Things Parents Wish They Knew Earlier: The Family Risk Management Handbook of Practical Solutions for Life’s Challenges

By Patrick Ow

In this incredibly in-depth handbook for families, Patrick Ow (of PracticalRiskTraining.com) gives an amazing amount of how-to detail on pretty much everything you need to know to succeed as an individual, couple, and family.

You will learn how to:
1.Identify goals, opportunities, and risks.
2.Accomplish something with your life and wealth.
3.Improve your finances and financial well-being.
4.Take care of your health, wellness, and happiness.
5.Seek better outcomes for your children (and young adults).
6.Provide better educational outcomes for your children.
7.Find a job fast and keep it (or love it).
8.Take a career risk (or opportunity) to fulfill your purpose.
9.Start a side business to secure (and future-proof) your income.
10.Make money from the gig economy.
11.Preserve and sustain your family business.
12.Overcome parenting and family challenges.
13.Make better (quality) family decisions.
14.Use your personality to succeed.

The handbook reveals practical information, how-to strategies and solutions, and a decision-making framework for making informed decisions.
The handbook’s goal is to strengthen families.

Based on corporate risk management practices, the book seeks to provide answers to the question, "What families must do right to succeed?"
Do not miss this handbook that anyone aspiring to build a strong family must own. It will be your one-stop resource for facing everyday challenges and making intelligent choices.

Click the "Buy" button to access this extensive knowledge base on everything you need to know.

About Patrick OW

Patrick Ow is a Risk Specialist and a corporate and personal trainer and coach at Practicalrisktraining.com.
As a Chartered Accountant with over 25 years of international risk management and corporate governance experience in the private, not-for-profit, and public sectors, he helps individuals and organizations make better decisions to achieve better results.

Patrick has authored several eBooks including Strategic Risk Management Reimagined: How to Improve Performance and Strategy Execution, Things Parents Wish They Knew Earlier: The Family Risk Management Handbook and Shocking Secrets Every Worker Needs to Know: How to Future-Proof Your Job, Increase Your Income, Protect Your Wealth in Today's Digital Age.

Contact - [e-mail]

• Language: English
• Publisher: Patrick Ow
• Release date: Jun 12, 2021
• ISBN: 9781005399276

Patrick Ow

Patrick Ow CA Risk SpecialistRisk & Performance Management Specialist | Corporate & Personal Trainer & Coach at PracticalRiskTraining.com | Corporate Planning | Strategy Execution | Business Continuity | Workshop FacilitatorHelping organisations and individuals make better decisions to achieve better results.Professional profile• A Chartered Accountant with 25+ years of experience in governance, management, risk and performance.• Worked in public sector, not-for-profit and for-profit organisations with budgets of up to AUD25 billion and a workforce of up to 12,000 employees.• Adept in helping organisations and individuals make better decisions to achieve better outcomes and results.• Strengths in big-picture strategic thinking and strategy translation and execution.• Recognised for being practical, understanding of issues and knowing what to achieve.• Proven track record for encouraging open discussions in a friendly and trustworthy manner.• Managed a team of up to four professionals and influencing stakeholders for action.To learn more about how I help corporate executives and individuals, go to Practicalrisktraining.com or email [e-mail].

Book preview

Things Parents Wish They Knew Earlier

The Family Risk Management Handbook of Practical Solutions for Life’s Challenges

Patrick Ow

Founder of PracticalRiskTraining.com

Copyright © 2021 by Patrick Ow

All rights reserved. This book or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permission of the writer except for the use of brief quotations in a book review.

The author is not a licensed financial advisor or counselor. The author only offers education and training, not prescriptive or financial advice. Therefore, the information contained within this book is strictly and solely for educational or training purposes. If you wish to apply the training content contained in this book, you’re taking full responsibility for your actions.

The author has made every effort to ensure the accuracy of the information within this book was correct at the time of publication. The author does not assume and hereby disclaims any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result from accident, negligence, or any other cause.

ISBN: 9781005399276

Practicalrisktraining.com/Families

Dedication

For Mei, Olivia, Sarah, Nicole, Esther and Benjamin

Table of Contents

Why read this family risk management handbook?

Chapter 1 — Identify goals, opportunities, and risks

Chapter 2 — Accomplish something with your life and wealth

Chapter 3 — Improve my finances and financial well-being

Chapter 4 — Take care of my health, wellness, and happiness

Chapter 5 — Seek better outcomes for my children

Chapter 6 — Provide better education and learning for my children

Chapter 7 – Keep my family safe and secure

Chapter 8 — Find a job fast and keep it

Chapter 9 – Take a career risk to fulfill my purpose

Chapter 10 – Start a side business to secure my income

Chapter 11 – Make money from the gig economy

Chapter 12 — Preserve and sustain my family business

Chapter 13 — Overcome parenting and family challenges

Chapter 14 — Make better family decisions and choices

Chapter 15 – Use my personality to succeed

Why read this family risk management handbook?

This is an incredibly in-depth handbook written for individuals, couples, parents, and families to overcome everyday challenges and to succeed and achieve better outcomes.

This handbook gives an amazing amount of how-to detail and action steps, practical strategies and solutions, and information on pretty much everything you need for making better-informed decisions and intelligent choices, including showing you a world-class decision-making process.

By reading this handbook, you will learn how to:

1. Identify and manage goals, opportunities, risks, and uncertainties.

2. Accomplish something with your life and wealth without feeling regretful.

3. Improve your budget, cash flow, finances, and financial well-being.

4. Take care of your health, wellness, and happiness.

5. Seek better outcomes and future for your children and young adults.

6. Provide better education and learning for your children.

7. Keep your family safe, secure, and protected at all times.

8. Find a job fast and keep it even if you don’t like it.

9. Take a career risk or opportunity to fulfill your purpose and passion.

10. Start a side business to secure and future-proof your income and family.

11. Make money from the gig economy smartly.

12. Preserve and sustain your family business beyond the second generation.

13. Overcome common parenting and family challenges.

14. Control your decision-making process and make better decisions and choices.

15. Use your personality to succeed by interacting with people in the way that suits you best.

The handbook’s goal is to strengthen families.

