits by receiving interest, or a stake in the business/investment.
Traditional Family Model
One thing the Bonners have noticed is the traditional family model seems to be prevalent in most old money families. Permanence is a necessity for a strong family and home life. The dual-income model may actually be depriving families of wealth. When you have two people working full time in ordinary roles, both parents will only veer achieve ordinary results. Children get neglected and both parents are unable to achieve anything extraordinary. Having ‘the state’ raise children will result in what the state wants, workers to fill the worker drone roles.
Family is everything really. To me, the meaning of life is to leave the next generation with more than the last. This is found all across nature, whether looking at evolution, avian nests, bees, or humans(collectively, anyway).
Passing from one generation to the next. Thinking like this will always keep the future exiting and give you something to live for.
The Matriarch
The Bonners strongly believe that one parent(probably the woman referred to as “The Matriarch”) should stay at home to create the family culture, instill values and raise strong, capable children. The matriarch is actually the most important role in the whole family. They make sure the next generation is well raised and adjusted for adulthood. They also resolve family conflicts and emotional issues and have a hand in education and real estate investments.
The Matriarch can also have her time freed up for learning more retaining to family budgeting, home financial management, entertaining and furthering her own education to pass onto children.
Update: Having a stay-at-home parent is the single best move you can make to creating a dynasty.
Retirement
The Bonners don’t believe in retiring in the traditional sense. Retirement leads to an early grave and zero productivity. Instead, the Elder Bonner has moved into a more “Shadow Master” type role, where he oversees the family and the business and is less hands-on. This can also be a part of the process to pass on the Patriarchal role to a successor.
This dapper gent still looks shrew to me. Totally a Shadow Master.
Home Life
The Bonners have 3 generations living under one roof. This saves on a lot of expenses that would otherwise be threefold, as well as combining their efforts to save on labor costs of chores, maintenance etc. This is something shunned in most of the western world but is still commonplaces in eastern cultures and places like Italy and France. This also creates generational homes with a strong sense of peace and pride. The extra family wealth created by doing this can further the family bank and investments.
Not in the book, but this practice is called ‘The Family Sanctuary‘.
It’s also good to get children involved in family projects and to avoid letting people skip out on family events unless it’s absolutely paramount. Projects help all the family members get involved with creating value and income for the family coffers.
Investing
I don’t agree with everything they had so say on investing(more on that later). One thing I really liked the idea of was “Beta Bets”. These are basically investments that look at the greater picture and plan long, long, long-term. Think 30-100 years. These are investments and assets that grandchildren will benefit from.
The idea is to look at macroeconomic shifts and place money into assets that will move with the times. Short term you may not be hitting “Alpha” and “Winning” but long term you will see compounded growth. The Bonners have done this with rental properties, chateaus in France, a farm in Argentina, gold and investments in emerging economies. This is something I currently do with precious metals. While I only have Silver, and “Family Fortunes” has me considering adding a little gold to our family vault.
They also enjoy the concept of deep value investing, whilst not actually believing in stock investments. They shun most Wall Street products stating that such products exist to make Wall St money not investors. This much is true for the most part.
Length
This Book was well-paced and didn’t really have a lul. It took me about 4 days of light reading with one final blast to get through it and I’m not a fast reader by any means. For comparison, Margin of Saftey by Seth Klarman took me over a month to trudge through, with heavy note-taking.
I found my mind wandering off during the “Hard Structures” Section, which brushed over a lot on trusts, tax-saving structures and hiring the correct professionals. I don’t live in the US, so a lot of this didn’t apply to me. You should really get professionals to help set up structures though, regardless of your nationality. It didn’t go into any depth at all, which is probably a good thing, but they didn’t really seem to know what they were talking about.
The last chapter on the book went into building a larder and a family stronghold. This can be hard to instill in the generation before mine. My parents are very on the side of “everything will always be OK”. What’s the harm in having a month or twos food in canned storage in a box in the shed? It’s only a few dollars that can be the difference between starving and surviving. Instead of buying ice cream each week, buy 2 cans of stew or similar. Should something like a disease breakout happen, or War shut off local municipalities, you’ll be grateful. If we’re talking generations here, then the odds of something happening during the lives of future family members is kind of 100%. Times on my side for the statistics here.
Pocket-watches can make great family heirlooms. Just saying.
