GENERATION WEALTH

I overheard the term from a radio station interview with the CEO of an insurance company. It struck a chord with me so strongly that I immediately inquired, what does this term mean? How does it work? Is this the latest fad? What exactly is Generation Wealth? Surprisingly, the phrase has stayed with me until today.

Investopedia refers to generation wealth as financial assets that are passed down from one generation of a family to the next. These assets can take the shape of real estate, cash, stocks, bonds, or other types of investments, as well as family enterprises. In short, wealth preservation is beyond one generation.

The idea of generation wealth has a peculiar twist because, according to an ancient Chinese text, ‘Wealth Does Not Last Beyond Three Generations’. This is often true because of internal family wealth inheritance disputes and perhaps because of the three-generational wealth cycle of wealth creators–wealth preservers-wealth spenders' syndrome. The law of future value, which states that wealth's net worth may decrease over time, dilution consequences from inheritance tax laws, and thinning of assets as they are handed to successive generations of heirs are further external economic considerations worth mentioning.

The other viewpoint is equally accurate. Families like Hermes, Ambani, Cargill, and Wertheimer, who are among the Top 10 Richest Families in the World according to gobankingrates.com, provide historical evidence of successful generation wealth. The Leader, The Teacher, and You article went on to explain how generational wealth preservation can be accomplished through a systematic application of successful leadership values and principles and consistent re-expression of those values and principles in ways that are appropriate to each generation.

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Next … First generation, the wealth creator.?