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> Your definition of “blow it” seems silly and inapplicable. When you have a huge financial parachute behind the scenes, you have room to absorb losses from poo

> Your definition of “blow it” seems silly and inapplicable. When you have a huge financial parachute behind the scenes, you have room to absorb losses from poor investments, and again the cases when legacy money is mishandled so badly as to lead to ruin are extremely rare and over-popularized in media. I'm not just talking about total financial ruin, I'm talking about staying rich over multiple generations. Over that timeframe, you'll have wars, market crashes, sovereign debt crises, currency crises, riots, and so on. Let's say I give you 10 million dollars, which puts you in the top 1% in the US. Over an 80 year lifespan, that's 125,000$ per year. In the period from 1900 to 1980, that money lost about 90% of its purchasing power. If you do "nothing", at the end of that period, you will be poor. So you have to invest the money. Who do you trust? The government? Untrustworthy. The stock market? Highly volatile. Gold? No yield whatsoever. Real estate? Requires upkeep, vulnerable to structural change. Diversify? You may not even beat inflation. It's easy to say in hindsight what is an isn't a dumb investment. You're biased by living in the tail end of the best century of the best economy in the history of humanity. > Getting one’s rich parents to fund a dumb start-up idea that wastes millions crashing and burning, and then reluctantly using family connections to get a $400k/year job in a finance or white-shoe law firm is not at all any version of “blowing it.” You think Wall Street just hands out $400k jobs to rich kids because they went to some prestigious school? You believe lawyers are hired on the basis of their inheritance?

perl4ever 7y ago
"You think Wall Street just hands out $400k jobs to rich kids because they went to some prestigious school?" I basically agree with your overall point that there are a lot of things that can happen to rich people or families over long periods of time, but I can't help pointing out that yes, Wall Street does just hand out jobs to rich kids: https://dealbreaker.com/2013/08/sometimes-jpmorgan-hired-the-children-of-its-clients https://dealbreaker.com/2013/08/sometimes-jpmorgan-hired-the... "Nepotism is allowed and inevitable; what is punished is clumsy nepotism. Invoking the proper formulas, observing the proper cooling-off periods between hiring a client's kid and using him to seek business, keeping the quid pro quo off of email: that's what counts. Obviously you hire the children of important clients and potential clients, and obviously that helps you at the margin to win business; you just have to do it the right way. There's a reason it's the Foreign Corrupt Practices Act; the goal is to make sure that companies conform their foreign corrupt practices to American standards of corrupt practice. When you follow other cultures' forms of corrupt practice, you get in trouble." https://dealbreaker.com/2015/02/wait-is-it-not-typical-of-jpmorgan-to-hire-people-people-who-send-sexually-explicit-emails-to-hr-and-are-described-as-the-worst-candidate-ever https://dealbreaker.com/2015/02/wait-is-it-not-typical-of-jp... https://dealbreaker.com/2015/11/jp-morgan-sons-and-daughters https://dealbreaker.com/2015/11/jp-morgan-sons-and-daughters
- gridlockd 7y ago
  I remain unconvinced, all of these are cases of Guanxi, which is incredibly important among Chinese. It's not so much about wealth, but about connections, especially political ones. You definitely want to be on the good side of certain Chinese officials, if you want to do business there. Even though such cases may exist, you're not likely to "fall" on a $400k job after blowing your inheritance on a startup. While good connections certainly help with creating wealth, wealth by itself doesn't necessarily help with creating good connections - especially if that wealth is now gone.
  - perl4ever 7y ago
    I don't have any special knowledge of how this works in Chinese culture or others, but I'm inclined to think, like the quote alludes to, that it's not just a Chinese thing - that just shapes the conventions for how it's done, and maybe in this particular case clashed with American conventions such that it became a problem for JP Morgan.
mlthoughts2018 7y ago
While I think there are several larger factual errors in your comment, it may not matter because it seems like we’re talking about totally different things. > “I'm not just talking about total financial ruin, I'm talking about staying rich over multiple generations.” I think the OP and my comments are all only talking about wealth outcomes over a single lifetime for a person born wealthy. AFAICT no part of this thread was about multi-generational wealth, and for multi-generational wealth I largely agree with your broader points.
- gridlockd 7y ago
  There is the point that I originally made: "Families that have been wealthy over generations have figured out how to do this, while the "noveau riche" often fail after one or two generations." That also implies that if you're born into "old money", you most likely will stay rich. Just being "born rich" isn't sufficient though.

perl4ever 7y ago

"You think Wall Street just hands out $400k jobs to rich kids because they went to some prestigious school?" I basically agree with your overall point that there are a lot of things that can happen to rich people or families over long periods of time, but I can't help pointing out that yes, Wall Street does just hand out jobs to rich kids: https://dealbreaker.com/2013/08/sometimes-jpmorgan-hired-the-children-of-its-clients https://dealbreaker.com/2013/08/sometimes-jpmorgan-hired-the... "Nepotism is allowed and inevitable; what is punished is clumsy nepotism. Invoking the proper formulas, observing the proper cooling-off periods between hiring a client's kid and using him to seek business, keeping the quid pro quo off of email: that's what counts. Obviously you hire the children of important clients and potential clients, and obviously that helps you at the margin to win business; you just have to do it the right way. There's a reason it's the Foreign Corrupt Practices Act; the goal is to make sure that companies conform their foreign corrupt practices to American standards of corrupt practice. When you follow other cultures' forms of corrupt practice, you get in trouble." https://dealbreaker.com/2015/02/wait-is-it-not-typical-of-jpmorgan-to-hire-people-people-who-send-sexually-explicit-emails-to-hr-and-are-described-as-the-worst-candidate-ever https://dealbreaker.com/2015/02/wait-is-it-not-typical-of-jp... https://dealbreaker.com/2015/11/jp-morgan-sons-and-daughters https://dealbreaker.com/2015/11/jp-morgan-sons-and-daughters

gridlockd 7y ago
I remain unconvinced, all of these are cases of Guanxi, which is incredibly important among Chinese. It's not so much about wealth, but about connections, especially political ones. You definitely want to be on the good side of certain Chinese officials, if you want to do business there. Even though such cases may exist, you're not likely to "fall" on a $400k job after blowing your inheritance on a startup. While good connections certainly help with creating wealth, wealth by itself doesn't necessarily help with creating good connections - especially if that wealth is now gone.
- perl4ever 7y ago
  I don't have any special knowledge of how this works in Chinese culture or others, but I'm inclined to think, like the quote alludes to, that it's not just a Chinese thing - that just shapes the conventions for how it's done, and maybe in this particular case clashed with American conventions such that it became a problem for JP Morgan.

mlthoughts2018 7y ago

While I think there are several larger factual errors in your comment, it may not matter because it seems like we’re talking about totally different things. > “I'm not just talking about total financial ruin, I'm talking about staying rich over multiple generations.” I think the OP and my comments are all only talking about wealth outcomes over a single lifetime for a person born wealthy. AFAICT no part of this thread was about multi-generational wealth, and for multi-generational wealth I largely agree with your broader points.

gridlockd 7y ago
There is the point that I originally made: "Families that have been wealthy over generations have figured out how to do this, while the "noveau riche" often fail after one or two generations." That also implies that if you're born into "old money", you most likely will stay rich. Just being "born rich" isn't sufficient though.