How Do Millionaires Lose Their Money In second Generation
How Do Millionaires Lose Their Money In second Generation.
Some are born with a silver spoon and spend all their lives enjoying the privilege their parents laid down to their 2nd generation, or possibly to their third generation. While some may never get wealthy. Not because they are not hard working, not because they are not brilliant, nor educated; but because they think short term not looking ahead of the generation when making and applying decisions. Some are [PROFESSIONALLY TRAPPED], they work hard all through their life striving with energy until they burn out of their physical strength to keep running the rat race.
This is to say, being poor is a personal decision either by attitude to life, or attitude to one who may have adopted a life pattern they don’t want to change or seeing themselves not changing it. Some may be poor to which it could be several factors behind their life circumstance. Our focus today is How Do Millionaires Lose Their Money in second generation, to which you will gain some knowledge why some could be poor, though they are presently rich.
You may never be able to generate sizable incomes that many of these millionaires have earned. You may not become a multimillionaire in a few short years. But you can still benefit from understanding how these people maintained an enjoyable lifestyle, accumulating wealth and later on their journey of accumulating more wealth, it all end with nothing accountable about.
The wealth attrition rate is surprisingly high. It affects 90 per cent of family fortunes, according to one study from the United States. In some cases, the money itself disappears, and in others it’s the family business that’s lost. Among the causes of the phenomenon are taxes, inflation, bad investment decisions and the natural dilution of assets as they are shared among generations of heirs.
Yet among the most compelling causes are younger family members who are ill-prepared or unwilling to shoulder the responsibility of wealth stewardship. They have grown up with plenty of money and are a step or two removed from the work ethic and drive of the people who made it for them. This could be most reason why affluent people around the world with wealth may never get to extend their riches to their next generation, some who inherited wealth go most with these trends even if their loves ones work hard to gain such wealth, it drastically phaseout in their second generation.
5 Common Reason 90% Of Rich Families Lose Their Wealth In Second Generation
1. The Financial Uneducated with Zero Finical Discipline
Most rich people who are born into wealthy families are either Uneducated financially, with Zero Finical Discipline. Most live their life in appraiser of trying to please the society in competition of who owns the most expensive toys, while they live in chronicle taxes debt. These set of people may inherit wealth, but they fail to realize that real creation of sustainable wealth are not what you earn from your parents, salary, but the discipline to sustain obtainable wealth.
My message for such people whose life is an example of what I explain above should understand real wealth and lasting wealth is only sustainable by being financial discipline also financial educated. Stop accumulating what doesn’t increase your financial values and assets, that even when it’s to be liquidate do not amount beyond the price it was gotten.
2.The money savers who don’t invest
The world fall into this category. The wealthy do more than just save. Ask the few wealthy persons with financial education you know. Did they become rich by simply setting aside a fraction of their income and depositing it in banks, or did they use their money to work for them?
Ordinary people save to spend. Wealthy people save to leverage.
Ordinary people chase trends and spend thousands of dollars if not more, to be “cool”. Wealthy people invest through properties, commodities, or the stock exchange and those wealthy folks who fails to realize this principle to sustainable wealth are most likely to phaseout from the wealth line, would not even pass to the next generation from getting to enjoy the wealth.
Years back I realize saving funds for no investment does cost you more by devalue your money when it is not invested. I am not trying to talk/discourage you form saving and doing away from banking your money. Banking is good because it could be more secure if the bank doesn’t foldup. But this has been one reason that have cost most people to loss their money. you have to know today savers are the biggest losers. Since 1971, the U.S dollars lost 95percent of its value when compared to gold. According to Robert T. Kiyosaki, it won’t take another 40 years to lose it remaining 5 percent value.
The best words to assist such people is to inform them money loses value when not equally invest, it will be spend acquiring what you don’t need, then selling what need later in the future. who know what would occur in the future, as banks doesn’t inform it customers if it may likely foldup. This could be the one of such reason people who believe they have to save to become wealthier lose their life saving to most banks that folded up. So, the best ways is to imbibe the attitude of investing and save to leverage.
3. living an Addicted lifestyle
You cannot live an impact full life if you’re addicted to the wrong stuffs. Addiction is a form of disease, and it can pose a series of negative consequences on a person’s well-being, physical health and professional life. There are many forms of addiction, and each one poses its own series of risks. Addiction could affect anyone but being able to detect you are becoming addicted would enable you take caution or preventive measures.
Most wealthy people suffering from addiction couldn’t give account of their wealth which means it didn’t even get to their next generation. They could be living in homes well established. Have the most expensive cars, have successful business. Professionally sound, come from a discipline family, have a successful career, but along the line, most missed it due to some circumstance that became the choice they exhibited that became the end of their life achievement. These are addiction consequence. Addiction to luxury life, addiction to drugs and sex, addictions to illicit deal. This kind of addiction could be why they may lose their wealth.
