Ever heard the phrase “Shirt sleeves to shirt sleeves in 3 generations”? It’s an anomaly to have multigenerational wealth sustain.
Discussion
Mainly it’s divorce that destroys family wealth. Many rich families have clued into this and now beat the idea of prenups into the heads of their children. There are even rich kid camps where they go to learn how not to marry someone who will ruin the family fortune.
That’s not actually true when you look at large multigenerational wealth. Mainly because divorce has only been more common in more recent generations. While divorce can significantly impact a couples finances when you’re looking at sustaining multigenerational wealth other factors come into play. Frequently one generation was able to make the wealth and successive generations do not know how to protect, grow, and sustain their wealth and end up squandering it. There’s also a comfort factor in successive generations who have the expectation of wealth and do not account for the work involved to maintain it.
If you look purely at numbers I would bet that more wealth is lost through bad business decisions by successive generations and repeated lavish overspending rather than a one off financial crisis like divorce. In preserving intergenerational wealth who you marry is one small piece of the puzzle. Many of these rich kid camps you speak spend much more time trying to teach business acumen and knowledge about managing money. Though I hear they also spend time discussing how all the relationships in your life affect your bottom line.
Who you marry can be a big indicator of whether a couple will accrue wealth in a lifetime. The Millionaire Next Door by Thomas J. Stanley has some interesting insight into that.
If you look purely at numbers I would bet that more wealth is lost through bad business decisions by successive generations and repeated lavish overspending rather than a one off financial crisis like divorce. In preserving intergenerational wealth who you marry is one small piece of the puzzle. Many of these rich kid camps you speak spend much more time trying to teach business acumen and knowledge about managing money. Though I hear they also spend time discussing how all the relationships in your life affect your bottom line.
Who you marry can be a big indicator of whether a couple will accrue wealth in a lifetime. The Millionaire Next Door by Thomas J. Stanley has some interesting insight into that.