Family Fortunes: How to Build Wealth and Hold on to It for 100 Years; Bill Bonner

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Hristo Botev
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Family Fortunes: How to Build Wealth and Hold on to It for 100 Years; Bill Bonner

Post by Hristo Botev »

https://www.bookdepository.com/Family-F ... 1118171417

Right book, right time for me. I recommend it for anyone trying to pursue ERE with kids, taking a multi-generational long view. Because it's Bonner, it's got a whole lot of "the sky is falling" in it, which of course speaks to me. But I read it as a book that provided some "how-to" ideas for building generational family resiliency. And, what really struck me, and as I've said elsewhere here before, everything I seem to be reading lately--whether from Bonner, Kingsnorth, Charles Hugh Smith, JMG, Wendell Berry, Kalmus, Greenfield, Radigan Carter, or of course @Jacob--all seems to come to the same basic conclusion, which is some form of focusing on resiliency and decoupling/decentralization, ultimately focusing on skills, simplification, and family and/or community building more than picking the right investment strategy or whatever.

Interesting Bonner concludes with recommending a rural "family stronghold" as the ultimate insurance policy. I'd be interested to hear Bonner and JMG debate that point, as a lot of the reasons Bonner gives for why a rural stronghold makes more sense than an urban one are ones that I know JMG could easily refute, and are even ones that I know several folks on this forum (including of course @Jacob) have already disproved; and I think Bonner misses some of the pros that urban living can bring in a crisis, and he certainly misses some cons (e.g., he seems to think that by virtue of owning a rural family stronghold that he visits occasionally he will be able to rely on his neighbors for support--hundreds of miles of surrounding "armed hillbillys" who presumably will defend him if SHTF; I'm oversimplifying for sure, but I can't remember whether it was JMG or CHS who came to the opposite conclusion, which is that those rural neighbors are going to know exactly where to go first when SHTF and we're living in a zero-sum situation, and that's the jackass city slicker with the rural compound that is usually vacant that likely has buried gold and a pantry full of good eating).

As for me, if at all possible the plan will be "both/and"--meaning I'd like to maintain both a rural "family stronghold" and a townhouse; which, of course, is what the Bonner family appears to do in practice anyway. And with healthy family relationships and enough family members, there'd almost always be family members at both the rural stronghold and the townhouse.

Also interesting that Bonner's survey of various successful (and not successful) family fortunes comes to one unmistakable conclusion: you build and preserve family fortunes through business, not really investments, and, funny enough, it's fights over how that family business should be run that also result in the loss of the family fortune.

Anyway, good book, and one I'll certainly return to from time to time as I try and work towards intergenerational "wealth" (by which I just mean resiliency).

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Re: Family Fortunes: How to Build Wealth and Hold on to It for 100 Years; Bill Bonner

Post by jacob »

Hristo Botev wrote:
Fri Feb 26, 2021 8:28 am
... but I can't remember whether it was JMG or CHS who came to the opposite conclusion, which is that those rural neighbors are going to know exactly where to go first when SHTF and we're living in a zero-sum situation, and that's the jackass city slicker with the rural compound that is usually vacant that likely has buried gold and a pantry full of good eating).
That was CHS in Survival+. Possibly also JMG but I don't know.

I bet that for the most part people are talking their book, that is, trying to rationalize their personal preference for city/country using resilience or whatever terms. In the standard "complexity" framework, the question is who/where will be able to increase the complexity of their "operating system" when the pressure is on and who will collapse into their respective subsystems. Would city-people be better at building community and coordinating than country-folks would be at being self-reliant when their trucks are no longer running and the power has been out for weeks? I'm not sure because the human capacity for complexity is for the most part already maxed out and directed at solving other problems.

