Three-Generation Rule
The idea that family lose their wealth in three generations is known as the "Three-Generation Rule". It states the first generation creates the wealth, the second generation preserves it, and the third generation squanders it. The hard work, determination, and grit it takes the first generation to make the money allows the second generation to be more relaxed.
A staggering 70 percent of wealthy families lose their wealth by the next generation, with 90 percent losing it after that. Among the causes are taxes, inflation, poor investment decisions and the assets shared. Yet among the reasons are younger family members unwilling to take on wealth management.
Building Generational Wealth
- Adopt a Big-Growth Mindset.
- Have a Clear Plan for Your Money.
Social Discipline and Intergenerational Equity
The Three Generation Rule states the social discipline for a habitat to survive is beyond normal societies.
The principle of intergenerational equity states every generation holds the Earth for the present and with past and future generations.
Bitcoin and Paradigm Shifts
Bitcoin is a marathon. Massive shifts take generations to settle and normalize. The old guard must pass for the new paradigm to lead. Every generation is a shift bringing new understanding.
Family Wealth and Generations
The lesson is to create a society encouraging mobility. It may not matter if your family followed the "three generation path" if other families move up to take their place. You can restart the cycle, becoming the new "first" generation.