Wealth

Being Rich Isn't Easy

E.A. Stuart established the Pacific Coast Condensed Milk Company in 1899, paying $25,000 for the technology to make evaporated milk. He had his share of business misfortunes, but lucked out when the Alaskan Gold Rush began and prospectors stocked up on evaporated milk. The Pacific Coast Condensed Milk Company became the Carnation Company, one of the world's leading food makers.

In 1985, Nestlé acquired Carnation for approximately $3 billion. The family of author Stuart E. Lucas owned almost 30% of Carnation, and suddenly had $1 billion cash collectively. The family had not prepared for the company's sale and was not ready to handle such wealth. The family's portfolio, better managed, might have grown by more than 100% from 1987 to 1994, yet it hardly grew at all. In fact, various costs and fees were seriously eroding the family fortune.

The family members met to decide what to do. Their discussions defined a strategy for wealth management founded in the conviction that they were stewards of this fortune, that its management had to be rooted in values, and that family peace, communication and harmony had to set the context for wealth management...