Generational wealth and why it's so hard to maintain
- Thread starter Fedorgasm
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You should check out "The family banking system" on YouTube. It describes what, I believe, the Rothschild family did to address this. The head of the family created a fund that members of the family can use for investing. The borrower would then repay the loan plus interest. This allowed the borrower access to money at a lower rate while increasing the family fund. As a precaution, a life insurance policy was taken out against the borrower in case something happened.
The concept made sense and wasn't all that difficult to implement. You'll definitely have to set it up as a company with a board of directors so no 1 person has control.
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Reminds me of a family guy episode where peter wanted chris to be raised Jewish to be successful even though they weren't jews themselves.
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I agree to an extent but people with that gene can also hoard other things....... Like expensive cars........that's when you get a trust fund kids that blows it on expensive objects.......
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As many other have pointed out, this only happens if someone along the chain is a shitty parent.
The closest thing I have seen to this happening with regularity relates to family owned businesses. A patriarch or matriarch creates a thriving business from scratch, their children run it and their grandchildren either run it into the ground or sell it.
But usually the grandchildren are still rich, even if they end up losing or giving up the business.
Another point is that this cycle would only happen with wealthy people. Someone who goes from poverty to middle class isn’t going to be able to afford to spoil his children to such a degree as to cause the cycle you describe.
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screen name checks out
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Neither growing up poor nor rich will instill values of hard work in kids by itself. Good parenting will do that, and having a stable home with solid finances will set your children up for much more success down the road than growing up dirt poor. Wealth creates wealth if properly managed.
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Just don’t baby them. My parents struggled a lot early on. Not poor really but my dad worked on a farm when he was a kid joined the military when he was sure he was going to be drafted. Anywho, my parents did well for themselves, upper middle class and all that good stuff. My and both my sisters struggled when we got out. My parents really only helped when it was needed, besides little things like birthdays and stuff. They let us screw up and treated us like adults. I’m pretty sure they thought I was a failure up until I was in my 30s. But me and my siblings are all doing well now. Just had to learn out lessons in our 20s.
I guess what I’m saying is don’t stress yourself if your kids are killing it at first. Let them be adults and they should make it eventually. Or at the very least you will know which ones will by the time the are 40.
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A motivated/disciplined person that grew up poor will always be the better . It's tough to be motivated growing up Inna big house and never going without or wanting for anything.
If I won powerball or Mega I wouldn't give kids a dime till they either became a success on their own or turned 45. Wouldn't want to rob my kids of greatest gift in young adulthood which is ambition and drive. After 45vifcthry haven't done shit then fuvk it I will throw a few bucks at em vsuse their my kid an I love em. Would never give money till they were middle aged.
If I won powerball or Mega I wouldn't give kids a dime till they either became a success on their own or turned 45. Wouldn't want to rob my kids of greatest gift in young adulthood which is ambition and drive. After 45vifcthry haven't done shit then fuvk it I will throw a few bucks at em vsuse their my kid an I love em. Would never give money till they were middle aged.
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Generational wealth is easier to continue/grow when the inheritors are well past middle age. Give young people a lot of money and it's going to cars and vacations and bling.
in my case, people in my family live into their 90s. My father's mother was 93 when she passed and my mother's parents were in their 90s when they passed so their combined wealth was not inherited by my parents until they were both in their 70s. Myself and my two sisters will not inherit anything until my parents pass which probably won't be for at least 10 years which by then will put me in my 60s and I'm well past the point now of wanting any material items.
in my case, people in my family live into their 90s. My father's mother was 93 when she passed and my mother's parents were in their 90s when they passed so their combined wealth was not inherited by my parents until they were both in their 70s. Myself and my two sisters will not inherit anything until my parents pass which probably won't be for at least 10 years which by then will put me in my 60s and I'm well past the point now of wanting any material items.
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The hardest part is the conflict of a parent who want what's best for their children, including material comfort. And yet, instill within them the discipline and understanding the value of money and how difficult it was the wealth was built.