What I Disliked about “Family Fortunes”
There was significantly less in “Family Fortunes” that I dislike as opposed to what I liked. The book was pretty basic in a lot of ways. And much of what was said as though it were fact, lacked any substantial back up. They talked about how ‘most of the stock market is a sham’, and to an extent, I do agree. Mega-bucks are built by selling companies, and especially taking them public. This doesn’t mean that you can’t make money by timing the market and putting yourself at an informational advantage. The Bonner Boys kept talking about Efficient Market Hypothesis(EMH), not really understanding what a hypothesis is – an unsubstantiated claim awaiting further research and evidence before it ascends to a theory. There are some things I agree with regarding EMH, but it really is just a hypothesis.
There was a bit of doom and gloom as well, and a healthy dose of this is a good thing. But spending your entire life waiting for the world to end and society to collapse is a sad way to live. Preparing for the worst is all good and a healthy lifestyle – when SHTF, you’re blow to go and at an advantage. Living your life waiting for the worst to happen is the worst way to live, if you can even call waiting to die, living.
Spouse ‘Selection’
Some of the stances on ‘spouse selection’ in Family Fortunes were understandable, but a bit misguided IMO. While letting just anybody into the family can wind up devastating. I think manipulating your children into who they marry is a way to guarantee failure. There’s a natural rebellion in a lot of people, and this is something you can’t control. In fact, the more you try to control it, the harder it is to rein in.
Instead, I think a better approach is to raise children that have a good judge of character and to set up strong ‘Hard Structures'(legal and accounting practices) to prevent gold-digging and erosion of wealth from divorce. This is something that is don’t with extracurricular study and observation, a duty that can be put onto the Matriarch.
Unfortunately, new family members can lead to a wedge being driven between old bonds. I can see where they were coming from, but I think “Mom & Dad said no.” is a terrible approach. The Bonners do have a ‘character test’ of sorts, but they’re only first-generation Old Money so it’s hard to tell if this suffice.
Gold
GIt is ok to have a little bit of your wealth in it, and yes, historically is has been used as a currency(or tied to it), but it’s a shiny rock, with little practical application. With the modern world being so dependant on technology, You’re better off “Beta Betting” on something with a more practical application.
The Bonners love gold, and having a Scrooge McDuck pool of gold would be awesome, but it isn’t going to throw off any appreciable income, so you’re better off investing into real assets before accumulating any significant amounts of gold. That said, gold can be a great hedge against hyperinflation.
I do personally hold gold and silver, but I can’t agree that it’s a sound investment at any high level. If you have a good financial foundation, then by all means, add some to your portfolio.
I wish I had the disposable income to justify one of these in the vault hah.
Distributions & Equality
Grab of Copy of the Book Here (clickable)Family Fortunes: How to Build Family Wealth and Hold onto it for 100 Years.
The Bonners basically say “There has to be one person who makes all this money, then gives it up for the good of everybody else.” Cool. This for them was their father. The Elder Bonner built a publishing business and handed it to his children to work on and grow. The Father doing this may be all good, but what if you’re going laterally? Or what if your parents need your money? None of these were covered in Family Fortunes.
I see issues here as I have saved my butt off, ground hard to get mortgage-free. I rarely go on trips(2 in my adult life), I don’t really drink/do drugs or do any leisurely activities that drain my wallet. I’ve spent countless hours researching investments and on projects(like this blog) to get the modicum of modern wealth that I do. Heck, even in our family business, I’m the only one working late into the night researching and building up plans for growth, while my father watches Netflix for 3-4 hours. I’m not mad about this, I actually like working, and it will ultimately be me who benefits from my actions.
Meanwhile, my parents are planning a Hawaii trip(they do deserve it, though they could be more frugal and better investors/savers). Sister 1 is always off overseas with her partner to blow savings and have a good time. Sister 2 is currently blowing her life savings on her big Euro Holiday. If I gave up all my hard work so they could have some of the wealth I’ve generated, I’d be pissed. Why should I toil while they party? And there in lies the problem of keeping it fair. This book covered nothing regarding keeping things fair, which is what I was looking for.
Update: I have since concluded you can’t go back a generation. Your generational wealth begins with you. You are the founding father or founding mother of your dynasty. Period.
“Just buy a Farm”
The Bonners haven’t quite hit that point where they are removed from the start-up life. Their children seem to be getting there(the singer and Actress chasers). It’s great to have money to help your children out, but it’s super important to keep the working culture. Without knowing how to make money, you can never expect to keep it.