Qazwer
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Re: Family Fortunes: How to Build Wealth and Hold on to It for 100 Years; Bill Bonner

Post by Qazwer »

Interesting book. Have to figure out if worth reading. I am going to use a vague form of wealth management thinking to analyze one thing you mention in it - given I have been thinking about it. I am going to also mention a point that the author mentions in his newsletter that seems to be a contradiction to his book.
Picking a rural area is a contrarian economic bet. Worldwide cities are booming. People are moving from rural to urban. Rural areas are becoming poorer. There is less access to opportunity that the denser networks of cities have, technologies lag. Urban areas are converging more in similarity and ability if successful in one to move to another. So rural is contrarian. But the bigger problem is it is a concentrated bet. Which rural area are you going to pick that you are sure will hold up for a 100 years? How will your family know when that bet is wrong? How will they be able to remove assets at that point (very fixed ones)? I guess with a large enough family you could hedge your bets - uncle billy the farmer, uncle Steve the technology worker in the city. But there will be drift in the family then with them having less closeness than in a single rural area vs how do you get them back once they have been to the city.
So you lose liquid assets. Liquid assets which the author also highlights for the ultimate non-concentrated bet - international living.
https://www.rogueeconomics.com/bill-bon ... e-bargain/

So summary
Rural family business is a concentrated, contrarian bet
Which makes you have to ask which one? How do you know if/when you made a mistake?

Hristo Botev
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Re: Family Fortunes: How to Build Wealth and Hold on to It for 100 Years; Bill Bonner

Post by Hristo Botev »

@Jacob: I grew up listening to that Hank Williams Jr. song "Country Boy Can Survive," and of course given where I grew up and who I hung out with I sang along as if I were in fact a country boy that could survive (I'm not, as I can neither "skin a buck" nor "run a trotline"). But as silly and as red-meaty as the song is, it presents an interesting dichotomy as between Jr.'s "country boy" and his NYC, businessman good friend who "was killed by a man with a switchblade knife for 43 dollars." But you're right, what's Jr. going to do when he can't get fuel for his Ford 7.3 Powerstroke Diesel (perhaps pay SClass for some biodiesel?). Personally, figuring out where my "stronghold" is going to be is so far down the road it's not even really worth worrying about; I should be focused on building some resiliency right now, where I'm at. For now, my "stronghold" is in my intown townhouse; it's a whole lot of baby steps from here to a place where I'm comfortable that my kids have what they need to weather whatever is coming.

Hristo Botev
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Re: Family Fortunes: How to Build Wealth and Hold on to It for 100 Years; Bill Bonner

Post by Hristo Botev »

@Qawzer: I probably should have mentioned that in the book Bonner dedicates a good bit more in page count to discussing the benefits of the hedge of having roots in more than one country, and the various strategies, pros, and cons of that particular hedge. He's clearly someone who thinks he can still be "an American" even living as an expat trying to reduce his US and state tax liability. I'm not quite to that point (ha!), though I won't lie I did look a few weeks ago to see what sort of investment would be required to buy a second passport in the country where I served in the Peace Corps, where I could relearn the language pretty quickly if needed. How times have changed. DW shot down that idea pretty quickly, however.

Laura Ingalls
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Re: Family Fortunes: How to Build Wealth and Hold on to It for 100 Years; Bill Bonner

Post by Laura Ingalls »

As the spouse of someone with ag land in his family that dates back to the 1860’s and the actual homestead act, the homestead is not some fantastical tool of resilience and wealth making or keeping. Instead it is a something to be fetishized by the oldest generation and something for the younger generations to joke about as their share is so fractionalized as to be semi worthless. The youngest generation will have shares of the lox varying from 25% to 3.1%. My kids will have a whopping 4.2%.

People living rural often don’t have more resiliency and instead are way car dependent. I loved my garden, chickens and kickass sunsets while in the county. Way less fond of the snow removal on 1/3 mile driveway, having kids with crazy long bus rides to get to public school and the logistical nightmare of having kids in any afterschool activities.

Hristo Botev
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Re: Family Fortunes: How to Build Wealth and Hold on to It for 100 Years; Bill Bonner

Post by Hristo Botev »

@Laura Ingalls: I should add that it was the senior Bonner's take of having a rural "Family Stronghold" as an insurance policy, resiliency hedge. But, he juxtaposed his wife's (I think) more positive spin into the chapter, which is that it really doesn't have anything to do with a hedge so much as it is a way to help keep the family together: a place for grandparents to live, to spend holidays together as a family, to have "family office" meetings, to be where family photos/paintings/heirlooms/jewelry are stored, and to be the setting for the family legend, etc.

