Is it better to have had and lost than to not have had at all?
That question is a variation on the quote by Alfred Lord Tennyson who said, “’Tis better to have loved and lost than never to have loved at all.”
Like the Alfred Lord Tennyson quote meant to give oneself comfort after a breakup, I imagine the response to my question, “Is it better to have had and lost than to never have had at all?” in the affirmative is a way for families who once had tremendous wealth but then lost it to feel good about themselves. Sure, we have nothing now, but it sure was great when it lasted.
America is truly the land of opportunity and many have amassed great fortunes from their hard work and efforts. Unfortunately, the originators of these fortunes did not pass on the same industriousness to their heirs to carry on their wealth and legacies.
For every Rockefeller whose fortune still endures, there are a dozen Vanderbilts who completely squandered their fortunes.
Here are a couple of examples of descendants who squandered their family fortunes:
The VANDERBILTs –
At the peak of his wealth, Cornelius Vanderbilt was worth $202 billion in today’s dollars. Vanderbilt amassed his fortune from his steamship and railway empire.
The Vanderbilts were once the wealthiest family in the United States, but over the generations, the family squandered it all on expensive luxuries like classical art, mansions, parties, and gambling.
CNN anchor Anderson Cooper is Vanderbilt’s sixth-generation descendent, and he says his mother told him early on, “There’s no trust fund.” In other words, the money’s all gone.
The HARTFORDs –
George Huntington Hartford made his fortune from turning a small chain of retail, tea, and coffee stores into A&P, America’s first grocery store chain. The Wall Street Journal once described A&P as “Walmart before Walmart,” and until 1965 it was the biggest retailer in America.
However, when Huntington Hartford inherited the family fortune, he squandered most of it through a lavish lifestyle. After 156 years in business, A&P closed its final store in 2015. Hartford went bankrupt and lived out his final years in a modest home.
What Financial Legacy Will You Leave?
Leaving a multi-generational financial legacy starts with teaching the ensuing generations about financial literacy. You can’t just hope your descendants know how to build and preserve wealth, you have to teach them by example. Teach them like how the Rockefellers and Hiltons taught their descendants – by investing in assets with intrinsic value.
Don’t Speculate
The wealthy don’t speculate. They don’t leave their fortunes to chance. They invest in passive income assets backed by tangible assets that endure and cash flow through wars, depressions, disasters, etc. income-generating tangible assets.
Why Income?
Because the wealthy understand that the key to wealth is to have money working for you 24-7. Because there are only some many hours in the day, there is only so much income you can earn from active income (i.e., your day job).
Only passive income investments can build wealth. That’s because these investments will make you money even when you sleep and unlike the number of jobs you can hold, you are not limited to the number of income streams that you can create and hold.
YOU DON’T HAVE TO BE BORN A ROCKEFELLER TO BECOME ONE
Passive income is a great equalizer. The blue-collar worker who can scrimp and save and allocate his savings into cash-flowing assets that grow over time can make money while he sleeps.
Income for those passive investments can then be diverted to other income-producing assets to compound wealth. The blue-collar worker is no longer constrained by an hourly wage and the number of hours in the day.
Contrast the frugal blue-collar worker who saves to invest in wealth-building assets with the high-paid professional who lives paycheck-to-paycheck because of their big houses, expensive cars, etc. who can’t save a dime to allocate to passive income investments.
The blue-collar worker will leave a legacy of wealth and the professional will leave a legacy of debt.
The Types of Assets Built To Endure
Those who successfully built generational wealth were focused on assets that produced income, grew over time, and were backed by a tangible asset. They favored natural resources, land, real estate, and businesses.
Why? Because these are the types of assets that can create income 24-7.
Cash flow and profits from these assets can then be used to acquire more of the same types of productive assets. The business owner uses office space and resources to peddle their wares then use the profits to expand the business by acquiring more office space and resources.
A real estate investor converts a building and land into rentable space and uses that income to acquire more rentable space.
What Type Of Legacy Will You Leave?
You decide. You control the type of legacy that you will pass on to your descendants.
First, build your own fortune, then pass on your knowledge and teach your descendants how to preserve this fortune – and even build upon it.
Pass on a legacy of wealth and financial literacy to your descendants – wealth and wisdom that will last for generations.
