“Generational wealth” is generally a myth. The second and third generations burn through any inheritance and sprint back to middle class rather quickly.
> “Generational wealth” is generally a myth. The second and third generations burn through any inheritance and sprint back to middle class rather quickly.
Ref? That was definitely not my impression from listening to "Capital in the 21st Century".
> Here is a quick and dirty reference discussing how lazy kids of rich people blow it:
The only evidence presented is assertions by companies selling wealth management services:
> "The “third generation curse” indicates that 90% of wealthy families are likely to lose their [money](404 ERROR) by the third generation, according to AMG National."
The only link to further evidence results in a 404; and the only advice is, "Train your kids not to be stupid", and "Use one of these wealth management services".
I think I'd actually seen that exact article before I listened to Piketty's book; but Pikkety actually provides evidence across many different countries, sometimes going back to the 1700s. Absent other evidence (which again you simply assert without giving a reference to), I'd trust an academic more than a company who has a vested interest in drumming up business by scaring people.
ETA: Even supposing we take the article at face value (which I definitely have doubts about), it makes two claims:
1. Of "wealthy" families, 90% will lose it within 3 generations
2. This can be prevented if children are taught money management skills growing up
Even supposing those are true it doesn't support the statement that "generational wealth is generally a myth".
Why? Because % families != % wealth. It's perfectly possible that 10% of wealthy families who consistently teach good money management to their children control 90% of the wealth.
uhh not sure what constitues a real job if not an author, consultant and teacher (on top of being a successful academic). Have you read his book? It's quite good.
> The government is NOT a good steward of wealth. They allocate inefficiently (because no accountability) so we should minimize what we give them.
Have you ever actually looked at how large companies allocate wealth, and how much actual accountability there is there? I can't tell you how many billions of dollars the company I currently work for burned with acquisitions whose products they shut down and teams they laid off two years later; and they're definitely not worse than normal, as far as I can tell. How many products has Microsoft attempted and then killed? How big is the Killed By Google graveyard? And in many cases people who make catastrophic decisions are rewarded -- "failing up" with golden parachutes and higher more influential posts.
In my experience, people who say things like this have a double standard. If you judge the government and corporations by the same standards, they come out about the same -- a bit of really good, a bit of really bad, lots of mediocre. The difference is that the government is at least nominally trying to work for the voters, whereas corporations are explicitly only working for their shareholders.
“Generational wealth” is generally a myth. The second and third generations burn through any inheritance and sprint back to middle class rather quickly.