Generations have passed, yet, families still have no generational wealth?

[contract]

Why is that?

Think back to how far family trees go... On and on and on.

Yet, no one stopped to think along the way.... Maybe I should make more money or at least save it forward for the next generation to invest. After a few generations with compound interest things are fucking nuts.

Example: $1,000 invested 1 time ONLY. Average 7% return. (Stock market) Not touch for 200 years. 3 generations... Not that difficult. We're not talking about shelling out an ENTIRE life's savings here.. Nothing even remotely extreme.

End result: 4th generation now has $752,931,621.65

That's $752 million fucking dollars.

If someone invested $1,000 and added even $100 month into the future family fund. The number is mindblowing: $14,563,830,453.15 $14 fucking BILLION with a B!

(Even $1 once, and a $1 monthly comes out to $12 million. If you want to argue over inflation and wages ages ago..)

Yet...

There's STILL people out there needing to take out 30 year morgages and slaving (SELLING is a better word) HALF of their life away to cover the costs of a house, car, college, etc. That's not even touching living expenses/basic needs here...

To the point where people still need to worry about an emergency fund? What the fuck...

No one stopped to even think about this?

Does everyone think LOVE will get the job done? Money covers hospital bills. Imagine your grandkid DYING because there's no generational wealth to cover a $1000 doctor bill... Money covers better/private schooling, travel expenses/family vacations/bonding time.

Now, I get that being born into poverty is easily one of the best things for a child to be succesful in life. But still, money is the only thing people keep track of... Trump kind of proved that be a bit untrue given he was born into wealth and made something of himself. Though, that's not always the case..

It amazes me, that countless generations have passed, and yet, 99.99% of the people I encounter today are literally broke! To the point where one missed (or a year's for some) paycheck(s) would rock their entire world.

 

[Klayne]

I understand where you are coming from, but I don't think it's that simple.

In the past many people were born slaves. Wars happened and people lost everything. Communism happened, everything is taken away, banks collapse, and other shit likes that.

Secondly, people are just fucking animals, and get addicted to things, gamble everything away, drink all the money etc.

Thirdly, and most importantly, if everyone was rich, no one would be rich. Without there being poor people you can't be rich really. That's the duality of the world. Without someone loosing, there can't be someone who wins. If everyone got a medal, the medal becomes worthless.

If everyone got a million, it would become the norm, and you would desire 100 million to feel rich.


Annnd, in the past 1000$ weren't as little as it is now. Inflation is a bitch

 

[RomesFall]

There are plenty of people who get inheritance and piss it up the wall. I've known several people like that just in the small town I live.

Even so, that middle-class who get inheritance etc, generally still stay middle-class.

Go down to the working class level, and social mobility is very low for a number of reasons. None more so than a lack of belief and desire. I've worked my way up from having less than 0 in my bank. Because I believed. Not even down to ability, except for special cases we all have more or less the same ability. We all have 24 hours a day.

It's a complicated subject.

 

[GrindingTo10K]

Annnd, in the past 1000$ weren't as little as it is now. Inflation is a bitch

According to http://www.davemanuel.com/inflation-calculator.php

$1,000 of 1815 dollars would be worth: $15,625.00 in 2015

But $15,625.00 is not a lot of money by today's standard, so it would have been entirely possible for some people. I guess those people did not think about their ancestors 200 years into the future, just their kids and grandkids? Also, 200 years ago there was not a middle class and most people were poor and just trying to find food for the day.

Thirdly, and most importantly, if everyone was rich, no one would be rich. Without there being poor people you can't be rich really. That's the duality of the world. Without someone loosing, there can't be someone who wins. If everyone got a medal, the medal becomes worthless.

This is the real answer. If everyone had a million dollars people who be prepared to pay 100 million for a house and 1 million would not be a lot of money anymore. I am sure in the far future a loaf of bread will cost 1 million dollars because >>>>

Inflation is a bitch

...this.

 

[darkzerothree]

Sooo many reasons...

One - 200 years
Investment in the stock market would be fine, but which company will last the next two hundred years?
You want to bet Apple, Facebook, or Google are gonnabe there? Or oil companies?
An awful lot happens in 200 years. Countries vanish and new ones are born in that time.

Two - Inflation and taxes
Inflation will kill a lot of the earnings, taxation on inheritance even more.

Three - death and the kids
If you've ever witnessed the fights that break out over who gets what in an inheritance, you'll know that the wealth will not survive. A lot of western countries divide the inheritance by law, too.

Four - life
Sickness, death, divorce, debts...
A lot of things can throw you out of wealth.

Real life
Let's take my own family. The amount of wealth that did not trickle down over centuries is amazing.

Maternal great grandmother was born to a very rich industrial family. They are still around. But - she got married, the inheritance went to the brothers (as was usual back then).

Paternal grandfather was a very well known Dr. The second world war happened.
My father inherited some of what was built up afterwards, but had to divide with his brother.

My father became a Dr. himself and is doing well.
Guess what - messy divorce left my mother a single mom with two kids and an ex who wouldn't pay shit.
Some of his might come my way, but with three ex wives and 4 kids- don't hold your breath.

My wife's family came to Europe in 1989 with the clothes on their backs and two suitcases - literally.

We decided to move to another country.

Now guess how much "generational wealth" is around?

 

[pfingy]

> After a few generations with compound interest things are fucking nuts.

Compound interest is kind of a myth... there sure as hell weren't any vehicles for compound interest 200 years ago, and I'm pretty sure there weren't many accessible vehicles for compound interest 75 years ago. It's one thing if you're a professional money manager, meaning you have access to investment opportunities and the ability to re-invest earnings but it's not like people 3-4 generations ago could just buy an S&P 500 ETF.

Also, like everyone else mentioned... real life, inflation, all that. Realistically, the US Dollar dates to 1913, or you could even say 1971... either way, there's massive inflation between the 1970's and today. There is also inheritance taxes to deal with. The point is that generational wealth doesn't have much to do with saving a little extra for future generations, it requires building social and political capital, and maintaining control over real wealth producing assets – assets that other people (bankers and the government) are eager to try to confiscate for themselves.

If you're great-grandfather saved a pile of gold and silver coins for your family, you'd find that the coins have basically the same purchasing power today as they did 100 years ago. We have a lot more stuff to buy now, so purchasing power is increased in that way – in deflationary sectors like technology, but in any sector where they government has interfered (e.g health, housing, education) you'll see that you would've been better off spending the money sooner rather than later because costs increase every year. For normal stuff like food and clothes, and ounce of gold get's you about the same today as it would've for your great-grandfather. So the best case scenario for a normal family (not super wealthy or politically connected) would be to save a little extra money that has not grown in value.

Thirdly, and most importantly, if everyone was rich, no one would be rich. Without there being poor people you can't be rich really. That's the duality of the world. Without someone loosing, there can't be someone who wins. If everyone got a medal, the medal becomes worthless.

^^ this is completely incorrect. If we all have clean, warm shelter, plenty of food, and quality healthcare, we're all way fucking happier than if we're cold, hungry, and sick.

It is true that without inequality we'd probably all be poor because we'd have a fucked up economy, but that has nothing to do with the value of material goods. If we all have Ferraris, then we all have Ferraris.