Based on corporate risk management practices, the book provides answers to the question, "What families must do right to succeed and thrive?"

This practical family risk management handbook provides information to individuals, couples, and families on various aspects of starting and maintaining a family, as they go through life’s challenges and as they journey through the family lifecycle.

This handbook is comprehensively written to cover a wide range of topics and challenges that could impact families and to help families make better-informed decisions. Hence, the length and depth of this handbook. Doing anything less would be an injustice to the complexities of starting and maintaining a family.

The 2020 pandemic has taught us a lot about ourselves — and about your true appetite for opportunity-seeking and risk-taking. It has exposed the fragile nature of ourselves, the inadequacies of the society and community we lived in, and our inability to overcome all changes in our lives.

Some people have viewed the situation as an opportunity of a lifetime. Others have feared the worst. Still, others find themselves awash in information and want help making sense of the uncertainty and chaos.

There is no right or wrong perspective. No matter what your outlook is, one thing is clear. The way each of us views opportunities and risks has changed dramatically.

Many people and families are re-examining their risk tolerance and approaches to family risk management, making adjustments that can give them greater peace of mind.

As you read this handbook, I hope you will find it to be as thought-provoking and insightful as I did in its writing. It has been based on my personal experience of raising five children of my own and being part of a faith community where I lead and mentor families that are going through the same challenges.

Many of the information contained in this handbook came from personal experiences and through research. It also came from many mistakes and regrets I have also made along the way. I had wished, on numerous occasions, for someone to have told me about the information contained in this handbook much earlier, telling me the pitfalls or things to consider when I made those decisions. Hence, the title of this handbook.

I realized that the quality of my decision can only be as good as the decision-making process I adopted and the information that is available to me at the time of the decision being made. I don’t have control over the outcome of the decision – good or bad – as we are all living in a chaotic and uncertain world. But I do have control over the decision-making process to make quality or better-informed decisions.

So, this handbook seeks to provide valuable information as inputs into your decision-making making process using a risk-based decision-making framework. Adopt or adapt this risk-based decision-making framework to make important decisions that could affect the future of your family.

Email contact: [e-mail].

Website: Practicalrisktraining.com

Other books by the author

Shocking Secrets Every Worker Needs to Know: How to Future-Proof Your Job, Increase Your Income, Protect Your Wealth in Today's – Available from Amazon.

When Strategy Execution Marries Risk Management - A Practical Guide to Manage Strategy-to-Execution Risk – Available from Amazon.

Chapter 1 — identify goals, opportunities, and risks

One of the greatest risks facing families, arguably, is complacency. It is without a doubt that we are living in challenging times – socially and economically.

Families that fail to take systematic and proactive action will remain exposed. For many families, conversations about risk can be sensitive and uncomfortable. They provide convenient excuses to avoid difficult issues.

The 2020 pandemic crisis reveals fundamental challenges in risk management that families must address and manage.

The first step in the risk management process is to acknowledge the reality of opportunity, risk, and uncertainty. Then ask the question, "What keeps me up at night?"

A discussion of deeply felt personal fears and anxiety can change the future for the family. Denial is a common tactic that substitutes deliberate ignorance for thoughtful planning and meaningful discussions.

What constitutes a ‘family’ has changed

Families are changing in many ways across many countries and continents. The notion of what constitutes a ‘family’ has changed.

Even the term ‘family’ is difficult to define, in some cases. There are now traditional and non-traditional models of ‘family’. They include:

1. Childless couples – It is increasingly acceptable for married couples to elect not to have children.

2. Couples who marry later in life (in their late 30s or later) – More career-oriented men and women and greater occurrence of couples living together. They are likely to have fewer or even no children.

3. Couples who have a first child later in life (in their late 30s or later) – They are likely to have fewer children.

4. Single parent I – High divorce rates contribute to a portion of single-parent households.

5. Single parent II – Young man or woman who has one or more children.

6. Single parent III – A single person who adopts one or more children.

7. Extended families

a. Young single adults who return home to avoid the expenses of living alone while establishing their careers.

b. Divorced daughter or son and grandchild return home to parents.

c. Frail elderly parents who move in with their children.

d. Newlyweds living with in-laws.

8. Unmarried couples – This includes heterosexual and homosexual couples.

9. Divorced persons (no children) – High divorce rate contributes to the dissolution of relationships before a child is born.

10. Single persons (most are young) – Primarily a result of delaying first marriage. This includes men and women who never marry.

11. Widowed persons (most are elderly) – Longer life expectancy, especially for women, means more over 75 single-person households.

These traditional and non–traditional models of ‘family’ have brought about different but significant challenges in terms of family decision-making and how opportunities, risks, and uncertainties are effectively managed within the ‘family’ unit.

Families are confronted with a myriad of decisions

Families are confronted with some very complex and sensitive decisions. Many decisions inherently come down to personality, values, mutual concessions and compromises, and commitment to the relationship and each other.

When two or more people enter a relationship, the number of decisions they make on their decreases significantly because their respective decision circles overlap with members of the family.

Nearly every decision you make individually in a family relationship setting has an impact on the other person. For couples, to maintain a healthy relationship, each partner must at least consider their partner or spouse when making decisions. For families, each member of the family must consider each other’s feelings and requirements when making individual and family decisions.

Family problems come in all shapes and sizes. They include:

1. Instrumental problems involving everyday decisions about money or transporting the children to and from school.

2. Affective issues that concern one or more family member’s feelings and emotions.

For example, getting a child to day-care for the first time may require dealing with instrumental issues regarding transportation and affective issues regarding the child’s fear of being left alone at a strange place for the first time.

Many family decisions can often be subjected to a great deal of conflict and uncertainty. Conflicting pressures are especially likely in families with children or when only one partner works outside the home. This requires a practical decision-making process that people can use and apply in resolving their conflicts and overcoming their situational uncertainty.

Always capitalize on your family strength

Families who define themselves as strong generally say that they love each other, find life together satisfying, and live in happiness and harmony with each other. In short, they are satisfied with their relationships with each other.

To build stronger families, this book seeks to find answers, strategies, and solutions to the question, "What families must do right to succeed?"