Also, ETA that I know that I certainly wouldn't want to live out in the country currently, as I'm pretty wedded to the kids' in parochial school and in after-school sports activities thing; and no way in hell I want most of the time I spend with my kids to be hours in the car chauffeuring them from one thing to the next. Urban for the win for me in that category, where we've got everything except weekend travel tournaments within walking or biking distance (or at least a very short drive). But, the idea of a family homestead that could be shared among multiple generations is appealing, provided you can work out what would likely be the very big headache of figuring out who (or what) "owns" what; who gets to use what and when; and so forth.

Question: Do you think that the ag land you married into has provided a positive adhesive for the extended family; or do the negatives (bickering about the shares and what to do with it and who gets to use it, etc.) outweigh the positives?
Last edited by Hristo Botev on Fri Feb 26, 2021 12:09 pm, edited 3 times in total.

Qazwer
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Re: Family Fortunes: How to Build Wealth and Hold on to It for 100 Years; Bill Bonner

Post by Qazwer »

We set our identity, built from childhood . In times we feel that our unsettled, we look for a new path. That path is informed by our childhood too. But it is not from the well formed bits - that went into our current identity. It is from an aspirational thing or half former idea we had then. Go back to nature, hunt your own food, or become an engineer or carpenter. These paths all have strengths and weaknesses, but we do not know them. Given how we built our self enforcing identities, it is likely that those near us will also not know them. There is a feeling he world is changing. I keep hearing it, in real life too. I do not know if that is true or an artifact of not knowing the world is always changing and echo chambers. I need to step back with an honest interpretation of my identity and reasonable pathways given starting point.

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Re: Family Fortunes: How to Build Wealth and Hold on to It for 100 Years; Bill Bonner

Post by Alphaville »

Qazwer wrote:
Fri Feb 26, 2021 10:16 am
Rural family business is a concentrated, contrarian bet
a decade or two ago i took that bet and lost :lol:

(even if it might eventually be correct some day, timing matters.)
Laura Ingalls wrote:
Fri Feb 26, 2021 11:46 am
Way less fond of the snow removal on 1/3 mile driveway
i had a much much longer "driveway" and so the vehicle wear and tear was brutal. the memory of mandatory gas guzzlers + 00's prices at the pump still hurts.

that plus constant wood heating plus plus plus made a huge carbon footprint.

we moved back to the city to live without cars--and other factors mentioned by @qazwer

nevertheless we regret nothing :D

(seriously, it was good learning)

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Re: Family Fortunes: How to Build Wealth and Hold on to It for 100 Years; Bill Bonner

Post by chenda »

@alphaville - I think you mentioned in another thread you have a cabin, is that a rural second home ? Just interested in how you visit car free or if you hire one when you need or something ?

Whilst I definitely lean towards small city urban as the optimal location, I wonder if the rural vs urban narrative is a bit too binary. A lot of rural Europe, and maybe parts of North America, are not that far from a town and only an hour or two from a city. Car dependency is more a matter of degree; you can often cycle or walk into a village for basic amenities, bus to town or city.

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Re: Family Fortunes: How to Build Wealth and Hold on to It for 100 Years; Bill Bonner

Post by Alphaville »

chenda wrote:
Fri Feb 26, 2021 3:50 pm
@alphaville - I think you mentioned in another thread you have a cabin, is that a rural second home ? Just interested in how you visit car free or if you hire one when you need or something ?
yeah, that was our home for years. we still go there in between places/during transitions. might retire there too, who knows.

i call it a cabin because that's how people most easily understand rural getaway homes that are not your main residence-- though it's not actually made of logs hahaha. bit of a language/communication hack. i guess "cottage" would be more fitting, but that makes me think of cheese :lol:

we haven't visited since covid, last time we drove there we went on a rented van during good weather season, picked up/dropped off stuff. van has enough ground clearance.

in bad weather... we'd need to leave rentals parked "in town" and get picked up by family. then we can borrow a truck to get around if needed because of infinite mud.
chenda wrote:
Fri Feb 26, 2021 3:50 pm
Car dependency is more a matter of degree; you can often cycle or walk into a village for basic amenities, bus to town or city.
due to rough roads and distance, the only alternative for us would be horse; then the horse would get spooked or killed by incoming automobile :?

