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The rich get richer.
You've no doubt heard that phrase many times.
But, is it true?
The short answer is no.
According to the Williams Group, a wealth advisory group, 70% of wealthy families lose their wealth by the second generation, and a staggering 90% by the third.
However, those raised in wealthy families have a greater advantage than those raised in poverty.
Benefits
- Better Education – Those who grow up in affluent homes often live in affluent areas. These neighborhoods often have better school systems with better teachers and more educational resources.
- More Resources – The rich obviously have more resources. They can hire tutors for their children. They can cover the costs associated with clubs or organizations that their children can participate in. They can enroll their children in SAT preparation courses. They can afford their children's college education.
- Extra Time – Many children brought up in poor homes, at times, are asked to help pull a cart – they have to find work to help the family. This reduces how much time they have to do anything else. Those raised in wealthy families do not have this need. So, rich kids have more time to study, more time to participate in school clubs and more time to spend building lasting relationships with their rich friends. These long-term relationships pay dividends down the road. Finding a job is easy – just reach out to one of your childhood friends, ask them to open a door for you.
- Formal Education – Wealthy children tend to attend expensive private schools. These schools are focused on preparing their students for college. As a result, nearly 100% of private high school graduates go on to college. On the other hand, only about 16 percent of low-income students graduate from college.
- Peer Pressure Success – Children raised in affluent homes are expected to go to college and sometimes graduate. In the minds of their wealthy parents, this encourages their children to get better, higher paying jobs when they graduate. In these affluent areas, this becomes a shared expectation when everyone within these affluent areas is on the same path – pursuing college and/or graduate school education. This “Herd Doctrine” has a great gravitational force that directs the behavior of those within the “rich local herd”.
But, growing rich also comes at a cost. There are certain disadvantages to growing rich that prevent the pursuit and accumulation of wealth.
Evil
- Less Willing to Take Risks – Those raised in wealthy homes have a lot to lose. Therefore, they are more dangerous than those raised in poverty, who have nothing to lose.
- Inferior Work Ethic – Comfort can lead to complacency. Those who grow up in a rich family don't have to work for their food, their school supplies, their video games, their iPhones, etc. If you have no choice but to work to get things that others give you, you are forced to develop a hard work ethic. Because success requires a strong work ethic, if you don't have it, success won't happen.
- Fear of Failure – One of the worst things about failure, is that failing at something can put you in the poor house. When you grow up poor, you are less afraid of poverty, because it is something you are familiar with and something you survived. Therefore, failure is not so scary. However, those who grow up in wealthy families are used to having the good things in life. So, fear of failure means losing what you have. That fear will stop you from pursuing your dreams, because such pursuits may fail.
- Uncomfortable With Failure – Those raised in wealthy families have many safety nets that help them when they fail. Comforting parents, teachers, private coaches, etc. However, when these children start work in the real world, the real world will not hold them back, just like their parents. They will eventually be exposed to failure, and when they do, they will be ill-equipped to overcome themselves.
- Unaccustomed to Sacrifice – Those who grow up in wealthy families are given things they did not have to work for or sacrifice. The pursuit of wealth always requires sacrifice. Sometimes for many years. If you are not used to sacrifice, it will be very painful and unbearable for you. Grinding it is usually not in the DNA of those who grew up in wealthy homes.
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