All families have strengths

All families have challenges and all families have areas of potential growth.

If one looks only for problems in a family, one will see only problems. But if one looks for strengths, one will find strengths.

And it's not about structure, but about function. There are strong single-parent families, strong stepfamilies, strong nuclear families, strong extended families, strong families with gay and lesbian members, strong two-parent families.

If you grew up in a strong family as a child, it will probably be easier for you to create a strong family of your own as an adult. It's also possible to do so if you grew up in a seriously troubled family.

Good things take time

Strengths develop over time. When couples start in life together, they tend to have considerable difficulty adjusting to each other. These difficulties are predictable. Adjusting to each other is not an easy task. But many couples who start shaky end up creating healthy, happy families.

Strengths are tested through the family lifecycle. For example, couples commonly face many challenges when their children reach adolescence and young adulthood. These transitions along the family lifecycle are predictable. But once the period has passed and the younger generation has gained relative independence from the parents, the family settles back into a more emotionally connected and comfortable mode.

Strong families are not immune to stress and crisis

A family's strengths are tested by everyday stressors and challenges. It will take several years before many couples and families believe they have become a strong family. They know this because they have been tested by the significant challenging events that life and work inevitably bring.

Crises can and do tear families apart. They can also make family relationships stronger. Families in crisis sometimes forget their strengths, unfortunately.

Capitalize on your family strengths

This is where a family's strengths can become the foundation for growth and positive change. Families become stronger by capitalizing on their strengths. Every individual in the family has strengths that they can bring to the table.

The qualities of a strong family include appreciation and affection, commitment, positive communication, spiritual wellness, and the successful management of stress and crisis.

Perhaps the most controversial finding of the family strengths researchers is the importance of religion or spirituality in strong families. People in strong families describe this concept in a variety of ways: some talk about faith in God, hope, or a sense of optimism in life; some say they feel oneness with the world. Others talk about their families in almost religious terms, describing the love they feel for one another with a great deal of reverence. Others express these kinds of feelings in terms of ethical values and commitment to important causes.

Spiritual well-being can be seen as the caring center within each individual that promotes sharing, love, and compassion. It is a feeling or force that helps people transcend themselves and their day-to-day stressors. They focus on that which is sacred to them in life.

What unites the strengths is that each is founded upon a sense of positive emotional connection. People in strong families feel good about each other and genuinely care for each other's well-being.

Decision-making in families

One of the keys to an effective family is the family members’ ability to identify the root cause of the problem and solve problems by identifying effective solutions that meet all requirements.

Families with an effective decision-making process in place are more likely to resolve instrumental problems and affective issues. It is important for families who become stuck and are unable to resolve an issue to learn and implement this process.

Having a simplified easy to use decision-making process can go a long way in minimizing conflicts, maximizing positive outcomes, and increasing the quality of relationships.

Making the best decisions at a particular time

In the face of uncertainty – upside or downside, only judge the quality of your decision at the time it is being made, not after the outcome becomes known. That means a good decision can have a good or bad outcome.

If you make good decisions at the time of making them, there is no place for regret in your thinking. From hindsight, everything looks different. Just continue to make good decisions using your preferred decision-making process. Do not regret if you have made the best decision possible then and the outcome is now out of your control.

It is all about effective communications

The family decision-making process is a communication activity. This communication may be explicit (as when families sit down and discuss a prospective decision) or implicit (as when families choose an option based on their past decisions or some other unspoken rationale). It could be a process that can be filled with tension, extremely pleasant and rewarding, both. Or it could be somewhere in between.

Frequently, there no ‘objective’ way to arbitrate differences. One partner may believe that it is important to save for the children’s future. The other may value spending now (on private schools and computer equipment) to help prepare the children for the future. Who is right? There is no clear answer here.

The situation becomes even more complex when more parties — such as children, grandparents, or other relatives — are involved.

Tips for better decision-making

One of the keys to successful family functioning is the family’s ability to solve problems and set clear boundaries for decision-making.

The following are some tips to help with family decision-making:

1. Avoid discussing an issue or problem at an inappropriate time – Problem-solving tends to be difficult when people are angry, tired, or even hungry. Have a discussion when everyone is calm.

2. Do not begin the decision-making process with a closed mind – You may be surprised at the creative solutions your family creates together when everyone is open and adopting an attitude of mutual trust and respect.

3. Be sure to listen to other people’s viewpoints, feelings, concerns, and requirements – Agree to disagree. Respect people and minimize conflicts. Consider the big picture. Love them for who they are. Be committed to their welfare. Find a win-win outcome for everyone, where everyone can walk away satisfied and committed to the agreed decision.

4. Clarify to make sure you understand correctly and not make erroneous assumptions – Always check your understanding to make sure everyone is on the same page. Assumptions kill. They can set you off on the wrong path.

5. Do not let anger become a barrier to progress or to achieve a positive outcome – Getting angry, criticizing, calling names, blaming, using sarcasm or other aggressive behavior does not help. If you’re angry, take a break. Anger will only increase the tension and result in a bad outcome for everyone.

6. Do not give in just because it is easier – Saying, "You’re right" with a big sigh, or being submissive to avoid conflict is not problem-solving. Its avoidance. A true understanding of self and others is key to conflict resolution in families. So is love for others, loving them for who they are, and not criticizing their behaviors.

7. Be realistic – Try to attach decisions to resources such as time, energy, and money. This shows commitment and understanding.

8. Avoid ultimatums and threats – Ultimatums threaten other people into submitting to what they want. For example, "You’ll do it, or I’ll divorce you!" Pushing someone into a corner and demanding a one-sided decision will not be helpful for family unity and cohesiveness.

9. Be respectful – Refusing to regard individual differences in personalities, goals, values, emotional investments, and lifestyles do not encourage teamwork and family unity, and cooperation.

10. Communicate directly – Using a middle person to communicate with another family member can cause even more emotions to flare. It can also lead to misunderstandings and infighting amongst family members.

11. Be involved and committed in family decisions – If you do not take an active interest in decisions that concern other members of the family, which could benefit from your involvement, do not be hurt when others are disinterested in your problems. Treat others with respect and care, as you would like them to treat you later.

