The annual family shareholder meeting for a 100-year-old business hit a snag. Some of the family members argued that they should be receiving more in dividends. Others argued the dividends should be reinvested in the business.
On the surface, this appears to be a technical disagreement over dividend distribution. When you look deeper, though, it’s an emotionally-driven issue.
Advisors to enterprising families are often asked to make recommendations on money issues. Typically, advisors search for the “right” answer. But, in enterprising families, money decisions are not cut-and-dry. Money represents security, freedom, legacy, identity, and more. It elicits varying emotions inside each individual—which makes money-making decisions so complex.
In this article, authors Anneleen Michiels and Claudia Binz Astrachan explain that underlying beliefs about money shape financial decisions. As such, it’s advisors’ jobs to help families tease these beliefs to the surface, so that families can make informed financial decisions.
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