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I think you're overlooking the influence of having good parenting. When kids witness their parents be successful in their work and make good decisions with the money they earn, without realizing it they assimilate a lot of lessons that will be useful to them later. It's Bandura's modelling (observational learning). Having 18 years observing good behaviour around finances has a lot of impact. Similarly, growing up poor is no guarantee you'll do well; I'd say it's usually the opposite. There are cases of immigrant families being poor but having very productive, wealth-building behaviour, but that's the exception. Most poor kids grow up witnessing their parents make terrible decisions with money, substances, relationships, etc. The parents have something wrong with them that lead them to be very poor in the first place; they're not immigrants or refugees. No matter how motivated the adult from a family like that is, some of their parents' negative patterns will have rubbed off on them and it'll require a lot effort to unlearn them. Kids from wealthy families typically don't have to unlearn anything in regards to finances; on the contrary, they're usually groomed from a young age on how to make money work for them instead of having to work for money. Since they have starting funds, it's a lot easier to pull off. When you're looking at statistics about losing wealth, I think you're looking at the long run i.e. maybe your grandchildren or great grandchildren will fuck up, but not necessarily your kids.
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My family seems to have just continued to get more successful one generation after another. My grandpa was born in 1909 and he grew up poor. My great-grandparents were farmers outside of Ottawa. I don’t know much about the farm, other than it wasn’t very big, less than 100 acres. My grandpa I don’t think even graduated high school because he needed to quit school and help out with the farm. WWII broke out when my grandpa was 30 years old and he enlisted and served in the Air Force; he was a flight lieutenant and was stationed in Britain for the duration of the war.
After the war ended he came home and set himself up as a real estate agent in Ottawa. He was modesty successful, and my father’s upbringing was much better than my grandfather’s had been. My dad went to university and became a chemical engineer. My dad moved our family to Northern Alberta in the mid 1970s to work at an oil refinery in the oil sands. He worked for his company 30 years and was very successful. He was able to put me and my three older siblings all through university and paid for all of it, so none of us had any debt. Suffice it to say, I’d consider my dad very successful, more so than my grandpa, who himself was more successful than my great grandfather.
My siblings and I are all relatively successful. My two older brothers are both engineers while my older sister and I are both lawyers. Of the four of us my sister is the most successful as she’s the General Counsel and a Vice President of the oil company that she works for, so she’s even more successful than our dad was in his career.
After the war ended he came home and set himself up as a real estate agent in Ottawa. He was modesty successful, and my father’s upbringing was much better than my grandfather’s had been. My dad went to university and became a chemical engineer. My dad moved our family to Northern Alberta in the mid 1970s to work at an oil refinery in the oil sands. He worked for his company 30 years and was very successful. He was able to put me and my three older siblings all through university and paid for all of it, so none of us had any debt. Suffice it to say, I’d consider my dad very successful, more so than my grandpa, who himself was more successful than my great grandfather.
My siblings and I are all relatively successful. My two older brothers are both engineers while my older sister and I are both lawyers. Of the four of us my sister is the most successful as she’s the General Counsel and a Vice President of the oil company that she works for, so she’s even more successful than our dad was in his career.
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That stats show you this is the truth however much Sherdog loves to beat the conservative "just work hard" drum, social mobility in the US up or down is far lower now than it was 50 years ago.
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Me too... so I just decided not to have kids.
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Nah that's just self mythologizing bullshit because you want to think you're special. Kids with wealthy parents do better than kids with poor parents 99% of the time.
Do you live in America? Literally the easiest country on earth to succeed in. If you grow up in America and you're poor when you're like 40, then you just retarded/lazy/an addict.
Do you live in America? Literally the easiest country on earth to succeed in. If you grow up in America and you're poor when you're like 40, then you just retarded/lazy/an addict.
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Showing them a strong work ethic might have a better effect than you realize.
Also, if you have a few kids, hopefully one of them will figure out how to improve the situation for future generations.
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Both of my high school kids are doing great despite having a comfy life. I’ve tried to teach them principles that I think are important for building and maintaining wealth. I’ve taught them basics of budgeting, saving, investing, credit management, taxes, estate planning, and both have taken a personal finance class. They both have savings accounts and retirement accounts, know about the power of compounding and diversification. I’ve tried to inspire an entrepreneurial spirit. I’ve helped them think about opportunities, create business plans, and take calculated risks. One did a web development program, has an online business, created a few apps. Both have self-employment income, probably more than most Sherdoggers make. I’ve tried to encourage setting very high goals. I’ve acknowledged their exceptional talents while emphasizing the importance of hard work, dedication, and perseverance.
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