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The wealthy are getting richer.
You have undoubtedly heard this soundbite repeatedly.
But is that true?
The short answer is: no.
According to wealth advisory group Williams Group, 70% of rich families lose their wealth within the second generation and a staggering 90% within the third generation.
Nevertheless, children who grow up in wealthy families have an enormous advantage over those that grow up in poverty.
Advantages
- Better education – People who grow up in wealthier households generally live in wealthier neighborhoods. These neighborhoods are likely to have higher school systems with higher teachers and more educational resources.
- More resources – The wealthy obviously have more resources. They can afford to rent tutors for his or her children. They can afford to fund incidentals for the clubs or organizations their children may take part in. They can afford to enroll their children in SAT prep courses. They can afford to fund a university education for his or her children.
- More time – Many children growing up in poor families eventually should pull the cart – they’ve to search out work to support the family. This limits their time for other things. Children from wealthier families should not have this need. Therefore, wealthy children have more time to check, more time to participate at school clubs, and more time to construct long-term relationships with their wealthy friends. These long-term relationships repay later. Finding a job is simpler – just reach out to one in all your childhood friends and ask them to open the door for you.
- Formal education – Wealthy children often attend expensive private schools. These schools focus more on preparing their students for school. As a result, nearly 100% of personal highschool graduates go on to school. Conversely, only about 16% of scholars from low-income families complete college.
- Peer pressure to succeed – Children growing up in wealthy families are expected to go to school and sometimes pursue graduate studies. In the minds of their wealthy parents, this prepares their children to search out higher, higher-paying jobs after graduation. In these wealthy enclaves, this becomes a shared expectation, with everyone in these wealthy neighborhoods following an identical path – pursuing college and/or graduate studies. This “herd doctrine” has a really strong pull that guides the behavior of those inside the “rich neighborhood herd.”
But growing up wealthy also comes at a value. There are certain disadvantages to growing up wealthy that hinder the pursuit and accumulation of wealth.
Disadvantages
- Less risk-averse – People who grow up in wealthy families have quite a bit to lose, in order that they are more risk-averse than individuals who grow up in poverty and don’t have anything to lose.
- Poor work ethic – Comfort can result in complacency. If you grow up in a wealthy household, you haven’t got to work in your food, school supplies, video games, iPhone, etc. When you may have no selection but to work to get the things that others get, you’re forced to develop a labor ethic. Because success requires a powerful work ethic. If you haven’t got that, success is unimaginable.
- Fear of failure – One of the disadvantages of failure is that in the event you fail at something, you’ll be able to find yourself within the poorhouse. When you grow up in poverty, you’re less afraid of poverty because you’re aware of it and have survived something. Therefore, failure doesn’t scare you as much. However, those that grow up in wealthy families get used to having the nice things in life. So fear of failure means losing what you may have. This fear will stop you from pursuing your dreams because such endeavors might fail.
- Failure is uncomfortable – Those who grow up in wealthy families have many safety nets to assist them after they fail. Comforting parents, tutors, private teachers, etc. However, when these children start working in the actual world, the actual world won’t coddle them like their parents did. They will eventually face failure and might be ill-equipped to beat it on their very own.
- Unaccustomed to creating sacrifices – People who grow up in wealthy families get things that they didn’t should work for or sacrifice for. The pursuit of wealth all the time requires sacrifice. Sometimes over a few years. If you are not used to creating sacrifices, it is going to be more painful and fewer bearable for you. Slogging away is not often within the DNA of people that grow up in wealthy families.