12. Establish suitable boundaries around family decision-making – Determine who will be involved in the process: immediate family, extended family, in-laws, etc. Get to the core or root cause of the problem. Do not attack the identity of the person but address the behaviors.

13. Solving problems as they arise – Competent families solve problems as they arise. Families that avoid problem-solving or seem incapable of dealing with many of their problems have more difficulties in the future.

Decision-making principles

There are three principles that you live by as you go through a joint decision-making process:

1. Communication – Understand one another’s perspective. Let others tell you what they see and what they believe to be true. Understand that their input is valuable and contributes significantly to the outcome, the final decision.

2. Respect – When one member of your family makes his or her decision, openly and wholeheartedly respect their judgment and allow them the freedom to succeed or fail on their own.

3. Trustworthiness – When making your decisions, consistently show others in your family that you can make good decisions on your own. It is what you do consistently that makes a lasting change.

Decision-making in relationships is a great litmus test for the health of your relationship.

Ultimately, the personal decisions you make will define who you’re individually (your identity) and who you’re within your family. When the foundation of a relationship is built upon the pillars of communication, respect, and trust, then it is bound to succeed.

Risk, opportunities, and risk management

"The essence of risk management lies in maximizing the areas where you have some control over the outcome, while minimizing the areas where you have absolutely no control over the outcomes." – Peter Bernstein, Against the Gods, 1996

Let us get technical for the moment.

What is a risk?

Risk is defined in the international risk standard, ISO 31000, as the "effect of uncertainty on objectives".

Note the following about the definition of risk, which will be relevant for identifying and managing family opportunities, risks, and uncertainties:

1. It must start with your objectives and what are you trying to achieve. Having a picture of what success looks like and how you can objectively measure that success. An objective is something that your efforts or actions are intended to attain or accomplish. It is an object or goal of your efforts or actions. For example, you have an objective to pay down your mortgage. Everyone has goals to achieve, actions to take.

2. There is an element of uncertainty to the achievement of your objectives. Uncertainty causes you to feel uncertain. It is the state, even partial, of deficiency of information related to, understanding or knowledge of, an event, its consequence, or likelihood. Following on from the same example, the uncertainty around paying down your mortgage is your ability to maintain or sustain your current employment in an environment of high unemployment and economic recession. Understand the context or circumstances of your uncertainty. Identify the root causes of your fears and concerns.

3. The uncertainty that you have identified has an impact – positive or negative – on the outcome you’re seeking to achieve. The effect of that uncertainty on the achievement of your objective of paying down your mortgage is that you may not have a job in six months. When you’re unemployed, you do not have the required income to continue paying down your mortgage. The risk to you, in this example, is, therefore, the risk of unemployment, or the inability to remain in employment.

4. Risk is often expressed in terms of a combination of the consequences of an event (including changes in circumstances) and the associated likelihood of occurrence of that event. Likelihood is the chance of something happening. An event is the occurrence or change of a particular set of circumstances appearing. In the example, the event that could trigger the risk of unemployment for you is the emergence of another pandemic in an already weakened economy. When new strains of deadly virus appear, the likelihood of you being unemployed has significantly increased from ‘low’ to ‘high’. The consequence or impact of the pandemic event on your ability to remain in employment and pay down your mortgage is ‘high’ because you’re the sole breadwinner in your family. Therefore, the unemployment risk to you is now rated as ‘critical’ because the likelihood and consequence of the virus are both ‘high’.

4. The effect of uncertainty is a deviation from what you had expected — either positive or negative. Given your current circumstances, you were expecting to pay down your mortgage over the coming years. But the risk of unemployment may negatively deviate you from achieving that objective.

5. Risk can also present opportunities for you. When the pandemic emerged, there is an opportunity to refinance your mortgage to a lower interest rate package because interest rates have gone down in response to the downturn. The unfavorable economic climate and the possibility of being unemployed may prompt or trigger you to take proactive action to source around for the cheapest interest rate for your mortgage and reduce your monthly mortgage repayment. Therefore, opportunities and risk are two sides of the same coin, so the speak. It depends on how you look at your situation – like a glass half full, or glass half empty.

What is risk management and risk management process?

In the corporate world, risk management as defined in ISO 31000 is the coordinated activities to direct and control an organization about risk. There is no reason why corporate risk management cannot be adapted for families.

As such, family risk management is the coordinated activities to direct and control a family about risk.

The risk management process is a set of proactive and structured activities to identify the unique opportunities, risks, and uncertainties that are associated with the achievement of the family’s goals and objectives.

Family risk management

Family risk management is specifically concerned with improving the likelihood and extent of success for every member of the family and collectively as a whole family. This is achieved by identifying objectives and uncertainties, enhancing opportunities, and controlling risks. It is about enhancing opportunities and minimizing risks for the whole family and individual members of the family.

Individuals in the family have their objectives to achieve. There will be personal opportunities and risks that each member of the family must identify and manage to achieve personal objectives.

As a group of individuals making up the family unit, there will be shared family objectives where every member of the family will agree to achieve collectively as a family. This will present family opportunities and risks that the family would need to identify and manage.

Applying corporate risk management to families

Family risk management brings to families a proven system of risk management like the risk management processes that are routinely used by businesses and other commercial organizations.

In some respects, the discipline of such a process is even more necessary in a family than in a business. Emotional and personality considerations can easily lead to important issues being avoided or poor-quality decisions being made. This results in poor outcomes for families.

There is no reason why you can’t apply corporate risk management to your family, outside of your work, in your everyday living. You may need the right tools and approaches to make informed family decisions and may require assistance and training in doing so. Hence, the main purpose of this book.

Uncertainty management in families

While no one can prevent unexpected events from occurring, proactive steps can be taken to determine where these events might arise. And if it does arise, what are the consequences and actions.

People are uncomfortable addressing opportunities and risks because it requires acknowledging uncertainty. It highlights the limits of their control and risk appetite over the future. And it brings out fears and anxiety in people.

