Part Two

The Stewardship of Wealth

America became wealthy and powerful, far beyond that of any other country in history, because of an economic system that produces private wealth on a massive scale and then deploys that wealth in creative ways. The holders of that wealth are the natural end result of that system and its most powerful symbol. Wealthy families are therefore central to the American experiment and therefore they are central to what we might call the near-paradise of peace that holds the promise of freedom and progress for all people globally.

As the principal beneficiaries and prime symbols of this remarkable system, wealthy families bear a serious responsibility to manage their wealth prudently, to engage in a level of stewardship appropriate to the important role our capital plays in America and in the world. We now turn our attention to the details of that demanding, and rewarding, task.

In Part Two, I will discuss the broad issues that most directly affect the ability of families to maintain their capital over long periods of time:

• Are we living in a permanent financial crisis or is this just a passing phase?
• Understanding and managing risk in all its many dimensions.
• The frankly scummy world of financial firms and what investors should do about it.
• The difficulty of finding appropriate financial advisors.
• The complexity of structuring families to make sound and disciplined investment decisions.
• Managing trusts.

Families who come to grips with these broad issues, who internalize the proper mindset of stewardship, will have gone a very long way toward ensuring the preservation of their capital across many generations.