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Short-term greed may benefit you, but only at the cost of your grandchildren. Your family is better off if there is an even playing field then if you get massive advantages yourself.

70% of Rich Families Lose Their Wealth by the Second Generation

70% of wealthy families lose their wealth by the second generation, and a stunning 90% by the third, according to the Williams Group wealth consultancy.

U.S. Trust recently surveyed high-net-worth individuals with more than $3 million in investable assets to find out how they are preparing the next generation for handling significant wealth.

"Looking at the numbers, 78% feel the next generation is not financially responsible enough to handle inheritance," says Chris Heilmann, U.S. Trust's chief fiduciary executive.

Family Wealth is 90% Gone by Third Generation

Statistics show that 65 percent of family wealthy is lost by the second generation and 90 percent gone by the third generation, according to tax lawyer and investment advisor Tim Voorhees of WealthCounsel, a nationwide collaborative organization for attorneys and wealth planning professionals.

Offspring of the super wealthy often suffer from "affluenza," he says, crediting Jesse O'Neill, author of "The Golden Ghetto: The Psychology of Affluence." They lack purpose, self-esteem and the ability to delay gratification.

"As problems grow worse, heirs withdraw from others, avoid accountability and develop progressively more serious social disorders," Voorhees states.

Family business founders, he says, often fail to instill values of hard work and thrift in their children and often leave flawed estate plans that fail to define who will inherit and control the family's wealth.

So there you have it. If you care about your descendants beyond your immediate children, you are better off advocating policies that help everyone in society rather than trying to accumulate as much wealth as you can at the expense of society. The zero sum games you play today to rip off other people's wealth will be played by others to rip off your grandchildren's wealth. And most people have more grandchildren then they have selves, so it's a net loss.

#politics #economics #rationalSelfInterest