So I like to dig into ideas and today it’s “the rich get richer”. Seems relevant to the Occupy movement, the political-economics that comes up in any modern discussion of poverty/race/etc., and the presence of the rich/dynastic presence of Clinton, Bush and Trump in the U.S. presidential election.
I feel like this is an important aspect of the “Wealth inequality” discussion, especially after Piketty’s book (which most people only read enough to confirm their biases, then stopped — http://www.huffingtonpost.com/2014/07/07/piketty-book-no-one-read_n_5563629.html)
On the one hand I get that it’s easier to make good investments if you have money to invest. More than that, if you’re rich and you don’t make good investments, you can not just lose a lot of what you have but also sabotage your offspring’s success as well.
But when we say “the rich get richer” do we mean the same family over generations? When we say “he/she inherited their money so they have no credibility as being a smart businessperson”, does having money guarantee you will keep it?
Biases and populist rhetoric aside, I’m yet to find a good scientific study. One CNBC article looking at “how many of today’s billionaires are first generation, second, third and so on” says that “family wealth seems to hit a cliff at the third generation.” (http://www.cnbc.com/2014/07/16/how-to-stay-rich-for-three-generations-.html)
Anyone who has leads is welcome to share them.