Additionally, most families have a negative perception of risk management because they only concentrate on risk when a crisis occurs. At that point they are in a reactive mode, unable to make healthy decisions or filter through the range of possible threats on the horizon without becoming quickly overwhelmed.

Incorporate risk management into family decision-making

To be effective, risk management must be an ongoing process that is incorporated into the family’s decision-making process. It requires the recognition of uncertainty. It also provides a systematic approach for prioritizing and cataloging both short-term opportunities and risks affecting the family.

It is not feasible to tackle all family opportunities and risks simultaneously. Nor is it logical to put the same efforts, time, and capital toward mitigating each one.

A proper risk management process enables a family to narrow in on the most critical issues that can affect their future. And to then determine how they can control or mitigate the effects of these issues.

Starting the conversation about opportunities and risks

Effective communication about opportunity and risk requires families to have meaningful conversations about how unexpected uncertainties, opportunities, and risks can and do impact the family.

They must approach the topic of opportunity-seeking and risk-taking from a completely personal perspective. That is, they must approach risk management, opportunity-seeking, and risk-taking from an experiential point of view.

Opportunities are upside risks, whereas risks are generally considered as down-side risks.

For some families, it may be easier to start conversations with investment and financial issues first before tackling the more sensitive family communication and relationship issues. For other families, it is the reverse sequence.

Four key questions are central to family discussions about opportunities, uncertainties, and risks:

1. Why does the family want to stay together? What are the benefits of family togetherness?

2. What does the family want to accomplish, especially with its legacy or wealth? What are each members’ goals? What are the collective family goals?

3. What do family members fear the most? What are the uncertainties, opportunities, and risks that are keeping family members up at night?

4. What can be done to enhance the opportunities or mitigate the risks attached to these fears and anxiety? What are the actions that can change the opportunity and risk profile for the family and members of the family?

One of the difficulties in discussing and managing opportunities, uncertainties, and risks is that families are faced with a vast number of issues and challenges. All families will face a wide range of opportunities, uncertainties, and risks that can impact their future and sustainability. Within this range, there will be some issues and challenges that they can easily identify as likely to occur. Other issues can be truly unanticipated.

Once a family has identified the known opportunities and risks and brainstormed about potential uncertainties, they can then envision the type of controls or mitigations they will need to put in place to manage the range of issues they may face. These controls and mitigations will help them achieve their objectives.

Family risk management keeps the family along the right path to success.

Focus on what matters most to families

A family is likely to have a long list of existing and potential opportunities, uncertainties, and risks.

In most cases, however, only two or three of these will disproportionately affect family unity, financial security, or long-term wealth sustainability. Identify and manage these core or critical opportunities and risks rather than try to tackle the entire list at one time.

It is common for family members to place different levels of importance on different risk factors. For example, one family member may feel that geography has become a major roadblock to family cohesiveness. While another member of the family who travels frequently is not concerned about that factor.

It is critical not to allow smaller, trivial matters to distract the family at the expense of more significant issues. Think long-term. Everything is possible, not everything is beneficial.

Families must focus on their known opportunities and risks and identify the ones with the greatest potential for success or harm.

In the same way, they must pinpoint the external factors and categories of influences beyond the family’s control that could lead to significant problems and challenges. For example, political instability or the introduction of government regulation.

To narrow down both categories, the family can apply the following questions:

1. Of the known risks, what are the one or two things that could most dramatically impact the family’s future or survival?

2. What are the internal or external influences, or factors that could lead to significant setbacks and anxiety for the family?

Isolating these core risks and acknowledging their potential impact affects how family members view the future and how they can make better-informed decisions, that would lead to better outcomes.

The risk management process for families

A risk management process is a proactive and structured way to identify the unique opportunities, uncertainties, and risks that are associated with the achievement of a family’s goals and objectives.

The benefits of a risk management process that is comprehensive, formalized, and structured include:

1. Focusing on opportunities, risks, and uncertainties that actively engage the family members in:

a. Open discussions and thinking about their future.

b. Focusing and clarifying individual and collective family goals.

2. Prioritizing opportunities and risks to serve as a proactive catalyst for action-taking without the need for a real-life triggering event.

3. Educating family members on how to use risk management during times of crisis to manage critical issues and make better-informed decisions for success and better outcomes.

The risk management process involves the activities of prioritizing opportunities and risks based on the likelihood of their occurrence and the potential impact or consequences of these opportunities and risks if they do occur. It also includes developing the appropriate strategies to mitigate or control the impact of top–priority opportunities and risks.

The family risk management process aims to increase the likelihood and extend of success for members of the family by the achievement of individual and family goals.

The activities of the family risk management process

The first activity in the family risk management process is to define your family and personal goals and objectives. Family and personal goals can be identified or developed for the following ten life areas that are essential for living a fulfilling and balanced life.

1. Money, finances, and wealth

2. Career, work, and business

3. Health (mental, emotional, and physical) and fitness

4. Fun, recreation, and leisure

5. Life’s routine responsibilities and commitments

6. Contributions and giving back to society

7. Family, social, and community relationships

8. Partner, love, and intimacy

9. Personal growth, learning, and development

10. Spirituality and spiritual health.

The fundamental question to be considered for this activity is, "What do you want to accomplish with your life and wealth? Or What family legacy do you want to leave behind?"

The second activity in the risk management process is to identify the broad range of opportunities, risks, and uncertainties that relate to the achievement of each goal or objective in each of the ten life areas.

This may be the most difficult activity as certain opportunities and risks are foreseeable and may have been addressed by the family. While other opportunities and risks are more unique to a specific family and must be addressed and resolved based on individual circumstances.

A review of the ten life areas can highlight how a family’s risk profile can extend beyond just financial concerns. Certain opportunities and risks may be difficult to broach and impossible to quantify by monetary measures. They may still present as the most significant threat to the family.

After opportunities and risks have been identified, the third activity establishes a hierarchy of actions based upon the likelihood of occurrence and its potential impact and consequences on the family.

Those events with a high likelihood of occurrence and high potential impact are classified as top-priority opportunities and risks for the family. They are the first to be addressed.

The fourth activity is to analyze each top-priority opportunity and risk. Then formulate strategies and actions that the family can take to enhance the opportunity or further mitigate the risk.

