Wealth. It is frequently fancied while sometimes sneered at. How do you keep it in the family? Shirtsleeves to shirtsleeves in three generations is a well known, international sentiment, with this in mind.
Historically, the first generation works hard, makes sacrifices, and ensures that the money comes in. In addition, they use it well. Because of this, the first generation can grow their wealth. Often this requires practicality and frugalness. While displaying these values, their children learn more about the ingredients to success and wealth.
Parents will sacrifice their pleasure to provide a better life for their children. During this period, the children see their parent’s effort and sacrifice. Because of this, they often choose or are directed toward more stable and higher income roles. Without having to toil and sacrifice as much as their parents, who shielded them from it, they develop more of a lifestyle led existence.
The parents often sow the seed of the family’s demise. They do not always train their children in hard work, sacrifice, sensible spending and intelligent, long term investing. Certainly the second generation seldom pass key life lessons on to their children.
The third generation, brought up with wealth and a nicer lifestyle, often have few of the key ingredients to maintain or build on the family wealth. Therefore, many times this third generation reduces the family wealth. This may be through poor investing, frivolous spending, family legal disputes or trying to live up to the family name.
You can prevent shirtsleeves to shirtsleeves in three generations. Be sure to instil in your children, and grandchildren, the concepts of hard work, sacrifice and developing an investor‘s mindset.