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>It is estimated that 70% of wealthy families will lose their wealth by the second generation and 90% will lose it by the third.[0] [0] https://www.nasdaq.com/

>It is estimated that 70% of wealthy families will lose their wealth by the second generation and 90% will lose it by the third.[0] [0] https://www.nasdaq.com/articles/generational-wealth%3A-why-do-70-of-families-lose-their-wealth-in-the-2nd-generation-2018-10 https://www.nasdaq.com/articles/generational-wealth%3A-why-d...

naveen99 2y ago
That might have been truer when people were having 6+ children. With the modern average of 1.5, I doubt more than 10% lose their trust funds.
Rinzler89 2y ago
What's the actual real world evidence on that? Plenty of rich European families have been rich for hundreds of years, and I'm not talking about royalty. That kind of disproves the theory. The ones who go broke fast are usually the ones who also got rich fast, trough luck instead of work or knowledge, like from lottery wins or speculations.
- Jerrrry 2y ago
  Comparing American generational accumulation to the olden European social quasi-caste system is a little disingenuous.
  - Rinzler89 2y ago
    Where did you see me compare it to Americans? I'm from Europe so my knowledge revolves around local examples.
- s1artibartfast 2y ago
  There is a lot of real world socioeconomic data on it. studies usually look at the population in terms of 20 or 25% segments. That doesn't mean it is true for the 1% or 0.1%. That said, there are lots of examples of people entering and leaving the top 1% too, so outcome isn't perfectly deterministic.
  - whimsicalism 2y ago
    Actually, real world socioeconomic data on familial wealth holdings is incredibly hard to come by.
    - s1artibartfast 2y ago
      Wealth is hard to come by, but income is much more available. Some countries have publicly available data on individual income filings. The US provides anonymized data, but scienentist have done a lot of fancy tricks to make the family connections clear. Raj Chetty among others have done a lot of work on US social mobility[1]. They were able to trend parent/child incomes in the US going back to 1940, and have tons of great insights. I dont remember all of the findings off the top of my head, but one was that relative social mobility (%s) for the US have been constant over time. Another was that economic mobility out of the bottom classes is dominated by poor immigrants. It is unclear if it is genetic, personality, or culture, but children of poor immigrants out perform native born poor by an enormous factor (2-3X better IIRC) https://www.econtalk.org/raj-chetty-on-economic-mobility/ https://www.econtalk.org/raj-chetty-on-economic-mobility/
      - Rinzler89 2y ago
        >Wealth is hard to come by, but income is much more available. Income is a completely different thing than wealth and those two are not always directly correlated. You can have a good income but not accumulate much wealth because all is bein eaten away by taxes and a high CoL, and you can also have a low income but still decent wealth from an inheritance for example. And the original claim was that wealth gets lost between generations by the majority of people which I find dubious.
        s1artibartfast 2y ago
        I think that as a practical matter, they are extremely correlated. Wealth sitting in cash loses half its value every 20 years. Physical assets require upkeep and property taxes. In practice, if you aren't making income, you losing wealth.
dom2 2y ago
This isn't a real statistic, it's an advertisement for wealth management.
- detourdog 2y ago
  I usually see this statistic about family businesses. In the USA a family business passing through 3 generations is rare. My personal observation is that the 4 generation has so many better options than the family business is holding them back with responsibility and the family unity has broken down through generational grudges.
dexwiz 2y ago
Are all decedents rich, or just a small fraction? Even if a family line has been continued for hundreds of years, there may be hundreds or even thousands of decedents of the original members who do not have access to the line of wealth. Also many families stay wealthy by only marrying members of other wealthy families. Marrying outside of the ruling class results in rapid dilution of power.
whimsicalism 2y ago
We do not have anywhere near the quality of data about familial wealth holdings to say anything of the sort
anon291 2y ago
That's losing their wealth, not becoming trapped in poverty. Wealth (as in hard cash) is fleeting. The behaviors that create wealth are not. I truly contend that, in America at least (what I'm familiar with), everyone can achieve a solid life. You might not be wealthy, but you will be able to support yourself and provide for a family. People losing their wealth does not mean they become destitute, nor should it. It just means they fall into a more 'normal' cohort.
afpx 2y ago
That study was done by the Williams Group. Although it is widely cited across many popular news sites, it is surprisingly impossible to find the original study. Also, there's also almost no information about the Williams Group out there. No, Wikipedia page, for instance. Their web site says they do: "Government Relations, Public Affairs, Lobbying"

naveen99 2y ago

That might have been truer when people were having 6+ children. With the modern average of 1.5, I doubt more than 10% lose their trust funds.