Develop and implement action plans to increase the likelihood and extent of your family's success.

Options for enhancing opportunities or mitigating risks include:

1. Avoiding the risk by deciding not to start or continue with the activity that gives rise to the risk.

2. Taking or increasing the risk to pursue an opportunity.

3. Sharing the risk – For example, through contracts and buying of insurance.

4. Retaining the risk by informed decision. This will be based on your appetite for opportunity-seeking or risk-taking. People participating in extreme sports or love bungee jumping falls into this category.

When the likelihood of the event occurrence is ‘low’, but the consequence of the event, if it occurs, is ‘high’ (for example, unforeseen house fire causing significant damage to your house), consider sharing your downside risk and consequence with third-party insurers by buying insurance products like:

1. Car insurance

2. Home, property, and home contents insurance

3. Life or personal insurance

4. Disability insurance

5. Health insurance

6. Long-term care insurance

7. Liability insurance

8. Income protection insurance

9. Pet insurance.

You cannot fully transfer your downside risk to a third party without being accountable for it. Insurers can only financially compensate you for your losses up to a pre-defined insured amount – for example, insuring your house for a sum of $500,000 for an insurance premium payment of $1,000.

There are some things that money or insurance cannot replace like old family photographs and painting, and old antiques that have been passed down for generations.

Mitigate any potential causes and consequences especially if there are gaps in your insurance coverage – for example, avoid storing inflammable materials in your house, installing fire alarms, and buying fire extinguishers.

The fifth activity is a logical extension of the fourth activity. It is the family’s commitment of its resources to implementing the agreed action plans.

These resources may be financial capital. Or it could also be human capital, both from within and outside the family.

The sixth and final activity is to monitor and identify any new opportunities and risks arising due to the ongoing, evolving dynamics of the family and the ever-changing financial, legal, political, or social environment.

Over time, revisit the ten life areas to understand the progress and changes you have made including any outstanding actions. On-going check-ins are helpful to understand overall patterns of behavior and any negative thoughts or emotions that are blocking these transformations and changes.

Note that circumstances and priorities do change over time.

What is a family lifecycle?

As a member of a family, you will go through different emotional, intellectual, and financial stages within a family lifecycle.

The stages of the family lifecycle are:

Independence and freedom from your parents. (Independence stage)

2. Coupling or marriage and relationship building with another person. (Coupling and inter-dependence stage)

3. Co-creation from babies through to adolescents and young adults, and parenting. (Co-creation and parenting stage)

4. Launching and independence of your adult children. (Launching adult children stage)

5. Retirement, senior years, and growing old together with your partner or spouse. (Growing old stage)

At each stage of the family lifecycle, you will face different opportunities, risks, and challenges, both in your personal and family life. In your journey, you will build or gain new skills and experience that will help you work through challenging opportunities and risks.

Not everyone passes through these stages smoothly, unfortunately.

Situations such as severe illness, financial problems, or the death of a loved one can influence how well you pass through the stages. Fortunately, if you miss skills in one stage, learn them in later stages.

Family and personal goals should be developed for each of the ten life areas. These ten life areas are essential for living a fulfilling and balanced life. They apply to each of the five stages of the family lifecycle.

Importance of the family lifecycle

Mastering the skills, experiences, and milestones of each stage allows you to successfully move or transition from one stage of the lifecycle to the next. If you don't master the skills and experiences, you may still move on to the next phase of the cycle, but you’re more likely to have difficulty with relationships and future transitions.

Family lifecycle theory suggests that successful transitioning may also help to prevent disease and emotional or stress-related disorders. It also helps you build upon the previous stages of life. Having a solid foundation at each stage of the lifecycle will enable that to occur.

Whether you’re a parent or child, brother, or sister, bonded by blood or love, your experiences through the family lifecycle will affect who you’re (your identity) and who you want to become (your success).

The more you understand the challenges of each stage of the cycle, the more likely you’re to successfully move on when you overcame these challenges.

Goals at each stage of the family lifecycle will differ. As you transition from one phase to another, your goals will also change. The constant redefining and achieving of new goals are inherent in this transition process.

As you transition, you’re also transforming and adapting. Be flexible and agile. Look forward, not look back.

Mistakes will be made. Learn from these mistakes and move forward.

Looking back and condemning yourself for the things you have done and the mistakes you have made will not be useful or helpful for you. Learn to forgive. There are more important things to worry about in the future. Be mentally and emotionally prepared for it. Life is too short to dwell on the past.

Disruptions to your life are normal

The stress of daily living, coping with a chronic medical condition, or other life crises can disrupt your daily life and normal living.

Whether you like it or not, you will be forced to transition to the next phase of the family lifecycle. There will not be any time to stop, to take a breather. The bus is constantly moving. Be flexible and constantly adapt to the ever-changing circumstances and relationships.

On-going stress or a crisis can delay your transition to the next phase of the lifecycle. Or you may move on without the strong foundation that you need to easily adapt and transition to the next phase of life.

Stress decreases willpower, self-control and weakens your resistance to old bad habits. It comes primarily from four places:

1. Work

2. Family

3. Finances

4. Health

The key to not giving in to the caustic effects of stress is awareness. Being aware that you are experiencing stress and being aware that that stress might cause you to make bad decisions or engage in bad behaviors, wakes up the pre-frontal cortex, which typically shuts down or hibernates under stress.

Be assured that you can learn missed skills and improve your family's quality of life at any stage. Self-examination, education, and perhaps counseling are ways to improve yourself and your family’s life.

Stage 1 – Independence

Independence is the most critical stage of the family lifecycle. As you enter young adulthood, you begin to separate emotionally from your family.

During this stage, you strive to become fully able to support yourself emotionally, physically, socially, and financially. Develop unique qualities and characteristics that define your identity.

Intimacy is a vital skill to develop during your independent, young adult years. Intimacy is the ability to develop and maintain close relationships with others that can endure hard times and other challenges.

