Can someone explain...

[RiverRat1]

Looking for good thought out answers not just off the top of head remarks.

When someone becomes successful and now the family has money, not stupid money but well off, how does that give their kids and grandkids an far bigger edge to also be very successful?

Yes, very well off people can have very unsuccessful kids. But seems like money runs in the family for many generations. Curious exactly how that works aside from a big business staying in the family.

Is it simply "know how"?

[KactusKiller]

Hard times creates strong men, strong men create good times, good times create weak men, weak men create hard times.

This saying is a pretty good rule of thumb. There are no exacts one way or the other. But the families who have generational wealth tend to raise fiscally responsible adults. Families that get rich tend to raise non responsible children. Being generationally wealthy continues for generations. Being rich is usually short term maybe 1-2 generations. Just my opinion.

[BlessedVeteran0305]

I'm not familiar with money being in the family, but it seems to me like it would stem from that original generation keeping the business in the family and making wise investments that would continue to profit for years to come and passing that knowledge from generation to generation. Just my .02

[bowfishin fool]

Look up the 3rd generation curse

I do think that access to better education and opportunities allows upper middle class to stay upper middle. Networking, social education, how to operate at that level…

Someone in poverty probably doesn’t know how to book the corporate yacht for the weekend, just like someone from the upper class would have a hard time figuring out the food stamp system in a timely manner.. it’s not that they couldn’t learn, it’s just the system they know how to navigate.


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[jerp]

This is a gross generalization but I think three main factors are example, expectations and social capital. Example: seeing your parents work hard to become successful and improve their standard of living helps instill a work ethic and delayed gratification. You know it can be done - you've seen and experienced it. Expectations: you are expected to perform well in school and make something of yourself ("it's what we do, it's the kind of people we are") Pressure not to drop the family ball. Social capital: This is very powerful as the generations roll on. There are many definitions but simply put it's the positive benefits you get from connections your family has built over the years.

Obviously there are very successful people that had none of the above and losers that had all of the above. I have seen the 3rd generation curse mentioned above many times with my clients. The second generation saw what it took for their parents to get rich and they follow accordingly. The third generation grows up in the private school and country club set and is more likely to feel entitled. Things are more likely to fall apart from there

[Rush2Judge]

This is a gross generalization but I think three main factors are example, expectations and social capital. Example: seeing your parents work hard to become successful and improve their standard of living helps instill a work ethic and delayed gratification. You know it can be done - you've seen and experienced it. Expectations: you are expected to perform well in school and make something of yourself ("it's what we do, it's the kind of people we are") Pressure not to drop the family ball. Social capital: This is very powerful as the generations roll on. There are many definitions but simply put it's the positive benefits you get from connections your family has built over the years.

Obviously there are very successful people that had none of the above and losers that had all of the above. I have seen the 3rd generation curse mentioned above many times with my clients. The second generation saw what it took for their parents to get rich and they follow accordingly. The third generation grows up in the private school and country club set and is more likely to feel entitled. Things are more likely to fall apart from there

As usual, Jerp nailed it. The first two mentioned cannot be overstated. Expectations (setting the bar high) for both yourself and your children. They notice if it is one sided.

[cashcropper]

Not to hijack but for the sake of argument how about this: If a generation is 20-30 years we are in the 3rd generation since desegregation of the public school system. Is it fair to say that there are no advantages in the public school system and that all are given the same opportunities regardless of race? And if so,does that mean that since we are into the 3rd generation of graduates into the work place does this mean there are no more advantages in the work place due to race?

[Ryan C]

I agree with Jerp on all points. The family teaching their kids what the public school system doesn't. I'm the second generation to own the family business. We've been through the ups and downs and are doing well right now. We teach our kids about finances without going into so much detail to scare them. LOL.

The public school system doesn't teach much of anything about personal or business finances. I went to a two year tech school to get my mechanics license and an associate degree. I learned about business from growing up in the business and seeing the results of certain decisions and being in meetings with our lawyer and accountant. No formal business education at all.