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Re: Family Fortunes: How to Build Wealth and Hold on to It for 100 Years; Bill Bonner

Post by chenda »

@alphaville ah I see, yes I remember you posting about it now. I like the Russian word Dacha :))

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Re: Family Fortunes: How to Build Wealth and Hold on to It for 100 Years; Bill Bonner

Post by Alphaville »

haha! yeah. i might call it the dacha. i'll live it up like a soviet apparatchik :D

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Re: Family Fortunes: How to Build Wealth and Hold on to It for 100 Years; Bill Bonner

Post by Sclass »

Not to derail the Bonner suggestion, but this one was another interesting book on the same topic.

Family Wealth--Keeping It in the Family: How Family Members and Their Advisers Preserve Human, Intellectual, and Financial Assets for Generations by James E. Hughes.

It’s such a manipulative strategy for creating an everlasting dynasty it’s almost wicked. He calls for a family religion and a a family “bible” of rules to live by as well as leadership to teach and enforce the family rules. Saving and investing are the backbone but it’s more about a structure to enforce saving, investing in not just money but personal growth intentionally targeted for business growth. More shocking was his appearance in James Johnson’s movie “The 1%” where he tailors a plan for their clan to maintain their wealth. The book encourages wealth builders to encourage their heirs of heirs beyond the grave to take joy in accumulating money and power. The idea is not to become Vanderbilts (shirtsleeves to shirtsleeves in two generations).

After reading it I realized the future is pretty dark if the rich follow his instructions. Without social upheaval the game can get locked up by a plutocracy.

It reminded me of the Rothschild family plans laid down by M. Rothschild in the the books by Nial Ferguson. Shirtsleeves to shirtsleeves seems to be the norm but I wonder how often is it not the case. Even if a few families “stick to the plan” a few generations, the math is terrifying.

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Re: Family Fortunes: How to Build Wealth and Hold on to It for 100 Years; Bill Bonner

Post by nomadscientist »

"After reading it I realized the future is pretty dark if the rich follow his instructions"

lol

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Re: Family Fortunes: How to Build Wealth and Hold on to It for 100 Years; Bill Bonner

Post by 7Wannabe5 »

Another way to split the difference between rural and urban is to choose a city that is not part of huge grid of interlocking metropolitan areas. My new location is within a large city proper, but close enough to very rural areas that median resident probably owns a snowmobile, ice shanty, or boat.

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Re: Family Fortunes: How to Build Wealth and Hold on to It for 100 Years; Bill Bonner

Post by Toska2 »

I would take the hillbilly over the city slicker for communication, coordination and whatnot. Regardless of their ruralness now-days, they are friends or friends of friends of every other hillbilly in 20 miles.

As of rural estates, my family's is worthless divided up between the fourth generation. Most of us are so far removed from it that even if it stayed as one chunk of property we wouldnt know how to keep it together.

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Re: Family Fortunes: How to Build Wealth and Hold on to It for 100 Years; Bill Bonner

Post by Qazwer »

@Toska2 you are assuming that the next problem would favor a tight smaller connection over a larger looser one
It could be closer to wars of conquest of Japan where an enlarging army overwhelms a smaller area. Or it could be slower with increasing tax by the city folk enforced by that similar army. It could also happen that the area you choose happens to be rich in some mineral so it is fought over - or a prime location etc
It is hard to predict the future with there having been so many pasts.

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Re: Family Fortunes: How to Build Wealth and Hold on to It for 100 Years; Bill Bonner

Post by Toska2 »

I am assuming that the city turns on itself before it amasses enough cohesion beyond what hillbillies have and their skills.

I noticed most riots didnt travel far.

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Re: Family Fortunes: How to Build Wealth and Hold on to It for 100 Years; Bill Bonner

Post by Alphaville »

Toska2 wrote:
Sun Feb 28, 2021 6:43 pm
I am assuming that the city turns on itself before it amasses enough cohesion beyond what hillbillies have and their skills.
funny story, my wife just got off the phone with her mom. she caught up with all the gossip, which was mostly about hillbily relative shenanigans. one damn disaster after another.

i don't share your faith in hillbilies :lol:

seriously, all the cousins with ability got an education and moved away. the ones left behind... aren't the sharpest.

in our family anyway.

(this contributed to the failure of our "back to the land" project btw)

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