In an intimate relationship, you learn about:

1. Commitment

2. Commonality or similarity

3. Compatibility

4. Attachment

5. Dependence on another person who is not in your family

6. Shared emotion in a relationship.

Learn who you’re outside of your identity within your family. Your ability to develop an intimate relationship depends on how successful you were at developing your identity earlier in life.

If you’re a lesbian, gay, bisexual, or transgendered person (LGBT), this stage may include making your sexual orientation known, or coming out to your family and friends.

Exploring interests and career goals is part of developing independence. To live successfully away from your family, develop financial and emotional independence.

Begin to be responsible for your health in this stage. Become responsible for your nutritional, physical, and medical needs. Developing healthy habits such as good nutrition, regular exercise, and safer sex practices is important for lifelong good health and happiness.

Learn new aspects of independence throughout your lifetime. Even when you have moved on to another stage of life, such as coupling, you continue to learn independence within the context of that stage.

During the independence stage, you hope to achieve the following:

1. Learn to see yourself as a separate person from your original family — parents, siblings, and extended family members.

2. Develop intimate peer relationships outside the family.

3. Establish yourself in your work or career.

Other important qualities you develop during this phase include:

1. Trust

2. Morals

3. Initiative

5. Work ethic

6. Identity, or who you’re in the world.

Stage 2 – Coupling and inter-dependence

The next stage in the family lifecycle is coupling. Using qualities such as trust and respect that you gained in the independence stage, explore your ability to commit to another person and a new way of life.

Although being in an intimate relationship with someone does involve a process of adaptation and relationship building, a marriage or committed union often requires unique skills and an attitude of giving and taking.

When you join families through marriage or committed union, you essentially form a new family system. Your family system includes your ideas, expectations, and values. These are shaped by the relationships and experiences with your original family and your new family.

When you marry or form a union, you combine your family system with your spouse or partner. This requires reshaping your goals and your partner's goals. It will involve awareness, understanding, and adjustments.

In the most functional relationships, partners can take two different points of view and create an option that neither person had considered. It differs from a compromise in that it is not giving up something. Rather, it is creating a third, better option.

You may find that some of the ideas or expectations that you held in the past are not realistic at this stage. Letting go is vital for long-term success.

Some common areas of adjustment include:

1. Finances

2. Lifestyle

3. Recreational activities or hobbies

4. Relationships with in-laws

5. Sexuality or sexual compatibility

6. Friendships

7. Putting another person's needs before your own.

The goal at this stage is to achieve interdependence. This occurs when you can fully enter a relationship with another person.

Inter-dependence also requires that you share goals and that you can sometimes place the needs of another above your own. But before you can achieve interdependence, first have a high degree of independence.

The relationship skills you learn in coupling serve as a foundation for other future relationships, such as parent-child, teacher-student, or physician-patient.

Within a couple, you learn:

1. Advanced interpersonal communication.

2. Problem-solving skills.

3. Common spiritual and emotional development goals.

4. How to form boundaries in relationships.

5. When to place the needs or importance of the other person above your own.

In the beginning, a happy marriage is usually full of passion and sexual intimacy. But over time, they become less important.

Hence, to maintain a satisfying union that can stand a test of time over a long period, it will require a high amount of considerate or kind acts (such as doing something nice for the other person without being asked) and praise.

The life skills you learn in this stage are important in developing true inter-dependence and the ability to have a cooperative and healthy relationship.

Some of the challenges of this stage include:

1. Transitioning into the new family system.

2. Including your spouse or partner in your relationships with friends and family members.

3. Being committed to making your union work.

4. Putting the needs of another ahead of your own.

You and your partner will have less stress if the transition into a new family system is smooth. Less stress often means better health and better outcomes.

Your specific goals for this stage of the family lifecycle are:

1. Forming a new family with your partner.

2. Realigning your relationships with your family of origin and your friends to now include your spouse.

Stage 3 – Co-creation and parenting

Parenting is one of the most challenging phases of the family lifecycle. For some, it has become daunting. For others, it is a delightful journey. Whatever it is, our lifestyles are rapidly changing with newer requirements. Different and evolving demands are being instilled into our lives.

To fulfill these demands and requirements and to accomplish the economic stability of the family, both fathers and mothers will have to work to make ends meet. Their attention towards their kids has become divided. We have seen the ratio of women staying back at home to look after their children has seen a decline over the last few years.

Deciding to have a baby

At some point in your relationship, you and your partner will decide if you want to have a baby. Some couples know that they do not want children or cannot have children.

The decision to have children affects your individual development, the identity of your family, and your relationships. Children are so time-consuming that skills not learned in previous stages will be difficult to pick up at this stage. Your ability to communicate well, maintain your relationships, and solve problems are often tested during this stage.

Introducing a child into your family results in a major change in roles for you and your partner. Each parent has three distinct and demanding roles: as an individual, a partner, and a parent.

As new parents, your identities shift along with how you relate to each other and others. The skills that you learned in the Independence and Coupling and inter-dependence stages, such as compromise and commitment, will help you move to the Co-creation and parenting stage.

Along with the joy that comes from having a child, you may feel a great deal of stress and fear about these changes. A woman might have concerns about being pregnant and going through childbirth. Fathers tend to keep their fears and stress to themselves, which can cause health problems.

Talking about your emotional or physical concerns with your family doctor, obstetrician, or counselor can help you deal with these and future challenges.

Parenting young children

Adapting your children into other relationships is a key emotional process of this stage. You will take on the parenting role and transition from being a member of a couple to being a parent of one or more children.

While you’re still evolving as individuals, you and your partner are also becoming decision-makers for your family. Continuing to express your individuality while working well together as a couple and as parents results in a strong marriage.

Your child's healthy development depends on your ability to provide a safe, loving, and organized environment. Children will benefit when their parents have a strong relationship with each other.

Caring for young children cuts into the amount of time you might otherwise spend alone or with your partner. If you did not fully develop some skills in previous phases, such as compromise and commitment for the good of the family, your relationship may be strained. For example, divorce or affairs may be more likely to occur during the years of raising young children if parents have not developed strong foundations from earlier life stages.

But for those who have the proper tools and strong foundations, this can be a very rewarding, happy time, even with all its challenges. Optimally, you develop as an individual, as a member of a couple, and as a member of a family.

