Category Archives: Money: It’s All in the Family

Income Inequality – What do you think?

http://money.cnn.com/2015/04/20/pf/couples-earnings-difference/index.html?iid=HP_LN

THE 8 PSYCHOLOGICAL ISSUES THAT CAN SPELL SUCCESSION PLANNING DISASTER

LOGOWPMCAfter years of advising entrepreneurial partnerships and family businesses – often working collaboratively with their financial and legal advisors – it continues to be puzzling:  why don’t they plan adequately for succession when it makes no rational sense not to?

Well, the short answer is: because it makes a-rational (and sometimes irrational) sense not to.  But only by addressing the psychological and emotional issues everyone would rather avoid can rational decision making rule the day.  What are these issues that – unresolved – spell DISASTER?  With thanks to the research and in-the-field expertise of my colleagues, present and past,  I offer my own take on the founder and family issues to consider.  A  primer:

D eath –

  • The Founder:  “I’m gonna live forever” attitude – or s/he simply doesn’t want to face her/his own demise.
  • The Family:   Taboo to talk about mom/dad’s death, not to mention life afterward?

I dentity –

  • The Founder:  “Who am I without the business?”  S/he fears loss of identity, which is bound up with the company s/he created.
  • The Family:    They worry about the Founder without the business – and the business without the Founder.

S upremacy –

  • The Founder:  “I’ve still got what it takes, they won’t know how to run this company without me.”  S/he doesn’t want to relinquish power and control.
  • The Family:    How to wrestle with the head of the family about a different vision for the firm’s future, when s/he is still the one in control.

A mbivalence –

  • The Founder:  “Of course I want my kids to take over.”  But s/he somehow undermines that process…
  • The Family:     The next generation want to take over, but feel guilty about pushing mom/dad out.  And the spouse may both want and fear retirement.

S olo  act –

  • The Founder:  “I’ll figure it out.  I’ve done fine this far, with no one helping me.” Getting professional help is seen as a sign of weakness – or a waste of money.  Or time, for someone who’s more of a doer than a planner.
  • The Family:    Having always relied on, leaned on the Founder, they don’t want to face the realization that s/he cannot just ‘take care’ of this, too.

T ime –

  • The Founder:  “Not now.  They’re not ready yet.”  It’s never a good time.  And then there’s the heart attack, or buyout offer…
  • The Family:     The next gen are dealing with the stresses related to adjusting to adulthood: becoming independent, having their own children, marriage (divorce); the spouse has his/her own concerns.

E motions –

  • The Founder:   “I can’t deal with all that emotional stuff.”  Jealousy, rivalry, quarrelling, choosing among the children: all things better (easier) ignored.
  • The Family:      Jealousy, rivalry, quarrelling, choosing sides:  all the old, unresolved issues flare up – and new ones show themselves.

R oles –

  • The Founder:  “So what would I do if I’m not running the business? Play golf all day?”  S/he does not see a future that works once s/he steps down.
  • The Family:     Change affects everyone in the family, and in different ways.   And everyone in the family copes with change differently.

What to do ?  What helps?  To be continued …

 

Copyright © 2013  Marlin S. Potash, Ed.D.  All rights reserved.  

When the Family Business Owner Needs a Psychologist. (Or his kids, partners, attorney think he does)…

As a psychologist working in this space for over 25 years, I’ve learned how difficult it often is for a family advisor – attorney, banker, accountant – to introduce a psychologist into a family business. It’s a delicate matter, one requiring tact, diplomacy, impeccable timing, a real understanding of the business’ needs and a strong belief that the understanding of oneself and one’s relationships with others is central to success in business.

Part of the problem is the commonly held assumption that behavioral consulting requires the family business owner to admit he has a problem, something that’s tough for anyone to do, let alone the person who’s been leading – and has often created – a successful business enterprise. So I don’t even go there: the business owner need not “admit” emotional weakness, nor be forced to face what he prefers to avoid. Because even if one could overcome such resistance, it sets up an initial relationship based on taking sides: right/wrong, argue/defend, consultant/business owner.

Far better, in my experience, to engage a psychologist who understands business in general, the business in question in particular. One who is able to admit what s/he doesn’t understand, to ask questions, to learn. Far better to focus not on fixing emotional problems but on helping the business owner increase organizational effectiveness, by utilizing state of the art behavioral psychology research and methods. Far better to focus on problem solving, ridding the organization of obstacles to profitability, considering new approaches and ways of looking at longstanding unresolved concerns the owner brings to the attention of the advisor. When the focus is on the business problem, rather than the business owner’s problem, when the psychologist views herself as a resource rather than the expert, and when she can translate psychological insight into real business terms,  well, then you’ve got a fighting chance of helping a family firm transition profitably into the next generation – and still want to see one another at the Thanksgiving table!

