Key Findings on Generational Wealth
Generation 1 (Creator): Accumulates the wealth.
Generation 2 (Steward): Manages or spends it.
Generation 3 (Consumer): Often depletes the remainder.
Statistics: Only about 30% of family wealth survives to the second generation, and only 10% makes it to the third, according to a study by The Williams Group.
Business Failure: Only 3% of family-owned businesses survive to the fourth generation.

Why Wealth is Lost
Lack of Preparation: Heirs may not understand the value of money or how to manage it.
Broken Communication: Parents often fail to discuss financial planning with their children.
Dividing Assets: Dividing wealth among more family members each generation leads to “exponential shrinkage”.
Taxes and Lifestyle: High taxes and increased spending by subsequent generations can drain assets.

How to Beat the Trend
To sustain wealth beyond three generations, experts recommend educating heirs early, involving them in investment decisions, holding family meetings, and creating a clear family constitution.