Q: How do you make a small fortune in a construction business?
A: Start the business with a very large fortune.
“<Insert opportunity here>” has the potential for success which will lead to "Generational Wealth"; what parent would ignore an opportunity that will do so much for their children? I ignore these opportunities and sometimes speak out against them. Real opportunity is when you want or enjoy something so much you don't care if you get paid. Unfortunately, generational wealth has almost nothing to do with inherited money. I have fourth generation firsthand experience in this area.
From my mother's side of the family:
My great-great grandfather was a pastor in lower Alabama who started a church; one of his sons (John F) became a doctor in the early 1900's and another (Max) was a lawyer. The doctor was my great granddad. He had exceptional character and a strong work ethic and worked hard in the roaring 20's. When the great depression hit, he was in a position to buy land as people needed to sell what they had to feed their families. He thrived during the great depression because labor was inexpensive and the land he owned produced crops that were in demand. Doctors were scarce in lower Alabama and he treated people without regard for how much they could pay for his services.
Perhaps because John F worked so much, or perhaps because he was "rich", one of his sons, my grandfather Fred didn't learn a good work ethic; he had good character, but was not a hard worker - when he married my grandmother, times were tough; she ended up getting a job at the post-office to support the family. Finally John F died and left Fred a huge estate of land – after that, he didn't have to work for the rest of his life. He had 3 daughters; my mom and two aunts. Momma went to college at Auburn and got a degree in teaching and married my dad when she graduated. She taught at an elementary school until I was born a couple of years later. Since early childhood I had a passionate curiosity for numbers and measurement so she taught me math, and then she taught me algebra; not in a lecture format - she would make some notes and let me spend days trying to figure out what they meant. Eventually I started discovering things in books that I could figure out; early grade school was an exciting time for me; our options as children were to play peacefully in the yard or read/study quietly inside.
From my father's side of the family:
My great grandfather emigrated from Italy with nothing in 1908, my grandfather was born in 1909, and my dad was born in 1938. I don't know what my great grandfather did for a living but I know he worked incredibly hard - over his lifetime he had 23 children and supported them all. One of his sons, my grandfather "Poppa", was a self-made man. In the 1930's he risked his life as a navigator and chief mate working on a ship in the merchant marine fleet. He was making $50 a week, which was excellent money at the time, but on returning from sea when my dad was 2 or 3 years old and finding my dad didn't know who he was, he quit and joined the police force making $5 per week as a beat patrolman. Poppa was a lifelong learner. One of his core values was continuous self improvement; 35 years later he retired as the assistant chief of the Mobile police department. My dad learned strong character and work ethic; he worked his way through college and graduate school, earned a PhD and DVM, worked hard his whole life, started and built a company, put 6 children through college without student loans, and retired owning a lot of land. After we (siblings) were married and starting families of our own, he paid off the mortgages on each of our houses.
Generational Wealth has nothing to do with leaving money to your children. It's about teaching and demonstrating to your children the following things:
1) High character
A person of high character believes that nothing is free. She/he does not accept anything from anyone without making sure that a proper price has been paid, in whatever form of value is appropriate. In the cases you are required to accept a "free" benefit, the exceptional person gives it away to an organization that is making the world a better place.
2) Exceptional work ethic
Unfortunately, in this unfair world, you have to work for free for an extended period of time before you're allowed to benefit from your efforts. Sometimes you have to work for free and get nothing of value in return. A person with an exceptional work ethic does this cheerfully and with his/her whole heart for the reward of knowing he/she is doing the right thing.
3) Common sense
A person with common sense makes his/her own plans and executes them without being swayed by opinions of others. She/he uses time tested techniques for success and a good knowledge of world history as a guide. She/he watches people over a period of time to correlate what they're doing that's working and what they're doing that's not. Paying attention to successful people is the great teacher in this area.
4) Excellent decision making skills
Making decisions in the face of uncertainty is a learned skill. Know and weight all the dimensions of each decision: opportunity cost, time cost, worst downside, probable downside, potential upside, probable upside, dependence on outside events, dependence on skills, available resources, etc.
5) A solid college or better education
Everyone is ignorant at some level; fortunately, a higher education helps most people be less ignorant in some areas of life. Wise parents teach children to focus on practical areas of learning which are applicable to things they enjoy doing and/or show them how to accomplish them with greater effectiveness. They take a lot of courses unrelated to their "perfect job" and pick up a broad understanding of a lot of different subjects. The world is a stage and you never know who is in the audience, and you won't get to perform if you don’t have the required vocabulary to ask an intelligent question.
6) Continuous lifelong learning
Count the number of books in your house and the content of them. When I grew up, I used to love going to "Poppa's" house because his library had hundreds of books in it - browsing the shelves was fascinating because he loved to read about and learn "interesting" stuff. When I was a young man, I spent hundreds of dollars a year on books and audio tapes; in the last decade I switched over to downloaded free content; nearly every PhD program in the world (especially the exceptional ones) puts a lot of course work online for free and nearly every PhD candidate publishes his/her dissertation for free. There is no excuse for not becoming a graduate level expert in your area of interest over the course of a decade or more.
7) Practical/personal confidence
Winning gracefully is a learned behavior. Treating every loss as an opportunity to learn is also a learned behavior. Keeping a positive outlook in the face of adversity is a key life skill. You don't need encouragement because, in fact, it's you that is encouraging everyone around you and by doing so, helping them be more than they otherwise could have been. The world is a stage and you never know who is in the audience, and you won't get to perform if you don’t have the required courage to ask a stupid question.
8) Systems theory skills
Every system has written rules, unwritten rules, and actual rules. Learning to explore the actual rules of a system is a key characteristic of a master in a given field. Learn to use leverage in its various forms; read the biographies of people who were widely considered accomplished in your field, and others. In any system where you aren't getting the results you want, it's not because you don't have the necessary resources, time being the most valuable - it's because you're not following the actual rules; you don't know them yet. There are no shortcuts, and there's no free lunch.
