One wealthy person recently posed a question that touched on a fear many wealthy families share: “How do you avoid the third gen curse?”
The person, who described themselves as a second-generation member of a wealthy family, referenced the old saying, “Shirtsleeves to shirtsleeves in three generations,” and asked others how families can stop inherited wealth from disappearing over time.
Why Family Wealth Often Disappears
Many commenters said the so-called “third generation curse” is less about spoiled heirs and more about human nature, family size and lifestyle creep.
“Many ultra wealthy families tend to have more kids than middle class families,” they wrote. “So at a minimum, the pie gets divided by more people.”
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Others pointed to divorce, addiction, overspending and descendants who choose lower-paying careers while still trying to maintain expensive lifestyles.
“Then, you have the one or few degenerates who do sabotage finances — drugs, schemes, etc. that quickly sink a fortune,” the commenter added.
Still, many people in the discussion argued that the issue isn’t really about money management alone. They said parenting and values matter far more.
One person from a fourth-generation wealthy family said only a few cousins were actively growing the family’s wealth while others simply chose careers or lifestyles they enjoyed.
“Most of us took on jobs we like, or became stay at home moms and are subsidized by the inheritance,” they shared, “and will probably pass on wealth to the next generation, but not as much as we received.”
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Some stressed the importance of making wealthy children work and experience discomfort instead of shielding them from every challenge.
“Our goal as parents should be to expose your children to challenges that they can overcome,” one person wrote.
Another said wealthy children need perspective.
“It’s really important for well-off parents to make sure their kids understand that THERE ARE PEOPLE who would KILL to live one day in your shoes,” they wrote after describing a visit to their parents’ impoverished home country.
Trusts, Rules And Family Pressure
Some wealthy families described using strict trusts to preserve money over generations.
One third-generation commenter said their grandfather created a trust that required beneficiaries to graduate from college and maintain employment in order to receive distributions.
“We aren’t allowed to take out as much money as we want,” they added.
Another said their family’s trust has survived for centuries through strict rules surrounding employment, inheritance and asset control.
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But not everyone believed preserving wealth forever should be the primary goal.
One woman who married into an extremely wealthy family said that later generations sometimes become consumed by fear of losing the fortune.
“NO ONE wanted to carry the shame of being the one who f***ed up and lost it all,” she wrote.
She argued that wealthy families should focus less on preserving every dollar forever …
This post was originally published here