You don’t need all these if you actually want to live an impactful life to influence your next generation positively. Remember, if you are addicted to consumption, you’ll have a lot debt to solve and you really cannot do much than phaseout.
4. The Greedy
Have you ever come across a greedy friend who thinks you own him/her everything but you are neither entitle to even a pin he/she owns? Well don’t every consider such people to be your friends, because my encounter with one was nothing but just a lesson.
They are not contented with their lot in life, some people look at all those things they could have that make life even better. Or so they think, anyway. The latest smartphone. The upgraded car. The bigger house. The 80 inch flat screen TV. The huge deck. The patio. The yacht. Sadly, all those expenses have to be paid, and it can lead to crippling credit card debt, loans that cannot be paid back, and the eventual loss of everything to pay back creditors. As Tyler Durden famously said in Fight Club, “the things you own end up owning you.” So, be very wary of greed. Happiness from those items is fleeting anyway.
These set of people are born into the millionaire family, but not of the millionaire mind. They could be hard working, but nothing is as important in their life compare to their money. Not even their families. They are misers. They can short change their spouse and children. Money is their God. These set of people believe you have nothing to offer reasonable if your money is not sufficient to theirs. Money controls their emotion and determines their attitude, and such people are brought down to nothing because the things they see as their God is what will destroy their wealth even in their own generation, their success are temporal because of their greed for more, they become addicted to either become a: “Gambler.”
Gambling Away Everything
You know the stories. You’ve seen the movies. Gambling can bring people great wealth in just a few seconds. But, for the vast majority, it’s a losing proposition. Couple gambling with greed, and you have a recipe for tragedy just waiting to happen. Every year, millions of people try and get lucky, and for most, it’s just a flutter. Win or lose, they walk away. But 2% of people who gamble get seriously addicted, and greed takes over. A win becomes an adrenaline rush. They want more. And more. They want to see the dollar signs multiply. Before they know what’s happened, they have lost everything trying to win back the money they once had.
5. Most Lack Knowledge
Hosea 4:6 says, “My people are destroyed for lack of knowledge.” What was it that Israel did not know, and why was that lack of knowledge so dangerous?
The rest of verse 6 helps explain: “Because you have rejected knowledge, I reject you from being a priest to me. And since you have forgotten the law of your God, I also will forget your children” (KJV). It’s important to note the structure of the verse: “rejected knowledge” is parallel to “forgotten the law.” This fits the context of the opening verse of the chapter, which states that Israel failed to acknowledge the LORD as their God (Hosea 4:1). The people did not simply lack knowledge; they actively rejected it.
You cannot become a wealthy person if you reject knowledge, and that is most case of these wealthy family who didn’t work for it, but actually inherited their wealth. They spend without the knowledge of knowing how to generate income, rather than build on knowledge to increase their wealth.
Wealthy families are able to acquire assets internationally, being no longer restricted by geography in an increasingly global world. This means such assets are bound by international regulatory jurisdictions, making it harder to plan for their transfer due to a lack of knowledge about the legalities. In an interview with the Singapore business review (SBR), RBC’s head of wealth management for Southeast Asia Gea Hong Tho said, “Many are delaying putting in place a proper plan as it is not as straightforward and they do not have precedent knowledge on how to structure it.”
6. Not Appreciate the Effort it Takes to Build Wealth
Often, people who have gone through the proverbial rags-to-riches path are highly motivated and even obsessive when it comes to accumulating and preserving wealth.
Lacking that drive, their children are usually better at spending than accumulating money. In fact, there are plenty of examples of young people who not only live the good life, but also document it on social media.
7. They Don’t Have to Work For It
If you work for it, you certainly will appreciate what it takes to sustain it. This is applicable to all that revolves the lives of sustaining wealth. You have to understand there is a work behind every reward, and most didn’t work for it, so they don’t understand management. This is because the offspring of the super wealthy grow up in a privileged environment; they don’t understand the amount of hard work that goes into accumulating wealth. According to Tim Voorhees, a tax lawyer from WealthCounsel, “Heirs given money typically have a strong inclination toward spending the money on possessions, pleasures, or other purposes without lasting significance.”
8. Parents Hide Their Wealth From Their Kids
On the flip side, sometimes such lack of knowledge is the result of the parents’ decision to hide their wealth from the kids. Their reason for doing so if often altruistic; they worry that if their children know how rich they are, they will grow up entitled and not understand the value of working hard.
Unfortunately, when kids suddenly receive significant amounts of money without any prior knowledge of how to handle it, they might not take the time or initiative to understand the values that helped accumulate the sum of the inheritance and may be inclined to spend it.
In conclusion, there are two main things that families can do to keep from losing their wealth: plan and educate. Planning for the transfer of wealth from one generation to the next may seem daunting. However, for families with large fortunes to safeguard, this is essential.
Education is another important aspect of wealth preservation. With proper planning, such engagement gives the heirs hands-on experience with what to expect eventually, when they need to take over the reins. Thus, with some careful planning and communication, families can ensure the sustainability of their wealth across future generations.