Rinzler89 2y ago

What's the actual real world evidence on that? Plenty of rich European families have been rich for hundreds of years, and I'm not talking about royalty. That kind of disproves the theory. The ones who go broke fast are usually the ones who also got rich fast, trough luck instead of work or knowledge, like from lottery wins or speculations.

Jerrrry 2y ago
Comparing American generational accumulation to the olden European social quasi-caste system is a little disingenuous.
- Rinzler89 2y ago
  Where did you see me compare it to Americans? I'm from Europe so my knowledge revolves around local examples.
s1artibartfast 2y ago
There is a lot of real world socioeconomic data on it. studies usually look at the population in terms of 20 or 25% segments. That doesn't mean it is true for the 1% or 0.1%. That said, there are lots of examples of people entering and leaving the top 1% too, so outcome isn't perfectly deterministic.
- whimsicalism 2y ago
  Actually, real world socioeconomic data on familial wealth holdings is incredibly hard to come by.
  - s1artibartfast 2y ago
    Wealth is hard to come by, but income is much more available. Some countries have publicly available data on individual income filings. The US provides anonymized data, but scienentist have done a lot of fancy tricks to make the family connections clear. Raj Chetty among others have done a lot of work on US social mobility[1]. They were able to trend parent/child incomes in the US going back to 1940, and have tons of great insights. I dont remember all of the findings off the top of my head, but one was that relative social mobility (%s) for the US have been constant over time. Another was that economic mobility out of the bottom classes is dominated by poor immigrants. It is unclear if it is genetic, personality, or culture, but children of poor immigrants out perform native born poor by an enormous factor (2-3X better IIRC) https://www.econtalk.org/raj-chetty-on-economic-mobility/ https://www.econtalk.org/raj-chetty-on-economic-mobility/
    - Rinzler89 2y ago
      >Wealth is hard to come by, but income is much more available. Income is a completely different thing than wealth and those two are not always directly correlated. You can have a good income but not accumulate much wealth because all is bein eaten away by taxes and a high CoL, and you can also have a low income but still decent wealth from an inheritance for example. And the original claim was that wealth gets lost between generations by the majority of people which I find dubious.
      - s1artibartfast 2y ago
        I think that as a practical matter, they are extremely correlated. Wealth sitting in cash loses half its value every 20 years. Physical assets require upkeep and property taxes. In practice, if you aren't making income, you losing wealth.

dom2 2y ago

This isn't a real statistic, it's an advertisement for wealth management.

detourdog 2y ago
I usually see this statistic about family businesses. In the USA a family business passing through 3 generations is rare. My personal observation is that the 4 generation has so many better options than the family business is holding them back with responsibility and the family unity has broken down through generational grudges.

dexwiz 2y ago

Are all decedents rich, or just a small fraction? Even if a family line has been continued for hundreds of years, there may be hundreds or even thousands of decedents of the original members who do not have access to the line of wealth. Also many families stay wealthy by only marrying members of other wealthy families. Marrying outside of the ruling class results in rapid dilution of power.

whimsicalism 2y ago

We do not have anywhere near the quality of data about familial wealth holdings to say anything of the sort

anon291 2y ago

That's losing their wealth, not becoming trapped in poverty. Wealth (as in hard cash) is fleeting. The behaviors that create wealth are not. I truly contend that, in America at least (what I'm familiar with), everyone can achieve a solid life. You might not be wealthy, but you will be able to support yourself and provide for a family. People losing their wealth does not mean they become destitute, nor should it. It just means they fall into a more 'normal' cohort.

afpx 2y ago

That study was done by the Williams Group. Although it is widely cited across many popular news sites, it is surprisingly impossible to find the original study. Also, there's also almost no information about the Williams Group out there. No, Wikipedia page, for instance. Their web site says they do: "Government Relations, Public Affairs, Lobbying"