 

Copyright © 2011 Marlin S. Potash.  All rights reserved.

The Weight of the World On Your Shoulders

worldonyourshoulders
Again. Still. Always…

You have responsibilities: to your children, to your spouse, to your parents, to your partner, to your employees, to your banker…

to yourself…

It’s too much. But it doesn’t go away. Oh, sometimes it gets quieter, or lighter. And sometimes it feels heavier or your feet are stuck.  And sometimes you even stumble under the weight of it all.

But you can’t rid yourself of it, make it go away, put it down once and for all.

So what’s there to do?

Carry your burden more lightly… Breathe deep into your center, remember your purpose, remember you are not alone, remember it is what it is, and, most of all, remember what is real…What matters…

And remember that it all passes; it all turns into the next thing.  Faster than we ever imagined…

Copyright © 2010 Marlin S. Potash. All rights reserved.

You and Your Credit Card: A Love Affair Gone Bad?

creditcards
Money can’t buy you class.

Can’t buy me love.

Don’t need no credit card to ride this train.

I bought a dress last week. An expensive dress. I paid in cash.

Yes, they thought I was nuts, too.

But here’s what I’ve learned: Counting out my stack of $20’s – the stack that required multiple trips to the ATM – makes it really clear just how much that dress costs. Counting out my wad of cash makes it really clear my money is leaving my hands (and bank account) for good. Counting out my hard-earned cash makes it really clear I’m trading my time and work for a thing (even if I’m secretly hoping that thing is really some terrific experiences).

And…

Counting out that wad of cash ensures that I think before I spend (far better than I don’t think, therefore I spend). Counting out that wad of cash ensures that, come the end of the month, I don’t suffer an anxiety attack when the mail comes. Counting out that wad of cash ensures that, though it’s a fortune, I pay for my dress what my dress cost, and not a penny more. No interest. No interest. No interest.

No credit card.

Sometimes – often times – no dress. But, then, no credit card debt. And maybe just a few more dollars for when I really need it…

One not-so-consuming consumer’s small contribution (here I join Roger Lowenstein and everyone else paying down their mortgage – see “The Long Payback” in today’s New York Times Magazine section*) to the current deleveraging in the American private sector… Learning from The Cheapskate Next Door: The Surprising Secrets of Americans Living Happily Below Their Means

Maybe it’s not so great for growing a consumption-based economy, but it sure feels virtuous…

C’mon in. The water’s fine, when you’re not in over your head…

*http://www.nytimes.com/2010/07/18/magazine/18FOB-wwln-t.html

Copyright © 2010 Marlin S. Potash. All rights reserved.

The Time Value of Money?

How about the money value of time?

Damon Darlin, in Sunday’s The New York Times Business section, writing about the time we spend trolling the Web to save a few of our hard-earned dollars: “It’s Free Only if Your Time is Worthless.”

Who’s working for whom? Is the Web working for us, or are we working for it?

Any behavioral economists out there want to answer this question: How to value our “free” time?

Time is money…
and money, in these times…

What’s more valuable – and when?
How do we balance our time and our money?

Copyright © 2010 Marlin S. Potash. All rights reserved.

Are We There Yet?

Is this it? The end? Of the bad times? Of the recession and all it’s many manifestations? Or did the recession end quite some time ago? Or are we simply poised, ever so fragile, between more severe peaks – make that troughs – to come?

worldrecession

I don’t know about you, but I’m confused. And also just a bit (well, maybe more than a bit) irritated. If economic indicators and official numbers are so good, if consumer spending is increasing and unemployment is slowing (and those are good things, right?), why do I see such widespread economic worry, depression about the depression, and a sense that each new “surprise” on the financial front is not really a surprise at all? Why do I know so many families struggling with how much they can afford? With how to plan for the future while living in the present responsibly? With how to teach their kids to be prudent without worrying them?

Why am I so bothered by the exhortations to both spend in order to save the economy and save in order to be responsible citizens? Is Greece ok now, or just ok for now? How much was indeed known by whom – and when – on Wall Street? Business as usual or something sinister and illegal? Something barely legal that shouldn’t have been? And what’s the difference between shorting as a responsible way to hedge bets and make profits – the all-American way – and just plain old bad greed?

What’s the difference between a good story and the real story? I’d sure like to think I’m getting closer to, rather than farther from, the answers…

Copyright © 2010 Marlin S. Potash. All rights reserved.