The Bonners suggest “Buying a Family Stronghold”. We can’t all just up and do this. My home in worth over half a million dollars and it’s tiny. A farm on the outskirts would cost in excess of $3mil and produce a fractional ROI, if anything. Creating a family farm isn’t really an option for everybody. But if you can spare the funds to buy and maintain one, by all means, you should. Failing this, gardening, creating little income streams and storing food and water for hard times won’t break your bank or your back.
*2022 Update: I’ve actually manage to purchase a 10 acre block of rural property with a modest house on it. We’ve added a garden, farm rabbits, sheep and have plenty of fruit trees. While it won’t be our forever home, it is something we can improve and add value to, and has the capacity to get us through hard times if it ever comes to that.
This is a small part of my land. Fruit trees and our main garden are here. A bit messy, but it’s home.
Who the book is for
If you’re interested in building old money for your family, Family Fortunes is a great launch point. t covers all the basics and will leave you with a lot more questions and pathways to go down.
The need for nepotism, family strength and dynastical wealth is growing. The times we are entering are becoming harder as out debt-based currencies weaken. Minimum wages drive up the cost of living and harm the people they were meant to help. It’s up to us as people to help our descendants along and give them a great foundation to launch their own adult lives from, integrating into the integrity of the family.
We can do this with generational intelligence, creating strong family values and providing permanence in our homes. If we can pool up some funds to make financial life easier for the subsequent generations, then, by all means, we should. A little sacrifice now will mean the world with 100 years of compounding interest.
Grab yourself a copy of Family Fortunes and begin accumulating the knowledge for building your dynasty.
How I will be applying the lessons in this book.
After reading this book, I’ve been left with a hunger for more information on the structure of family wealth as well as making it fair. As most reasonable people know, the thirst for knowledge never stops.
Beta Investing
I’m looking into more beta investing strategies and will be taking some long plays on assets for this purpose. I’m considering Ancient Coins, Gold, More Silver, Land, and Commercial Real Estate. Time is on our side for building Dynastical Wealth.
Family Business
The book has left me with a strong desire to build on my Dad and I’s business to make it a source of Family Money. Earning what we do now is great, but we need to grow significantly if we are to get anywhere. This means me figuring things out on how to grow. There is no system anybody can buy that will tell you how to do this. Word of mouth is key in our industry and I’ve got to focus on that.
Family Structure Development
Family structure is another thing Mrs Black and I are working on. Creating Family Traditions, and educating our children properly is very important to us. This is what is called Human Capital and it is the foundation of all generational wealth. We’re also on the hunt to purchase a larger, permanent home to bring our children up in, but there is no great rush for this. The Rothschild Elders apparently raised 11 children in a 1 bedroom flat (…or so they say).
I’m trying to teach humility and that hard work pays off, it would be great if my children could see the transformation hard work and frugality brings, rather than be born into ‘luxury’. “Family Fortunes” pushes multi-generational homes hard and I am really fond of this idea.
Work (even) Harder
Creating more assets and working (even) harder is also a paramount value stressed in “Family Fortunes”. The book preaches hard work pays off. work 12 hours and you’ll trump the guy who works 8, not only by 150% but by 1000+ hours/year, leaving you at a significant advantage. Time to double down and work 25/8.
Build your Larder
I’m not a dooms-dayer. I’m not really a ‘prepper’. But having some contingencies doesn’t hurt. I have a 200L barrel of water out back and enough canned food for around a month or so. I’ll look into build up stockpiles of supplementary resources. Can’t afford the farm(yet), but I can grow our urban homestead just a little more each week, maybe it’s time to finally get the materials together for the rain collection system that I can set up if I need to. Not the main focus of “Family Fortunes”, Bt something everybody should think about.
Won’t last long, but better than nothing. On our new property we have a 20,000L tank, putting this little barrel to shame.
Will you continue the western tradition of broken, disparate families, waiting to be all alone again? Are you going to build a dynasty and wealth to help your descendants? Or Leave them to start fresh is an increasingly difficult world?
Pick up a copy of “Family Fortunes, How to Build Family Wealth and Hold on to it for 100 Years” and get some answers to these difficult questions. Or, you can drop me a comment below if you need any help with any of the points in this review.
Thanks for reading. Yours,
