The first earns it, the second enjoys it and the third destroys it
Creating wealth beyond generations is the toughest thing. Today, financial education teaches us so many things, but sometimes it doesn't teach now to retain wealth beyond generations. The first generation person might be able to create a lot of wealth. The second generation is in the luxury of the previously built wealth and enjoys it to the fullest. The third generation tries to enjoy the wealthy, but mostly they destroy the wealth and end up in the ground up again. This is how the story of most of the wealthy people looks. I think it is also more to do with the order of nature in the distribution of wealth. There are a few families who continue to retain their wealth even beyond generations.
If a family is rich enough, financial education is something that gets missed out in such families. Financial education is not only about teaching the path in which we can earn money. It should also be about teaching to be conservative and spend the money on the right path. Many rich families have this problem. They end up spending a lot of money in unwanted things, and they don't have a conservative mindset. They also sometimes think cheap of people who have a conservative mindset. I have seen many rich friends and at the same time, very calculative about money. That skill is very important.
Depending on our own earned money. This is the next thing that is usually thought in middle-class families. Even though fathers is earning a good amount of money or if they have good wealthy family that can take care of their family for generations, they make sure every individual understands the value of money and they make them earn money to spend for themselves. This is how every individual in the family is allowed to earn their own money and spend the money they earn. Sometimes the lessons learned can be harder, but that's important to keep the money safe throughout life.
Money is not everything, but we have to understand the importance of money before we talk about all those things. We understand the importance of money only if we earn the money by ourselves with our efforts. Living with the money that is earned by someone else will not give us that understanding. Some people take it in the sense where getting rich is an interesting thing, but staying rich is a boring thing. Being born rich may not be a thing, but we can die with a huge empire of wealth that we have created.
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Just like you said, these people don't know the pain of working hard and earning every penny they spend, that's why they spend lavishly.
Parents should learn to teach and make their kids know the value of money, from a young age they should make them earn their allowance, even if it's by doing chores at home
You might want to learn what GINI is and the countries that sit top of the GINI rankings. Clue - the US sits the very bottom of the GINI rankings in the developed world.
Okay, it will check it out. Thank you
That's true, for example the son of my boss is a total incompetent, the company will most likely fail when it's his turn, who has grown with wealth and easy life, destroys it
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The importance of having good knowledge about money can’t be overstated. Just having money alone is not what will sustain that wealth and that’s why a lot of people still go broke after acquiring enormous wealth.
!PIMP
@hopestylist here!
Right! It can only come from direct experience to understand why/how wealth is created and maintained. Without skin in the game, the wealth eventually evaporates to where it's managed better.
I think that is the reason education is important, not just for general knowledge, but also a lesson about money, how to get it, and how to keep it as well, otherwise it will be gone so easily without any financial literacy.
sahe kaha bade bhai, ye sab cheeje baccho ko sikhana jarure hai. Jab koi job krta hai tabhe usko money ke value samajh mai ate hai
It is as difficult to create wealth as it is to maintain it and teach the next generation how to use it properly. Therefore, every family should provide financial education to their children. If the children of the family can acquire financial education or financial literacy well from a young age, then the wealth can be preserved for many years.
totally with you on teaching kids to earn their own spending even when the family can afford more. That habit builds a conservative muscle and keeps the third act from turning into a bonfire of cash, which is kind of the opposite of generational ADvice. Boring compounding beats flashy financial chaos every single time.
"Boring compounding beats flashy financial chaos every single time."
I'm afraid not. In order for that to be true the central bank would have had to get the interest rate so wrong that the national debt would go exponential.
yep, boring coMPounding in real businesses still tends to beat chaos across decades, even when rates swing.
Central banks can mess up, but unless we hit true debt spiral territory, saving steadily and and reinvesting usually wins for households.
are you saying policy shocks can wipe out long term returns for anyone staying unlevered?
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This is no doubt a profound reflection on the cycle of wealth and the importance of financial education across generations. True wealth isn't just about accumulation, but about preserving and passing on values of responsibility and prudence. Earning and managing money consciously builds a legacy that endures and stands the test of time .
Ain't that the truth!
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Successful families put it in family trusts so that no one individual can blow the lot. There are family trusts that go back 800 years or more. They don't work, or invest per se, but curate. Over 50% of all land on the planet is owned by undocumented companies and trusts. In some countries it is as high as 90%
I actually believe that the reason why a lot of people find it hard to achieve financial freedom is not that they are not able to earn but they are not able to manage it