Family wealth doesn't last 3 generations, a notion that I can only agree subject to conditions because it is a notion that confines within a group of people: East Asians ex-Japan.
Many believe that its a curse of building wealth, the price to pay, and all sort of 'destiny of life' reasons. But they are not the reasons for a family wealth to be gone by the third generation.
The main reason is culture and to be more precise; Confucianism. The basic underlying is that a family wealth should be transferred through the main male lineage and leave the girls out most of the time. Wealth is for the eldest son to take whether he deserves it or not and if the father has a different view and pass it to another son then the eldest son will revolt because the view is already in place that the eldest son should inherit the wealth no matter what. So you can see the potential conflicts over the pennies.
In Japan there are many families whose wealth have been passed on for more than 3 generations and the Japanese are more confucianistic than the Chinese people today. The fact is that a society can subscribe to Confucianism yet cast out the bad or irrelevant parts by today's standards, and also adopt modern or western practice of preserving family wealth through the generations.
The trick is pretty simple actually. Create a trust, put the money into it, governed by a trust deed, controlled by an independent trustee and overseen by the law. This way wealth can be equitably transferred to off springs subject to conditions set in the trust deed. This is why many wealthy families in the west and Japan can last for centuries.
It is only a curse because we refuse to innovate.
Many believe that its a curse of building wealth, the price to pay, and all sort of 'destiny of life' reasons. But they are not the reasons for a family wealth to be gone by the third generation.
The main reason is culture and to be more precise; Confucianism. The basic underlying is that a family wealth should be transferred through the main male lineage and leave the girls out most of the time. Wealth is for the eldest son to take whether he deserves it or not and if the father has a different view and pass it to another son then the eldest son will revolt because the view is already in place that the eldest son should inherit the wealth no matter what. So you can see the potential conflicts over the pennies.
In Japan there are many families whose wealth have been passed on for more than 3 generations and the Japanese are more confucianistic than the Chinese people today. The fact is that a society can subscribe to Confucianism yet cast out the bad or irrelevant parts by today's standards, and also adopt modern or western practice of preserving family wealth through the generations.
The trick is pretty simple actually. Create a trust, put the money into it, governed by a trust deed, controlled by an independent trustee and overseen by the law. This way wealth can be equitably transferred to off springs subject to conditions set in the trust deed. This is why many wealthy families in the west and Japan can last for centuries.
It is only a curse because we refuse to innovate.
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