Book Review: Wealth by Stuart Lucas

If you have wealth, you want to protect it. And even help it grow further. If you are looking for a book to help you do those things, you might consider Wealth: Grow It, Protect It, Spend It and Share It by Stuart Lucas. Now, this book was published in 2006, and it is aimed at high net worth individuals. The idea is to grow your wealth so that you can enjoy it now, share it with others, and pass it along to your children (and hopefully set something up so that your grandchildren get a piece as well).

Wealth is written by Stuart Lucas. He is an heir of the Carnation (you know, the food products company) fortune, as well as a wealth manager. He has been recognized by Forbes for his investing ability as a mutual fund manager and is the Chairman of Wealth Strategist Network LLC. (This group is putting on a Private Wealth Management course at The University of Chicago Booth School of Business.) The forward to the book is written by Joe Mansueto, the Chairman and SEO of Morningstar. So, dude knows his stuff. And the book is an interesting read — even for those of us who are not yet high net worth individuals.

Wealth follows a logical course through helping you create a plan for protecting and growing your wealth. There are chapters on defining your values, how to use taxes to your advantage, looking at different types of investors, defining financial objectives, how you can make giving part of your wealth program, and wealth transfer. After each chapter is a helpful section on having a family discussion about the principles described, as well as a conclusion. One of my favorite chapters is Chapter 2, which goes through the 8 principles of wealth management:

1. Take charge and do it early.
2. Align family and business interests around wealth-building goals and strategies.
3. Create a culture of accountability.
4. Capitalize on your family’s combine resources.
5. Delegate, empower and respect independence.
6. Diversify but focus.
7. Err on the side of simplicity where possible.
8. Develop future family leaders with strong wealth management skills.

I think #3 is vital for those looking to increase their wealth. Without accountability and a method of holding yourself (and others) responsible for their mistakes, you can end up with a rapidly decaying family fortune.

Another interesting discussion is the emphasis that Lucas places on leakages. These are things that decrease your wealth: taxes, fees, spending. When I talked to him last week, Lucas pointed out that he was very deliberate about using that word: “Some people thought that the work ‘leakages’ was too charged. But the whole point is to get you to think twice about where your money is going. Once you add up taxes, fees for investments and advisors, and your spending habits, during a bad time like this recession you discover that it doesn’t take very long before your assets are cut in half. You have to pay attention and adjust your thinking and spending during times of lower returns.”

I found several helpful nuggets of information in Wealth, and think it is well-worth adding to your personal finance library.