Specific goals when young children join your family are:

1. Adjusting your marital system to make space for children.

2. Taking on parenting roles.

3. Realigning your relationships with your extended family to include parenting and grandparenting roles.

Parenting adolescents and teenagers

Parenting teenagers can be a rough time for your family and can test your relationship skills. It's also a time for growth and creative exploration for your entire family. Families that function best during this period have strong, flexible relationships developed through good communication, problem-solving, mutual caring, support, and trust.

Most teens experiment with different thoughts, beliefs, and styles, which can cause family conflict. Your strengths as an individual and as part of a couple are critical as you deal with the increasing challenges of raising a teenager.

Strive for a balanced atmosphere in which your teenager has a sense of support and emotional safety as well as opportunities to try new behaviors. An important skill at this stage is flexibility as you encourage your child to become independent and creative.

Establish boundaries for your teenager. Encourage exploration at the same time. Teens may question themselves in many areas, including their sexual orientation and gender identities.

Because of what you learned when you developed your identity in the earlier stages of life, you may feel more prepared and more secure about the changes your child is going through. But if you did not work through these skills at earlier stages of life, you may feel threatened by your child's new developments.

Flexibility in the roles each person plays in the family system is a valuable skill to develop at this stage. Responsibilities such as the demands of a job or caring for someone who is ill or aging may require each person in the family to take on various, and sometimes changing, roles and responsibilities.

This is a time when one or more family members may feel some level of depression or other distress. Watch out for mental health issues. It may also lead to physical complaints that have no physical cause along with other stress-related disorders.

Nurturing your relationship and your individual growth can sometimes be ignored at this stage. Toward the end of this phase, a parent's focus shifts from the maturing teen to career and relationship. Neglecting your personal development and relationship can make this shift difficult.

You also may begin thinking about your role in caring for aging parents. Making your health a priority in this phase is helpful as you enter the next stage of the family lifecycle.

Specific goals during the stage of parenting adolescents include:

1. Shifting parent-child relationships to allow the child to move in and out of the family system.

2. Shifting focus back to your partner, mid-life relationships with others, and career.

3. Beginning a shift toward concern for older generations in your extended family.

Stage 4 – Launching adult children

The stage of launching adult children begins when your first child leaves home and ends with an empty nest. When older children leave home, there are both positive and negative consequences. If your family has developed significant skills through the family lifecycle, your children will be ready to leave home, ready to handle life's challenges.

Free from the everyday demands of parenting, you may choose to rekindle your relationship especially with your partner or spouse, and possibly your career goals.

Developing adult relationships with your children is a key skill in this stage. You may be challenged to accept new members into your family through your children's relationships. Focus on reprioritizing your life, forgiving those who have wronged you (maybe long ago), and assessing your beliefs about life and the legacy you want to leave behind.

If you struggled with previous life phases, your children may not have learned from you all the skills they need to live well on their own. If you and your partner have not transitioned well together, you may no longer feel compatible with each other. This may lead to divorces or separation.

Gain the skills you may have missed. Self-examination, education, and counseling can enhance your life and help ensure a healthy transition to the next phase.

This is a time when your health and energy levels may decline. Some people are diagnosed with chronic illnesses. Symptoms of these diseases can limit normal activities and even long-enjoyed pastimes.

Health issues related to mid-life may begin to occur and can include:

1. High blood pressure (hypertension)

2. Weight problems

3. Arthritis

4. Menopause

5. Osteoporosis

6. Heart disease (coronary artery disease)

7. Depression

8. Stress-related illnesses.

You may also be caring for aging parents in this phase, which can be stressful and affect your health.

Specific goals to reach this stage include:

1. Refocusing on your relationships without children.

2. Developing adult relationships with your grown children.

3. Realigning relationships to include in-laws and grandchildren when your children begin their families.

Stage 5 – Growing old

During the growing old phase of the family lifecycle, many changes occur in your life. Welcoming new family members or seeing others leave your family is often a large part of this stage as your children marry or divorce or you become a grandparent.

This stage can be a great adventure where you’re free from the responsibilities of raising your children. Simply enjoy the fruits of your life's work. Challenges you may face include being a support to other family members, even as you’re still exploring your interests and activities or focusing on maintaining your relationship.

Many people are caring for elderly parents. You may feel challenged by their emotional, financial, and physical needs while trying to help them keep their independence.

You may experience declining physical and mental abilities or changes in your financial or social status. Sometimes you must deal with the death of other family members, including your partner.

The quality of your life, in part, depends on how well you adjusted and transitioned to the changes in earlier stages. It often also depends on how well you have cared for your health up to this point. Normal aging will affect your body, resulting in wrinkles, aches, pains, and loss of bone density. The chances of having a mental or chronic physical illness increase with age. But aging does not mean you will automatically experience poor health.

Retirement can be a fulfilling and happy time. Becoming a grandparent can bring you great joy without the responsibility of raising a child. But those who are without adequate support systems or not well off financially may have a more difficult time in this phase of life.

Specific goals to reach for at this final stage of your family lifecycle include:

1. Maintaining your interests and physical functioning, along with those of your partner, as your body ages.

2. Exploring new family, social, and community roles and involvement.

3. Providing emotional support for your adult children and extended family members.

4. Making room in the family system for the wisdom and experience of older adults.

5. Providing support for the older generation without doing too much for them.

6. Dealing with the loss of a partner, siblings, and other peers, and preparing for your death.

7. Reviewing your life and reflecting on all you have learned and experienced during your life cycle.

8. Passing on a positive legacy to your children and grandchildren.

Shifting the conversations to "What will I do when it happens?"

It may not a question of if, but when.

You will transition through the different stages of the family lifecycle at some point in your life. It is only a question of when the next phase of the family lifecycle would appear and are you ready for it.

The next stage of the family lifecycle will come, regardless of how prepared you’re in dealing with it, or how equipped are you for managing it. For some, the transition can be enjoyable and seamless. For others, it could be a struggle.

The only relevant discussion, therefore, about the future is in shifting the question from "whether something will happen to the question, What will I do when it happens?"

What will you do when the baby arrives?

What will you