Our son graduates high school in about a month and is following in my footsteps, so far. He goes to high school til noon then works for our local HVAC guy until he finishes for the day. There has been more than one school night that he comes home after 11:00 pm. He likes to hunt and we expect him to pay any expenses that are not necessary for his high school education, so he works so he can play.

[adam_p]

This is a gross generalization but I think three main factors are example, expectations and social capital. Example: seeing your parents work hard to become successful and improve their standard of living helps instill a work ethic and delayed gratification. You know it can be done - you've seen and experienced it. Expectations: you are expected to perform well in school and make something of yourself ("it's what we do, it's the kind of people we are") Pressure not to drop the family ball. Social capital: This is very powerful as the generations roll on. There are many definitions but simply put it's the positive benefits you get from connections your family has built over the years.

Obviously there are very successful people that had none of the above and losers that had all of the above. I have seen the 3rd generation curse mentioned above many times with my clients. The second generation saw what it took for their parents to get rich and they follow accordingly. The third generation grows up in the private school and country club set and is more likely to feel entitled. Things are more likely to fall apart from there

I'll add having a family safety net allows you to focus on progress instead worrying about paying the bills. Easier to take risk that way.

[dgilbert]

The world problems continue.

[Texas452]

Hard times creates strong men, strong men create good times, good times create weak men, weak men create hard times.

This saying is a pretty good rule of thumb. There are no exacts one way or the other. But the families who have generational wealth tend to raise fiscally responsible adults. Families that get rich tend to raise non responsible children. Being generationally wealthy continues for generations. Being rich is usually short term maybe 1-2 generations. Just my opinion.

I agree with this.
I came from a family of farmers, hard work, live within your means ect.
I have many first and second cousins, that have become multi millionaires just starting with nothing.
They are all very hard workers, it seems like the next generation is doing well.

[rebelbow]

it works to give the kids an advantage as long as the kids dont know they are well off.

[flyin7]

You bet that gives their children a little bit of an advantage. Everything from how to get through school (if it's required for what the kids are wanting to do), to pointing them in the right direction when starting a business or even opening doors for them.
When it comes to helping your kids through school, I mean that you can let them know what classes to take seriously and which ones to just pass.
When pointing them in the right direction, I mean that you'll be able to let them know what you did to figure out stuff and what they can do to bring business in the door when business is slow.
When I say that you can open doors for them, I don't see anything wrong with that. After all, hopefully you are in business to provide for your family and if you've been blessed with a good business, then hopefully one of your kids will be able to carry it on.

There are so many little ways that people can help their kids get ahead in this world.

[Death from Above]

Generational blessings.

The more affluent I am, the more time I am able to invest in the lives of my children. The social, emotional, academic and spiritual potential payouts are more robust the more I invest.

Not always the case but certainly we can see that having more time/resources to invest in the kids sets them up for a potentially better future.

Not always the case because money is never a substitute for crappy parenting

[Barney1971]

I agree with Jerp on all points. The family teaching their kids what the public school system doesn't. I'm the second generation to own the family business. We've been through the ups and downs and are doing well right now. We teach our kids about finances without going into so much detail to scare them. LOL.

The public school system doesn't teach much of anything about personal or business finances. I went to a two year tech school to get my mechanics license and an associate degree. I learned about business from growing up in the business and seeing the results of certain decisions and being in meetings with our lawyer and accountant. No formal business education at all.

Our son graduates high school in about a month and is following in my footsteps, so far. He goes to high school til noon then works for our local HVAC guy until he finishes for the day. There has been more than one school night that he comes home after 11:00 pm. He likes to hunt and we expect him to pay any expenses that are not necessary for his high school education, so he works so he can play.

love this post... the education you get at home can be 1000 times more valuable than any college degree. im a firm believer in parents that teach kids how to work at an early age and lead by example.
Entitlement is one of the biggest cancers facing kids today- so many young people dont know how to work now. We still live in the good ole USA and if you want it you can go get it. I HATE hearing people blame others for not having anything (racism, white privilege, blah blah.) I Love to see immigrants come here (legally) with barely a shirt on their back and one generation later they own busineses and have kids graduating from college.