Mammoney - Your Ultimate Guide to Personal Finance & Investing

How the Gerdau Family Built a Governance Model That Lasts Generations Introduction In an era where most family-owned businesses collapse by the third generation — with statistics showing that only about 12% survive to the third and a mere 3% to the fourth — the Gerdau Group stands as a towering exception. Founded in 1901 by João Gerdau in Porto Alegre, Brazil, as a small nail factory, the company has evolved into one of the world’s largest steel producers, operating in 10 countries with more than 30,000 employees and annual revenues exceeding $13 billion (as of recent reports). What is most remarkable is not merely its financial success, but the sophisticated family governance architecture that has enabled five generations of the Gerdau family to maintain unity, purpose, and control while professionalizing management and expanding globally. This article examines the deliberate, decades-long construction of a governance model that has preserved wealth, values, and influence across more ...

The Psychology of Wealth: Why Family Protocols Must Address Emotions, Not Just Money Introduction Wealth preservation across generations is often treated as a purely technical exercise: trusts, tax strategies, asset allocation, and legal structures. Yet century after century, the data remain stubbornly consistent—approximately 70% of wealthy families lose their fortune by the second generation and 90% by the third (according to studies by The Williams Group and Roy Williams). The surprise is not that taxes, markets, or bad investments destroy wealth; those factors are manageable. The real destroyer is almost always human: emotions, unresolved conflicts, mismatched values, entitlement, shame, guilt, sibling rivalry, and the unspoken psychological weight of inherited money. Family protocols (also called family constitutions, governance charters, or family agreements) that focus exclusively on financial rules while ignoring the emotional and psychological architecture of the family are th...

How Rich Families Stay Rich: The Role of Governance and Legacy Planning Introduction In an era where immense fortunes are amassed through entrepreneurship, innovation, and strategic investments, the perpetuation of wealth across generations remains a profound challenge for affluent families. Historical patterns reveal that wealth accumulation is often fleeting; studies indicate that approximately 70% of wealthy families lose their fortunes by the second generation, escalating to 90% by the third, primarily due to a lack of structured mechanisms to manage and transfer assets effectively. This phenomenon, often encapsulated in the proverb "shirtsleeves to shirtsleeves in three generations," underscores the vulnerability of family fortunes to dissipation through poor decision-making, internal conflicts, or inadequate preparation. Family governance and legacy planning emerge as critical safeguards, providing formalized frameworks that align family members' interests, preserve...