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re: Half of the UK is owned by 1%
Posted on 4/20/19 at 11:09 am to Decisions
Posted on 4/20/19 at 11:09 am to Decisions
quote:
In fact, the generally accepted statistic is that 70% of fortunes are lost in the second generation and 90% in the third. That’s simply unreal. These scant few families who have continued to grow are the exception, not the rule.
This isn’t actually true.
Read Clarks research at UC Davis.
Earlier studies didn’t look back far enough, we were capturing generational churn. The son of the industrialist, becomes a painter.
Families actually rise and fall over the course of several centuries.
1
Posted on 4/20/19 at 12:14 pm to Lima Whiskey
I looked at that study and don’t necessarily agree with you. According to the graphs the families that were rich regressed pretty significantly back to the mean over the course of 3-4 generations. Certainly far enough to not be considered “rich” anymore.
When I say “fortunes are lost” I’m not saying the descendants spend themselves into the depths of poverty. I’m picturing a fall from wealthy to something like middle/upper-middle class. I know that doesn’t seem as drastic as some would like to picture, but it’s the most common outcome.
Children decide that they’re content with the portion that they’re given and rather than adding to the estate they stagnate. Then it’s split amongst their heirs during the next generation and the problem snowballs further.
THIS outcome is all too common. Some families avoided this pitfall somewhat through primogeniture, but it really comes down to inherited ambition, not inherited assets.
When I say “fortunes are lost” I’m not saying the descendants spend themselves into the depths of poverty. I’m picturing a fall from wealthy to something like middle/upper-middle class. I know that doesn’t seem as drastic as some would like to picture, but it’s the most common outcome.
Children decide that they’re content with the portion that they’re given and rather than adding to the estate they stagnate. Then it’s split amongst their heirs during the next generation and the problem snowballs further.
THIS outcome is all too common. Some families avoided this pitfall somewhat through primogeniture, but it really comes down to inherited ambition, not inherited assets.
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