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In the personal finance book Rich Dad, Poor Dad, Robert Kiyosaki writes “It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.
This line articulates perfectly the essence of Wealth Management. It identifies three facets to Wealth Management:
- Inter-Generational Transfer
It’s not enough to just create wealth. The more important part is keeping it, saving it and letting your wealth grow by investing it. However, that just covers the first two points i.e. Saving and Investing. The third thing that Kiyosaki mentions is how many generations you keep it for. A study in Italy found that the richest families in the 21st Century are primarily the same as the richest families in the 16th Century. Five Hundred years, 30 Generations of people inheriting wealth, maintaining it and adding to it. The main reason for this is education. Hence, wealth management doesn’t end at investing. There is another step to it, educating and guiding the next generation.