I'm often in conversation with families and family office professionals about financial reporting. What graphs, formats, or presentation templates work best? How to visually explain things in ways that family members can understand? How to present complex material consistently, simply, and transparently? In this post I want to introduce a graph that I find particularly helpful for communicating with family members about their stewardship of their financial capital over time. As background, for me a good graphic illustrates something visually in a way that is more persuasive and communicative than can be achieved with words or numbers alone. In this case, the question to be answered visually is this: how is the family stewarding its financial capital over time? To answer that question requires a working definition of success for the family's financial capital. What is the family's goal for their financial capital? For most families, the answer boils down to this: at the very least, a family that wants to preserve its financial capital over time must seek to preserve purchasing power by beating…
Is this the best single graph available to track a family's stewardship of its financial capital? You decide.