Ever considered the idea of starting a family bank?
My friend, David McAlvany is the author of The Intentional Legacy. He says that family banks can preserve assets, build identity and loyalty, and bless your heirs. The bank’s purpose is to financially assist family members with education, home buying, new businesses, or health care. Imagine a bank free of institutional constraints, where a family council sets rules for deposits, withdrawals, loans and repayments. Responsibility would be taught and financial stability provided. Even tax savings would be possible with proper documentation. Those who reach a certain age and live a mature lifestyle would be encouraged to participate in annual meetings. These are opportunities to pray, review requests, analyze investments, and celebrate. “Without counsel plans fail, but with many advisers they succeed.” (Proverbs 15:22)
A code of conduct would require applicants to meet certain goals before becoming eligible for consideration. Penalties would need to be in writing should any problems arise. For example, an interest free loan could become interest bearing should the borrower fail to abide as agreed. Family banks could also forgive loans or gift heirs the loan amount. Poor credit could be irrelevant and overlooked within the family bank as long as certain conditions are met. Responsible financial behavior and accountability would be expected. Entrepreneurs could have their dreams supported with flexible lending terms. I think family banks are a good idea for those looking for ways to help your family now and to teach the next generation.
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