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By Ilze Alberts*
Only 30 percent of family businesses built by one generation are passed on to their children, and only 10 percent of those businesses ever reach a third generation, according to studies.
Says Ilze Alberts, psychologist, life strategist and newly-published author, “One reason suggested is that the third generation doesn’t possess the same set of values, work ethic, and perspective because of their very different experience growing up.”
In her new book Passing the Torch – Preserving Family Wealth Beyond the Third Generation, Ilze explores why the proverbial saying From Shirtsleeves-to-Shirtsleeves in Three Generations ring true for many families. She also talks about how to prevent this from happening to you.
According to Ilze, the first generation struggles hard to rise above their current conditions to achieve a more comfortable life for themselves and their family. “They work hard, diligently save their money, and by their later years have something of value to pass on.
“Their children, the second generation, grow up as a witness to their parents’ struggle and understand the value of hard work. Although they now live a comfortable life, they can remember a childhood filled with frugality and perhaps even poverty. Because of this, they make educational and financial choices that help them build on what their parents created. By retirement, they have, most likely, acquired even greater wealth.
“The third generation, however, has no memory of want or struggle. They’ve only known a life of plenty.
“When the family wealth is passed onto them, they lack the values and skills necessary to maintain the health of the assets. If universal proverbs and small business statistics are to be believed, the third generation squanders the resources their parents and grandparents worked so hard to achieve. Thus, the three generations cycle.”
Ilze believes that it is the birth right of every family to be a powerful unit for generations to come. She helps families to break the “spell” and make sure they preserve family wealth beyond the third generation.
- Ilze Alberts is a Psychologist and Human Behavioural Specialist and she is known for her skills in mentoring leaders in families and businesses. She is an accomplished international speaker and author. You can email her: [email protected].