The fact that wealth tends to dissipate slowly in families probably reflects the effect of genes and assortative mating (hard-working, smart, industrious, educated people tend to marry folks with similar qualities and pass those genes along to their offspring).
I believe the results of the 1832 Georgia Land Lottery, in which the wealth was randomly assigned, showed that wealth from an economic windfall dissipated within about 40 years.
Well personally I have not seen many grandchildren who blew grandpas money completely. For one, an inheritance gets divided up among several so if kid A blows his money on bad choices, what about kids B and C? And most likely grandpa is still around kicking and wont give Kid A too much if he cant handle it.
Now I do know of one guy who basically mooched off his mother for all his 51 years. His sister said that at age 51, he made right at about $50,000 in his whole life from the few jobs he ever had. His kids got nothing of course since he blew his portion. However his siblings have done quite well so the family fortune isnt all gone. Only his portion.
I’m not exactly sure what the distinction between “rich” and “wealthy” is, and past threads have shown that people don’t always agree on what those terms mean, so rather than use possibly ambiguous terms, let’s consider clearly defined measurable things.
Net worth (assets less liabilities) is a measurable quantity. So the question of how long it takes wealth to build or dissipate can be phrased as the period of time over which the net worth of a person significantly differs from that of their ancestors.
No. The article in question is a statistical survey of people with unusual surnames. Saying that it takes 300 to 500 years for wealth to dissipate means there’s a measurable effect over all people with a given surname, not just a path from one wealthy ancestor to one wealthy individual.
I suppose if people who do really poorly are so ashamed they change their names, that would tend to focus only on the more successful, but I don’t know how common that might be. There are probably also people who change their names to more affluent-sounding names in order to get some social cachet.
Since you asked…
I think the premise is flawed. Because I’ve seen many people inherit wealth and instead of using it to enrich their lives and the lives of others, they wasted it on alcohol, drugs, gambling which led to unemployment and a substance abuse problem. Including ridiculous business investments. Plus they ended up financially worse off than before they inherited the wealth.
There is an assumption that people leaving money to their heirs they too will have all good intentions, but this is essentially leaving money to people you don’t know and won’t ever met. They could have completely different values than you.
The smart thing to do, if you are going to leave money, is put it in a trust that it can only be used for specific purposes such as getting a college degree. Purchasing a primary residence. The rest of it should be left to a good cause or future generations to do the same.
Having said that, I can tell you, I know from experience that if someone would have simply gave me things after college so I didn’t have to work for them I don’t believe I would have gone on to achieve the things I’ve done which I’m most proud of. When you take away the sense of achievement from people, they tend not to have something to work for and improve themselves. I’m still the same person, it has to do with my own personal values, but you can’t install those values in others simply by giving them money and expect them to do as you wish them to do.