Wealth is Like Oxygen
Invisible, and you only notice it when it runs out
Almost every culture has a saying about wealth not lasting. The English talk about clogs to clogs in three generations. The Americans say shirtsleeves to shirtsleeves, the Italians from the stars to the stables, the Chinese rice paddy to rice paddy.
The pattern is fairly predictable, and I'm sure you've witnessed it first-hand. The first generation builds the money. They start with little, so they understand risk, sacrifice and uncertainty in a way that gets built into how they live. The discipline and the wealth arrive together.
The second generation grows up watching it happen. They see the long hours and the setbacks, and a lot of that discipline rubs off even when the hardship doesn't.
By the third generation, the money has always just been there, like oxygen. Nobody in that generation went without it or had to wait for anything it could buy. They've never seen what it took to create, and that's usually where it starts to come apart.
When families plan to break this cycle, they focus almost entirely on the financial side. Trusts, tax, structures, estate planning. These things matter, of course, but the bigger risk is behavioural.
Money with no struggle behind it is a hard thing to hand someone. Many first-generation wealth creators spend years removing every obstacle from their children's paths because they want life to be easier for them. It's a kind intention, but resilience and grit don't pass down with the assets. A child who never meets friction and failure doesn't learn the same lessons as their parents.
This is why I think wealthy families are better off intentionally introducing some discomfort. That sounds harsh. But life brings discomfort eventually, and a controlled version early is a lot kinder than a catastrophic one later. Children should hear "no," work and earn, and feel the difference between wanting something and needing it. Most of all, they should grow up understanding that wealth is a tool, not who they are.
Families also need to talk about money far more openly. In many wealthy households, the subject is treated as classified information. The children are told almost nothing for years, then handed a large sum and expected to manage it well. That isn't how judgement develops.
For us as advisers, this is the work. The trusts and the tax planning are the easy part. The harder and more useful conversation is about the next generation: what they know and whether they've been prepared for the money or just shielded from everything that might have prepared them.
