The traditional three generations named in the loss of private wealth are: the wealth creator, the silent “caretaking” generation, followed by the third “spending” generation.
The prototype of the first generation is someone strong and successful. The second generation is raised in the shadow of the first and tends to act as a passive caretaker. The third generation is raised in a wealthy environment but without an appreciation of the effort that was involved in its creation or the skills. This is the generation that loses the wealth.
If the negative saying is the beginning point, the goal is to “break” the cycle. But I do not think the three-generation cycle needs to be the starting point-and I do not think the loss of private wealth is more likely than not to happen. If we start with a positive analogy, looking at nature and at four generation types, we can optimistically learn and appreciate the role of each generation. The common background theme can be one of sustainable wealth, generation after generation. This includes, on a more theoretical level, a commitment to a world view that is cyclical, not linear. Instead of the “three generations” view-which is a linear view, with a beginning, middle, and end-we need to adopt a cyclical view, which is more in harmony with life and the seasons.3 It is also consistent with the four-cycle approach of the Russian economist Nikolai Kondratiev: Prosperity, Recession, Depression, and Improvement.
BARBARA R. HAUSER
Source – The Journal of Wealth Management