The Curse of the 4th Generation Wealth

Posted on October 23, 2014 by Holly Hansen, One of Thousands of Life Coaches on Noomii.

You may have heard of the phrase “shirt sleeve to shirt sleeve” which refers to the common belief that for most of the Wealth in Family, will be gone within 3 generations. And time and time again this deems to be true, based on my personal research and conversations with friends and clients. Below I also bring up 3 steps to how to break this curse.

Here is how this breaks down:

1st Generation – this person or together with their spouses, they start with nothing but works hard to gain the money, they have a deep desire to create a long lasting financial legacy for their family, so they don’t have to suffer or struggle like they did. These folks are the Earners. They do all the work to make the fortune, and tend to have more conservative views on their money.

2nd Generation (The Gainers and the Born Wealth) – Children of 1st Generation of Wealthy may either have seen the family come into money or was born into it. Either way, they benefit from the money in the family, usually don’t have to work for it. These generations are the Gainers. They will usually gain this money through inheritance or through trust funds. They enjoy the benefits of their gained money, They buy the nice houses, wear beautiful clothes, spend their time on Charity or on the Board Arts Boards. And unless they have the right circle of trust (various personal and financial advisers) this is where the family fortune plateaus.

3rd Generation (Born Wealth) – The Children of the 3rd generation have learned their financial values from their family and peers, most have never had to work hard for anything. They tend to run into problems with entitlement or even money guilt. This is the generation that tends to consume the financial fortune which leaves no financial legacy for their children;

The Fourth Generation has to start the process all over again. And the curse is, they were raised around money, only to find there is no legacy for them.
So what is the solution, what strategies can be done to avoid the curse of the 4th generation?

Here are three things that can make a difference:

1. Parents teach your children several important things:
+ Teaching their children a healthy sense of responsibility and respect for money
Expose them to situations where money can’t buy happiness but their own efforts can
+ Teach them about creating short term and long term goals – this will help them see their life as whole and not just what is happening at the moment

2. Get really clear about your own personal life purpose and meaning so you can come up with a Personal Plan to help you figure out what you want your life to be about.
+ Self-Exploration – Read books, attend seminars and reflect through meditation and journaling
+ Get a Private Empowerment Coach – If you find you need more than Self Exploratory work. If you want to have a trusted partner on your journey to help you figure things out, create plans and take action. Your Coach can help you, overcome what is blocking you, create a balanced happy life with purpose and meaning. My clients are looking for that one on one support to take them to the next level of life satisfaction.
+ Get a Psychotherapist – If you find yourself facing persistent depression, anxiety, despair or grief, you should find a trusted therapist to help you through the dark back into light

3. Surround yourself with the right Legal and Money Advisers* who really listen to you and will align your Personal Plan with your Financial Life. And most importantly of all, they should be all working together in alignment on your behalf.
+ Financial Advisers – From Insurance to Investments, you need a set of Financial Advisers that you trust to act in your best interest based on your needs and desire to grow and maintain the wealth legacy for generations to come
+ Certified Public Accountants – A good CPA can help you with Tax protection strategies and help you keep track of your financial health.
+ Legal Advisers – From Estate to Tax Attorneys, it is important to protect your wealth and your family with legal experts who are well versed in working with Legacy Family Wealth.

So in summary, if you educate your Kids, get your own Personal Plan in order, and use that Personal Plan to work with your Legal and Money advisers, you can overcome the curse of the 4th generation, and your money can last for many more future generations. And that is a beautiful thing!

• Note: Sometimes you get all or some of these roles in one place if you belong to a Family Office