The statistical odds of retaining family wealth until the third (12%) and fourth generations ( 3%) are well cited, as
I’ve written about before. What I hadn’t seen until recently were the statistics around
New Wealth created each generation and the numbers are simply staggering.
Approximately 80 percent of the wealthy are not raised with wealth, it’s obtained during their lifetime.
Whether they come into money via a windfall inheritance or lottery win, or, more likely via entrepreneurship and savvy investing, the vast majority of wealthy people are learning what it means to be wealthy for the first time.
The implication is ominous: People are streaming out of the metaphorical Land of Wealth at a much faster pace than they are pouring in. Only by this massive exodus could the 80/20 proportion of acquirers outnumbering inheritors remain in place, by so wide a margin, so consistently, over so long a period of time. - James Grubman
If 80% of wealth is newly made each generation and 70% of families lose it by the second generation, there’s a glaring opportunity to investigate why that is and how it can be avoided.
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