Are you familiar with the proverb, “Shirtsleeves to Shirtsleeves in Three Generations?” Or maybe you’ve heard the saying as: “Rags to Riches to Rags in Three Generations.” The ancient Chinese version of this proverb is Fu bu guo san dai, which roughly translates to, “Wealth does not sustain beyond three generations.”

Various cultures throughout history have seen this same pattern. The first generation works hard, creates success and builds wealth; the second generation preserves it and transfers it; and the third generation (or sometimes subsequent generations) spends it until it is completely depleted.

Why is this pattern so universal? Is there anything we can do to change the outcome? In this month’s column, we’ll examine this phenomenon and see how the outcome can possibly be reversed.

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